House debates

Wednesday, 8 August 2007

Superannuation Legislation Amendment (Trustee Board and Other Measures) (Consequential Amendments) Bill 2007

Second Reading

Debate resumed from 28 February, on motion by Mr Nairn:

That this bill be now read a second time.

12:05 pm

Photo of Chris BowenChris Bowen (Prospect, Australian Labor Party, Shadow Assistant Treasurer) Share this | | Hansard source

The main purpose of the Superannuation Legislation Amendment (Trustee Board and Other Measures) (Consequential Amendments) Bill 2007 is to make consequential amendments to 30 current acts arising from the establishment of the Public Sector Superannuation Accumulation Plan on 1 July 2005, the establishment of a single entity to administer the Commonwealth superannuation schemes for Commonwealth government civilian employees, the introduction of a new regime for managing legislative instruments under the Legislative Instruments Act 2003 and changes to the earning bases for the superannuation guarantee regime from 2008.

As background, the Public Sector Superannuation Accumulation Plan was established on 1 July 2005. The establishment of this plan was a direct result of the closure to new members of the defined benefits Public Sector Superannuation Scheme. As the honourable member for Cunningham and I know, defined benefits schemes have been closed to several categories of Commonwealth employees. This plan is the main Commonwealth superannuation scheme for those entering the Commonwealth Public Service from 1 July 2005. The establishment of the PSSAP meant there were three Commonwealth civilian superannuation schemes: the CSS, the PSS and the PSSAP. The management of these three schemes is now undertaken by the newly formed Australian Reward Investment Alliance. This body replaced the former CSS and PSS boards.

In relation to the LIA, from 1 January 2005 a regime was established to reform and manage procedures for the making, scrutiny and publication of Commonwealth legislative instruments by establishing a federal register of legislative instruments; encouraging rule-makers to undertake appropriate consultation; encouraging high standards in drafting legislative instruments to promote their legal effectiveness, clarity and intelligibility to users; providing public access to legislative instruments; establishing improved mechanisms for parliamentary scrutiny of legislative instruments; and establishing a sunset mechanism to ensure periodic review of legislative instruments and, if they no longer have a continuing purpose, to repeal them.

This bill changes the earnings base for the superannuation guarantee from 1 July 2008. It removes a pre-21 August 1991 lower base for SG calculations, principally in the mining industry. From 1 July 2008, superannuation guarantee requirements are to be changed to simplify the earnings base of an employee for superannuation guarantee purposes. The Superannuation Laws Amendment (2004 Measures No. 2) Act 2004 simplifies the earnings base of an employee for SG purposes. The SG amendments already enacted but to be applied from 1 July 2008 will have the effect that all employers will calculate their SG liability against an employee’s ordinary times earnings. Various provisions will be removed from 1 July 2008 so that simpler ordinary times earnings will be the basis of calculation in all cases.

Among the provisions that will be repealed are those which allow the use of a pre-21 August 1991 earnings base and earnings bases specified in industrial awards, superannuation schemes, occupational superannuation arrangements or law of the Commonwealth, state or territory. From 1 July 2008, employers will still be able to use notional earnings bases specified in legislation or industrial agreements on the basis of their superannuation guarantee contributions where these are above an employee’s ordinary times earnings, but the superannuation guarantee will be assessed only against ordinary times earnings. This is largely a technical bill, which the opposition supports.

12:09 pm

Photo of Martin FergusonMartin Ferguson (Batman, Australian Labor Party, Shadow Minister for Transport, Roads and Tourism) Share this | | Hansard source

I rise today to speak in support of the Superannuation Legislation Amendment (Trustee Board and Other Measures) (Consequential Amendments) Bill 2007. I am absolutely delighted to be speaking on the issue of superannuation. I say that because Australia recently celebrated the 15th anniversary of the superannuation guarantee introduced under the Hawke-Keating government in July 1992. That legislation effectively meant that all Australians are entitled to a minimum superannuation payment of nine per cent and that has effectively meant that we have changed the debate in Australia in terms of savings and the capacity of the private sector to invest, for example, in the provision of vital infrastructure. As a former President of the ACTU, I regard that as one of the greatest achievements of the Australian trade union movement, which worked in a constructive partnership with the Australian Labor Party in government from 1983 to 1996.

