The majority voted in favour of a motion to read the bill for a second time. In other words, they voted to agree with the bill's main idea, which means they can now discuss it in more detail.
What is the bill's main idea?
In his second reading speech, Whitlam MP Stephen Jones (Labor) explained that the bill:
repeals paragraph 5(e) of the Superannuation (Salary) Regulations with effect from 1 July 1986 and provides that the effect of the repeal does not apply to individuals where limited circumstances are satisfied.
The changes in the bill are only relevant to current and former Commonwealth public sector civilian employees.
The default superannuation salary of a member of the Commonwealth Superannuation Scheme established under the Superannuation Act 1976 includes the value of any allowance that, under the regulations, is to be treated as salary under the act.
Prior to 1 March 2022 paragraph 5(e) of the regulations provided that the rent-free use of housing made available to a person by reason that they held a particular office or performed particular duties or work was an allowance that was to be treated as salary for the purpose of the act.
The value of rent-free housing as per paragraph 5(e) of the regulations flowed through to the default superannuation salary of members of the Public Sector Superannuation Scheme, and members of the Public Sector Superannuation Accumulation Plan and certain members of non-Commonwealth choice funds.
At the time the regulations were made in 1978, an employee's assessable income was taken to include the value of rent-free housing. With the introduction of the fringe benefits tax regime in 1986, the tax burden in relation to rent-free housing shifted from the employee to employer.
Following this change in 1986 the Commonwealth has typically not treated rent-free housing as forming part of superannuation salary and generally neither employers nor employees have made superannuation contributions that have taken into account the value of rent-free housing.
A recent case before the Federal Court has exposed differing views on the operation and scope of former paragraph 5(e) of the regulations. If the interpretation as argued by the applicants was accepted, it would have significant financial impacts for the Commonwealth and inequitable financial outcomes for differing cohorts of individuals.
Some individuals would receive an unexpected windfall increase in their superannuation benefits while others could incur potentially large unexpected debts for unpaid member contributions with little or no corresponding increase in their superannuation benefit.
Conflicts of interest
Both Goldstein MP Zoe Daniel (Independent) and Mackellar MP Dr Sophie Scamps (Independent) left the chamber before the vote (so they didn't take part) because of potential conflicts of interest. See the Hansard for more information.
Summary
Date and time: 9:22 AM on 2022-08-04
Allegra Spender's vote: Aye
Total number of "aye" votes: 116
Total number of "no" votes: 5
Total number of abstentions: 30
Related bill: Public Sector Superannuation Salary Legislation Amendment Bill 2022
Adapted from information made available by theyvoteforyou.org.au