Stephen Smith (Perth, Australian Labor Party, Shadow Minister for Industry, Infrastructure and Industrial Relations) Share this | Hansard source

Labor supports the Long Service Leave (Commonwealth Employees) Amendment Bill 2006, which was introduced into the parliament last week, because, while Labor does not support the sale of Telstra, Labor does support protecting those employees who are at risk of being adversely affected by the sale. The purpose of the bill is to extend the operation of the Long Service Leave (Commonwealth Employees) Act coverage of Telstra employees for three years from the date on which the Commonwealth ceases to have a controlling interest in Telstra. Telstra employees currently accrue long service leave entitlements—three months long service leave after 10 years of service—under the Commonwealth long service leave act. However, the Telstra (Transition to Full Private Ownership) Act 2005, the transition act, overrides this—which means Telstra employees will stop accruing benefits under the long service leave act from the day the Commonwealth ceases to have a controlling interest in Telstra—and includes savings provisions for Telstra employee long service leave entitlements accrued up to that date.

The proposed amendments to the Commonwealth long service leave act would defer the operation of the substantive and savings provisions for three years after the day upon which the Commonwealth ceases to have a controlling interest in Telstra, to provide Telstra employees with some degree of certainty about their accrued and future long service leave entitlements. The Telstra (Transition to Full Private Ownership) Act 2005 already protects preprivatisation long service leave entitlements accrued by Telstra employees. This bill does not affect that.

The intention of extending the coverage of Telstra employees under the long service leave act for a period of three years from the day when the Commonwealth ceases to have a controlling interest in Telstra is to provide certainty to Telstra and those employees who have not yet concluded alternative long service leave arrangements post privatisation. While Labor remains opposed to the sale of Telstra, this bill seeks to minimise any negative impact of the sale on Telstra employees, so far as long service leave entitlements are concerned, by providing a three-year transition period for employees and Telstra to come to alternative arrangements.

While ultimately the form of arrangement that Telstra and its employees decide upon is up to them, Labor would encourage Telstra to continue to offer employees long service leave entitlements at the existing levels once the transitional period has expired, unless Telstra employees agree otherwise. Telstra staff are currently employed either under a certified agreement, which expires in August 2008 and provides for long service leave at the Commonwealth LSL act rate, or under AWAs, which provide that long service leave will be paid in accordance with Telstra policy but cannot be lower than the relevant state-legislated minimum. The amendment will provide certainty to employees beyond the term of the existing certified agreement and, for those who are currently engaged under AWAs, their entitlements will not fall below current levels for the next three years.

Unfortunately, this approach is not replicated in the government’s approach to the superannuation entitlements of Telstra employees. The government has failed to guarantee, and continues to fail to guarantee, the rights of 1,800 Telstra employees who, as a result of the sale of the Commonwealth’s majority interest, can no longer be members of the Commonwealth Superannuation Scheme—the CSS. On 7 September last year the Minister for Finance and Administration, Senator Minchin, the minister responsible for oversighting the sale of Telstra, explicitly said in respect of Telstra employees that ‘superannuation conditions would continue once the company was sold by the government’. But this misleading statement has been comprehensively exposed by the Telstra 3 prospectus, which at page 51 states:

Telstra employees who are members of the Commonwealth Superannuation Scheme (CSS) will cease to be “eligible employees” for the purpose of the Superannuation Act 1976, and will no longer be entitled to contribute to the CSS.

This will have adverse financial consequences for many Telstra employees. There is of course precedent in this area. In 1992, the Department of Finance and Administration, Qantas and staff associations determined a solution to shield members of the Commonwealth Superannuation Scheme from superannuation losses triggered by the Qantas sale and loss of active CSS membership. That solution was in two parts. The first part, the ‘delayed updated pensions’ option, or DUP, was added to the Commonwealth Superannuation Scheme subordinate legislation to cater for those with a shorter career but aged close to 55. The normal preservation option was available for longer serving members, as well as immediate withdrawal of a lump sum for CSS. The second part was in the form of a Qantas Superannuation Trust deed, which provided ongoing benefits for CSS members that broadly topped up the preserved or delayed CSS benefits to give the same pension benefits or lump sum benefits to staff as though CSS membership had continued until normal resignation, retirement or redundancy exit from Qantas.

Given this precedent, it should be no surprise to those listening that Labor was surprised to see that the government saw fit to extend long service leave protections to Telstra employees but has not sought to extend similar protections in the area of superannuation. In spite of its promise, the government has failed to protect the superannuation pension promise made to up to 1,800 Commonwealth Superannuation Scheme Telstra employees.

