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

David Hawker (Speaker) Share this | Link to this | Hansard source

Is the amendment seconded?

Martin Ferguson (Batman, Australian Labor Party, Shadow Minister for Primary Industries, Resources, Forestry and Tourism) Share this | Link to this | Hansard source

I formally second the amendment, Mr Speaker. I welcome the opportunity to support the comments of the shadow minister for industrial relations and member for Perth concerning the rights and entitlements of Telstra employees. In doing so, it is with some pleasure that I second his second reading amendment. I say that because the amendment focuses the House’s attention on the issues before the House this afternoon that go to the future entitlements and the working conditions of Telstra employees. As the member for Perth has informed the House, the opposition will support the Long Service Leave (Commonwealth Employees) Amendment Bill 2006. But, while supporting the bill, I express some concerns as to the intention of the government towards the ongoing long service leave entitlements of Telstra employees, and this afternoon I intend to make some comments about the superannuation entitlements of Telstra employees.

Whenever the Howard government introduces legislation of this kind, it highlights, unfortunately, its inability to have a greater vision for Australia—and that is what is happening with this bill before the House. The passing of the bill will provide a transitional period of three years for Telstra employees to remain covered by the Long Service Leave (Commonwealth Employees) Act from the day on which the Commonwealth ceases to have a controlling interest. That is going to be a black day in Australia’s history, and we know that day is not far into the future. The government is well down the path of its $20 million advertising blitz to try to encourage, through radio and television, unsuspecting Australians to purchase Telstra shares. This advertising blitz coincided with the launch of the prospectus earlier this month.

We all appreciate that actually getting that prospectus together and finally making it available for public consumption was the outcome of a huge fight between the government and the Telstra board. Putting that aside, the bill today is about providing Telstra employees with some degree of certainty about their accrued and future long service leave entitlements. Hopefully it will minimise any negative impact of the sale of Telstra with respect to Telstra employees and their families. I simply say that bills such as this are very important. Workers give employers great support, and historically Telstra has been a well-respected Australian employer. People actually wanted to work for Telstra. The history of Telstra also shows that it was a good trainer. It was a terrific trainer of technicians and apprentices, with highly respected and recognised apprenticeship training opportunities around Australia. It is therefore only appropriate that, with the potential sale of Telstra and the walking away from its responsibilities by the Howard government, those loyal, longstanding employees are actually given some protection; and that is what this bill is about.

This bill appropriately allows Telstra time to arrange an alternative process. In saying this, I urge Telstra to continue, at a minimum, to offer employees long service leave entitlements at the existing levels once the transitional period has expired. There is no good reason why the existing Telstra employees’ long service leave entitlements should be reduced at some point in the future. I think that is appropriate, because one of the biggest problems in Australia at the moment, given the wages surge occurring in some sectors because of a huge shortage of skilled tradespeople, is trying to encourage workers to remain with a particular employer for an extended period of time. Decent superannuation and long service leave are part of a package to assist employers such as Telstra in retaining the loyal service of workers, who historically never thought about leaving. The truth is that, with the privatisation of Telstra and a change in culture, there is every reason to suspect that, at some point in the future, rather than being forced to take redundancies, some of these workers may choose to leave because they do not see the same sense of loyalty that previously existed at a Telstra management level and at a government level—when it was clearly a government mentality.

With respect to the rights of the Telstra employees, I simply say that the three-year transitional period appears adequate. It reportedly has the support of Telstra and its workforce. It will not change the Telstra (Transition to Full Private Ownership) Act 2005, which protects preprivatisation long service leave entitlements accrued by Telstra employees. That act also provides for a three-year transitional period. Telstra staff are currently employed either under a certified agreement or an AWA, both of which provide for long service leave. Today’s amendment will provide much-needed certainty for employees on both arrangements, beyond the term of the existing certified agreement and for those who are currently engaged on AWAs. It will ensure that their entitlements will not fall below current levels for the next three years—an interim solution. That is a good and fair outcome for workers in the immediate future. It reflects the fact that this is a sensible bill, a bill that will provide some consolation for the employees of Telstra, who face much uncertainty in their short- and long-term future thanks to the Howard government’s absolute obsession with privatisation.

