Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

In rising to speak to the Judges and Governors-General Legislation Amendment (Family Law) Bill 2012 I do so foreshadowing that the coalition intends to send this to a Senate committee. We are in this chamber because there will be not an opposing vote in this chamber. However, there are many things of concern about this bill that I think we need to address. The first one is the constitutionality point—that is, it is provided in the Constitution that a judge—and that is federal, of course, because that is what it covers—cannot have their remuneration diminished during their continuance in office. The remuneration is a widely read term and refers to all financial emoluments associated with that office, including pension rights. In respect of the Governor-General, you could say it is in violation of section 3 of the Constitution, which prohibits alteration of the Governor-General's salary during his or her continuance in office.

Those points are serious points and need to be made right at the outset, but it is also just as important to draw attention to the precedent that this seeks to create by having a special family law provision for a separate class or, indeed, a subset of a class of individuals within our community. Many of us who have been involved in discussions over superannuation and the status that it should have in reference to family law were concerned that superannuation was left out for decades after the passage of the act and was not considered to be marital property. Therefore, it was outside the purview of the court and the act and was not dealt with.

Then whilst we were in office we brought in a provision which legislated for superannuation to become part of marital property and that is the situation for all citizens of Australia. This bill proposes to create special laws for judges who are federally appointed judges and the Governor-General. I suspect that the Governor-General has been thrown in to make it look good because it certainly did not come from that office that this bill be generated, nor am I aware that it came from particularly the Federal Court or the High Court. I do understand that it is almost a bill to meet an anomaly of a particular former Family Law Court judge and a dispute with his spouse. That is no way to make law.

I am very concerned that we could have a situation where the federal parliament would make a law specifically for federal judges. It would not cover state judges and I am reminded that, with regard to defined benefits, there is a qualifying period for judges just as there is for members of other defined schemes. I can cite examples of other people in defined benefit schemes who have been divorced prior to their becoming eligible to receive a pension and they had to raise sufficient money to pay out the spouse. Should they not in fact qualify for the pension it was in terms just 'bad luck'. So it is totally unfair that there is a carved-out niche for a particular group of people, whether it be judges or accountants or school teachers or policemen or any other category of people. I think it is important that these laws are universal laws and apply equally to people across the board. Even though there will be no voting against this bill in the House, I am flagging that we will seek to have a Senate inquiry into the bill so that some of these issues can be flushed out and evidence can be taken, and we can see properly perhaps what motivates the bill. I think the concerns of many need to be assuaged.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I speak in support of the Judges and Governors-General Legislation Amendment (Family Law) Bill 2012. The member for Mackellar has no idea what she is talking about on this issue. This is a case of making sure that governors-general and judges are treated the same way as every other citizen in this country with respect to section 79 and section 75(2) of the Family Law Act. That is what this legislation purports to do. The Constitution makes it very clear that the Commonwealth parliament has the power under section 51 to make laws in relation to matrimonial causes and divorce, and that is the basis upon which we have made laws under the Family Law Act—and it was a reforming Whitlam Labor that brought family law up to date in the mid-seventies with the Family Law Act.

In this legislation, we are making sure spouses and partners of judges and governors-general are treated in the same way as any other citizen of this country in the states and territories. The changes in this legislation go back a little way and I will explain that to the House. When someone separates in a marital relationship or a de facto relationship, or a same-sex relationship as a result of the laws we have passed, under part VIII of the Family Law Act they have the right to bring an application for property orders in the Family Court or the Federal Magistrates Court. The Family Court, in exercise of its power, can make a property order under section 79(1) of the Family Law Act and take into consideration the factors under section 79(4), which talk about the financial and non-financial contributions made to matrimonial or cohabitation type property. And the court looks at other factors under 75(2).

The situation with respect to superannuation has always been a vexed issue in family law. In fact, it was often the case that the courts engaged in quite unusual tactics to get around the situation that superannuation, whether a defined benefit scheme or an accumulation fund, was a source of income or an asset to a person's benefit. In the case of Coghlan v Coghlan of some years ago, judges referred to superannuation as another species of asset and not really a matrimonial asset. This has always been a vexed issue. It is often wives who are disadvantaged in these circumstances. If they have been together for a long time and the husband has a large amount of superannuation and there is a matrimonial house, a car, a bit of savings and property, it is often wives who have been disadvantaged by the non-treatment of superannuation whereby it is considered to be an asset.

Under this legislation, we are making sure that the partners and spouses of judges and governors-general are treated in the same way as every other Australian is treated if they separate, and avail themselves of the right to seek an order for property settlement under part VIII of the Family Law Act. The member for Mackellar raised the question of what the situation would be with a serving judge. If a judge is serving and is not yet qualified for a pension, at the time of the split the adjustment of the benefit would be based on the proportion that has accrued at the time of the split. With respect to property settlement, even if the person has not yet, say, qualified by reason of age for the superannuation, the trustees of the superannuation fund can adjust the superannuation by way of order or by way of a binding financial agreement. I have been involved in cases—

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

There is no fund; it's consolidated revenue!

