Bernie Ripoll (Oxley, Australian Labor Party, Shadow Minister Assisting the Leader for Small Business) Share this | Hansard source

It is a pleasure to speak on this bill. I will state at the outset that Labor will be moving amendments to this bill when it comes to the Senate.

Labor does support reducing duplication and finding efficiencies within the public sector. Labor is very concerned that the ComSuper staff, who are moving to the CSC, are being transferred away from the APS and will lose their ability to apply for jobs in the APS, and transfer at level to an APS agency, and that they will be disadvantaged compared to APS employees. This is particularly important in Canberra, where the ComSuper staff are based, as the majority of available jobs they may wish to apply for will be within the APS. If the government is determined to compulsorily transfer ComSuper employees to CSC, they should ensure that all rights and entitlements are protected. Labor is preparing amendments that will achieve this and protect these employees, who face an uncertain future, and that will not affect the operations of CSC at the same time. I will speak in more detail on the amendments later during my contribution, but first I would like to go over the general outline of this bill as set out in the explanatory memorandum circulated by the minister.

The bill merges ComSuper, the provider of administrative services in relation to the Australian government civilian and military defined benefit superannuation schemes, with the Commonwealth Superannuation Corporation, the trustee of the Australian government schemes. CSC, a corporate Commonwealth entity for the purposes of the Public Governance, Performance and Accountability Act 2013, will be the continuing government entity and will be responsible for the overall management of the Australian government superannuation schemes, including both trustee and administrative services roles. The relevant schemes are: the Commonwealth Superannuation Scheme; the Public Sector Superannuation Scheme; the Public Sector Superannuation Accumulation Plan; the Military Superannuation and Benefits Scheme; the Defence Force Retirement and Death Benefits Scheme; the Defence Forces Retirement Benefits Scheme; the Defence Force (Superannuation) (Productivity Benefit) Scheme; the 1922 scheme; and the PNG scheme. CSC will have similar responsibilities in relation to the proposed new military superannuation arrangements that will commence from 1 July 2016, subject to the passage of the proposed legislation.

The merger will improve the efficiency of the management of the Australian government superannuation schemes by removing duplication and overlap that exists as a result of two government bodies being involved with the delivery of administration services. The merger will provide CSC with control over the delivery of administration services in relation to the Australian government defined benefit superannuation schemes, consistent with its regulatory responsibility as trustee of the schemes.

It is important to note that the bill does not change the benefit design of the civilian and military superannuation schemes. The bill, also, does not change the composition and structure of the board of CSC, the trustee of the affected funds. The merger is expected to deliver savings of half a million dollars per annum. The changes that relate to PSSap administration fees have estimated savings of $26.8 million over four years from 2015-16.

Administering the defined benefit superannuation schemes will require CSC to draw on Commonwealth appropriations to pay superannuation benefits to members of the schemes. It will also collect administration fees that are payable by the Commonwealth under legislation governing the schemes, and recover debts owing to the Commonwealth—for example, arising from overpayments of benefits. As CSC is a separate legal entity to the Commonwealth, the bill includes provisions to legally enable CSC to perform these functions on behalf of the Commonwealth. As the Commonwealth remains legally responsible for the functions, the bill enables the minister to make instruments in relation to these functions. These powers are currently available to the minister under the administration of ComSuper.

A CSC special account will be established. Administration funding, including administration fees collected by CSC on the Commonwealth's behalf from agencies with employees in the Australian Government schemes, will be credited to that account. The account will form part of the CRF, and CSC will be able to debit the account to, among other things, pay costs incurred in the performance of its role as administrator.

As a result of the merger, the statutory office of CEO of ComSuper will cease, and the statutory agency of ComSuper will be abolished. ComSuper staff whose employment is transferred to the CSC will become non-APS employees of CSC engaged under section 26 of the governance act. This will be achieved by a determination of the Australian Public Service Commissioner under section 72 of the Public Service Act 1999.

The transitional provisions in the bill will assist in maintaining the terms and conditions of employment of ComSuper staff on transfer to CSC and meeting legislative requirements governing the transfer. Currently, there are roughly 400 employees of ComSuper and, because of job duplication that may occur in the merger, a voluntary redundancy program will be undertaken. The targeted number of voluntary redundancies is 70 positions. The merger is the single largest forced transfer of employees out of the Public Service since the Australian Protective Services was moved. Concerns have been raised that, because the merger means that ComSuper will cease to exist and its staff will be compulsorily transferred out of the Australian Public Service to the CSC, this forced change could affect their careers and make it much more difficult to move to an APS agency. In the event that the new CSC downsizes, staff are also concerned at losing the redundancy rights that would allow them to be redeployed in the APS if their positions are cut.

I flagged earlier that Labor will move amendments to this bill when it reaches the Senate. Labor's amendments will address the concerns by providing transferred ComSuper employees with broadly equivalent mobility rights to those they would have had if they had remained employed in the APS. Labor's amendments enable transferred ComSuper employees to move from the CSC to an APS agency as if they were still APS employees. These measures in Labor's amendments will ensure that ComSuper employees who transfer to CSC will be able to transfer at any level or win promotion to APS roles at other agencies. Labor's amendments ensure ComSuper employees who transfer to CSC are not disadvantaged in seeking and applying for a future role with the APS. Labor's amendment will apply for a period of three years. Our proposed amendments are simple and sensible changes that address the concerns of ComSuper staff. When the bill comes to the Senate, I urge the government and the crossbench to work constructively to make sure that these amendments do address the concerns of ComSuper staff. I thank, in advance, the government and the crossbenchers for their support in this.

