Barnaby Joyce (Queensland, National Party, Shadow Minister for Finance and Debt Reduction) Share this | Hansard source

I rise to speak on the Superannuation Industry (Supervision) Amendment Bill 2010. This bill makes some minor changes to the ability of superannuation fund trustees to purchase assets through limited recourse loans. The purpose of this bill is to resolve uncertainty with the application of the borrowing exemption allowing for limited recourse loans, which reduces the risks to superannuation funds investing through this type of borrowing. Section 67 of the Superannuation Industry (Supervision) Act generally prevents a trustee of a regulated superannuation fund from borrowing money. There are exceptions in the bill, such as if there is a temporary need for liquid funds to settle outstanding security transactions.

The coalition does not support risks to superannuation balances unless the investor has assumed that risk with due diligence. Superannuation investors should not have to worry about risks that are beyond their control. This is one of the reasons the coalition opposes Labor’s great big tax on mining, which follows up their great big tax on everything, which has now been book-ended by their great big change in leadership. This is the main reason the coalition supports the amendments to the Superannuation Industry (Supervision) Act.

The bill makes some important amendments and clarification to the exemption in the act allowing superannuation trustees to access limited recourse loans for the purposes of producing or purchasing investment assets. These amendments will limit loans to a single asset or asset class. This will limit the risk to one asset and prevent a member’s superannuation balance from being accessed in the event of a default on a loan. The amendments will also prevent personal guarantees relating to superannuation assets from being used as security against the recourse loan. This protects the balance of the investor’s superannuation account and provides that investor and the lender with certainty as to which asset is attached to the risk involved. The coalition support these principles and we support the legislation. I commend the bill to the Senate.