STATUTES AMENDMENT (TRANSITION TO RETIREMENT—STATE SUPERANNUATION) BILL

Committee Stage

In committee (resumed on motion).

(Continued from page 1022.)

Clause 7.

The Hon. R.I. LUCAS: To summarise the brief contribution I made before the lunch break for the one member who was not here at that time, without going through all the detail, the amendment that has been moved is a test amendment for the remaining two pages of amendments I am about to move (that is, they will be consequential on the first amendment). Therefore, I intend to flag all the issues that relate to it. This issue is being pursued by the South Australian Superannuation Federation, the SA Superannuants and the PSA. In a moment, I intend to read part of a letter I received on 11 October from Bill Hignett, the President of the South Australian Government Superannuation Federation. In summary, those organisations support the thrust of the amendment that is being considered by the Legislative Council at the moment. I repeat that it will be at no cost to the taxpayers of South Australia; it relates only to the Triple S scheme. It will provide an additional option for members who do not want to go into part-time work prior to retirement after the age of 55 to access a portion of their accumulated benefit, if they so choose.

I am told that the average accumulated benefit of public servants in the Triple S scheme is $50,000. If that is the case, they will transfer the $50,000 into an approved arrangement, and they would be able to take only 10 per cent of that ($5,000) per year for whatever purpose they are seeking. I made the point prior to the break—and I seek confirmation from the minister—that my understanding is that virtually all the participants in the Triple S scheme have retired by the age of 60. The peak of retirement at the moment is around the age of 55, and the second peak is around the age of 57. Significant numbers of public servants are retiring in that age group 55 to 57, so we are not talking about large numbers of people staying around in the public sector beyond the age of 60, based on both past and recent experience.

I think the final point I made before the lunch break was that, in my view, there are very significant taxation reasons why a lot of people will not access this particular option anyway—or, indeed, the option the government is looking at. They may well want to keep as much of their benefit until after age 60, at which time there would be a very significant commonwealth tax benefit in relation to accessing their superannuation. I know there are swings and roundabouts and that different circumstances apply to different people and different taxation arrangements. That might mean, in certain cases, that would apply to some people under the age of 60, but I am speaking in general terms.

In conclusion, I will read part of the letter sent to me on 11 October by Mr Bill Hignett, the President of the South Australian Government Superannuation Federation. I understand that there was a meeting of the executive last Wednesday. The letter states:

Dear Mr Lucas

Re: Statutes Amendment (Transition to Retirement—State Superannuation) Bill

You will be aware that the South Australian Government Superannuation Federation has expressed concerns about the Statues Amendment (Transition to Retirement—State Superannuation) Bill, 2007. The Federation's most urgent concern is that the Bill places unnecessary restrictions on members of the Southern State Superannuation (SSS) scheme who might wish to use transition to retirement arrangements. In particular it requires SSS members who have reached preservation age to reduce their level of employment in order to access any part of their accrued benefit. This is not acceptable to the Federation which is committed to seeing SSS members have full access to their accrued benefit without a requirement to reduce their level of employment. The Government has acknowledged that this can be done without increasing its superannuation costs.

Knowing that SSS members can be given full access to their super at no cost to the Government the Federation has been interested to read in Hansard the reasons which the Government has for its intention to make SSS members move to a reduced level of employment at or after preservation age in order to become eligible to obtain access to just part of their accrued SSS benefit under transition to retirement provisions.

The Government's reasons as given in Hansard seem very weak. They have the Government praising its own proposed arrangements when no other State Government has sought to apply the same arrangements, and dismissing the alternative which all the other State Governments have accepted. No other State Government, and, to the best of our knowledge, no superannuation fund trustee, supports the South Australian Government's claim that a legitimate transition to retirement arrangement requires a person belonging to a simple accumulation scheme, like the SSS, to reduce his/her level of employment in order to obtain access to just part of his/her accrued benefit. The Federation wants to see SSS members enjoying the same transition to retirement options which nearly everyone else in similar schemes across Australia already has. This includes the option of full access while remaining in full-time employment.

