LEGISLATIVE ASSEMBLY MEMBERS' SUPERANNAUTION CONTRIBUTIONS BILL 2004 Second Reading Speech

Northern Territory Second Reading Speeches

LEGISLATIVE ASSEMBLY MEMBERS' SUPERANNAUTION CONTRIBUTIONS BILL 2004

(This an uncorrected proof of the daily report. It is made available under the condition that it is recognised as such.)

Bills presented and read a first time.

Ms MARTIN (Chief Minister): Madam Speaker, I move that the bills be now read a second time.

The Legislative Assembly Members’ Superannuation Amendment (Scheme Closure) Bill and the Legislative Assembly Members’ Superannuation Contributions Bill are a package of legislation to put in place superannuation arrangements for new members of the Legislative Assembly who are elected at or after the next general Territory election. This legislation is the culmination of my commitment at the last election that the superannuation arrangements for parliamentarians should not be out of line with arrangements generally available to the community.

By way of background to these bills, the current parliamentary scheme, Legislative Assembly Members’ Superannuation Scheme or, as we know it generally, LAMS, is a defined benefits scheme. This means that benefits for members are fixed and related to salary and length of membership, and unrelated to earnings on any funds set aside to meet benefits. While defined benefits schemes used to be relatively common, with the advent of universal superannuation and the Commonwealth Superannuation Guarantee, most defined benefits schemes have now been closed. The most common type of superannuation scheme now, and that which is generally available to the Territory work force, is a defined contribution or accumulation scheme. This means the amount set aside each year is fixed, and the final benefit depends on the amount set aside and the investment’s earnings on those amounts.

Honourable members will recall that I announced a review of the LAMS scheme early in 2002, following which the terms of reference were tabled in this House. The review was the result of my government’s concern about the high cost of LAMS to the Territory, and in regard to the considerable differences between LAMS and other superannuation arrangements commonly available to the wider community. The time frame for the review was deliberately structured to allow a full and thorough analysis of the issues, in particular, so that honourable members of this House and the general public could have an opportunity to provide input into the consideration and development of new arrangements. Ken Clarke, the former Under Treasurer, undertook the review, which was presented to my government in November of 2002.

In line with its objectives, the review by Mr Clarke canvassed a number of options for revised parliamentary superannuation arrangements, which would reduce the cost to Territory taxpayers and which would be comparable with arrangements in other jurisdictions, as well as having regard to community expectations. In February, I tabled the review in this House and invited comments from members on future arrangements for both current and new members. Following this, the Under Treasurer and the Commissioner of Superannuation briefed both sides of the House and the independent members.

Madam Speaker, I turn now to the first of the two bills - the Legislative Assembly Members’ Superannuation Amendment (Scheme Closure) Bill. This bill will close the Legislative Assembly Members’ Superannuation Scheme to new members who are elected at or after the next general election for the Territory. There will be no impact on the existing superannuation arrangements for sitting members, who will continue to be covered by the LAMS. Sitting members will not have an option to transfer to the new arrangements.

The new superannuation arrangements will also apply to all former members of the Legislative Assembly who have left the Assembly but who are re-elected at or after the next general Territory election. This means that former members will not be able to rejoin the LAMS scheme. Where a former member is receiving a pension from LAMS, the bill will provide for the suspension of that pension until they next leave the Assembly.

The second bill in this package is the Legislative Assembly Members’ Superannuation Contributions Bill. New members who are elected at or after the next general Territory election will receive employer superannuation contributions at a rate of 9%, as required by the Commonwealth Superannuation Guarantee. This rate is consistent with that received by the majority of Territory workers. The bill provides that 9% will be paid into a complying superannuation fund or retirement savings account nominated by the member. Where a member does not nominate a fund, the 9% will be paid into a default fund. As the new arrangements are less generous than the current LAMS scheme, the bill provides for new members to be able to salary sacrifice additional contributions up to 50% of their basic and additional salary to their chosen superannuation fund. Salary sacrifice is widely available to the general community and will not entail any additional cost to the Territory. These changes are consistent with changes that were recently made to the Commonwealth parliamentary scheme and to some state parliamentary schemes.

Madam Speaker I commend both bills to the house.

Debate adjourned.

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