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Wednesday, 17 November 1993
Page: 2993

Senator WATSON (11.38 a.m.) —The committee has before it the Superannuation (Resolution of Complaints) Bill 1993. This is an important part of the higher prudential standards to be applied to superannuation in this country. It is important because many of the traditional ways of handling disputes such as through the court system are expensive and lengthy. Most members do not have either the resources or the confidence in their ability to tackle trustees in circumstances where they believe they have been unfairly treated.

  Currently, there is before the committee, on behalf of the Liberal-National coalition, an amendment in respect of the complaints tribunal. The tribunal cannot deal with a complaint about a trustee's decision if it is about a benefit that was paid before the commencement of the act and—it is this `and' that is so important and which I think a lot of people have lost sight of—if the benefit was paid in whole or in part to a person other than the complainant.

  The amendment is in two parts and is very restrictive, far more restrictive than the recommendations of the Senate Select Committee on Superannuation. For example, it does not stop the lodgment of all complaints before the commencement date of 1 July 1994, only those where it was paid in whole or in part to a person other than the complainant. Therefore, I would submit that well over 90 per cent—perhaps 95 per cent—of the expected cases which are likely to come before the tribunal would be affected by the decision.

  The government's intention to reject this amendment would cause suffering in an area where, most probably, those people have greatest need for the cash resources and the cash payment that would flow from the trustee's decision. The issue is the consequence that will flow if the government and any other parties reject this amendment. The consequences of rejection of our amendment would be that the trustees would automatically delay payment in necessitous circumstances where there is the probability or the possibility of dispute because it would give rise to a double jeopardy position. The delay could well be for between six and nine months because we know that there will be a string of cases before the tribunal after 1 July because cases before 1 July 1994 in respect of problems can be heard by the tribunal after 1 July. Given the resources of the tribunal, one could well find that people would be denied an otherwise legitimate payment for up to 12 months in most necessitous circumstances. I think this is quite unfair.

  For example, a trustee could not run the risk in circumstances where money was paid out in good faith to a named beneficiary such as a widow. The money is paid out to the widow and subsequently, six or eight months down the track, along comes the de facto and says, `Well, this was unfair. I have been living with this chap for 24 years. I am the true beneficiary'. The tribunal would then make up its mind and say, `In the interests of natural justice—the other lady has moved off, is unknown, is perhaps living in another state—we will declare that the moneys should be paid to the de facto lady because she had been living with the deceased for a good number of years'.

  In such circumstances, what hope would the trustees have of getting that money back, paid in good faith to the widow? It would create a double jeopardy position for the trustees. Particularly in small funds, it could severely embarrass the cash position of the fund and place in jeopardy the interests of the remaining members of the fund. I am sure that that is not what would be required. Therefore, I ask the government to reconsider its position. It is a small amendment. It will not affect a lot of people. The point is the consequences that will flow from the refusal of the trustees to pay out if there is any doubt at all about their decision being upset subsequently by the tribunal. They are not given the time delay because of cases being stacked up.

  Because we are looking into the future, I would ask the government and any other honourable senator who has any doubt about supporting my amendment to reconsider their position. It is in line with recommendation No. 16.1 of the Senate select committee, which had cross-party support from the Democrats and the Labor Party, but I remind honourable senators that this is more restrictive than that particular recommendation, and there is all the more reason for the Senate to support it.

  I also remind the Senate that complainants still have the right of access to the court system, as they do now, where they have this sort of difficulty. Obviously the tribunal process, which we recommend, is a very inexpensive method and it is a good invention. But I think we have to be very careful that we do not disadvantage people in circumstances where they could be denied a legitimate payment, simply because trustees will be warned, wherever there is a doubt, not to pay because such payment could be overridden subsequently by the tribunal. That is the greater problem. Then there is the associated problem that these people, who will be in necessitous circumstances, will be denied access to this money. I ask the government, through Senator Sherry, a very capable former chairman of that committee, to reconsider its position.