The Government, and those advising it in superannuation matters, appear to see the world as a place where everyone, at age 55, has accrued sufficient superannuation to allow them to reduce their income and enjoy additional leisure time. In the real world there are very few people in that position. In the real world many people in Australia today, at age 55, face a difficult shift to retirement because of limited superannuation savings and a limited capacity to enhance those savings due to their incomes being quite modest. People in this position need to make the most of every opportunity they have to enhance their superannuation savings. In the Federation's opinion the new rules for superannuation access at preservation age represent the best opportunity that people on modest incomes and belonging to simple accumulation schemes like the SSS have ever had to enhance their retirement savings.

The Government's position characterises an effective strategy of saving for retirement that such people might use as merely 'tax minimisation' when this strategy is being recommended by the nation's most highly respected and conservative financial institutions. It is a strategy which the Federal Taxation Commissioner has accepted as legitimate and which the Federal Government must expect to be applied widely. The rules allowing use of this strategy had bi-partisan support in the Federal Parliament.

The Government seems to think it would be untenable for SSS members to have full access to their superannuation. If pension scheme members do not also have full access to their (quite different) benefit. In response to this we ask all members of either of the Parliamentary Superannuation Scheme's PSS1 or PSS2 divisions to consider whether they would regard it as unfair for PSS3 members to be given better access to their benefit than they have. We doubt that any PSS1 or PSS2 members would feel this way.

Interposing there, I did raise the issue in relation to the parliamentary scheme and I think the government did respond that it was not contemplating any changes. The letter continues:

Providing members of relatively costly pension schemes such as the PSS1, PSS2 and State Pension Schemes early access to the pension while they continue to work full-time would further increase the cost of the schemes, but this is not the case for simple accumulation schemes like the SSS. Early access has no effect on the cost to employers of such schemes regardless of a person's work status. No fair-minded person, knowing this and belonging to a pension scheme which involves employer support well above the standard 9 per cent of salary, would begrudge those receiving only the minimum 9 per cent support better access to a smaller benefit. The Federation requests you to consider proposing and/or supporting an amendment or amendments to the Statutes Amendment (Transition to Retirement—State Superannuation) Bill, 2007 such as the following:

It then proceeds to outline a structure of a particular amendment, which in my judgment and in the judgment of others, is covered by the amendment which I have moved in this chamber and a copy of which I have provided to the federation, to the PSA and to SA Superannuants. In conclusion, the federation says:

The federation is aware that this matter is listed on the Notice Paper under Orders of the Day in the Legislative Council on Tuesday 16 October. We are seeking your support for this amendment.

Yours sincerely,

Bill Hignett, President.

In summary, that is the proposition.

I ask the minister to comment on my understanding of the peaks in terms of retirement within the Triple S scheme. I will not repeat them; I think he is aware of the claims that I have made and my understanding in relation to that.

The Hon. P. HOLLOWAY: The amendment which the Hon. Mr Lucas has moved, seeking to insert a new section 30B in the Southern State Superannuation Act, which established the Triple S accumulation scheme, only impacts on the Triple S scheme, which is a non-defined benefits scheme. If passed, the amendment will enable all employees who are members of the Triple S scheme to access their accrued superannuation benefit without any change in their existing employment arrangements after attaining the preservation age. In short, they really have nothing to do with transition to retirement. The amendment will mean that employees who are currently aged over 55 years will be able to access their accrued superannuation benefit in the Triple S scheme whilst continuing to work full time for the government.

Under the amendment, employees will be able to access their accrued superannuation without any evidence of their genuinely transitioning to retirement. In fact, they will be able to access their superannuation even if they are not transitioning to retirement. Whilst an option to access superannuation benefit before full retirement or even a reduction in the level of employment is permissible under commonwealth law, it does cause one to question the wisdom of the commonwealth policy.

The concern must surely be that the policy will simply encourage many employees to start eroding their accrued superannuation benefits before they start any form of genuine transition to retirement. If passed, the amendments will not result in any increased cost to the state government, because the proposal is limited to Triple S only, although, to the extent that people are drawing down their super, I think that at some stage in the future there is likely to be an impact in higher levels of pension. So, in our capacity as federal taxpayers it may have a cost but, in terms of the state, it will not have a cost: I concede that.