Labor continues to oppose the government’s sale of Telstra, and in doing so echoes the sentiments of many Australians across the nation, especially those in rural, remote and regional Australia. I also express some concerns with this bill as I believe it highlights the government’s short-sightedness. We would not be standing here today debating this bill if the Howard government recognised the fact that Australians want to continue to own Telstra. We are all shareholders at the moment. That is the truth of it: we are all, as Australians, shareholders in Telstra at the moment and there is no good reason to actually change that share ownership provision as it currently exists in government hands. The problem is that the Howard government wants to see Telstra no longer in government ownership—no longer with a public focus. Without good reason, it is consumed with full privatisation. For good reason, the Australian community see Telstra not as a privatisation opportunity but rather in the same way as the Labor Party does—that is, an essential building block for the future of Australia. I say that because nearly all Australians depend on the Telstra network in one way or another, whether it be for business, industry, health, education or simply as a resident.

The fact that the government treats the sale of Telstra as a political plaything is a disgrace. Its sale is, first and foremost, in the Liberal Party’s interest, not in the interest of the Australian people, and that is not good enough. This is an outfit worth billions that should be used to position Australia for the future. It will be worth an estimated $8 billion if the float goes ahead as the government has planned, but the reality is that it would be worth so much more if we used it strategically to position Australia for the future. It is an outfit the world would love to have as it currently exists in Australia. It is the key to our competitive position as a nation in the future, not just in the telecommunications industry but in many industries which depend on reliable telecommunications services being provided to Australian consumers and businesspeople at a reasonable cost. It is about making sure that we invest in our future with respect to broadband improvement to guarantee that we are able to secure our economic prosperity in the decades ahead.

Anyone who reads the papers or watches the news on television understands why Telstra needs to be retained in public ownership. It is a critical component of our economy that underpins industries across the board. Its privatisation provides no guarantees for its future or sensible management in the nation’s best interest. We are already unfortunately seeing the effects of the looming sale. Only in July this year the media reported that the telco was to slash up to 12,000 jobs nationally over five years, with New South Wales to feel the brunt of the cull. The job losses continue a sliding trend. According to the Minister for Employment and Workplace Relations, Telstra currently employs about 40,000 workers, a figure that has been on a downturn over the last 10 years. That has coincided with a decade of government under Prime Minister Howard.

The fact is that this government has only ever had one telecommunications policy in 10 years of government, and that is selling Telstra—the full privatisation of Telstra, step by step. A lot of ordinary mums and dads and small shareholders are now suffering as a result of the previous sale of Telstra in shares. The fact that the Prime Minister spruiked what a good investment the shares were at the time means they are now suffering the impact of a dud investment encouraged by the Prime Minister. The result has been a slow-down, as a result of government action, in investment in both the infrastructure and the skills base that Australia needs to provide advanced communications services.

Historically the Commonwealth, state and territory governments and their instrumentalities were actually at the forefront of apprenticeship training in Australia. The full sale of Telstra effectively is a further step down the track. The result is that the Commonwealth will make no direct contribution towards apprenticeship training to any government department or instrumentality in the years to come. The biggest losers in that context—

David Hawker (Speaker) Share this | Link to this | Hansard source

Order! I would ask the member to link his remarks to the bill.

Martin Ferguson (Batman, Australian Labor Party, Shadow Minister for Primary Industries, Resources, Forestry and Tourism) Share this | Link to this | Hansard source

Obviously I raise these issues because they go to the entitlements of workers and apprentices. In days gone by, a young person left school, went to work for Telstra as a 16-, 17- or 18-year-old and spent the rest of their working life there because it was a good, secure job with decent entitlements, such as long service leave and superannuation. That is the crux of the debate this afternoon.

It goes to the issue that, 10 years ago, in June 1996, Telstra alone employed 76,522 full-time people entitled to these long service leave entitlements. Optus employed another 4,000. Total industry employment with access to decent long service leave entitlements was 85,000 to 90,000. However, the figures now reveal that there are only approximately 67,750 people employed in the telecommunications industry—a loss of around 20,000 jobs. It is a trend that the government have foisted on the Australian community and it is significant given the government’s frequency in touting that they are responsible for employment growth whilst they themselves downsize—and in doing so seek to create an opportunity to reduce workers’ long service leave entitlements over time. Looking at these figures, the question needs to be asked: where is the growth in telecommunications employment?

