Debate resumed from 18th November.

The Hon. J. W. SHAW [3.22]: This 48-page bill contains a large number of amendments to the various public sector superannuation schemes, some of which are highly technical in their nature. I understand the Attorney General and Minister for Industrial Relations did not arrange to discuss the details of this bill with the Labor Council of New South Wales or relevant public sector unions before presenting it to the Parliament. In spite of the fact that most of the proposed changes have apparently been initiated at the State Authorities Superannuation Board, which is the board of trustees for the State Authorities Superannuation Scheme, the proper course would have been for the draft bill to have been discussed with the relevant public sector union representatives at the Labor Council of New South Wales prior to introducing the bill into the House. In a sensible approach to amending such an important condition of employment as superannuation, the procedure would be made a lot easier for the Parliament if it were known that the unions who represent the majority of fund members had agreed to the changes. In view of the three recent bills dealing with superannuation and, in particular, the proposal which is currently before another place to refer certain matters to a parliamentary committee, it can reasonably be questioned why another separate bill is brought into the House at this stage.

The Opposition appreciates that technical changes to the schemes are sometimes essential, but it can be observed that there were some technical changes proposed in at least one of the other bills submitted to this Parliament and which now may be held over until February 1993 pending revision by a parliamentary committee. I think it can legitimately be asked why the Minister did not put all of the technical and non-contentious amendments into one bill, so that they could be dealt with more efficiently by the Parliament. It is clear that the State Authorities Superannuation (Scheme Closure) Bill and the First State Superannuation Bill should have been treated as cognate legislation, and the technical changes put in a separate bill. Proposed section 46AD(3) provides that any surplus after meeting any liability vested in the Crown by this section is vested in the Crown. The Opposition believes that this provision should be reviewed next year, when Commonwealth legislation is expected to introduce laws relating to prudential standards for superannuation schemes, particularly in relation to the ownership of surpluses.

The transfer of a surplus might appear simple where a public sector organisation is wholly privatised, but the situation is more complex where only part of an organisation is privatised. The Government's proposal to revise the definition of salary in the various schemes is commendable, as it is to be expected that there will be a development of non-money packages within the public sector. There should be no rorting of the system through the flexibility which this method of payment can produce. The remaining amendments are mostly of a machinery nature, but it is worth noting that the Government has recognised the need to pay interest on reserve unit accounts in the State Superannuation Fund to members who withdraw from that system within 10 years. A number of representations have been received from fund members on this issue and the Government is commended for correcting the problem. The Opposition supports the bill.

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The Hon. S. B. MUTCH [3.26]: I support the Superannuation Legislation (Miscellaneous Amendments) Bill. The bill makes important changes relating to two very successful areas of Government policy: privatisation, and enterprise agreements. The bill quite clearly sets down rules that will apply in relation to any proposed privatisation. To date various arrangements have been made with respect to superannuation. This bill sets out a cogent and workable policy for transfer of superannuation for people who transfer from the public sector to the private sector. It is clearly inappropriate for a person who transfers to the private sector to continue to have access to or benefit from a Government funded scheme, and this bill provides for portability and preserves the accrued benefits owing to people who move out of the public sector. No cash benefits will be available from the process of transfer itself. In the event of privatisation, the overall and outstanding liability or surplus in the superannuation benefits payable to people employed by an organisation that is privatised will be ascertained and will be a factor in any proposed sale of a government trading enterprise. With respect to enterprise agreements, the bill will amend the definition of salary in relation to members of the senior executive service. Because of the nature of the new agreements that have been entered with members of the senior executive service, who may opt for a cash component and for part of their salary package to relate to cars, and so on, the bill will enable certain benefits to be taken instead of salary; they will form part of the package on which contributions are made and upon which superannuation will ultimately accrue. In general, those are the two basic areas covered by the bill. I support the bill.

