House debates

Wednesday, 15 May 2013

Bills

Superannuation Legislation Amendment (Service Providers and Other Governance Measures) Bill 2012; Consideration in Detail

12:05 pm

Photo of Bruce BillsonBruce Billson (Dunkley, Liberal Party, Shadow Minister for Small Business, Competition Policy and Consumer Affairs) Share this | Hansard source

As I have already stated, the coalition will allow the government's amendments to pass through this parliament. However, as I said in my speech on the second reading on this bill, the government has once again been forced to bring in a raft of changes to its own legislation after it has been introduced. As I mentioned, the government's amendments follow the outcomes of the inquiry by the Parliamentary Joint Committee on Corporations and Financial Services into this bill, which found many serious issues that the government had not dealt properly with. I recognise and welcome that industry input and coalition scrutiny have enhanced this bill. It is good to see that the government does occasionally recognise its mistakes and adopts the measures and good ideas put forward by the coalition, such as the cap on fees.

As I have stated in relation to the product dashboard, the coalition puts this government on notice that they have to be balanced in their approach when designing the regulations and not to favour their mates who are in industry superannuation funds. The coalition reserves the right to pursue amendments to the legislation to fix this issue, should the government not get the balance right.

Question agreed to.

by leave—I move opposition amendments (1) to (7):

(1) Clause 2, page 4 (table item 24), omit the table item, substitute:

(2) Clause 2, page 5 (after table item 29), insert:

(3) Clause 3, page 6 (lines 1 to 5), omit the clause, substitute:

3 Schedule(s)

(1) Each Act, and each set of regulations, that is specified in a Schedule to this Act is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this Act has effect according to its terms.

(2) The amendment of any regulation under subsection (1) does not prevent the regulation, as so amended, from being amended or repealed by the Governor-General.

(4) Schedule 1, page 14 (after line 20), after item 41, insert:

41A At the end of section 29VA

  Add:

Trustee may set a cap for certain fees

(10) Notwithstanding any other provision of this Act, the trustee, or the trustees, of a regulated superannuation fund that offers a MySuper product, may determine that a fee that is payable by members of the MySuper product is to be capped at a certain amount (the capped fee) if:

  (a) the fee is wholly, or in part, calculated with reference to a percentage of the member's account balance; and

  (b) the capped fee is to apply to all members of the MySuper product.

(5) Schedule 1, page 29 (after line 9), after item 73, insert:

73A After section 89

  Insert:

89A Public offer fund independence rule

Basic rule

(1) For the purposes of this Part, a fund complies with the public offer fund independence rule if:

  (a) both:

     (i) the fund has a group of individual trustees;

     (ii) at least one third of the group of trustees are independent directors or independent trustees, or a combination of both; or

(b) both:

     (i) the fund has a single corporate trustee;

     (ii) at least one third of the board of the corporate trustee are independent directors or independent trustees, or a combination of both.

Note:    Independent director and independent trusteeare defined in subsection 10(1) of this Act.

Vacancy

(2) For the purposes of the application of the public offer fund independence rule, if:

  (a) a vacancy occurs in the membership of a group of trustees or of the board of a corporate trustee; and

  (b) immediately before the vacancy occurred, the fund complied with the public offer fund independence rule; and

  (c) the vacancy is filled within 90 days after it occurred; and

  (d) immediately after the vacancy is filled, the fund complies with the public offer fund independence rule;

the fund is taken to have complied with the public offer fund independence rule at all times during the period of the vacancy.

(6) Schedule 1, page 29, after proposed item 73A, insert:

73B Subparagraph 92(3)(a)(ii)

  Omit "basic equal representation rules", substitute "public offer fund independence rule".

73C Paragraph 92(3)(c)

  Repeal the paragraph, substitute:

  (c) each prescribed policy committee must consist of equal numbers of employer representatives, independent representatives and member representatives.

(7) Schedule 1, page 29, after proposed item 73C, insert:

73D Subparagraph 93(3)(a)(ii)

  Omit "basic equal representation rules", substitute "public offer fund independence rule".

73E Paragraph 93(3)(c)

  Repeal the paragraph, substitute:

  (c) each prescribed policy committee must consist of equal numbers of employer representatives, independent representatives and member representatives.

The Cooper review recommended an end to the equal representation model on superannuation boards under which union and employer representatives dominate industry superannuation funds. For the record let me recap recommendation 2.7. It said:

For those boards that have equal representation because their company constitutions or other binding arrangements so require, the SIS Act should be amended so that no less than one‐third of the total number of member representative trustee‐directors must be non‐associated and no less than one‐third of employer representative trustee‐directors must be non‐associated.

This government has failed to act on this recommendation from its own, much-heralded Cooper review into superannuation.

On behalf of the coalition I am moving amendments which will enact the following principles: (1) that existing equal representation requirements in the Superannuation Industry (Supervision) Act 1993 and regulations be repealed; (2) that these be replaced by requirements which give effect to the principle that each affected trustee board or group of trustees at a minimum will contain one-third in number independent directors or trustees; (3) for the purpose of independents it will take the meaning of section 10 in the SI(S) Act; (4) the independence rule would only be applied to public offer funds. The coalition views this amendment to be serious in nature and, should our amendment not be successful here today, we will continue to push for this should we be offered the opportunity to form government for this great commonwealth, Australia, at the next election.

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