That is not just my view and the view of the opposition; the truth is that Australia’s approach to retirement income is world leading. That is acknowledged by many other countries throughout the world. That view has also been appropriately endorsed by the World Bank since 1993, when it undertook a global study of retirement income systems and demographic factors. It concluded:

Systems providing financial security for the old are under increasing strain throughout the world. Rapid demographic transitions caused by rising life expectancy and declining fertility mean that the proportion of old to young is growing rapidly. Traditional safety nets, such as community and extended family care are weakening under the weight of this growing burden. Also in peril are the formal systems, such as government backed pensions, which have proven to be both unstable and difficult to reform. The result is an impending old age crisis that threatens not only the old but also their children and grandchildren who will inevitably shoulder this burden ... Financial security for the old would be better served if governments developed three systems, or ‘pillars’ of old age security: 1) a publicly managed system with mandatory participation and the limited goal of reducing poverty among the old; 2) a privately managed, mandatory savings system; and 3) voluntary savings.

That was the intent of the system developed by the federal Labor Party in government. Its groundbreaking legislation came into effect in July 1992. It is clearly about making sure that we look after our senior citizens in retirement and that we have a capacity for a privately managed superannuation scheme that gives them a guaranteed minimum and that requires voluntary savings over and above the guarantee of nine per cent in 1992.

I compare that to the system that we inherited from the current Prime Minister when he was the Treasurer in March 1983. We discovered on coming to government in 1983 that for most people the age pension was their main source of retirement income; superannuation was largely the preserve of the wealthy or people employed in local government and state and federal public services. We also had in place a number of private superannuation schemes operated by key companies that suggested to many workers that, if they stayed with their employer for a lengthy period of time, they would get some superannuation on leaving the company or on retirement. What we discovered more and more was that in the fine print there were outs for the companies to escape their superannuation obligations. In March 1983 the Australian Labor Party in government—with Bob Hawke as the Prime Minister and Paul Keating as the Treasurer—realised that as a nation with a major demographic challenge confronting Australia’s future in the 21st century something had to be done about the fundamental issue of retirement, side-by-side with the huge challenge to Australia in building our savings base and creating a universal safety net to guarantee dignity in retirement for all Australians.

In addition to that problem we had a taxation problem. That went to the fact that a substantial proportion of concessionally taxed superannuation savings was dissipated well before retirement. It was not just a question of increasing access to superannuation savings; it was also a serious question of having an overhaul of the taxation system in place that was part and parcel of the superannuation system in 1983. The facts showed that, in 1983, 40 per cent of the workforce had some superannuation cover; but, by 1991, through the partnership between the ACTU and the Australian Labor Party in government, that had grown to 72 per cent.

People should not forget that the campaign to spread superannuation was resisted by many major companies in Australia, with the support of the then opposition through its various leaders. This was a campaign that they suggested was wrong for Australia. History has now shown that it was absolutely of fundamental importance to the future of retirement income in Australia, our capacity to save and also our capacity to bring forward public investment in infrastructure by a partnership with the private sector. The whole nation has benefited as a result of the initiatives commenced by the Hawke and Keating governments in March 1983. I say that because the record will show that the superannuation guarantee levy built on the achievement and laid the foundation for the income security and higher standards of living in retirement for all future generations that we rightfully expect as a nation. The fruits of the levy are being felt further today, and people my age and younger will see the benefits for decades to come.