The Hon. ELISABETH KIRKBY [3.30]: The Australian Democrats support the Superannuation Legislation (Miscellaneous Amendments) Bill 1992. The changes made in this bill are to ensure that public sector superannuation schemes are in line with the Government's policy on privatisation and enterprise bargaining. So far as privatisation is concerned, public superannuation cover will cease once an employee has become part of the private sector, because it is believed that the Government should not underwrite benefits for people who are no longer employees. That is part of a wider problem with privatisation. An old public servant - in terms of service and not in years - will definitely lose out in this conversion. However, the Government believes that it is inappropriate for it to provide superannuation cover for new private sector employees. So the bill will standardise the procedures for transferring employees' superannuation when an enterprise is sold to private interests. Employee benefits under the existing public sector scheme will be preserved. There will be the opportunity to transfer accrued benefits to a new fund, which will be established by the new employer. No cash benefit will be available simply because of the transfer. Outstanding surplus or liability in the public sector superannuation scheme will be determined on actuarial advice in consultation with Treasury case by case. The surplus or liability will be transferred to the Crown and will be a factor in the sale of the enterprise.

The second reason the Government has introduced this legislation has to do with the introduction of enterprise agreements. Enterprise agreements involve a broad concept of remuneration. That is out of line with the definition of salary for contributions and benefits under superannuation Acts. Therefore, the definition of salary will be expanded to include the cost of certain employment benefits that are taken on a salary sacrifice basis. The benefits which may be superannuated will be those approved by the Minister, with the concurrence of the Treasurer. The method of setting the cost of any benefit will be determined as part of the process of enterprise negotiation. In regard to deficiencies in existing provisions governing salary which can be superannuated by the senior executive service, under the senior executive service scheme officers can nominate a certain proportion of their salary to be used for calculating superannuation, if an amount greater than the cash salary is desired to be superannuated. Employees must fund their
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chosen level of benefit through the employer oncost amount. It is necessary to prevent increases in the nomination of superannuable salary that outstrip increases in the package as a whole. However, that rule can be circumvented, since under current legislation the cash component of the total remuneration package is automatically included in the superannuable salary.

Theoretically, therefore, an employee could increase the cash component of his or her package just before retirement and thereby maximise his or her benefit without having funded it properly. From now on a total superannuable salary amount will be nominated, and this will be able to be increased only in proportion with any increase in the overall package. It is planned also to include superannuation contributions at least equal to the superannuation guarantee charge in the remuneration package of senior executive service appointees who are not on contract. The rationale for this is that the employer oncost for superannuation for senior executive service appointees was to be met from superannuation packages. Obviously the bill has the support of the Opposition, as was said by the Hon. J. W. Shaw, even though the Labor Council was not consulted prior to its being drafted. Therefore the bill will have bipartisan support from all honourable members. The Australian Democrats certainly do not oppose it.

Reverend the Hon. F. J. NILE [3.34]: I wish to put on record the support of Call to Australia for the Superannuation Legislation (Miscellaneous Amendments) Bill. The bill will effect a number of administrative changes to the closed public sector superannuation schemes. The proposed legislation will allow in the future, in a more clear and precise way, maximum fairness and efficiency in the administration of the various schemes. The bill will insert in the various superannuation Acts provisions that will bring the legislation into line with the existing policy of the coalition Government on privatisation and reflect in the schemes major changes which have occurred in the public sector in the area of enterprise agreements. We have put on record our wholehearted support for enterprise agreements. As the House is aware, we supported the industrial legislation which made it possible for them to be implemented in the State.

The DEPUTY-PRESIDENT (The Hon. D. J. Gay): Order! There is far too much audible conversation in the Chamber.

Reverend the Hon. F. J. NILE: I am pleased that legislation was implemented in a far more harmonious atmosphere than occurred in Victoria. This bill will make provision to remedy a deficiency in current legislation governing superannuable salary applicable to senior executive service appointees. Other minor changes will make the various funds operate more fairly and efficiently. For those reasons we are pleased to support the legislation.

The Hon. VIRGINIA CHADWICK (Minister for Education and Youth Affairs, and Minister for Employment and Training) [3.36], in reply: I thank all honourable members for their contributions. As was noted by the Hon. J. W. Shaw, the amendments are highly technical in nature. Though there was support for the legislation, the honourable member commented on what he regarded as a failure by the Government to adequately consult. I say simply that these proposals were largely initiated by the State Superannuation Board. That board has equal representation of employee and employer groups. Though I understand what was put by the honourable member, given the structure of the board, the failing to which he referred is not such a great sin. That having been said, I commend the bill to the House.

Motion agreed to.

Bill read a second time and passed through remaining stages.

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