Trustee Companies Further Amendment Bill
TRUSTEE COMPANIES FURTHER AMENDMENT BILL
Bill introduced and read a first time.
Declaration of urgency agreed to.
Second Reading
The Hon. J. W. SHAW (Attorney General, and Minister for Industrial Relations) [10.07 a.m.]: I move:
That this bill be now read a second time.
I seek leave to have the second reading speech incorporated in Hansard.
Leave granted.
The Trustee Companies Further Amendment Bill 1997 amends the Trustee Companies Act 1964 to exempt charitable trusts from the operation of the Trustee Companies Amendment Bill 1997.
Members will recall that the Trustee Companies Amendment Bill changed the fee structure applying to long term trusts in order to ensure that trustee companies were able to recover the costs of administering these trusts, and to ensure a fair balance between fees charged to capital and income.
After the bill was passed by this House, concern was expressed as to the impact of the bill on charitable trusts. After receiving representations from Philanthropy Australia, the Government agreed to amend the bill to exempt charitable trusts from the bill.
I commend the bill to the House.
The Hon. J. P. HANNAFORD (Leader of the Opposition) [10.08 a.m.]: The Opposition does not oppose the legislation, even though during debate on the original bill in the lower House concern was expressed about the impact of previous changes on charitable organisations. Interested groups indicated that they had not been consulted on the original bill, although I note that the Trustee Companies Association was involved in extensive consultation at that time. I do not know whether the Government has had the opportunity to consult with trustee companies about their attitude to this bill. I learned only last night that the bill would come before this
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House today, and I have not had time to talk to the trustee companies, although I consulted with them about the concerns that charitable organisations had at the time that the previous legislation was before the House.
The object of the legislation is to reintroduce an element of control over the fees payable to a trustee company in respect of the administration of a charitable trust. Many charitable trusts have assets of great value. One organisation that approached me was administering a family trust of the order of $25 million. The trustee companies assured me that they have had considerable negotiations with charities about fees; that the trustee companies regard charitable trusts as charities; that charitable trusts are valuable clients; that there would not have been an increase in fees that was not commensurate with the value of the work being undertaken by the trustee companies; and that the charitable trusts would not be adversely affected by the original legislation.
It was for that reason that I did not take the view at that time that the charities would be seriously adversely affected, although there would be an effect, in that fees would be negotiated and would reflect the work that was being done. There is competition among trustees for this type of work, and the mechanisms contained in the legislation would have allowed a change of trustee administrator if the fees charged were unreasonable. I was satisfied from discussions I had with all the trustees that no trustee would want publicity about losing the work of a charity and, therefore, there would not be adverse fee increases. I note that the Government has decided that the fees charged to charitable trusts should be controlled, and the coalition will not oppose that decision.
The Hon. J. W. SHAW (Attorney General, and Minister for Industrial Relations) [10.12 a.m.], in reply: I thank the Leader of the Opposition for his acquiescence to the bill. He has explained his attitude to the failure to differentiate charitable trusts when the bill passed through this House. I am generally in the same position. The Government did not have notice about the concerns of Philanthropy Australia prior to the introduction of the bill. However, it responded to those concerns as soon as it became aware of them. Exemption of charitable trusts from the amendment processes generally was, in a sense, a difficult policy choice, but, on balance, the Government came to the view that they should be exempted. That is reflected in the bill. I commend the bill to the House.
Motion agreed to.
Bill read a second time and passed through remaining stages.