In some ways this bill continues the tradition of reform started by the Hawke and Keating governments and further enhances the administrative arrangements pertaining to superannuation. It is an ongoing, evolving system. Virtually all employees are now accumulating substantial superannuation savings to help fund their retirement income. It is also interesting to note that the industry wide superannuation funds are performing exceptionally well in terms of earnings and are also exceptionally competitive in terms of the management fees charged, including the death and disability insurance coverage provided by those schemes. Contrary to what was suggested by the current government and many employers at the time, these funds are well managed. They are professionally managed. They are not union dominated. They are joint trustees of employers’ and workers’ representatives, working to achieve the best possible return for ordinary workers who have chosen to join those schemes and, in doing so, to reduce what the nation would have to invest in the old age pension to look after people in retirement in the future. It has been a win-win situation for all, despite the vigorous opposition pursued by the Howard government representatives who, prior to March 1996, were in opposition.

I think it is important, because virtually all Australian workers are now accumulating substantial superannuation savings to help fund their retirement income. It is about them paying their way. The increased self-funding of retirement has enabled the Howard government, and will enable successive governments, to improve the retirement conditions for Australians who, for one reason or another, are unable to adequately fund their own retirement incomes. Having said that, let me also say that older Australians trying to make ends meet on the age pension are among the most disadvantaged in our community, and that is a fact of life today. We should also be paying close attention to the struggle that many of those people who did not have access to superannuation now confront on a day-to-day basis. For them, the welfare of the aged still remains conditional on our capacity to maintain a decent old age pension funded through our tax system at this particular point in time.

Finally, can I say that self-funding of retirement has and will increase the flexibility in the Commonwealth budget, especially as our population ages, and will increase our national savings overall. We should also not forget that during the 1980s economic debate was dominated by the need to increase private savings and to close the current account deficit. Superannuation, I contend, was not only a measure to increase the benefits to people in retirement; it was also essentially about increasing national savings and thereby reducing the need to borrow from foreign sources by creating a large pool of domestic savings.

As we all appreciate, today global capital is footloose. There is enormous foreign investment in Australia, but Australia’s superannuation savings are also going into projects all over the world so as to ensure that we diversify the investment basis of the various superannuation schemes operating in Australia. On that note, another milestone reached this year was the accumulation of over $1 trillion in Australia’s superannuation funds. Who would have thought we would have achieved that when, on winning government, we started this program in March 1983 when we found that retirement income in Australia was in an absolute mess. It is a major achievement and it opens up a wealth of opportunities for Australia in the 21st century. I say that because these funds will continue to be cash flow positive through to 2020, and they provide a significant opportunity for Australians to invest in their future.

Governments, and the people whose taxes they collect, simply cannot afford to fund the level of infrastructure investment needed for Australia’s future economic prosperity without the private sector. For example, in November 2005, according to Ernst and Young, the eastern states of Australia needed more than $100 billion of investment in infrastructure on transport, energy and water over the next 10 years. The truth of the matter is that it is no longer a question of planning projects. The key challenge confronting governments at a state and federal level is how we bring forward the delivery and implementation of project plans. That is what is required of an alternative government, through Infrastructure Australia, working in partnership with all the different portfolios from transport and roads to communications—just to name a couple of areas that need investment at this particular point in time.

The superannuation funds I referred to are looking for investment opportunities overseas. They cannot find them in Australia at the moment because of tardiness at a federal level and, in some instances, at a state level in their incapacity to put these projects in place and bring forward private sector investment. The truth is that Australia’s retirement incomes are therefore being used, in some instances, to fund other countries’ economic growth. While this is a good thing, here at home we are facing a future funding shortfall of $100 billion in infrastructure investment that could increase economic growth opportunities, create training, apprenticeship and tertiary education opportunities, create jobs for our children and grandchildren, eliminate congestion in our cities and, at the same time, provide good earnings on our superannuation savings, thereby improving the capacity of people to retire with some dignity.

I am assured by many that, for example, road tolls will never be accepted. The truth is that tolls developed by government in partnership with the private sector by and large deliver value for money, through more time for work, family or play, lower fuel costs, lower greenhouse emissions, less noise and air pollution, and less wear and tear on vehicles.

