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Monday, 16 September 1985
Page: 604

Senator MESSNER(9.58) —The Superannuation Legislation Amendment Bill amends legislation in respect of superannuation arrangements for employees of the Commonwealth. The Opposition welcomes the general thrust of the legislation but, as I will point out a little later, there are a number of matters of detail which the Opposition shall address and on which it shall move amendments during the Committee stage of the debate. The sudden rush in the passage of this legislation has left me without an opportunity to speak to Senator Siddons and the other members of the Australian Democrats about the nature of those amendments and we will have an interesting time in the half hour ahead.

Senator Walsh —What are you talking about? They have been around for months.

Senator MESSNER —I will debate those points when I come to them. The main point at issue with this legislation for the Opposition is the Government's proposed membership of the Superannuation Fund Investment Trust. As the Bill stands at present, the Government proposes to appoint five members in the following format: A full time principal member will be appointed by the Minister. In addition, a full time member will be nominated by the Australian Council of Trade Unions in accordance with clause 7 (4) of the Bill. Two part time members will be nominated by the Australian Council of Trade Unions and a part time member will be nominated by the Minister. The point that concerns the Opposition is that three of those five members will be appointed specifically at the nomination of the Australian Council of Trade Unions. First and foremost we see the Australian Council of Trade Unions, which has absolutely no role in its direct relationship with the employees whose contributions go into these superannuation funds, as being a totally inappropriate body to represent those employees of the Superannuation Fund Investment Trust in the direction of the Trust's affairs.

The second point is that obviously this is a further example of the way in which this Government is beholden to the ACTU and the way in which it does its bidding at its beck and call. Clearly, the pressure which has been exercised by the ACTU upon this Government to obtain membership of this superannuation trust is a further example of the way that the unions hold total sway over this Government. It is not as though there is just a question of representation on this Trust that is at the core of the issue. It is of course a far broader matter because clearly the majority of members of the Board of the Trust will be specifically nominated by the ACTU. It is those points to which we take severe objection. We will be moving our amendments during the Committee stage. They are aimed at establishing only one criterion for the appointment of members to the Board which relates specifically to the qualities of expertise and investment on the part of the Board members. I will outline to the House the Opposition's amendment in this respect. It contrasts with the Government's amendment which places control in the hands of the ACTU. The amendment will change the Act to provide that the Trust is represented by the following five people: Firstly, a full time principal member nominated by the Minister; secondly, a part time member nominated by the Minister after consultation with employees associations representative of the contributors to the fund-that is the employee association; the trade union, if you like-which is specifically representative of the members of the fund itself. This is in stark contrast to the Government's approach in that we believe somebody entirely outside the ACTU should be appointed to represent those employees.

We then propose as a third limb to our amendment that three part time members be nominated by the Minister but after consultation with the Securities Institute of Australia, the Life Insurance Federation of Australia, the Australian Bankers Association, the Australian Merchant Bankers Association and the Actuaries Institute of Australia. Lest anybody be in doubt, I reiterate that it is specifically our concern that, given the enormous amounts of capital involved in such a Trust, there are proper and appropriate people who have the understanding, expertise and the knowledge to make the proper judgments about the investment of such enormous sums of capital and that the very best available minds in Australia should be at least consulted by the Minister for Social Security (Mr Howe) to ensure that he appoints the appropriate people to the Trust to conduct its affairs.

We believe that that is a very important aspect of the conduct of the affairs of any government. Indeed, it should have reference to expertise wherever possible. The Opposition parties think that this is a particularly important matter when we relate it to the circumstances of this particular investment trust. Anybody would know that at present superannuation is of highest importance and is a growing issue right across the Australian community not only for the public servants employed by the Commonwealth of Australia but also for private individuals, those employed in private industry.

The Government has recently been undertaking negotiations with various unions to try to establish a system of occupational superannuation which will bring about the membership of superannuation funds for all working Australians. That is part and parcel of the so-called accord, mark II, and is a major thrust of the deal that has been done with the trade unions. It represents a cave-in to them and consequently a step down the road towards occupational superannuation as the Government perceives it.

