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senate vote 2020-08-25#3
Edited by
mackay staff
on
2020-10-02 13:04:34
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Title
Bills — Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019; in Committee- Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019 - in Committee - Choice of funds
Description
<p class="speaker">Rex Patrick</p><p>I move my amendment (1) on sheet 8926 revised:</p><p class="italic">(1) Page 2 (after line 12), after clause 3, insert:</p>- The majority voted against [amendments](https://www.openaustralia.org.au/senate/?gid=2020-08-25.36.1) introduced by NSW Senator [Jenny McAllister](https://theyvoteforyou.org.au/people/senate/nsw/jenny_mcallister) (Labor), which means they failed.
- ### What is the main idea of the bill?
- According to the [bills digest](https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/bd/bd1920a/20bd104):
- > *The purpose of the Treasury Laws Amendment (Your Superannuation, Your Choice) Bill 2019 (the Bill) is to amend the Superannuation Guarantee (Administration) Act 1992 (SGAA) to ensure employees under new workplace determinations or enterprise agreements have an opportunity to choose the superannuation fund for their compulsory employer contributions.*
- ### Amendments text
- > *(1) Schedule 1, page 3 (before line 5), before the heading specifying Superannuation Guarantee (Administration) Act 1992, insert:*
- >
- >> *Fair Work Act 2009*
- >>
- >> *1A At the end of section 187*
- >>
- >> *Add:*
- >>
- >> *Requirement relating to restrictions of choice of superannuation fund*
- >>
- >>> *(7) If the agreement includes a restriction on the choice of superannuation fund or funds available to employees, the FWC must be satisfied that the restriction is in the interests of the employees who will be covered by the agreement.*
- >>>
- >>> *(8) For the purposes of considering whether the restriction is in the interests of the employees, the FWC must consider:*
- >>>
- >>>> *(a) the extent to which the employers who will be covered by the agreement have complied, or are likely to comply, with the requirements of the Superannuation Guarantee (Administration) Act 1992; and*
- >>>>
- >>>> *(b) the features of the proposed default superannuation fund or funds, including matters such as insurance; and*
- >>>>
- >>>> *(c) any other relevant matters.*
- >
- > *(2) Schedule 1, item 6, page 4 (lines 3 and 4), omit the item, substitute:*
- >>
- >> *6 Paragraph 32C(6 )( h)*
- >>
- >> *Repeal the paragraph, substitute:*
- >>
- >>> *(h) an enterprise agreement:*
- >>>
- >>>> *(i) made before 1 January 2021; or*
- >>>>
- >>>> *(ii) if the agreement includes a restriction on the choice of superannuation funds—made on or after 1 January 2021.*
- >
- > *(3) Schedule 1, page 4 (after line 16), at the end of the Schedule, add:*
- >
- >> *8 Subsection 32NA(2)*
- >>
- >>> *After "An employer is not required under section 32N to give an employee", insert "or a person who is eligible to become an employee".*
- >>
- >> *9 Paragraph 32NA(2)(a)*
- >>
- >>> *After "the employer is making", insert "or will make".*
- >>
- >> *10 Paragraph 32NA(2)(b)*
- >>
- >>> *After "the contributions are made", insert "or will be made".*
- >>
- >> *11 Subsection 32NA(9)*
- >>
- >>> *After "An employer is not required under section 32N to give an employee", insert "or a person who is eligible to become an employee".*
- >>
- >> *12 Paragraph 32NA(9 )( a)*
- >>
- >>> *After "the employee is", insert "or will become".*
<p class="italic">4 Review of amendments</p><p class="italic">(1) The Australian Prudential Regulation Authority (<i>APRA</i>) must conduct a review into the operation of the amendments made by this Act.</p><p class="italic">(2) Without limiting the matters that APRA may consider when conducting the review, the purpose of the review is to:</p><p class="italic">(a) identify any unintended consequences of the amendments made by this Act on the operation of defined benefits schemes, including the ongoing viability and profitability of defined benefits schemes; and</p><p class="italic">(b) consider whether amendments to the <i>Superannuation Guarantee (Administration) Act 1992</i> or any other Act are necessary to rectify the unintended consequences identified under paragraph (a).</p><p class="italic">(3) In conducting the review, APRA must consult industry stakeholders.</p><p class="italic">(4) The review must be completed before the end of the period of 30 months beginning on the day this Act commences.</p><p class="italic">(5) APRA must give the Minister a written report of the review.</p><p class="italic">(6) The Minister must cause a copy of the report to be tabled in each House of the Parliament within 15 sitting days of that House after the report is given to the Minister.