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Tuesday, 8 October 1985
Page: 813


Senator MESSNER(5.09) —by leave-I move:

Page 2, clause 4, leave out paragraph (b).

Page 2, clause 4, leave out paragraph (e).

Pages 4 and 5, paragraph 7 (1) (a), proposed new sub-section 30 (1), paragraphs (a), (b), (c) and (d), line 38 (page 4) to line 3 (page 5), leave out the paragraphs, insert the following paragraphs:

``(a) a full-time principle member nominated by the Minister;

(b) 1 part-time member nominated by the Minister after consultation with employees' associations representative of contributors of the Fund; and

(c) 3 part-time members nominated by the Minister after consultation with the Securities Insitute of Australia, the Life Insurance Federation of Australia, the Australian Bankers' Association, the Australian Merchant Bankers' Association and the Actuaries Institute of Australia.''.

Page 5, paragraph 7 (1) (b), leave out proposed new sub-sections (3) and (4), insert the following sub-section:

``(3) In making appointments of persons as members of the Trust, the Governor-General shall ensure that, so far as is practicable, a person is not appointed unless that person has experience and expertise in finance, industrial relations, superannuation and investment.''.

Page 5, paragraph 7 (1) (c), lines 14 and 15, leave out ``and the full-time union-nominated member''.

Page 5, paragraph 7 (1) (e), lines 19 and 20, leave out ``or as the full-time union-nominated member''.

Page 5, sub-clause 7 (4), line 44, leave out ``the member of the Trust referred to in paragraph 30 (1) (d)'', insert ``a member of the Trust referred to in paragraph 30 (1) (c)''.

Page 6, clause 8, proposed new sub-section 30B (1), line 18, leave out ``the full-time union-nominated member'', insert ``a part-time member''.

Page 6, clause 8, proposed new sub-sections 30B (4) and (5), leave out the sub-sections.

Page 7, clause 8, proposed new sub-section 30B (7), leave out the sub-section.

Page 7, clause 8, proposed new paragraph 30B (8) (b), line 10, leave out ``the full-time union-nominated member'', insert ``a member''.

Page 7, paragraph 9 (a), lines 13 and 14, leave out ``and the full-time union-nominated member''.

Page 7, clause 10, lines 19 and 21, leave out ``, the full-time union-nominated member'' (twice occurring).

Page 9, paragraph 13 (d), lines 19 and 20, leave out ``or the full-time union-nominated member''.

Page 10, clause 14, proposed new sub-section 36 (2), leave out the proposed sub-section.

Page 10, clause 14, proposed new sub-section 36 (3), lines 17 and 18, leave out ``or as the full-time union-nominated member''.

Page 10, clause 14, proposed new sub-sections 36 (4) and (5), leave out the sub-sections.

Page 10, clause 14, proposed new sub-section 36 (9), lines 39 and 40, leave out ``, as the full-time union-nominated member''.

Page 10, clause 14, proposed new sub-section 36 (9), line 42, leave out ``, the full-time union-nominated member''.

Page 18, clause 25, proposed new sub-section 161 (6), leave out the sub-section.

The arguments have been well canvassed, both in the second reading debate and in the course of my remarks in regard to the amendments of the Australian Democrats which have just now been lost, but I would like to make one of two further points. The amendments that we are proposing to clause 7 of the Superannuation Legislation Amendment Bill, which is the clause establishing the new membership of the Superannuation Fund Investment Trust, are designed to put emphasis on the most important criterion-that three part time members of the Trust will in future be nominated by the Minister but only after consultation with the following organisations which are well known in the Australian community for their background, experience and expertise in the area of financial management, investment management and control, and administration of funds: 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.

The point that we are getting at here is that the funds which will be invested by Commonwealth Government employees in the Superannuation Fund Investment Trust will be, as they should be, managed in such a way as to generate the highest possible growth rates, so that they get the best possible return on their money, and, of course, to maximise the benefits to the employees. That is the thrust of our amendment. It certainly takes away from the Government's proposal, which is that four of the five members of the Trust in future are to be nominated by the Minister after receiving a slate of instructions from the Australian Council of Trade Unions. I do not think we have to go over those arguments again. But of course, this is part and parcel of the Government's proposals to extend control over the administrative and investment procedures of the SFIT through the power of the trade union movement. I have referred earlier to the way in which these things have been undertaken in respect of such schemes as the Builders Unions superannuation scheme, the Australian scheme, the Queensland United Employers Superannuation Trust scheme and so on.

What we need is to draw continually on the expertise of people who know the investment markets, who know how to take part in and to properly direct the Trust along the lines of maximising investment returns. This amendment only imposes upon the Minister the duty to consult those organisations. Those organisations will not have the power of nomination in the sense that automatical acceptance of their nominations would be forced upon the Minister; rather, a panel of people would be put forward to the Minister and the Minister would then make the appropriate appointment after judging individuals' capacities. That is the criterion to which we hold and we believe that the amendment fully takes account of that.

The Leader of the Government in the Senate (Senator Button) has said that there may well be at times some conflict of interest on the part of individuals who are members of the Trust and appointed under the provision which we are proposing, who may be members of private firms or of various organisations which may be beneficiaries in some way of funds that are invested on behalf of the Trust. Of course, that is a possible consequence, but I believe that it would not be the kind of consequence that would necessarily stultify the operation of the Trust, and that all men of good will would, of course, where there was a conflict of interest, stand up and make sure that that interest was well known to all members of the Trust and, in particular, to the Minister. That is a normal code of behaviour. It is a normal pattern of events. Consequently, having the aegis of organisations such as those I have mentioned, which are well known, prestigious and well established institutions in the Australian community, and carrying that imprimatur, surely we can rely upon the integrity of the men who would be on such a panel to pay that kind of attention to the critical issues that might be involved if any conflict of interest arose. If such conflict occasionally arose, it would be nothing compared with the conflict of interest that would exist in employee organisations appointing people who would totally control the fund under the Government's proposals, having four of the five members of the Trust and continually acting in conflict of interest of their own position. As a result, that obviously would impose very severe limitations upon their ability to carry out independent judgments. That again demonstrates the reasons why we are so strongly behind these proposals to put the main thrust of the legislation upon the question of expertise.

That is not to say that we ignore entirely the need to have representation from employee organisations and associations. In fact, part (b) of the amendment draws attention to that. It says:

1 part-time member nominated by the Minister after consultation with employees' associations representative of contributors of the Fund . . .

Clearly, there ought to be that much representation upon the Investment Trust, and consequently we make the provision along those lines. But in no way do we subscribe to the view that the ultimate control of the Superannuation Fund Investment Trust ought to be in the hands-as it would be under the Government's proposals-of the Australian Council of Trade Unions. As we have discussed before, that is demonstrably of very great difficulty, considering the spectacular lack of success of the present Prime Minister (Mr Hawke), when he was President of the Australian Council of Trade Unions, in matters of business. We have only to instance the lack of success in the case of the ACTU Bourke's store in Melbourne as an example of that.