Kelvin Thomson (Wills, Australian Labor Party) Share this | Link to this | Hansard source

Order! The member for Mackellar was heard in silence. She will extend the same courtesy to the member for Blair.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

There are a plethora of superannuation arrangements, involving politicians, judges, military people, accumulation funds, defined benefit schemes. This legislation makes sure that everyone is treated equally. We want to make sure that the current arrangements happen as every Australian would expect them to happen. If the member for Mackellar has a look at the current arrangements for family law, she will see that, on that issue in relation to judges and governors-general, they are inconsistent with the idea that they should be treated in the same way as every other Australian. Does the member for Mackellar think that judges and governors-general should be treated in another way? That is not the case.

We want to make sure that, when this bill is passed, the former spouse will be able to receive his or her share of the superannuation benefit as a separate interest benefit. I have done thousands of these types of cases involving Australian citizens, and I have been involved in lots of cases involving very senior figures in this country. I am not going to start mentioning individual people that I have acted for or their spouses—

Mrs Bronwyn Bishop (Mackellar, Liberal Party, Shadow Minister for Seniors) Share this | Link to this | Hansard source

I should hope not.

Shayne Neumann (Blair, Australian Labor Party) Share this | Link to this | Hansard source

I tell you what: I have acted for more Tory politicians than Labor politicians in relation to family law cases—or their spouses, including people in chambers all over the place. I am not going to start naming them. It is a long time since the member for Mackellar has practised in the area of family law. She should have a good look at the law and what we are doing in this regard. This is a necessary undertaking. The fact that the coalition cannot bring themselves to just get rid of this anomaly goes to show the extent to which they will say no to everything—even to good law that actually fixes up irregularities and eccentricities. This legislation does that. It is a sensible piece of legislation that will make sure the family law splitting arrangements on superannuation are the same for all Australians. We on this side of the House do not believe that Australians should be treated unequally, even if those opposite believe that that is the case.

Gary Gray (Brand, Australian Labor Party, Minister for the Public Service and Integrity) Share this | Link to this | Hansard source

I thank all speakers on the Judges and Governors-General Legislation Amendment (Family Law) Bill 2012 to date. The bill will implement new family law arrangements for the federal judiciary and governors-general by amending the Judges' Pensions Act 1968 and the Governor-General Act 1974. The new arrangements will allow for a former spouse of a judge or a Governor-General to receive his or her share of a superannuation benefit as a separate benefit at the time of a family law split. This is consistent with family law, which aims to provide separating parties with a clean break.

Under the Family Law Act 1975, superannuation interests for part of the property of a married or de facto partner can be split between separating parties at the time of a property settlement. However, the current family law arrangements for judges and governors-general are inconsistent with the family law policy of a clean break. The arrangements are also out of step with other Commonwealth defined benefit superannuation schemes, which have since 2004 provided separate interest benefits to former spouses of scheme members in a family law split.

For judges, the current percentage-only arrangements mean that any split of the pension of a judge in a family law settlement only occurs when pension payments are made to a retired judge. Payments to a former spouse do not commence until the judge retires and cease upon the judge's death. There is no certainty as to the overall quantum of the benefit that the former spouse is entitled to receive.

For governors-general, there are currently no scheme-specific separate interest arrangements in place to cover the splitting of superannuation pensions. The bill will address these issues by putting in place scheme-specific arrangements for judges and governors-general which provide a separate interest benefit in the event of a family law split of a superannuation benefit. As well as bringing the arrangements into line with the family law policy and with other Commonwealth superannuation schemes, the new arrangements will give the parties greater control over their respective individual benefits. The proposed changes do not mean that the Commonwealth will be determining property settlements. The Family Court or the separating parties will decide whether the superannuation benefit is to be split and, if so, the amount or percentage of the split.

The arrangements in the bill will operate when a splitting order or an agreement is made in relation to a superannuation interest in the scheme. The interest of a judge or Governor-General in the superannuation scheme will be valued at the time of the family law split and a separate interest for the former spouse will also be created at this time. If a pension is not payable to a judge or Governor-General at the time of the split, the pension of the former spouse will be deferred. The deferred pension will become payable when the former spouse reaches his or her retirement age or before this if he or she is certified as permanently incapacitated. Once the judge or Governor-General retires and commences a pension that pension will be adjusted to take account of the amount transferred from the former spouse. If at that time of the family law split, a pension is being paid in respect of the judge or Governor-General, the pension for the former spouse will be payable immediately and the pension of the judge or Governor-General will be adjusted to take account of the amount transferred to the former spouse.

The bill also includes transitional provisions to cover existing family law cases in the Judges' Pensions Scheme. The transitional arrangements provide the former spouse with a separate interest pension from the date the legislation comes into force, based on the splitting percentage in the court order or agreement. There are also safeguards to make sure that there would be no unintended consequences for the parties arising from the proposed new arrangements.

These reforms proposed by the bill are an important step to align the family law splitting arrangements for judges and Governors-General with family law principles and to bring consistency to the family law arrangements across the Commonwealth defined benefit superannuation schemes. I commend the bill to the chamber.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.