What is required is delivery and leadership at a government level to bring forward some of this infrastructure investment in partnership with the private sector. In doing so, you deliver to the shareholders who are, effectively, ordinary workers who have chosen to select various superannuation funds in which to invest their retirement incomes. I am not just talking about the big operators, such as the Macquarie Banks and the Leightons, who are at the centre of these projects; I am also talking about the mum and dad investors saving, through superannuation or direct investment in the share market, for the future of their children and grandchildren, and for their own retirement.

In the 21st century, public ownership of infrastructure assets does not have to mean public funding. Public ownership today can just as legitimately come from direct investment through the share market, through listed infrastructure funds or through superannuation as through public sector investment derived from taxes and other government fees and charges. It comes back to a capacity at a government level to lead and break through the barriers. It is something that is lacking at the Howard government level through lack of direction and strength at this particular time.

It is about time we as a community realised that there is more than one form of community ownership when it comes to roads and infrastructure, including water and communications infrastructure. Community ownership of infrastructure in the modern sense is about the economic empowerment of individuals to make their own investment choices—investment decisions that, I suggest, can build the infrastructure for their children’s and grandchildren’s future and grow their retirement incomes at the same time.

Just think, for example, about if we had been able to bring forward some of this infrastructure over the last five to six years in terms of our coal export opportunities. We would have earned hundreds of millions of dollars worth of additional export earnings, if we had not had the blockages in places such as Newcastle, Dalrymple Bay and Hay Point. A lack of leadership at a government level and a failure to actually bring forward the investment has deprived Australia of an even bigger economic cake and, in doing so, ripped away apprenticeship opportunities and employment opportunities in those very key regional centres of Australia.

Also, that effectively means that capital is footloose. If we do not bring on these projects in Australia sooner rather than later then they are looking for investment in other countries. That is why, for example, Indonesia has now overtaken Australia as the major coal-exporting nation in the world. That is why Brazil was looked to by some of these major mining companies in the past as an alternative source of supply for iron ore.

I stress today that we have a responsibility at state and federal government levels, in partnership with the private sector, to bring forward some of these investment opportunities via the superannuation funds. We can no longer be tardy on this particular front. It is no longer about the extraction of taxes and spending by governments on behalf of the Australian community. This represents a real challenge. The lack of leadership on infrastructure at a Commonwealth level in recent years has meant that Australia has denied itself a wealth of economic and employment opportunities.

I say in conclusion in support of the member for Prospect that, as he has already said, the main purpose of the bill before us today is to make consequential amendments to 30 current acts, arising from the establishment of the Public Sector Superannuation Accumulation Plan on 1 July 2005, the establishment of a single entity to administer the Commonwealth superannuation schemes for Commonwealth government civilian employees, the introduction of a new regime for managing legislative instruments, and, finally, changes to the earnings base of the superannuation guarantee regime from July 2008. Federal Labor support this bill, but let me say that superannuation reform must continue in Australia, regardless of which party is in government, to ensure that it seeks to achieve what we set out to achieve in March 1983—that is, secure incomes for future generations of Australian retirees and a better standard of living for the aged in our society.

The superannuation guarantee legislation today is a proud achievement of Labor in government seeking to do the best thing by all Australians, rather than superannuation, as it was previously, being the preserve of the better-off in the Australian community. The 15th anniversary should not be forgotten. It is a great achievement, and Australia is better off. Today’s superannuation legislation builds on the achievements of Labor in government. I commend the bill to the House.

12:28 pm

Photo of Tanya PlibersekTanya Plibersek (Sydney, Australian Labor Party, Shadow Minister for Human Services, Housing, Youth and Women) Share this | | Hansard source

As someone under the age of 40, I am amongst the first generation of people who have had access to compulsory superannuation. That contrasts markedly with the experience of my parents’ generation. My father was lucky enough to work for a company—Qantas—that was one of the first companies to give superannuation to all of its employees rather than just to upper management. But, for the majority of people in my father’s generation, superannuation is not adequate retirement income. Looking at this generation of under-40s, we ask: although we have access to compulsory superannuation, will our contributions and our employer contributions over the years actually provide an adequate retirement income?