Whilst under the amendment members in the Triple S scheme will be able to access their accrued superannuation on reaching the preservation age, members will still be limited to taking the accessible superannuation in the form of an income stream, a non-committable allocated pension. The ability to have a lump sum will not be permitted in accordance with the commonwealth standards. The government's view is that the amendment should be opposed on the grounds that the government's package of proposals before the parliament is about only allowing access to accrued superannuation if those persons show evidence of a genuine transition to retirement. An employee can only show evidence of their genuinely transitioning to retirement by moving to a less responsible job or having a reduction in their level of employment.

When the changes to superannuation were introduced by the Federal Labor government back in the 1980s, clearly, the philosophy behind that was to recognise that the Australian population was ageing and to encourage people to provide for their own retirement. I was at a luncheon earlier this year and a prominent demographer from the University of Tasmania made the point that, I think in her state of Tasmania, in 2009 the number of people leaving the workforce would exceed those entering. In our state that will happen in, I think, 2011, followed by other states soon after. So, when our Prime Minister campaigns during the election campaign that he is going to cure employment, it is a pretty easy thing to do when the number of people who are leaving the workforce will start to exceed those who are entering it.

Who could not cure unemployment? This is the first time in centuries that that demographic phenomena will hit our community, and that is why we need a superannuation scheme to encourage people to stay in the workforce to address those issues. We are now almost at the point where those demographics lock in. Paul Keating as treasurer in the 1980s extended the superannuation scheme and there have been a number of changes since, but the purpose of that was to provide self provision for retirement. If one has access to superannuation at 35 years, regardless of whether one is transitioning to retirement, without it being aimed at encouraging people to stay in the workforce, surely the outcome will be that ultimately there will be a greater burden on the taxpayers of this country through the pension and other schemes, which was the whole purpose of introducing superannuation in the first place.

Philosophically I am happy with the position that we oppose the amendment on the basis that the Labor Party has consistently tried to improve the level of self provision for retirement within this country, and the measures we have introduced have been consistent with that. Faced with a fist full of dollars, we know which policy tends to win out, but ultimately the question is raised that, if we are facing this demographic issue where people will be leaving the workforce faster than those coming in, who will pay all the pensions in future? We know there is under-provisioning for retirement through our superannuation schemes. I suggest that this amendment can only serve to make that worse.

The Hon. Rob Lucas asked for confirmation on a number of issues. He asked questions in relation to the average benefit in the Triple S scheme. The median balance in the Triple S scheme for persons aged over 55 years is $59,000, and 90 per cent of persons aged over 55 years have balances below $160,000. The present experience gained over the past five to 10 years indicates that 70 per cent of people aged 55 will be fully retired by aged 60 years. Clearly there will be a huge impact on our society. We are already getting questions in this parliament about a shortage of people. We are reading today that the shortage of pilots is affecting country areas.

The demographic changes taking place in this country will be enormous. We can easily solve unemployment—that will not be a problem at all. The dilemma is how we will find enough doctors, pilots, nurses, teachers and mining engineers, which will be a far greater challenge. Clearly superannuation is one way of trying to encourage people to remain in the workforce. It is certainly not a panacea to that huge demographic issue, but it can help.

The other information we have is that 15 per cent of employees in the state pension and state lump sum schemes aged over 50—that is, 1,300 employees—are senior employees on packages of over $100,000. This represents a huge loss of valuable skills and corporate knowledge if 70 per cent of those employees retire before they reach age 60, so we can see the issue we are facing. The government will oppose the amendment on that basis. It is a philosophical issue. There are two issues. We believe the bill is about transition to employment. Whether you give employees their full lump sum at 55 years is not about transition to retirement but is a different issue. Philosophically the Australian Labor Party has been endeavouring over two or three decades to ensure that people are better prepared for retirement and that the massive fiscal burden of years to come can be addressed, as well as the loss of skills, which is what this bill is all about.

