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5       Treasury Laws Amendment (Putting Members’ Interests First) Bill 2019

Order of the day read for the adjourned debate on the motion of the Assistant Minister for Finance, Charities and Electoral Matters (Senator Seselja)—That this bill be now read a second time— and on the amendment moved by Senator Ciccone :

At the end of the motion, add “and the bill be referred to the Economics Legislation Committee for inquiry and report by 11 October 2019”.

Senator Sheldon, by leave and at the request of Senator Ciccone, withdrew the amendment.

Debate resumed.

Question put.

The Senate divided—

AYES, 44

Senators—

Abetz

Colbeck

Lines

Rennick

Antic

Davey

McAllister

Roberts

Askew

Duniam

McDonald

Ruston

Ayres

Fawcett

McGrath*

Scarr

Bilyk

Gallacher

McKenzie

Sheldon

Birmingham

Gallagher

McMahon

Smith, Dean

Bragg

Green

O’Neill

Smith, Marielle

Brockman

Hanson

O’Sullivan

Stoker

Chandler

Henderson

Paterson

Urquhart

Chisholm

Hughes

Patrick

Van

Ciccone

Hume

Pratt

Walsh

 

 

NOES, 8

Senators—

Di Natale

Hanson-Young

Siewert*

Waters

Faruqi

McKim

Steele-John

Whish-Wilson

* Tellers

Question agreed to.

Bill read a second time.

The Senate resolved itself into committee for the consideration of the bill.

 

 

 

In the committee

Bill, taken as a whole by leave, debated.

The Assistant Minister for Superannuation, Financial Services and Financial Technology (Senator Hume) moved the following amendments together by leave:

No. 1—Schedule 1, item 1, page 3 (line 15), omit “1 July 2019”, substitute “1 November 2019”.

No. 2—Schedule 1, item 1, page 4 (after line 13), at the end of subsection 68AAB(4), add:

                        ; or (e)  a member to whom the dangerous occupation exception applies (see section 68AAF).

No. 3—Schedule 1, item 1, page 5 (after line 29), at the end of subsection 68AAC(4), add:

                        ; or (e)  a member to whom the dangerous occupation exception applies (see section 68AAF).

No. 4—Schedule 1, page 5 (after line 35), after item 3, insert:

3A  After section 68AAE

Insert:

68AAF   Dangerous occupation exception

     (1)   The dangerous occupation exception applies to a member of a regulated superannuation fund to, or in respect of, whom a benefit is provided by the fund under a choice product or MySuper product held by the member by taking out or maintaining insurance if:

                              (a)  the trustee or trustees of the fund make an election under this section that members holding that product will be covered by a dangerous occupation exception if they are employed in an occupation specified in the election; and

                              (b)  the election is in force; and

                               (c)  the member is employed in an occupation specified in the election; and

                              (d)  it is reasonable to expect that some or all of the contributions paid into the product will be paid in respect of that employment.

     (2)   The trustee, or trustees, of a regulated superannuation fund may elect that members holding a choice product or MySuper product specified in the election are covered by a dangerous occupation exception if they are employed in an occupation specified in the election and either:

                              (a)  a Fellow of the Institute of Actuaries of Australia has certified that:

                                                  (i)   based on rates of death, or death and total and permanent disability; and

                                                 (ii)   using information from the most recent 5 years in relation to Australian occupations;

                                      the occupation is in the riskiest quintile of Australian occupations; or

                              (b)  the occupation is as an emergency services worker (as defined for the purposes of the Work Health and Safety Act 2011 ).

     (3)   The election must be made in writing.

     (4)   The election is in force during the period:

                              (a)  beginning on the day on which a copy of the election is given to APRA; and

                              (b)  ending on the day on which the trustee, or the trustees, of the fund give APRA notice in writing that the election is withdrawn.

     (5)   As soon as practicable after the election is made, a copy of the election must be:

                              (a)  published on the trustee’s, or each trustee’s, website; and

                              (b)  given to APRA.

     (6)   Within 28 days of the dangerous occupation exception applying to a member of the fund, the trustee or trustees must give the member:

                              (a)  a notice in writing stating that the trustee or trustees have elected to treat the member’s occupation as a dangerous occupation, and are providing the benefit under the choice product or MySuper product by taking out or maintaining insurance; and

                              (b)  details of the annual cost to the member of providing the benefit under the choice product or MySuper product by taking out or maintaining insurance; and

                               (c)  details of how the member may elect to have the benefit cease.

