STATUTES AMENDMENT (TRANSITION TO RETIREMENT—STATE SUPERANNUATION) BILL

Committee Stage

In committee.

Clauses 1 to 6 passed.

Clause 7.

The Hon. R.I. LUCAS: Due to the closeness to the lunch break and the fact that I know that at least one or two Independent or minor party members of the chamber are still contemplating their position in relation to this series of amendments, I will formally move the first amendment and speak to it, but it would be my suggestion to the committee that we delay the vote on it until after the lunch break. I move:

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and

(d) the member has not applied for the benefit of section 30B.

In my view, this amendment should be treated by the committee as a test case for the two pages of amendments; they are all part of a package. So, if the first amendment is defeated, I do not intend to proceed with the remaining amendments. Of course, if they are successful, I would suggest to the committee that we have the debate on the first part of the amendment and the rest of it can be taken as consequential. This issue, which is the substance of this particular amendment, was canvassed at length by myself and some other members (I think the Hon. Sandra Kanck and possibly other members) during the second reading contribution.

Put simply, South Australian Superannuants, the PSA and the umbrella body, the Superannuation Federation—which represents the interests of public sector workers and those with interests in superannuation—have all expressed a view that they would like to see some change to the legislation as it has been introduced into the parliament. Certainly, I have had discussions with the PSA and with Mr Ray Hickman and have had conveyed to me the views of the PSA and SA Superannuants.

As I understand it, an executive meeting of the Superannuation Federation (I think last Wednesday) agreed in principle with the purpose of the amendments that are before the committee at the moment. It may well be that some of those groups have raised issues of detail in relation to the amendments and, given that the opposition's office was going backwards and forwards to people with various drafts of the amendments, it was sometimes hard to catch up with which particular draft was being commented on by the individuals. Nevertheless, the bottom line is that, at the end, the PSA, SA Superannuants and, as I understand it, the executive meeting of the Superannuation Federation have agreed with the thrust of the amendments that are before the committee at the moment.

Put simply, everyone agrees with the bill insofar as it goes—that is, the government has some provisions there for people transitioning to retirement; the government put in a range of tests which need to be met before you can qualify for the transition to retirement provisions and, put simply, they are that you move from full-time work to part-time work. I think there are other provisions in relation to going from a higher-classified job or paid job to a lower-classified or paid job, as well. What the PSA, SA Superannuants and others have put is that they believe that in most, if not all, other schemes there is an additional option which is available to members of the Triple S scheme. We are really only talking here about the Triple S scheme; we are not talking about any of the defined benefit or pension schemes available to public servants.

Put simply, what they want is access to some of their superannuation entitlements, in a wider variety of circumstances prior to retirement. They argue that some people are not in a position to be able to move from full-time work to part-time work, even though they may well be, in their own minds, preparing themselves for retirement. They are also not in a position to move from a higher-paid job to a lower-paid job prior to retirement. This amendment is seeking to provide the additional option that they have sought. I hasten to say that the government, on advice, has indicated to the parliament that this will be at no cost to the government or to the taxpayers, so there is no argument against this proposition in that it will cost taxpayers.

The Hon. P. Holloway interjecting:

The Hon. R.I. LUCAS: That may well be an issue. We will leave that for the government to argue its case. It may well be the government's position that it does not want people in a wider variety of circumstances to access some of their superannuation because they might waste it and then the federal taxpayers, at a later stage, will have to provide them with an aged pension. That is the government's argument, if it wants to choose to go down that path. The key issue in relation to a lot of these amendments is: in the first place, does it impact on the South Australian government and its taxpayers in terms of the budget? The government has confirmed in advice to us that that is not the case.

My advice is—and I will ask some questions of the government to confirm this—that the average benefit or amount that a Triple S scheme member has at the moment is about $50,000. My understanding is that the overwhelming majority of those people in the Triple S scheme have left the Public Service by the age of 60. It is also my understanding that the peak retirement age is about 55, with another peak at about 57. We are talking about providing an option for public servants from the age of 55. You cannot access this if you are under 55. You would have an option from the age of 55, bearing in mind, as I said, that virtually everyone on the Triple S scheme has gone by the age of 60. I thought that in recent times—under the example of the Prime Minister and others, urging people to stay on longer in the service—there would have perhaps been some significant change but, again, we have not seen much indication of state public servants following the Prime Minister's lead.

If, for example, someone has $50,000 in a Triple S scheme package—as under the government scheme, except for those who have taken part-time work, but in this case it will be a wider group of people—they would be able to take it out and put it into an approved or regulated fund. So that might mean that it might go into AMP or some other superannuation provider—as opposed to Super SA—or they can roll it over into an appropriate product, as I understand it. A person can then access no more than 10 per cent of that lump sum in each 12-month period. So, if it is $50,000, they can access 10 per cent of that—which is $5,000—each year. Given that, on average, the peak retirement age is 55 or 57, many of these people—if they are going to access this option at all—may well access $5,000 each year for two years and then retire at 57.

I hasten to say that, given the commonwealth taxation arrangements which provide significant tax benefits for those over the age of 60, there will be a considerable tax incentive for people not to take money out of their superannuation prior to the age of 60. So, I do not think anyone should assume that, just by giving the option—as the government is doing under the government scheme, or under this additional option—everyone will race out to take their money out and spend it. So, if the Leader of the Government was suggesting that in any way, I would strongly dispute that that is likely to be the case. There are significant reasons why you might not do it.

Equally, however, SA Superannuants and others are arguing, 'This is our money; we're entitled to it. If we are transitioning to retirement and we don't want to take part-time work, we may well want to access just a little bit of the money that we've got.' There might be any number of reasons why that might be the case. You might want to assist one of your children; it may well be that you have a partner with ailing health and you want to go for a short holiday whilst that partner is still in robust health; it may be that there is something in the house that you want to do in order to make your life more comfortable; it may well be that you have other moneys coming to you after the age of 60 from some other scheme, or whatever it might happen to be. There is a range of options that may well present themselves for individuals.

Progress reported; committee to sit again.

[Sitting suspended from 13:00 to 14:17]