For those reasons we will be opposing the amendment. We do concede that it is legal under commonwealth law. It does beg the question about what a future commonwealth government would do and whether the changes are ultimately sustainable financially, but that is another issue. As confined to the Triple S scheme it will not cost the state taxpayers, although it may cost us as federal taxpayers.

The Hon. R.I. LUCAS: In relation to those people within the Triple S scheme, is it correct that 90 per cent or more of Triple S scheme members will have retired by the age of 60?

The Hon. P. HOLLOWAY: I will just repeat the information. Experience gained over the past five to 10 years indicates that overall 70 per cent of people at age 55 will be fully retired by age 60.

The Hon. R.I. LUCAS: Do you have advice in relation to the Triple S scheme?

The Hon. P. HOLLOWAY: My advice is that it is 90 per cent; so it is 70 per cent of all people and 90 per cent of Triple S scheme members.

The Hon. R.I. LUCAS: In relation to the amendment, we are talking about the Triple S scheme. The point I was making earlier is that over 90 per cent of Triple S scheme members would retire by age 60. Is it correct that in relation to the Triple S scheme the peak in retirements in the public sector at present is around age 55 with another peak at around 57?

The Hon. P. HOLLOWAY: That is correct.

The Hon. R.I. LUCAS: The minister has raised the issue of long-term impacts if the amendment is passed. In my second reading contribution I placed on the record advice from financial advisers such as Glenn Todman and George Mileski (a financial planner from Mercer Wealth Solutions) in relation to the superannuation/tax arrangements for people and the benefits as a result of most recent commonwealth government changes. In relation to the sorts of scenarios I pointed out in my second reading contribution—which his advisers would have seen—if this amendment passes, is it possible for public servants to structure their superannuation and tax position so that they can see a significant financial benefit from having this particular option, should they choose to go down the path that Mr Todman, Mr Mileski and other financial planners have talked about?

The Hon. P. HOLLOWAY: It may be true in theory that through restructuring their tax people do get that benefit but, if most of them are going before age 60 in any case, it may be that the theory is not realised.

The Hon. R.I. LUCAS: It is a complicated superannuation/tax arrangement, but the bottom line (which the minister has just confirmed) is that Mr Todman, Mr Mileski and others have highlighted a complicated set of tax and superannuation arrangements which can provide benefits for public servants who may want to structure financial and taxation arrangements in a certain way. I acknowledge the point the minister has talked about and it may be an incentive to stay longer than age 60 in the public sector, if they have the capacity to structure their financial arrangements so that there is a benefit to them. Whilst I acknowledge the potential argument that the minister is raising that some people may end up spending the money in the short term on a range of things, it is possible (as has been indicated) that a number of people would structure their financial and superannuation arrangements at a net benefit to them and at no cost to taxpayers.

There may be some cost to the federal income tax arrangements but, if we are looking at who might have the capacity to absorb a financial hit, federal income tax collection is probably best positioned to be able to sustain a potential hit. It may well have the benefit of encouraging some of these people to stay on in the public sector for longer because they are able to extract some financial benefit from the sorts of options that will be provided if this amendment is passed.

The Hon. P. HOLLOWAY: The only point I would make in relation to that is that the great bulk of members of the Triple S scheme—those on salaries of $50,000 or less—are much less likely to have the cash available to be able to restructure their schemes to draw benefits. Those who are most likely to benefit from such tax arrangements that the Hon. Rob Lucas was talking about are more likely to be those who already have much higher levels of superannuation, anyway. The problem is with the lower paid workforce, for whom it will be very difficult to be able to gain the benefits of those sorts of arrangements; they obviously have less capacity to pump that extra money into superannuation to receive the benefits from it.

The Hon. M. PARNELL: I suppose one of the great dilemmas of life is that none of us knows the precise date of our demise, and on retirement we try to err on the side of caution and make sure that we have enough put aside. I have listened very carefully to what the minister has been saying about the demographics and, in fact, it is an issue that arises in lots of debates. The traditional pyramid, with a broad base of young people at the bottom and a few old people at the top, is becoming distorted. At a conference I attended recently I saw the transition of the pyramid into a shape that strongly resembled a coffin: the peak of the pyramid was knocked off with older people and there was this bulge of baby boomers coming through. It raises the question, with an older population and more people retired, as to who will pay for the pensions in the future. There has been talk, in connection with the election campaign and outside, about people working longer and that being a necessity for our society if we are to properly look after each other.