     (7)   To avoid doubt, nothing in this section affects the obligations of a trustee under the covenants referred to in section 52, or of a director of a corporate trustee under the covenants referred to in section 52A.

Note:         For example, under paragraph 52(7)(c) each trustee is subject to a covenant to only offer or acquire insurance of a particular kind, or at a particular level, if the cost of the insurance does not inappropriately erode the retirement income of beneficiaries.

No. 5—Schedule 1, item 8, page 7 (lines 5 and 6), omit “1 October 2019”, substitute “1 February 2020”.

No. 6—Schedule 1, item 8, page 7 (line 7), omit “ 1 July 2019 ”, substitute “ 1 November 2019 ”.

No. 7—Schedule 1, item 8, page 7 (line 11), omit “1 July 2019”, substitute “1 November 2019”.

No. 8—Schedule 1, item 8, page 7 (line 14), omit “1 August 2019”, substitute “1 December 2019”.

No. 9—Schedule 1, item 8, page 7 (line 18), omit “1 October 2019”, substitute “1 February 2020”.

No. 10—Schedule 1, item 8, page 7 (line 23), omit “1 July 2019”, substitute “1 November 2019”.

No. 11—Schedule 1, item 8, page 8 (line 9), omit “1 July 2019”, substitute “1 November 2019”.

No. 12—Schedule 1, item 8, page 8 (line 20), omit “ 1 July 2019 ”, substitute “ 1 November 2019 ”.

No. 13—Schedule 1, item 8, page 8 (line 24), omit “1 July 2019”, substitute “1 November 2019”.

No. 14—Schedule 1, item 8, page 8 (line 27), omit “1 October 2019”, substitute “1 February 2020”.

No. 15—Schedule 1, item 8, page 8 (line 30), omit “1 July 2019”, substitute “1 November 2019”.

No. 16—Schedule 1, item 9, page 9 (line 13), omit “1 October 2019”, substitute “1 February 2020”.

Senator Roberts moved the following amendments together by leave:

Amendment (5), omit “February”, substitute “April”.

Amendment (9), omit “February”, substitute “April”.

Amendment (14), omit “February”, substitute “April”.

Amendment (16), omit “February”, substitute “April”.

Debate ensued.

Explanatory memorandum : Senator Hume tabled a supplementary explanatory memorandum relating to the government amendments moved to the bill.

Debate continued.

 

Question—That Senator Roberts’ amendments be agreed to—put and passed.

Senator McAllister moved the following amendments together by leave:

Amendment (1), omit “November 2019”, insert “January 2020”.

Amendment (4), item 3A, paragraph 68AAF(1)(c), before “the member”, insert “it is reasonable to conclude”.

Amendment (6), omit “ November 2019 ”, substitute “ January 2020 ”.

Amendment (7), omit “November 2019”, substitute “January 2020”.

Amendment (8), omit “December 2019”, substitute “February 2020”.

Amendment (10), omit “November 2019”, substitute “January 2020”.

Amendment (11), omit “November 2019”, substitute “January 2020”.

Amendment (12), omit “ November 2019 ”, substitute “ January 2020 ”.

Amendment (13), omit “November 2019”, substitute “January 2020”.

Amendment (15), omit “November 2019”, substitute “January 2020”.

Debate ensued.

Question—That Senator McAllister’s amendments be agreed to—put.

The committee divided—

AYES, 29

Senators—

Ayres

Gallacher

Lines

Siewert

Bilyk

Gallagher

McAllister

Smith, Marielle

Brown

Green

McCarthy*

Steele-John

Carr

Hanson-Young

McKim

Walsh

Chisholm

Keneally

O’Neill

Waters

Ciccone

Kitching

Pratt

Watt

Di Natale

Lambie

Sheldon

Whish-Wilson

Faruqi

 

 

 

NOES, 33

Senators—

Abetz

Duniam

McKenzie

Ruston

Antic

Fawcett

McMahon

Ryan

Askew

Hanson

O’Sullivan

Scarr

Birmingham

Henderson

Paterson

Seselja

Bragg

Hughes

Patrick

Sinodinos

Brockman*

Hume

Payne

Smith, Dean

Chandler

McDonald

Rennick

Stoker

Colbeck

McGrath

Roberts

Van

Davey

 

* Tellers

Question negatived.

Question—That the amendments moved by Senator Hume, as amended, be agreed to—put and passed.

Senator Whish-Wilson moved the following amendments together by leave:

Schedule 1, item 1, page 3 (line 8),at the end of the heading to section 68AAB, add “ in relation to choice products ”.

