Statutes Amendment (Fund Selection and Other Superannuation Matters) Bill

Second Reading

Adjourned debate on second reading.

(Continued from 2 March 2021.)

The Hon. K.J. MAHER (Leader of the Opposition) (17:58): I rise to speak on this bill, which seeks to pick up an initiative previously moved, I understand, by the Hon. Connie Bonaros to introduce what is commonly referred to as choice of fund for South Australian government employees and other members of public superannuation schemes.

The bill seeks to provide a choice of fund for members of the Southern State Superannuation Scheme (the Triple S scheme), provide an opportunity for partial choice or portability in moving a member's accrued superannuation benefits out of the Triple S scheme into another eligible scheme of their choice, and facilitate a change of employment arrangements of the staff of Super SA to be done not by the Treasurer but, instead, by the Super SA board.

There has been a long held view that allowing choice of fund would diminish the pool of funds available for investment from the government superannuation scheme and, with that, make it more expensive to invest in those funds from various categories of investment. Further, the Triple S scheme enjoys constitutional protection, which basically means that it maintains a tax exempt status or a tax exemption for moneys paid as contributions into that scheme—both superannuation guarantee contributions and any additional contributions a member may elect to make.

SA is the last public sector regime, as far as we are aware, to enjoy this constitutional protection. Indeed, when the current Prime Minister was Treasurer, our side has been informed that there was communication with the state government urging that there needed to be change in regard to this issue of constitutional protection. Public sector leaders have voiced their views on the bill to the opposition. It was of particular concern to representatives of SA Police and, to a lesser extent, representatives of the Ambulance Service.

With regard to police, it is worth bearing in mind that there are slightly different superannuation arrangements in place for police as a result of an enterprise bargaining agreement reached about a decade ago, whereby police would pay an additional 4.5 per cent of their salary post-tax into the superannuation scheme to make sure that they not only had financial capacity to provide for their retirement but also had enough capacity to provide for additional income protection and total and permanent insurance through the scheme.

The government, we understand, has consulted with the Police Association, and this arrangement should not be put at risk. However, police will not have full choice of fund but partial capacity, with a certain amount to be left in government super for insurance purposes.

The organisation which represents the greatest cohort of members of the Public Service, namely the Public Service Association, is reluctantly resigned to this move, we are advised, whilst not seeing the additional benefits available for their members and whilst seeing the potential risk of losing the tax exempt status; that is, the constitutional protection I mentioned earlier. Further, they have concerns about the insurance arrangements and how this may be impacted by a member exercising choice of fund.

There is one public sector group that is very strongly in support of this, and that is the Australian Nursing and Midwifery Federation. They are a strong proponent of this move, the reason being that roughly 60 to 70 per cent of their membership have other employment outside the public sector, for example, in private hospitals—so they may be a member of a fund such as HESTA—or in an aged-care facility and so on. I understand it has been a frustration to their members. It is a significant example, I will admit. I think we have in excess of 20,000 nurses in South Australia, maybe even more.

There is also the looming threat of insurance arrangements being privatised and moved away from Super SA. If Super SA is seeking to hive off parts of the business that it might see as too labour intensive, namely insurance arrangements, and also seeking to increase their own workforce substantially over the next four years, together with seeking to change the terms of employment of people in Super SA—

The PRESIDENT: There are one or two many conversations in the chamber. I would like to hear the Leader of the Opposition.

The Hon. K.J. MAHER: —it seems inevitable that a move to a market competitor in the Triple S scheme, a scheme that is actively out in the market, will be able to lose its own members to competitors but also able to attract members from its competitors.

If the plan is for Super SA to open itself up to allow members to exercise choice of fund and to start competing in the market in a very limited way under the terms of this bill by trying to entice former Triple S members or members who have an inactive Triple S account, they will be starting the process of competing in the market.

This raises the real risk of the commonwealth telling us in South Australia that we cannot have it both ways; that is, a constitutionally protected, tax exempt scheme competing in an open market environment. This is a massive risk, I am advised, of roughly $100 million a year to the state's public servants. Labor believes this risk is too great and poses a risk much greater than the potential benefits. Therefore, we will not be supporting the bill.

Debate adjourned on motion of Hon. D.G.E. Hood.