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Wednesday, 21 August 1985
Page: 122


Senator COATES(6.24) —by leave-I move:

That the Senate take note of the report.

This report on the administration of the Superannuation Fund Investment Trust brings to an end three years of inquiries into the SFIT affairs, its investments and office practices, and its administration. It has been a difficult inquiry dealing with very complex issues and personal relations. It is the Committee's second report on this matter. Our first report was made in November 1983 following problems in the Trust which were brought to the attention of the Committee by the Auditor-Generals' report of 1980-81. The issues developed from there. There appeared to be no improvement in the administration of the Trust and there was a break-down in the relations between the Chairman and the investment manager, a conflict which ultimately intruded into the SFIT's primary role of efficient and prudent investment. I should emphasise that more than $2 billion of contributors funds was involved. Ultimately, a very serious report was made by the Auditor-General to the then Minister for Finance.

The Committee's report deals with these issues. It deals with the Auditor-General's reports on the Trust's annual reports. It deals with the Government's action as a result of the Auditor-General's special report, the inquiry by MrMonaghan, the joint working party on the Monaghan report and the inquiry by Mr Agafonoff into the staffing situation. In this report we deal in some detail with the investment policies and practices of the Superannuation Fund Investment Trust and, in particular, with its investment in resource projects. As was to be expected, we deal with the appointment of Mr Hammond as Chairman of the Trust, the working relations in the Trust and the break-down of those relations between the Chairman and the chief investment manager.

We deal also with the role of the Department of Finance and its response to the problems in the office of the Superannuation Fund Investment Trust. We also deal briefly with the Trust's more recent annual report, for 1983-84, and we discuss the lessons that can be learned from this whole sorry issue so that those lessons can be applied to statutory authorities generally. I draw the attention of the Senate and of all those interested to the 28 findings and recommendations covering all these issues to which I have referred and which we summarise in chapter 10 of the report. I will not take the time of the Senate to read out those findings and recommendations. It would be invidious to try to select some of them because they are all important.

I would like to thank the staff and members of the Finance and Government Operations Committee, including former members of the Committee, for their work on this very difficult and complex inquiry. I thank all those who gave evidence to the Committee. I remind the Senate that substantial amendments to the Superannuation Act which alter the structure, powers and duties of the SFIT were introduced into the Senate during the last session and that the Committee reported on those amendments in the light of its knowledge of the SFIT, and having considered carefully the reports to the Minister on the SFIT by Mr Monaghan, the joint working party and Mr Agafonoff. The Committee's report on the amending Bill is annexed to this report which I have tabled. I draw attention to the Committee's statement that it believes that the Bill satisfactorily provides for much needed changes to the administration of the Superannuation Fund Investment Trust.

Finally, I would like to emphasise that the contributors to the superannuation fund administered by the SFIT have a right to expect that the administration of the trust will be conducted with the highest degree of professionalism and probity. The very unfortunate breakdown in the administration of the SFIT which has been examined by the Committee has now been resolved after exhaustive and thorough examination. Subject to the positive improvement in the SFIT's management that I have referred to, the Committee believes that both contributors and the private investment sector can be confident in the future of the administration of the Superannuation Fund Investment Trust. I commend the Committee's report to the Senate and seek leave to continue my remarks later.

Leave granted; debate adjourned.