The Opposition has had grave doubts about the way the Government has been allowing the so-called trend to superannuation in the market place to develop in the last year or so. Indeed, we have seen a very loose hand upon the reins in the development and establishment of schemes such as the builders unions superannuation scheme, the Queensland United Employers Superannuation Trust scheme, the Australian scheme and all those schemes which are being directly sponsored by various trade unions with the object of ensuring that they extract the best possible deal in the form of deferred wages from employers. Anybody with any knowledge of the industrial scene knows that the trend to so-called superannuation, as it has been called over the last 12 months, is nothing else but a sham. This is particularly exemplified by the trend towards the BUS scheme.

The BUS scheme is merely a sham which has been established to create a system of tax deductibility for deferred wage increases that have been forced upon employers because if they had been called deferred wages, which is what they properly are, they would not have been deductible to the employer under the taxation legislation. So the unions have cajoled and forced employers into extra payments which they have called superannuation. This is not the case. It is not superannuation because, firstly, employees are not contributing anything to it. Employers are the only contributors. Secondly, employees can draw out those funds virtually at will upon winding up their employment with a particular employer. Of course, that can be virtually a voluntary decision in any circumstance. There has been no attempt to establish the preservation of benefits towards long term retirement income and consequently we see that as nothing else but a sham to get around the present so-called mark I wages and incomes accord.

We have taken a very strong line on that matter and have tried to draw the attention of the public to this rapidly growing development in the industrial scene. Indeed, if the Government does not take a hold of it very quickly we will see this development get way out of hand so that there will be little chance for the Government in the future to be able to retrieve the situation to establish a proper industrial superannuation scheme right across the community. For that reason we have been putting our views very clearly on that matter wherever possible and drawing the Government's attention to these concerns. I might add that it seems that this has all been done with the collusion of the present Minister for Employment and Industrial Relations (Mr Willis). Indeed, I recall that 12 months or so ago he was advocating to the unions, particularly those in the building trades, that they should seek wages outside of the accord by seeking to establish these so-called superannuation arrangements. As a result, pressure has been brought to bear on employers and a situation has developed which is very dangerous insofar as many employees, many workers who would like to be able to obtain work on a building site, cannot obtain entrance to that building site without the production of a so-called BUS scheme card. My colleague Senator Boswell may have some detailed information on that which no doubt he will develop, but the point is this: It is simply a form of compulsory unionism to use the weapon of a false form of superannuation to encourage workers to become members of a union in order to obtain work. They are trying to get a form of deferred wage not a form of superannuation, as they euphemistically call it.

I provide that as a background to the situation into which the Government is rapidly getting itself. We are seeing vast sums of capital flowing into these new `superannuation schemes' and this obviously is putting considerable sums of money into the hands of and under the control of various trade unions. It is clearly the objective of the Government to encourage that but fortunately we now see some sense of rationality. Hopefully the Government will change the direction of its thinking towards proper superannuation which is aimed at providing retirement benefits for employees in the long run. That is what we would like to see.

Senator Townley —Those funds aren't doing very well at the moment, are they?

Senator MESSNER —They are not doing so well at the moment. We have discussed that at other times. They are the simple facts. The same thinking that has been evident in the positive encouragement of those developments, of false superannuation schemes, by the Government and by the Minister, Mr Willis, to circumvent his own accord with the trade union movement--

Senator Robertson —That is ridiculous. It is typical of your nonsense.

Senator MESSNER —It is not. Mr Acting Deputy President, the major point is this: The Government is encouraging the development of schemes which put as much control as possible into the hands of union representatives, or the unions themselves, because it is under pressure from the trade union movement so to do. This point is certainly brought home very clearly in the legislation before us tonight. As I said earlier, the key point is that we have an investment trust to run the huge Commonwealth superannuation scheme. That trust is to have five members, four of whom-80 per cent of the voting capacity-are to be appointed by the Minister and nominated by the Australian Council of Trade Unions. Eighty per cent of the control of the funds of the huge Commonwealth superannuation scheme will be under the control of a foreign body altogether, the Australian Council of Trade Unions.

