The majority voted in favour of a motion to read the bill for a second time. In other words, they voted to agree with the bill's main idea, which means they can now discuss it in more detail.

What is the bill's main idea?

In her second reading speech, ACT Senator Katy Gallagher (Labor) explained that the bill:

repeals paragraph 5(e) of the Superannuation (Salary) Regulations with effect from 1 July 1986 and provides that the effect of the repeal does not apply to individuals where limited circumstances are satisfied.

The changes in the bill are only relevant to current and former Commonwealth public sector civilian employees.

The default superannuation salary of a member of the Commonwealth Superannuation Scheme established under the Superannuation Act 1976 includes the value of any allowance that, under the regulations, is to be treated as salary under the act.

Prior to 1 March 2022 paragraph 5(e) of the regulations provided that the rent-free use of housing made available to a person by reason that they held a particular office or performed particular duties or work was an allowance that was to be treated as salary for the purpose of the act.

The value of rent-free housing as per paragraph 5(e) of the regulations flowed through to the default superannuation salary of members of the Public Sector Superannuation Scheme, and members of the Public Sector Superannuation Accumulation Plan and certain members of non-Commonwealth choice funds.

At the time the regulations were made in 1978, an employee's assessable income was taken to include the value of rent-free housing. With the introduction of the fringe benefits tax regime in 1986, the tax burden in relation to rent-free housing shifted from the employee to employer.

Following this change in 1986 the Commonwealth has typically not treated rent-free housing as forming part of superannuation salary and generally neither employers nor employees have made superannuation contributions that have taken into account the value of rent-free housing.

A recent case before the Federal Court has exposed differing views on the operation and scope of former paragraph 5(e) of the regulations. If the interpretation as argued by the applicants was accepted, it would have significant financial impacts for the Commonwealth and inequitable financial outcomes for differing cohorts of individuals.

Some individuals would receive an unexpected windfall increase in their superannuation benefits while others could incur potentially large unexpected debts for unpaid member contributions with little or no corresponding increase in their superannuation benefit.

Votes Passed by a modest majority

Nobody rebelled against their party.

Party Votes
Australian Greens (100% turnout) 0 Yes 12 No
Penny Allman-Payne Queensland No
Dorinda Cox WA No
Mehreen Faruqi NSW No
Sarah Hanson-Young SA No
Nick McKim Tasmania No
Barbara Pocock SA No
Janet Rice Victoria No
David Shoebridge NSW No
Jordon Steele-John WA No
Lidia Thorpe Victoria No
Larissa Waters Queensland No
Peter Whish-Wilson Tasmania No
Australian Labor Party (84% turnout) 21 Yes 0 No
Catryna Bilyk Tasmania Yes
Carol Brown Tasmania Yes
Anthony Chisholm Queensland Yes
Raff Ciccone Victoria Yes
Patrick Dodson WA Yes
Katy Gallagher ACT Yes
Nita Green Queensland Yes
Karen Grogan SA Yes
Jenny McAllister NSW Yes
Malarndirri McCarthy NT Yes
Deborah O'Neill NSW Yes
Fatima Payman WA Yes
Helen Polley Tasmania Yes
Louise Pratt WA Yes
Tony Sheldon NSW Yes
Marielle Smith SA Yes
Glenn Sterle WA Yes
Jana Stewart Victoria Yes
Anne Urquhart Tasmania Yes
Jess Walsh Victoria Yes
Linda White Victoria Yes
Tim Ayres NSW Absent
Don Farrell SA Absent
Murray Watt Queensland Absent
Penny Wong SA Absent
Jacinta Nampijinpa Price NT Country Liberal Party Yes
Andrew McLachlan SA Deputy President Yes
David Pocock ACT Independent Yes
Jacqui Lambie Network (0% turnout) Absent
Jacqui Lambie Tasmania Absent
Tammy Tyrrell Tasmania Absent
Liberal National Party (100% turnout) 2 Yes 0 No
Matthew Canavan Queensland Yes
James McGrath Queensland Yes
Liberal Party (46% turnout) 11 Yes 0 No
Alex Antic SA Yes
Wendy Askew Tasmania Yes
Andrew Bragg NSW Yes
Richard Colbeck Tasmania Yes
David Fawcett SA Yes
Sarah Henderson Victoria Yes
Jane Hume Victoria Yes
Jim Molan NSW Yes
Gerard Rennick Queensland Yes
Paul Scarr Queensland Yes
Dean Smith WA Yes
Simon Birmingham SA Absent
Slade Brockman WA Absent
Michaelia Cash WA Absent
Claire Chandler Tasmania Absent
Jonathon Duniam Tasmania Absent
Hollie Hughes NSW Absent
Kerrynne Liddle SA Absent
Matt O'Sullivan WA Absent
James Paterson Victoria Absent
Marise Payne NSW Absent
Linda Reynolds WA Absent
Anne Ruston SA Absent
David Van Victoria Absent
National Party (75% turnout) 3 Yes 0 No
Ross Cadell NSW Yes
Perin Davey NSW Yes
Bridget McKenzie Victoria Yes
Susan McDonald Queensland Absent
Pauline Hanson's One Nation Party (0% turnout) Absent
Pauline Hanson Queensland Absent
Malcolm Roberts Queensland Absent
Sue Lines WA President Absent
Ralph Babet Victoria United Australia Party Absent
Totals (68% turnout) 40 Yes – 12 No