One of the questions, I guess, will be whether 55 year olds who stay in employment will waste the superannuation that they access or whether they will invest it wisely. Will they genuinely apply it to their own future? It is a difficult question to answer. The whole rationale of the compulsory superannuation scheme is that people needed not only to be encouraged but also forced to save for their own retirement and that, effectively, has happened through superannuation, which is a trade-off, I suppose, for wage increases; we receive some of our pay in the form of compulsory savings. I am a little nervous about the federal income tax implications. Whilst I understand that there are no direct implications with respect to the state, people may be able to structure their affairs so as to pay less federal income tax. If that is the case, it may well be that the federal tax regime needs to deal with that.

I have before me the letter of the South Australian Government Superannuation Federation, which has been read out at some length, in which the federation says that it wants to see Triple S members enjoying the same transition to retirement options that nearly everyone else in similar schemes across Australia already has, and this includes the option of full access while remaining in full-time employment. It would seem to me that, if there are federal taxation implications, they will need to be dealt with in relation to other superannuation schemes that already provide the types of entitlements that the amendments of the Hon. Rob Lucas seek to introduce into this legislation.

On the question of equity across comparable super schemes, I am inclined to support the amendment. I have received quite a large amount of correspondence from organisations and individuals urging support for such an amendment. However, I would pose a question of the mover, which relates to the technical side of the amendment. In the South Australian Government Superannuation Federation letter (which I assume was to all members of parliament), its preferred model of amendment was to delete existing section 30A and replace it with another section 30A. However, I note that the honourable member's amendment leaves 30A as it is and inserts a new section 30B. My question of the mover is: can he assure us that both the intent and effect of his amendment are the same as requested by the South Australian Government Superannuation Federation?

The Hon. R.I. LUCAS: That is why, in my phrasing, I talked about my amendment picking up the essential elements or thrust of what was being sought by this group. The answer to your question is: yes, that is my advice. However, the reason for continuing to retain the two—30A and 30B—is, as the minister pointed out, that the government's clause is headed 'Transition to retirement', whereas mine is 'Early access to superannuation benefits'. I think the technical point the minister made on behalf of the government is that, while it can be argued that mine is a transition to retirement, in essence it may not be; it is early access to superannuation benefits. I expect in many cases that will be a form of transition to retirement but, to be fair, the minister's point is reasonably accurate—that is, there are two essential groups.

One group consists of those catered for by the government (which is transition to retirement), which is characterised by a decision to move to part-time work and/or a lower classification level; and my amendments seek to provide early access to superannuation benefits. Clearly, you could draft them as they were intending—put them all together and call it one if you wished—but my advice here is clear; it makes it easier. The government's bill is there, which I assume we are all going to support. We can simply support this add-on as 30B, without having to restructure the bill. If we do not, the government's bill stays as it is without having to restructure amendments, etc.

The Hon. SANDRA KANCK: Under those circumstances, if the Hon. Mr Lucas's amendment is successful should not the bill be retitled to reflect early access to superannuation benefits in the title rather than transition to retirement?

The Hon. R.I. LUCAS: To be honest, I am not fussed either way. I think it is a good point from the Hon. Sandra Kanck, and I must admit that in the drafting I did have a fleeting thought about it, but I was not particularly fussed. I thought we might see whether the amendment passes; if it does then I am happy to take advice from the minister if he wants to have the title changed (and parliamentary counsel is here, so we can do so). It is not an issue that I have strong views about one way or another. Of course, if the amendment does not pass we do not have to worry about changing the title of the bill.