If we need any evidence that this Government is under the control of the union movement, we need look no further than this Bill, the Superannuation Legislation Amendment Bill. That is the situation that we face and that is why there is such widespread concern amongst Opposition members about this Bill-and rightly so-and why the Australian Democrats are also greatly concerned about the matter. Because we believe that the problem is of such magnitude and of such importance we will move amendments which will lead to a more rational approach to the control of such huge amounts of money.

One would have thought that the key purpose behind all of the Government's thinking in managing the affairs of such a huge superannuation fund would be to ensure that proper controls, with proper management and proper expertise, were exercised to ensure maximum return for contributors. That certainly would have been the guiding hand in any decision that the Opposition would have taken; it is a most important part of any decision-making process. Anybody who has any concern at all for or involvement in financial affairs in this country knows how difficult it is to find people of expertise and quality to make appropriate decisions and to have them appointed to control funds of any size, let alone the largest superannuation fund in the land. Yet this Government sees fit to appoint unqualified people who have no control whatsoever; in effect they are appointed and nominated by the Australian Council of Trade Unions.

Senator Robertson —Who says they are unqualified? We picked the right people, which is more than you lot did.

Senator MESSNER —Senator Robertson makes the point very well. He says that they picked the right people. He picked the right people and Mr Willis and the Prime Minister (Mr Hawke) picked the right people-they are picking the people from the Australian Council of Trade Unions. They are the people they want. They are not picking people with expertise in the market-place or with any kind of investment know-how. That is not their wish at all; all they want are people who will do the bidding of the trade union movement. That is what this is all about. It is about union control of huge sums of money. That is what this whole business is about. This is evidenced not only in this legislation, as I have mentioned, but it is also evidenced by the growth of such schemes as the BUS scheme, the Australian scheme, the QUEST scheme, and so on.

Senator Townley —Jobs for the boys.

Senator MESSNER —It is more than jobs for the boys. There are very sinister overtones which I know Senator Townley appreciates. I know that he can see that these people lack the ability to control such huge sums of money. One must ask what they intend to do with that money once they establish control over it. That is a very important question. Obviously one must have regard for the fact that there could well be motives other than the altruistic ones which could influence how they decide to direct resources toward particular development projects. One may imagine trade unions have particular investments in mind. I can remember one or two that were absolutely, terribly spectacularly unsuccessful. I recall the Bourke's-ACTU store in Melbourne which ended up going broke. Solo petrol was another great ACTU project which went the way of all things. Of course we must recall that it was the object of the present Prime Minister to establish those businesses. In fact he was the chief executive of them all. Look what a great manager he was. That has been demonstrated very clearly to the people of Australia.

Senator Robertson —He didn't manage the business. Get your facts straight.

Senator MESSNER —The honourable senator is dead right. He did not manage the business. I think the point is made. We in the Opposition will move amendments to the legislation during the Committee stage of the debate. I say again that we are looking to establish a means by which the Government can consult with very experienced people in the area of investment before making appointments to the Superannuation Fund Investment Trust, providing at the same time for one part time member of the Trust from the employee organisations who represents those contributors directly. We are not against trade unions in the sense of not wanting them involved to some degree and understanding what is going on. Our point is that the person who represents them should be genuinely representative of the individual members of the Fund itself. That is the point. That is why we say not that some remote body such as the ACTU should nominate people, but rather that people should be appointed after consultation, from the body of employees themselves. We agree that that is quite appropriate. Indeed, our amendment covers that point. As we have said earlier, the other one of the five appointees remains as the nominee of the Minister. They are our propositions. We believe that they would be effective. I will debate them in more detail during the Committee stage of the Bill.