</p><p class="italic">(7) In this section, <i>Minister</i> means the Minister administering the <i>Superannuation Guarantee (Administration) Act 1992</i>.</p><p>This amendment requires the Australian Prudential Regulation Authority to conduct a review into this legislation. The purpose of it, really, is to provide a safety net. It requires the review to look at any unintended consequences of this legislation and, if any unintended consequences are found—and I note that it requires consultation with stakeholders to form that particular view—to make recommendations to the minister as to how to rectify those unintended consequences. The review must be completed within 30 months of this legislation coming into effect. The report must be written and provided to the minister, and the minister must then table the report within 15 days of it being given to the minister.</p> <p class="speaker">Jane Hume</p><p>Thank you, Senator Patrick. The government will support this amendment. The government notes that managing the composition of their membership is an unavoidable operational consideration for any defined benefit scheme and doesn't believe that a change to the proposed bill is required at this time. However, as identified by the Senate committee's final report on this bill, new evidence may well emerge over time, and the government will be agreeing to Senator Patrick's amendment to require APRA to review the status of defined benefit schemes within 30 months to ascertain whether there have been unintended negative consequences.</p> <p class="speaker">Jenny McAllister</p><p>I wish to indicate that Labor also will support the amendment. The committee did hear evidence, from a range of stakeholders who were in a position to know, that the scheme proposed by the government would hurt defined benefit schemes. The small number of witnesses who were in a position to tell us about that were unequivocal in saying that was the case. We believe there will be detrimental effects to defined benefit schemes and we support a review, but the fear, of course, is that it will be too little, too late and that, in fact, the damage will have been done by this needlessly partisan intervention into a perfectly functioning super scheme. Nonetheless, we support the amendment proposed by Senator Patrick.</p> <p class="speaker">Nick McKim</p><p>I rise simply to indicate the Australian Greens' support for this amendment.</p><p>Question agreed to.</p> <p class="speaker">Jenny McAllister</p><p>by leave—I move opposition amendments (1) to (3) on sheet 1000 together:</p><p class="italic">(1) Schedule 1, page 3 (before line 5), before the heading specifying <i>Superannuation Guarantee (Administration) Act 1992</i>, insert:</p><p class="italic"> <i>Fair Work Act 2009 </i></p><p class="italic">1A At the end of section 187</p><p class="italic">Add:</p><p class="italic"> <i>Requirement relating to restrictions of choice of superannuation fund</i></p><p class="italic">(7) If the agreement includes a restriction on the choice of superannuation fund or funds available to employees, the FWC must be satisfied that the restriction is in the interests of the employees who will be covered by the agreement.</p><p class="italic">(8) For the purposes of considering whether the restriction is in the interests of the employees, the FWC must consider:</p><p class="italic">(a) the extent to which the employers who will be covered by the agreement have complied, or are likely to comply, with the requirements of the <i>Superannuation Guarantee (Administration) Act 1992</i>; and</p><p class="italic">(b) the features of the proposed default superannuation fund or funds, including matters such as insurance; and</p><p class="italic">(c) any other relevant matters.</p><p class="italic">(2) Schedule 1, item 6, page 4 (lines 3 and 4), omit the item, substitute:</p><p class="italic">6 Paragraph 32C(6 )( h)</p><p class="italic">Repeal the paragraph, substitute:</p><p class="italic">(h) an enterprise agreement:</p><p class="italic">(i) made before 1 January 2021; or</p><p class="italic">(ii) if the agreement includes a restriction on the choice of superannuation funds—made on or after 1 January 2021.</p><p class="italic">(3) Schedule 1, page 4 (after line 16), at the end of the Schedule, add:</p><p class="italic">8 Subsection 32NA(2)</p><p class="italic">After "An employer is not required under section 32N to give an employee", insert "or a person who is eligible to become an employee".</p><p class="italic">9 Paragraph 32NA(2 )( a)</p><p class="italic">After "the employer is making", insert "or will make".</p><p class="italic">10 Paragraph 32NA(2 )( b)</p><p class="italic">After "the contributions are made", insert "or will be made".