The Hon. SANDRA KANCK: As a consequence of comments I made in my speech, I received an email from Mr Ray Hickman of SA Superannuants which, in part, reads as follows:

On reading Hansard I have seen that the departmental briefing provided to you characterised a strategy for retirement savings that I and others have outlined as 'tax minimisation' and something that the government could not support. This appears to have given you a concern that the strategy might be unethical. As your colleague the Hon. Rob Lucas pointed out, it is tax avoidance, and not tax minimisation, that is unethical (and illegal). Tax minimisation does not involve any question of unethical conduct where it simply involves a person arranging his/her affairs in a transparent fashion that meets the requirements of taxation law. In my opinion, the arrangement which the government claims to have ethical reservations about is a perfectly respectable strategy for any person to employ.

It then goes on to talk about a couple of examples of people salary sacrificing and so on. I have to confess to knowing probably zilch about salary sacrifice; I do not know what it is and I have never done it.

I am one of those strange creatures who actually believe in paying my tax, because I look around me and see the things that are provided to me. I know that on my own I cannot pay for a hospital, but if I put my money in with other people then we can all get a hospital. I cannot pay for a tram on my own, but if we all put our money in together we can get a tram. It is clear to me that, if I set about to minimise my tax, notwithstanding the fact that tax minimisation is strictly legal, it does mean that someone else has to pay more tax to make up for the fact that I have minimised my tax. So, there remains an ethical component in my decision making on this.

I note that the Hon. Robert Lucas's amendment is about only those in the Triple S scheme and, clearly, of the three schemes that are involved in this legislation, they are the most disadvantaged. I note the comments of the Hon Mr Lucas and the Hon. Mr Holloway that it will not cost the South Australian taxpayer; however, it could cost the federal taxpayer. It does seem to me that, if you use it in some way by continuing to work full-time and use it to assist your son or daughter with maybe a home loan deposit or something, you use it up and then become dependent on the commonwealth-funded pension.

However, having then listened to what the Hon. Mr Holloway had to say about the savings of those who are in the Triple S scheme, it is fairly clear to me from those amounts that when they retire those people in the Triple S scheme would not be living off their super for very long anyhow before it was exhausted and they would be going onto a commonwealth funded pension.

I guess there are ultimately two issues: the one that Mr Parnell raised about parity or equity with interstate counterparts, and then there is the other issue about what this bill is. As I said in my second reading speech, I welcomed it, because I think the idea of being able to transition to retirement is a good one. If this amendment is passed, then it is clear that people in that Triple S scheme will be able to continue working full-time and also access their superannuation. That is obviously not genuinely transitioning to retirement. So, in the final analysis, having listened to all the arguments, I have come to the conclusion that I will not be supporting the amendment.

The Hon. P. HOLLOWAY: In regard to the question about what would happen if money were to be rolled over into the Triple S scheme from other funds, my advice is that that is money that they would be able to access as well, under the amendment.

The committee divided on the amendment:

AYES (10)

NOES (6)

PAIRS (4)

Majority of 4 for the ayes.

Amendment thus carried.

The Hon. R.I. LUCAS: I move:

Page 7, after line 16—Insert:

30B—Early access to superannuation benefits

(1) For the purposes of this section, the basic threshold is an amount prescribed by the regulations for the purposes of this subsection.

(2) Subject to this section, a member may apply to the Board for the benefit of this section if—

(a) the member has reached—

(i) the age of 55 years; and

(ii) his or her preservation age; and

(b) in the case of the first application by the member under this section—the combined balance of his or her eligible contribution accounts equal or exceed the basic threshold; and

(c) the member has not applied for the benefit of section 30A.

(3) An application under this section may be made for the payment of the whole, or a specified proportion, of the balance of the member's eligible contribution accounts but, in the case of the first application by a member under this section, the application must seek the payment of an amount that is at least equal to the basic threshold.

(4) Once a member has made an application under this section, a second or subsequent application cannot be made—

(a) unless at least 12 months have elapsed from any preceding application; and

(b) unless the combined balance of his or her eligible contribution accounts equal or exceed an amount prescribed by the regulations for the purposes of this subsection.

(5) The Board may require that an application under this section be made in such manner, and comply with such requirements, as the Board thinks fit.

(6) A payment pursuant to an application under this section will be drawn from the member's contribution account first and then, to the extent (if any) that an additional amount is required for the purposes of the payment, from the member's other eligible contribution account or accounts in accordance with the regulations.