Schedule 1, item 1, page 3 (line 11), omit “or MySuper product”.

Schedule 1, item 1, page 3 (lines 26 and 27), omit “or MySuper product”.

Schedule 1, item 1, page 4 (line 30), omit “or MySuper product”.

Schedule 1, item 1, page 4 (line 33), at the end of the heading to section 68AAC, add “ in relation to choice products ”.

Schedule 1, item 1, page 5 (line 1), omit “or MySuper product”.

Schedule 1, item 1, page 5 (lines 11 and 12), omit “or MySuper product”.

Schedule 1, item 1, page 5 (after line 29), after section 69AAC, insert:

68AACA   Benefits providing by taking out insurance—MySuper members with low-balance account or who are under 25 years old

     (1)   Each trustee of a regulated superannuation fund must ensure that a benefit is not provided by the fund to, or in respect of, a member of the fund under a MySuper product held by the member by taking out or maintaining insurance if:

                              (a)  both of the following apply:

                                                  (i)   the member has an account balance with the fund that relates to the product that is less than $6,000;

                                                 (ii)   on or after 1 November 2019, the member has not had an account balance with the fund that relates to the product that was equal to or greater than $6,000; or

                              (b)  the member is under the age of 25 years.

     (2)   This section does not apply to:

                              (a)  a defined benefit member; or

                              (b)  an ADF Super member (within the meaning of the Australian Defence Force Superannuation Act 2015 ); or

                               (c)  a person who would be an ADF Super member apart from the fact that the regulated superannuation fund is or was, for the purposes of Part 3A of the Superannuation Guarantee (Administration) Act 1992 , a chosen fund for contributions for the person’s superannuation by the Commonwealth; or

                              (d)  a member to whom the employer-sponsor contribution exception applies (see section 68AAE).

     (3)   Nothing in this section affects a right of a member of a regulated superannuation fund if:

                              (a)  the right relates to insurance cover; and

                              (b)  in compliance with this section, an insurance premium in relation to the member for that insurance cover ceases to be paid; and

                               (c)  the right exists because of insurance premiums paid in relation to the member before insurance premiums cease to be paid as mentioned in paragraph (b).

     (4)   Nothing in this section affects a right of a member of a regulated superannuation fund if:

                              (a)  the right is a right to insurance cover for a fixed term, subject only to the payment of insurance premiums; and

                              (b)  that fixed term begins before the time at which a trustee of the fund is required under subsection (1) to ensure that a benefit is not provided to, or in respect of, the member under a MySuper product held by the member by taking out or maintaining insurance.

Schedule 1, item 2, page 5 (line 32), omit “ and 68AAC ”, substitute “ 68AAC and 68AACA ”.

Schedule 1, item 3, page 5 (line 35), omit “and 68AAC”, substitute “68AAC and 68AACA”.

Schedule 1, item 5, page 6 (line 6), omit “or 68AAC”, substitute “, 68AAC or 68AACA”.

Schedule 1, page 6 (after line 6), after item 5, insert:

5A  After section 68AA

Insert:

68AB   Commonwealth to provide permanent incapacity benefit and death benefit to certain MySuper members

     (1)   This section applies to a member (the applicable member ) of a regulated superannuation fund under a MySuper product held by the member if:

                              (a)  section 68AACA applies in relation to the product; and

                              (b)  the member does not hold a choice product or another MySuper product with any regulated superannuation fund (including the first-mentioned fund) that provides permanent incapacity benefit and death benefit to the member.

     (2)   APRA, on behalf of the Commonwealth, must provide permanent incapacity benefit and death benefit to the applicable member in accordance with:

                              (a)  if the member holds a MySuper product with only one regulated superannuation fund—the policy of insurance that fund has taken out for the purposes of section 68AA; or

                              (b)  otherwise—the policy of insurance determined by APRA under subsection (3).

     (3)   If the applicable member holds a MySuper product with more than one regulated superannuation fund, APRA must determine, from the policies of insurance those funds have taken out for the purposes of section 68AA, the policy the provision of permanent incapacity benefit and death benefit must be in accordance with.

     (4)   In making a determination for the purposes of subsection (3), APRA must take into account any matters specified in the regulations made for the purposes of this subsection.

     (5)   The regulation s may prescribe circumstances in which APRA is not to provide permanent incapacity benefit and death benefit under this section.