</p><p class="italic">11 Subsection 32NA(9)</p><p class="italic">After "An employer is not required under section 32N to give an employee", insert "or a person who is eligible to become an employee".</p><p class="italic">12 Paragraph 32NA(9 )( a)</p><p class="italic">After "the employee is", insert "or will become".</p><p>These amendments seek to establish arrangements that will allow workers to retain the choice to bargain for a single fund or set of funds where it is determined by the Fair Work Commission that it is in their interests to do so. This is about protecting choice. This is about protecting the choices made by workers in the context of their workplace, along with their colleagues, and in the context of their union—their choice to collectively determine what is in their best interests.</p><p>The amendments we are considering will ensure that if an enterprise agreement includes a restriction on the choice of superannuation fund or funds available to employees it will go before the Fair Work Commission, and the Fair Work Commission must be satisfied that the restriction is in the interests of the employee who will be covered by the agreement. What this will allow, as was made clear by witnesses who appeared before the Senate inquiry into this legislation, is consideration of key factors that are essential to the proper functioning of our superannuation system. It will allow safeguarding against underpayment and it will allow features which are specific to certain workplaces or industries, which are attached to certain superannuation funds, to be retained. I commend the amendments to the Senate.</p> <p class="speaker">Jane Hume</p><p>The government will be opposing the amendments on sheet 1000. The government can't support an amendment whereby employees' ability to choose the fund that receives their superannuation contributions will continue to be restricted. Allowing choice to be restricted in circumstances approved by the Fair Work Commission fails to acknowledge that each employee has individual financial circumstances which impact on which superannuation fund is most appropriate for them. The key is that employees should have the power to make this decision—not the employer, not the superannuation industry and not the government. Individuals should not have to bear the consequences of holding multiple accounts, including facing multiple fees and multiple insurance premiums.</p><p>We should be clear about what these amendments are actually about. In the committee and previously, the opposition have said that it is about insurance risk. But the ACTU advised my office during just the last sitting period that this reform actually makes very little difference to insurance arrangements. It's really about providing assistance to individual funds, which are, let's face it, now multibillion dollar companies that Labor sees fit to prop up and shield from competition by removing an employee's right to choose their fund. You can't imagine these circumstances in any other part of the financial services industry. Imagine if any other financial services company unaffiliated with the labour movement approached Labor and begged them to be propped up by locking in customers and denying them choice. Imagine if a telecommunications company or an energy company came begging: 'Please prevent a customer from switching to another provider.' They'd be laughed out of the room and rightly pilloried in the media for doing so. The fact that Labor thinks it's okay for superannuation funds to do so, I think, is telling indeed. It speaks volumes about what is wrong with this industry—this complacency and entitlement. Make no mistake, this amendment is all about funds and it's not all about the members.</p><p>Furthermore, the operation of this amendment is ambiguous. It's not at all clear whether the choice of fund restrictions would apply to employers with compliance concerns or employers that fail to meet their SG obligations. If they did impose restrictions in these circumstances, the result is that employees would be stripped of their right to choose because of their employer's noncompliance. In other words, Labor's amendment would be punishing employees because their employers had failed to pay their superannuation. In any case, the amendment doesn't address the SG noncompliance. The government take SG obligations very seriously and believe that noncompliance is best dealt with through our targeted reforms to improve the overall integrity of the superannuation guarantee.</p> <p class="speaker">David Fawcett</p><p>The question is that opposition amendments (1) to (3) on sheet 1000 be agreed to.</p>
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