(7) The payment will, according to an election made by the member as part of his or her application, be invested by the Board (on behalf of and in the name of the member)—

(a) with the Superannuation Funds Management Corporation of South Australia; or

(b) with another entity that will provide a non commutable income stream for the member while the member continues to be employed in the workforce,

so that the member receives (and only receives) a payment in the form of a pension or annuity (a drawn down payment).

(8) An investment under subsection (7) will be on terms and conditions determined by the Board.

(9) An entitlement to a draw down payment is not commutable.

(10) However, the value of an investment may be redeemed in due course under subsection (14).

(11) When the Board makes a payment on an application under this section—

(a) the member's contribution account and, if relevant, any other eligible contribution account, will be immediately adjusted to take into account the payment; and

(b) section 12(2) and (3) will apply with respect to the relevant components constituting the payment.

(12) When a member retires from employment (and is thus entitled to a benefit under section 31), the member's entitlement under section 31 will be adjusted to take into account an entitlement provided under this section (and that section will then have effect accordingly).

(13) If a member's employment is terminated on account of invalidity or by the member's death, any entitlement under section 34 or 35 (as the case requires) will be adjusted to take into account an entitlement provided under this section (and the relevant section will then have effect accordingly).

(14) When a member retires, has his or her employment terminated on account of invalidity or dies (whichever first occurs), an investment being held under subsection (7) may be redeemed (subject to any rules or requirements applicable to the exercise of a power of redemption).

(15) The making of a payment under this section must take into account the operation of any provision under Part 5A.

(16) The Governor may, by regulation, declare that any provision of this section is modified in prescribed circumstances (and the regulation will have effect according to its terms.

(17) In this section—

eligible contribution accounts of a member means—

(a) the member's contribution account; and

(b) the member's employer contribution account; and

(c) if the regulations so provide—

(i) the member's rollover account;

(ii) the member's co-contribution account.

As I said, the rest of the amendments are consequential, so I do not intend to speak to them. The Legislative Council has adopted a position—and I accept that this is an issue really for the Treasurer and the government to address—where public servants who receive 9 per cent superannuation as part of the Triple S scheme will be able, in certain circumstances, to have early access to superannuation.

I raise the issue of whether the government is at least prepared to think through the equity for those members of parliament, for example, who are in exactly the same situation with the PSS3 scheme whereby their only superannuation is exactly the same benefit that public servants receive, which is the 9 per cent superannuation. Is the Leader of Government prepared to take up this issue with his colleague the Treasurer? I hasten to say that neither the Leader of the Government nor I are in a position of potential benefit from this as we are older serving members of the parliament, if I can put it that way—or longer-serving members of the parliament.

A number of the Leader of the Government's own backbenchers and members and, indeed, on this side of the council there are a number of newer members of parliament, who are members of the PSS3 scheme, receiving the 9 per cent superannuation and, ultimately, if public servants are allowed by the parliament early access to superannuation benefits in certain circumstances, is the Leader of the Government prepared to at least have that discussion with the Treasurer as to whether there ought to be, at some stage, consideration of that option being provided to parliamentary members? I notice that the shop steward for the government members is not currently present in the chamber, so I will forward my comments to the government members' shop steward on these particular issues.

The CHAIRMAN: He is not here, anyway.

The Hon. R.I. LUCAS: Well, perhaps I need to speak to someone else if your advice is correct, Mr Chairman's. I will leave that with the Leader of the Government as an issue.

The Hon. P. HOLLOWAY: I will raise it with the Treasurer.

Amendment carried; clause as amended passed.

Clause 8.

The Hon. R.I. LUCAS: I move:

Page 7—After line 24—Insert:

(6) If a member has received the benefit of a payment under section 30B—

(a) the superannuation interest of the member will be taken to include the balance that is being held under section 30B(8) and (9);

(b) any entitlement under section 30B will be adjusted to take into account the effect of a payment split under this Part.

Amendment carried; clause as amended passed.

Remaining clauses (9 to 18) , schedule and title passed.

Bill reported with amendments; committee's report adopted.

Third Reading

Bill read a third time and passed.