Of course, we have to acknowledge that it was the last Labor government in 1992 that designed and established the framework for the superannuation guarantee contribution. At the time there were many people on the other side of politics saying that it was a bad idea. I think time has proven that it was probably one of the greatest financial and social decisions made by the Labor government, for two reasons: because it has improved the quality of life for many people after retirement, giving them a little bit more spending power than if they had to rely on the old-age pension, and because funds under management—which the member for Batman was referring to—have given us a multi-trillion dollar pool of investment to invest in both Australia and overseas. It has meant that we now have one of the largest pools of funds under management of any country in the world. That gives us enormous opportunities for investing in productive infrastructure in Australia—of course, always keeping in mind that the primary responsibility of superannuation trustees is to their members, to ensure a good return on investment.

Whilever we have an ageing population, as we do now, the issue of compulsory superannuation will become more important and our assessment of the adequacy of retirement income will become a greater issue. A report was released on 2 August by the Allen Consulting Group for the Investment and Financial Services Association. The report was entitled Australian national saving revisited. That report shows that we have an ageing population and, although we have compulsory superannuation, the pool of funds that will be available in the future does not meet the needs of that population. A report by AMP at the end of July showed that 3½ million Australians will fall short in their retirement incomes. That is about a third of the workforce. The Allen report for IFSA says that there will be a savings gap of about $452 billion. That shows the magnitude of the gap that we are talking about.

Financial planners estimate that retirees need about 60 per cent of their pre-retirement income to live comfortably in retirement. The current level of nine per cent compulsory employer superannuation contribution will give you that 60 per cent of earnings in retirement if you are in employment for 40 years straight. The reality, of course, is that many Australians do not have that unbroken working pattern for a variety of reasons, including unemployment and disability, but most, particularly many women, experience a broken pattern of employment because of their family responsibilities. The median amount of a baby boomer’s superannuation is $30,700 for men but only $8,000 for women, due to a number of factors, including a broken working pattern.

While we have these reports showing that retirement income generally, despite compulsory superannuation, will be inadequate, the situation for women is considerably bleaker. NATSEM data shows that 73.4 per cent of women aged 65 and over now live on an income of less than $300 a week. Three-quarters of women in retirement live on less than $300 a week. That trend of the feminisation of poverty in old age will increase as our population ages. Fifty per cent of women who have either retired or will retire in the next 10 years have less than $20,000 in superannuation; 20 per cent of women who are retired or are on the verge of retiring have less than $5,000 in superannuation. These figures are alarming. By 2019, men on average will have accumulated double the superannuation that women on average will have accumulated. So we are looking at a generation where poverty will be starkly gendered. Older women will be much more likely to be living in poverty than older men.

In July 2005, Dr Ross Clare of the Association of Superannuation Funds of Australia, in his evidence to a parliamentary inquiry into the superannuation of under 40-year-olds, said:

You can do a lot of research and determine quite conclusively that on average women tend to have less entitlement to superannuation than men—or you can ask your mum. Each will give you the same answer.

What alarms me even more than this trend is our lack of engagement with the trend, the unlikelihood that things will change very much in the future. So women, even young women under the age of 40 who have been contributing to superannuation for as long as they have been in paid work, face additional barriers that keep their retirement incomes lower than men. They are barriers that are generally unique to women and they are the result of the superannuation guarantee contribution being predicated on a stable paid linear model of employment that does not take account of the breaks that women’s employment generally shows because of time out, particularly around childbirth but also for caring later for parents and others.

I want to look a little bit more closely at some of the barriers to women’s superannuation savings. The first is obviously the pay gap. The reality is that women’s earnings over a lifetime are often substantially lower than those of men, even for women with similar qualifications and work histories. The sad truth is that we expect in a modern developed country like Australia that the pay gap between men and women’s wages will improve over time. It has been either steady or worse in recent years, and I think that is something that we need to examine very closely. On average, full-time working men are earning nearly $200 a week more than full-time working women. For the last decade, women have earned about 85 per cent of men’s wages. We forget—we think that these battles have been won and yet the figures for the difference between men and women’s wages, even in full-time employment, are substantial.

