Nick Xenophon (SA, Independent) Share this | Hansard source

I endorse wholeheartedly Senator Milne’s comments in relation to managed investment schemes. I note that Senator Milne will be moving an amendment to the Tax Laws Amendment (2010 Measures No. 1) Bill 2010, which I will be supporting, in relation to managed investment schemes. If I could add to one of the criticisms that Senator Milne made about these schemes, not only do they affect issues around wood products, agricultural use and land use, they also affect water. They distort the water market. They act to intercept water that otherwise would be going to river systems, which completely distorts both the use of agricultural land and the inflow of water into our river systems. So I will be supporting that amendment strongly, and hopefully the government will see the logic of clamping down on these schemes.

I should also foreshadow that I will be moving, in the same vein, in a sense, as Senator Milne’s amendment, an amendment to formulate a test, to be known as a ‘public benefit test’, against the aims and activities of entities, whether they be religions or charities, to receive tax-free status. My colleagues know of my position in relation to the Church of Scientology and of my moves to have an inquiry into it. We should go down the path of having a public benefit test, and this bill is as appropriate a vehicle as any other tax amendment bill to deal with these matters.

In relation to this particular bill, ask any small business owner and they will tell you that one of their biggest burdens is red tape, with administrative costs on par. It is time consuming, frustrating and confusing, and anything that reduces time and money spent on administrative duties so that they can focus on the business itself is ideal. Small business owners can have anywhere from one to 20 employees, and it is more than likely that each of these employees has a different superannuation fund, so many small businesses opt to use a clearing house service, where the provider receives a total deposit for all its employee super payments from the employer and deposits the relevant moneys and funds accordingly. The establishment of a government-run optional superannuation clearing house seems a logical step which will, most importantly, enable employers to extinguish their superannuation obligations with a single payment to the approved clearing house. This means that, once the employer has made their payment to the clearing house fund, they will not be liable for a superannuation guarantee in instances where the superannuation is, for whatever reason, not paid to the employee’s fund.

I understand the concerns of the opposition and of some stakeholders in terms of the allocation of this project to Medicare and the effect that it has on competition in the sector, and I note Senator Cash’s impassioned speech about the promises that were made at the last election, but it seems to me that the issue is about the implementation of this. The issue is about facilitating this for employers, and the clearing house is the way to go. I note that the Association of Superannuation Funds of Australia says that this measure was:

The most significant first step in lowering administration costs for employers ...

and therefore it is to be welcomed.

I will speak to the opposition’s amendments when they are moved, during the committee stage. It is important that we consider the risks involved in this going to a private fund. Given the time constraints, I think it is more appropriate to ventilate the issues in the context of amendments that will be moved by the opposition in the committee stage. I support the second-reading stage of this bill. I will listen to the arguments in relation to the opposition’s amendments; but, from what I have seen so far, this seems to be a sensible way forward in dealing with the issue. Administratively, it seems to be the cleanest and most effective way of relieving the burden on small businesses of their superannuation obligations where there are multiple funds involved.