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Legislative Assembly for the ACT: 2000 Week 6 Hansard (25 May) . . Page.. 1867 ..

Amendment agreed to.

Clause 7, as amended, agreed to.

Clauses 8 to 10, by leave, taken together and agreed to.

Clauses 11 and 12, by leave, taken together.

MS TUCKER (8.47): I move:

I am putting forward these amendment to fix up what I believe is a loophole in the act regarding the charging of fees by a government department for the management of an investment of money from a superannuation banking account. At present the act says that the department may deduct a management fee from the interest received on the investment. I am concerned that this opens up the potential for a department to charge an exorbitant management fee, as a way of making a profit on the investment of superannuation funds, and to redirect interest money that should rightfully be added to the superannuation account.

It should be remembered that it is not just the superannuation appropriations that need to be protected. The interest earned on the investment of such appropriations also needs to be protected. Obviously, the more interest that can be obtained on the superannuation fund, the less the money that has to be appropriated to meet a given superannuation liability. We should not be squandering this interest on high management fees. The amendments simply state that the management fee charged by the department cannot be more than the actual costs and expenses incurred by the department in managing the investment.

MR HUMPHRIES (Treasurer, Attorney-General and Minister for Justice and Community Safety) (8.48): Mr Speaker, I indicate that the government supports the amendments moved by Ms Tucker. I note that in the circulated amendment proposed new subclause 4A referred to subsection (3) when it should have referred to subsection (4). Ms Tucker has fixed up that issue.

The Central Financing Unit is a department for the purposes of the Financial Management Act. Subclauses 11(4) and 12(3) of the bill reflect the current practice for investments managed by the Central Financing Unit. Subclauses 11(4) and 12(3) allow for the deduction of fees from the earnings of the invested superannuation moneys. The proposed new subclauses will cap the fees at the level of the costs incurred by the CFU. That is a sensible arrangement, Mr Speaker, and I have no problem with that. I support the amendments.

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