Richard Colbeck (Tasmania, Liberal Party, Parliamentary Secretary to the Minister for Finance and Administration) Share this | Hansard source

The Superannuation Legislation Amendment Bill 2007 makes a number of enhancements to the Australian government civilian and military superannuation schemes. The bill removes, from 1 July 2008, the requirement for contributory members of the Commonwealth Superannuation Scheme, the CSS, to make member contributions to the scheme. As a result, member contributions will become voluntary. This will provide members with the same flexibility and incentives to contribute to superannuation that are available to the broader community. The bill also allows, from 1 July 2008, eligible members of the PSS to elect to leave the PSS and join another superannuation arrangement for payment of future contributions. A member’s eligibility to join another superannuation arrangement will be determined by the choice of arrangements that their employer has in place.

From I July 2008, the bill will enable members of the CSS to obtain early release of their funded account balances on severe financial hardship and compassionate grounds to the extent allowed under the superannuation regulatory framework. The bill will also facilitate from 1 January 2008 the prospective restoration of pensions for persons whose spouse pensions, provided under certain closed Australian government civilian and military superannuation schemes, were cancelled upon remarriage. Upon valid application, spouse pensions cancelled on remarriage—prior to 1976 in the civilian scheme and 1977 in the military scheme—will be prospectively reinstated. Changes to the CSS as a consequence of the government’s Better Super reforms are also included in the bill.

The main amendment will ensure the continued payment of employer productivity contributions where a member has not provided their tax file number. This is consistent with the arrangements in the broader community where employer contributions would still be payable even though the member has not provided their tax file number. The other amendments are technical and take account of the payment of amounts from the CSS fund in relation to release authorities issued by the Commissioner of Taxation to reflect the changed superannuation terminology. The bill also ensures that entitlement to benefits in the military superannuation schemes relating to post-retirement marriages is consistent with treatment in the civilian schemes. The bill also addresses an anomaly in the family law provisions of the Defence Force Retirement and Death Benefits Act 1973 to allow the family law orders to be applied as intended.

The bill was referred to the Senate Standing Committee on Finance and Public Administration for inquiry. The committee made five recommendations. Recommendations 1 and 2 required the government to instruct the trustee of the scheme, the Australian Reward Investment Alliance, in relation to providing information to members of the Public Sector Superannuation Scheme about the implications of reducing member contributions to zero and promoting the changes that enable spouse pensions that were cancelled upon remarriage to be restored. The government agreed in principle with both recommendations; however, the government could not agree with the exact wording of the recommendations as the legislative framework established under the Superannuation Industry (Supervision) Act 1993 does not permit the government to instruct the trustee of a regulated superannuation scheme.

The government acknowledged the intention of recommendations 3 and 4 that individuals not be financially disadvantaged by the commencement of policies in the bill. However, the government is concerned that providing for the retrospective effect of these policies may have unintended detrimental effects on individuals. The government considers that the broad desired outcome can be achieved effectively through alternative mechanisms. The government agrees with recommendation 5 that the bill pass the Senate. I also indicate to Senator Murray that the government will not be supporting his amendment. I acknowledge his comments on the overall perspective in relation to that amendment. I can assure him that there is work being done on progressing that, but at this point in time we are not in a position to support the amendment.

Question agreed to.

Bill read a second time.