The bill includes consequential amendments to a range of Commonwealth legislation governing the superannuation schemes to take account of the merger. In addition to dealing with matters arising from the transfer of ComSuper staff to CSC employment, the bill contains provisions that deal with a number of other transitional matters arising from the merger. This includes provisions to transfer the assets and most of the liabilities of ComSuper to CSC. To maintain consistency with the treatment of administration funding currently received by ComSuper for provision of administration services, the bill makes CSC exempt from income tax in relation to funding received from the Commonwealth for this purpose.

The other significant measure in this bill deals with the collection of the cost of administering the PSSap. The governance act and the 2005 act which governs the PSSap will be amended by the bill so that the cost of administering the PSSap will be deducted from member accounts, consistent with arrangements that apply in private sector accumulation superannuation funds. The changes that relate to PSSap administration fees have estimated savings of $26.8 million over four years from 2015-16. Until now, the government had covered the costs of administering the PSSap for its members. There are 127,628 members of the scheme. While this bill will allow the CSC to set administration fees for the benefit of members, a rough, back-of-the-envelope calculation based on the $26.8 million saving over four years is $52.50 per member per year. These new arrangements for PSSap members will bring these members into line with members of private sector funds, and Labor will not oppose this measure.

The two measures in this bill deal with Public Service superannuation, so it is timely to examine the Abbot government's record in this area. The Abbott government has shown its contempt for the Public Service by offering employees from several departments an unreasonable cut to their hard-won conditions on top of a pay cut in real terms. Under the Abbott government's public sector workplace bargaining policy, every government department and agency has been left with nowhere to turn but to cut costs through cutting real wages and working conditions. The government cannot expect the Australian Public Service to function effectively when large numbers of staff are being sacked and those left behind are forced to fight for the most basic workplace entitlements. The Abbott government has recklessly gutted the Public Service even faster than planned, with 11,000 full-time equivalent public servant positions gone in 2014 alone.

Before the election, Tony Abbott said that 12,000 jobs would be shed from the Public Service but only through natural attrition. After the election, though, he announced 16,500 full-time public servant jobs would be cut and not though natural attrition. Most of these jobs are now gone, putting strain on the system and the workers who remain. The Abbott government is so focused on job cutting that it has ignored the key drivers of efficiency, productivity and customer service. Labor believes very much in an affordable, sustainable and productive Public Service, but crudely retrenching staff, cutting back on jobs, reducing wages and cutting conditions does not lead to a more efficient or effective workforce.

On its record on superannuation, as it relates to this bill and in a range of other areas, the Liberal government has a very poor record by any measure. Let's look at the pause in the superannuation guarantee. The superannuation guarantee is currently at 9.5 per cent. Under Labor, the increase to 12 per cent was to take effect between 1 July 2013 and 1 July 2019. The Liberals announced their first delay as part of the original MRRT repeal bill. This delay postponed any further increase till 1 July 2016, and the full 12 per cent would take effect on or after 1 July 2021. Then, as part of the budget, the Treasurer announced the government's second delay of a further 12 months, meaning the full 12 per cent will not be reached until 1 July 2022. As part of a deal with the Palmer United Party, the Liberals have made a third delay, meaning the full 12 per cent will now not be reached until 1 July 2025. These pauses come in the wake of the Prime Minister promising before the election, on no fewer than 14 occasions, that there would be no unexpected adverse changes to superannuation. That promise seems to have gone the way of so many other promises made before the election.

On another adverse change to superannuation, the Liberals did remove the low-income superannuation contribution, which was part of the MRRT repeal, from 1 July 2017. The LISC is a superannuation contribution made on behalf of individuals with an adjusted taxable income of $37,000 or less in an income year, with the maximum contribution amount payable being $500. The contribution is designed to broadly return the tax paid on concessional contributions by any individual's superannuation fund.

The Abbott government's cut will take effect from 1 July 2017 and will affect approximately 3.6 million low-income earners, two-thirds of whom are women. This will have an enormous impact on their retirement savings. Taken together with the pause in the superannuation guarantee, industry estimates that the combined adverse negative impact on national savings by 2025 will be around $150 billion. At budget estimates it was revealed that the government did not request Treasury to model the impact of repealing the low-income superannuation contribution on superannuation savings. The LISC is a measure that has been described by Industry Super Australia as the single most important policy setting in the super system that helps to address the inequity in savings gap whereby women are currently retiring with about 40 per cent less in superannuation than men.

I would like to conclude where I started by reiterating that Labor does support reducing duplication and finding efficiencies within the Public Service. However, we are concerned that ComSuper staff who have moved to the CSC are being transferred away from the APS and will lose their ability to apply for jobs in and to transfer to an APS agency without being disadvantaged as compared to other APS employees. In a city like Canberra this is obviously something that is critically important. It is Labor's belief that, if the government is determined to compulsorily transfer ComSuper employees to CSC, they should ensure all rights and entitlements are protected. The amendments that Labor is preparing for the Senate will protect these employees who face an uncertain future otherwise.

See this speech in context