Cullen Michael: Government Superannuation Fund Amendment Bill — First Reading 
Text is incorporated into the Bound Volume 
Cullen Michael: Government Superannuation Fund Amendment Bill — First Reading 
[Sitting date: 23 September 2008. Volume:650;Page:19066. Text is incorporated into the Bound Volume.] 
Hon Dr MICHAEL CULLEN (Minister of Finance) 
: 
 That was most uncalled for! I move  
That the Government Superannuation Fund Amendment Bill be now read a first time. 
 At the conclusion of the first reading debate I will move that the bill be referred to the Finance and Expenditure Committee.  
This is a simple but important bill. It amends the Government Superannuation Fund Act 1956 to give effect to the Budget 2008 decision to provide all Government Superannuation Fund and National Provident Fund annuitants with an annual cost of living adjustment linked to 100 percent of CPI changes. The Government Superannuation Fund also known as the GSF is a Government-owned fund set up to provide for public servants’ superannuation. It was set up in 1948 and it was closed to new entrants in 1992. It has a liability to pay benefits to members currently valued at over $11 billion which exceeds its investments by over $8 billion.  
As part of Budget 2008 Cabinet agreed to increase the Government Superannuation Fund and National Provident Fund annuitants’ annual cost of living indexation to 100 percent of the CPI. This adjustment is estimated to impact around 17000 Government Superannuation Fund and 2100 National Provident Fund annuitants and their annual cost of living adjustments indexed at rates between 90 and 100 percent of the CPI. I have taken this decision to ensure that all annuitants are treated consistently with regard to annual cost of living adjustments. The cost of this decision—at a one-off figure for balance sheet purposes—is $33.2 million.  
The adjustment had originally been intended to apply from 23 July next year. I have received several petitions including a letter from the president of the Government Superannuitants Association David Swallow to bring forward the date from which 100 percent CPI indexation would apply. This bill brings forward the date to 2 April 2009 to align with the annual cost of living adjustments and we are dealing with this bill now so that the bill can get off to the select committee submissions can be called for and the bill can be passed before 1 April next year.  
One other small clause in the bill—clause 5—corrects an error that was made in the Government Superannuation Fund Amendment Act 1990. In 1990 Parliament increased the amount by which the annuity is reduced by surrender by some nine times. In other words when someone surrenders a part of the superannuation scheme the annual amount is multiplied by nine times. That figure should have been an increase to 10.8 times the annual amount and in fact it was not done so in the law but the practice since then has been to pay the 10.8 figure rather than the nine. This error apparently has not been picked up for some 18 years. Some hawk-eyed person has finally discovered it and this bill rectifies that error in the 1990 legislation.  
I should declare an interest of course given recent events. As a person under the old parliamentary superannuation scheme I would be affected by the latter provision if in fact the current law was to be applied.