At the conclusion of my remarks, I will formally move a second reading amendment in the following terms:

That all words after “That” be omitted with a view to substituting the following words: “whilst not declining to give the bill a second reading and while welcoming the fact that the Government has extended long service leave protections to Telstra employees for a period of 3 years following the time that the Commonwealth ceases to have a controlling interest in Telstra, the House;

(1)

regrets the fact that the Government has offered no such protections to the up to 1800 existing Telstra employees who are currently members of the Commonwealth Superannuation Scheme (CSS) who will have that membership terminated as a result of the Telstra 3 privatisation;

(2)

considers the fact that the cessation of CSS membership will mean the Government’s pension promise made to Telstra CSS members will not be kept;

(3)

notes that no comparable provision has been made to ensure the pension promise is met, as occurred in the Qantas privatisation;

(4)

notes that no other compensation is provided for;

(5)

condemns the Government for its failure in this regard; and

(6)

calls on the Government to immediately rectify the position for these disadvantaged Telstra employees”.

That the government has neglected to provide protections for superannuation entitlements as it has done for long service leave entitlements should be unsurprising. This government’s handling of the Telstra privatisation is as inept and fumbled as it is wrong public policy. It should be unsurprising then that the government is clearly keen to move this legislation through the parliament as quickly as possible, having introduced it only on Wednesday of last week. There is, however, good reason for the government to seek to do so: every time there is a focus on Telstra this government is exposed. It is exposed here because on the one hand it has given Telstra employees certainty with their long service leave arrangements but on the other it has stripped certainty—money—from Telstra employees’ superannuation entitlements.

Labor opposed and continues to oppose the sale of the remaining parts of Telstra in Commonwealth hands. Labor has voted against the sale of Telstra on every occasion that the Howard government has tried to force it through the parliament. Labor promised the Australian public at the last three federal elections that it would oppose the sale of Telstra. The reasons Labor opposes the sale are well known. Labor believes that a fully privatised Telstra will inevitably increase prices, slash services and desert communities where a profit could not be made. Labor believes that a fully privatised Telstra would leave town faster than the banks. Labor believes that Telstra should be kept in public ownership to ensure that it invests in the telecommunications infrastructure needed by the Australian economy and needed to deliver new telecommunications services to Australian consumers.

In contrast to Labor’s position, the Howard government’s obsession with the privatisation of Telstra, which it has pursued since it was elected in 1996, has worked against our international competitiveness, particularly when it comes to broadband utility; against our national interest; against the interests of the Australian community; against the interests of rural and regional Australia; against the interests of Australians who live in the outer metropolitan areas of capital cities; against the interests of Telstra itself; and against the interests of Telstra shareholders. The government—and the Prime Minister—actively encouraged many small shareholders and investors to invest in the first privatisation and the second privatisation of Telstra. It actively encouraged them to purchase shares in Telstra, particularly in T2. And we saw what happened: investors lost money hand over fist, courtesy of the Prime Minister’s advice that the share offer was a very good deal and should be taken up. That advice has now come back to haunt the Prime Minister, so much so that he is now hiding from offering a similar view on the current Telstra sale.

Labor remains implacably opposed to the sale of Telstra. But we recognise that the current political reality means that we are now unable to do anything to prevent the sale from occurring. As a consequence, Labor considers this particular amendment to be a sensible move. As a consequence of that, we recognise that it is incumbent upon the House to ameliorate the worst impacts of that sale on Telstra employees. The most appropriate way of ensuring that is by providing certainty. That is what the bill seeks to do. I formally move the second reading amendment circulated in my name:

That all words after “That” be omitted with a view to substituting the following words: “whilst not declining to give the bill a second reading and while welcoming the fact that the Government has extended long service leave protections to Telstra employees for a period of 3 years following the time that the Commonwealth ceases to have a controlling interest in Telstra, the House;

(1)

regrets the fact that the Government has offered no such protections to the up to 1800 existing Telstra employees who are currently members of the Commonwealth Superannuation Scheme (CSS) who will have that membership terminated as a result of the Telstra 3 privatisation;

(2)

considers the fact that the cessation of CSS membership will mean the Government’s pension promise made to Telstra CSS members will not be kept;

(3)

notes that no comparable provision has been made to ensure the pension promise is met, as occurred in the Qantas privatisation;

(4)

notes that no other compensation is provided for;

(5)

condemns the Government for its failure in this regard; and

(6)

calls on the Government to immediately rectify the position for these disadvantaged Telstra employees”.

I commend the amendment and the bill to the House.

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