If you add on to that the fact that women are much more likely to take breaks from paid work to care for children or for other family members, you see the additional problem. Child care is a particular issue. I no longer have shadow ministerial responsibility for child care, but I am still passionately interested in it. One of the main reasons that many women do not return to work within a period after having children is, if you are paying for child care for one child, two children or three children, it is just not worth your while. For some people this is a personal preference, and I applaud that personal preference. It is a wonderful thing if you are able and want to do it. Many women would like to return to work. They see that the longer they stay out of the workforce the more their lifetime earning capacity diminishes, but once they factor in the childcare costs, transport costs and so on, it is just not worth their while. We can improve that situation by improving child care. Countries that have good quality, affordable child care have much higher women’s participation rates. So it is not just about personal preference here.

When women return to work after having children, they often sacrifice increased pay for greater flexibility. Again, if that is a personal choice that people make to work part time or more flexible hours that is terrific. What I fear is that a lot of women would love to have more responsible work, would like to have promotions and so on, but that our workplaces are not responsive enough, they are not willing enough to accommodate more flexible working patterns because they do not understand the value and the skills that parents—women—can add to the workplace.

So that pay gap is a significant problem when it comes to the accumulation of superannuation savings. Another barrier is the big increase we have seen in the casualisation of work, and especially women’s work. Industries where women are concentrated have seen some of the greatest growth in casualisation. What we often see now are workers generally, but women more likely, to be cobbling together income from more than one job. There might be two, even three, part-time or casual jobs and, because the superannuation guarantee only kicks in when you are earning more than $450 a month, women who are working irregularly or casually may well be missing out because they are not eligible for employer contributions.

If you are earning $400 each from three different employees, you can see how this can have an impact on women’s long-term ability to save for their superannuation. That increase in casualisation has seen about a quarter of Australian workers now in casual jobs. About a third of women are employed casually. Work Choices is increasing this trend and we also see Work Choices, by driving down penalty rates and overtime as people are forced on to AWAs, has an effect on women’s ability, and in fact on everyone’s ability, to save for their superannuation.

ABS data shows that women who are on AWAs and who work a standard 38-hour week on average are earning $87.40 less per week than those on collective agreements, and women on AWAs who work part-time are earning $85.10 less per week than those collective agreements. If you lose $80 a week or the equivalent moving on to an AWA, obviously your ability to put money away for superannuation is affected—not just the compulsory contribution but any capacity you have to make additional voluntary contributions.

For women who choose to spend time out or are forced to spend some time out of the workforce because of their caring responsibilities, they do—or the family does—get additional support through the family tax benefit part B. That is a good thing. We want to enable people to have the broadest range of possibilities, the broadest range of options when it comes to raising their families. But that money is generally never put away for savings; it is spent on the day-to-day expenses of families, which are so high these days.

Women may be able to make voluntary contributions during a period out of the workplace or their partner or husband is able to make contributions for them, but for most women the reality is that they assume that they will be able to rely on their partner’s or husband’s retirement savings. In most instances this is terrific, it is fine, but sadly in a growing number of cases where you see divorce, women who have assumed that their retirement income would be comfortable because of their husband’s superannuation find that it is not. Changes in the Family Law Act in 2002 went some of the way to addressing this by allowing superannuation to be divided like other property. But, of course, anyone who has taken action through the Family Court knows that you have to have some money up-front to perhaps get the result that you are after through litigation in this area.

The other thing to consider, of course, is that women are more likely to live longer than men. That is not great news for men, I suppose—the longer they live the better. I have some of my parliamentary colleagues very worried here, haven’t I? I would not take any personal action to make that happen. It means that any retirement savings have to last much longer and they are also more likely, with older age, to experience greater health expenses and also greater retirement home or nursing home expenses. So the smaller final superannuation savings of women often have to go a lot further.