Schedule 1, item 6, page 6 (lines 9 to 16), omit the item, substitute:

6  At the end of paragraph 20QA(1)(a)

Add:

                                                (ix)   no benefit that despite section 68AAB of the SIS Act could, because of the application of subsection 68AAB(5) or (6) of that Act, be provided to, or in respect of, the member under the product by taking out or maintaining insurance is provided in that way; and

                                                 (x)   no benefit that despite section 68AACA of the SIS Act could, because of the application of subsection 68AACA(3) or (4) of that Act, be provided to, or in respect of, the member under the product by taking out or maintaining insurance is provided in that way; and

Schedule 1, item 7, page 6 (lines 17 to 19), omit the item, substitute:

7  Subsection 20QA(3)

Omit “subparagraphs (1)(a)(iv), (v) and (viii)”, substitute “subparagraphs (1)(a)(iv), (v), (viii), (ix) and (x)”.

Schedule 1, item 8, page 7 (line 9), omit “or MySuper product”.

Schedule 1, item 8, page 8 (line 6), omit “or MySuper product”.

Schedule 1, item 8, page 8 (line 22), omit “or MySuper product”.

Schedule 1, item 9, page 9 (line 11), omit “or MySuper product”.

Schedule 1, page 9 (after line 13), after item 9, insert:

9A  Application of sections 68AACA and 68AB

(1)    Section 68AACA of the Superannuation Industry (Supervision) Act 1993 (the SIS Act ), as inserted by item 1 of this Schedule, applies in relation to a benefit provided by a regulated superannuation fund to, or in respect of, a member of the fund under a MySuper product held by the member, if the member becomes such a member on or after 1 February 2020.

(2)    Section 68AB of the SIS Act, as inserted by item 5A of this Schedule, applies in relation to a member of a regulated superannuation fund under a MySuper product held by the member to which that section applies if the Consolidated Revenue Fund is appropriated for the purposes of providing permanent incapacity benefit and death benefit to such a member under that section.

Debate ensued.

Question—That the amendments be agreed to—put and negatived.

Senator McAllister moved the following amendments together by leave:

Schedule 1, item 1, page 3 (line 15), omit “1 July 2019”, substitute “1 April 2020”.

 Schedule 1, item 8, page 7 (lines 5 and 6), omit “1 October 2019”, substitute “1 July 2020”.

Schedule 1, item 8, page 7 (line 7), omit “ 1 July 2019 ”, substitute “ 1 April 2020 ”.

Schedule 1, item 8, page 7 (line 11), omit “1 July 2019”, substitute “1 April 2020”.

Schedule 1, item 8, page 7 (line 14), omit “1 August 2019”, substitute “1 May 2020”.

 Schedule 1, item 8, page 7 (line 18), omit “1 October 2019”, substitute “1 July 2020”.

Schedule 1, item 8, page 7 (line 23), omit “1 July 2019”, substitute “1 April 2020”.

Schedule 1, item 8, page 8 (line 9), omit “1 July 2019”, substitute “1 April 2020”.

Schedule 1, item 8, page 8 (line 20), omit “ 1 July 2019 ”, substitute “ 1 April 2020 ”.

Schedule 1, item 8, page 8 (line 24), omit “1 July 2019”, substitute “1 April 2020”.

Schedule 1, item 8, page 8 (line 27), omit “1 October 2019”, substitute “1 July 2020”.

Schedule 1, item 8, page 8 (line 30), omit “1 July 2019”, substitute “1 April 2020”.

Schedule 1, item 9, page 9 (line 13), omit “1 October 2019”, substitute “1 July 2020”.

Question—That the amendments be agreed to—put.

The committee divided—

AYES, 28

Senators—

Bilyk

Gallacher

Lines

Siewert

Brown

Gallagher

McAllister

Smith, Marielle

Carr

Green

McKim

Steele-John

Chisholm

Hanson-Young

O’Neill

Urquhart*

Ciccone

Keneally

Polley

Walsh

Di Natale

Kitching

Pratt

Waters

Faruqi

Lambie

Sheldon

Whish-Wilson

 

 

NOES, 32

Senators—

Abetz

Duniam

McKenzie

Ruston

Antic

Fawcett

McMahon

Ryan

Askew

Hanson

O’Sullivan

Scarr

Birmingham

Henderson

Paterson

Seselja

Bragg

Hughes

Patrick

Sinodinos

Brockman*

Hume

Payne

Smith, Dean

Chandler

McDonald

Rennick

Stoker

Davey

McGrath

Roberts

Van

* Tellers

Question negatived.

 

 

 

After 11.45 am : The President resumed the chair and the committee reported progress.