There have been some measures in this area, such as superannuation contribution splitting and the tax offset, that have helped women who are in unpaid work caring for their families. The measures in the Superannuation Legislation Amendment (Trustee Board and Other Measures) (Consequential Amendments) Bill 2007 allow some growth in superannuation. They allow women to continue to make contributions to grow their superannuation, including by having some of their husband’s contribution transferred to their fund at the year’s end. The take-up of the superannuation co-contribution scheme introduced by the government has also been high amongst women. Indeed, Labor welcomed the announcement in this year’s budget of the doubling of the government’s co-contribution on contributions made in superannuation accounts in the last financial year.

All of these things are positives, but there are a number of additional things that we should investigate to truly address this problem. I think the adequacy of women’s retirement savings is one of the greatest financial and social issues that will face us over coming decades. We should look at some of the strategies that have been recommended, including through having a parliamentary inquiry by the House of Representatives Standing Committee on Economics, Finance and Public Administration but also by a number of other people. We need to look at specific strategies for helping women boost their retirement incomes. We need to start with a recognition by the government that the financial information that women are receiving about superannuation needs to be specifically targeted and that their information needs are different from those of men because they need to include this information about broken working patterns and so on.

I noticed that the Minister Assisting the Prime Minister on Women’s Issues, Julie Bishop, asked the Treasurer what proportion of the $25 million budget set aside for the Financial Literacy Foundation will be spent on women’s superannuation literacy. I was waiting for an answer; I was very interested in the answer. I think unfortunately the answer is no money. I am advised that the Treasurer’s Financial Literacy Foundation spent no specific money on programs which target women’s financial literacy in respect of their superannuation.

The members of the Standing Committee on Economics, Finance and Public Administration, in their inquiry into superannuation for people under 40, agreed that a lack of superannuation is one of the most pressing financial areas where women are especially prone to a lack of financial literacy. The committee recommended that the Financial Literacy Foundation with the Office for Women target specific programs to improve the financial literacy of women under the age of 40 with respect to superannuation. I do not think that has happened.

We could have another look at some of the other recommendations of that committee, including helping women who are on paid maternity leave to continue to contribute to superannuation with superannuation guarantee contributions from their employer. That is one of the recommendations we should explore. The standing committee recommended that the government should have a look at the particular issue of the lack of super guarantee contributions during periods of maternity leave. (Time expired).

12:48 pm

Photo of Chris PearceChris Pearce (Aston, Liberal Party, Parliamentary Secretary to the Treasurer) Share this | | Hansard source

I thank all those honourable members who contributed to the debate on the Superannuation Legislation Amendment (Trustee Board and Other Measures) (Consequential Amendments) Bill 2007. In summing up, I will bring the debate back to what the legislation is all about rather than talk about what we have just been listening to. The main purpose of this bill is to update a range of legislation as a consequence of other legislative changes. The bill amends a number of Commonwealth acts as a consequence of the establishment of the Public Sector Superannuation Accumulation Plan, otherwise known as the PSSAP, by trust deed under the Superannuation Act 2005. The PSSAP was established on 1 July 2005 and replaced the Public Sector Superannuation Scheme, otherwise known as the PSS, as the main superannuation scheme for new Australian government employees and other office holders. The bill proposes amendments to a number of Commonwealth acts that deal with terms and conditions of employment and it includes references to the PSSAP where appropriate.

The bill also amends a number of acts to reflect the consolidation of the governance arrangements for the three major superannuation schemes for Australian government employees. They are the Commonwealth Superannuation Scheme, known as the CSS, the PSS and the PSSAP. Since 1 July 2006, the Australian Reward Investment Alliance, known as ARIA, has been the trustee for the three schemes. From 1 July 2008, all employers will be required to calculate their superannuation guarantee liability for an employee using the employee’s ordinary time earnings.

The bill will amend the Superannuation Act 1976, which provides for the CSS, and the Superannuation (Productivity Benefit) Act 1988 as a consequence of this change. The amendments will enable minimum benefits paid under those acts to comply with the superannuation guarantee requirements following the change to the earnings base from 1 July 2008. I commend the bill to the House.

Question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.