There is no growth, only a loss of jobs through the casualisation of the workforce, often without long service leave entitlements, and the export offshore of labour intensive jobs to cheaper call centres. Is this what we want to become of one of our most important nation-building tools: to be manipulated according to political will, with jobs sacrificed to meet privatisation demands and short-term horizons? Can the country and the industries that underpin our economy afford a further deterioration of the network, further job cuts, loss of workers’ entitlements and a further running down of our infrastructure base, which is the key to our economic future? I simply say the answer is no. It would be a step backwards for working Australians. It is a backward step for Telstra. It is a backward step for the quality of telecommunication services across the nation.

The government has said that the job losses are regrettable. The Prime Minister has come out and said that he would ‘like to try to guarantee job security for Telstra workers once the company is sold but cannot’. It would have resolved issues on the long service entitlements of these workers if he could have given an ironclad guarantee. I believe the government has only itself to blame. The call centre closures and job cuts are a response to continuing market pressures for cost reductions which are in turn a consequence of privatisation. It is the government’s policies that have brought the job losses about, and the issue has been returned squarely to its door. Yes, Telstra’s recent $3 billion profit will add to the shine of the sale, but it is a profit that has been bought through a shedding of staff and it cannot continue forever. Obviously this bill is about potentially creating an opportunity in the future to reduce costs by reducing long service leave entitlements after the three-year transitional period. These cuts are unsustainable and, I believe, not worth it if the true cost of privatisation is Australian jobs.

The pressures of privatisation are likely to leave the telco operating on a shoestring budget with respect to staff. This week in the media, Telstra came under fire from the tourism industry on workers’ entitlements after confirming that it had introduced a holiday ban in the lead-up to Christmas for some staff in certain divisions. While it is not clear which sections will be affected by the ban, Telstra has forced certain staff to suspend annual leave until Christmas. This is an important issue. It is at a time when the domestic tourism industry continues to slump. This is hardly a move that acts in the nation’s best interest and it begs the question: would company policy be different if the telco were in full public ownership?

I raise these issues because a recent survey by the tourism industry, which is dependent on an efficient telecommunications industry, revealed that Australians had accrued 70 million annual leave days owing to them, at an estimated worth of around $11 billion to the economy. The federal government tourism body has even been forced to launch a campaign trying to convince companies to get employees to take a break—using long service leave, as currently provided, to do so—as an opportunity to assist the Australian tourism industry. This is an important matter, because it is about seeking leadership from large companies such as Telstra to set the example and get their staff to take a holiday or long service leave to enhance their health and to maintain their capacity to do the job for Telstra.

It is a commonly understood fact that well-rested employees contribute far more and have higher productivity levels if they can take a rejuvenating break in the form of annual leave or long service leave. Taking a holiday should not be just seen as an optional extra. Long service leave is not an optional extra. It has historically played an important role in developing an acceptable overall package of employment conditions in addition to a salary for Australian workers. It is a vital part of our wellbeing as a nation. It is a vital part of what is required by families to survive in a very stressful world. It is a vital part of securing our future.

In conclusion, can I say that my concerns go one step further. I raised my concern about the bill’s short-sightedness. My concern applies not only to the sale of the telco but to the government’s failure to also protect the superannuation pension promise made to up to 1,800 Commonwealth Superannuation Scheme Telstra employees. Perhaps the Minister for Employment and Workplace Relations would like to comment on this issue in his response this afternoon. Their membership of the Superannuation Scheme will be terminated as a result of Telstra’s full privatisation and it is an unfair act in what is increasingly becoming an unfair workplace. It is another promise broken by the government—and a cruel one at that, with no compensation provided for these workers.

I stand with my colleagues in condemning the government for its failure in this regard, especially as no comparable provision has been made to ensure the pension promise is delivered, as was the case with the full privatisation of Qantas. I also support the second reading amendment, moved by the member for Perth, condemning the government for its failure to guarantee the rights of Telstra workers who are members of the Commonwealth Superannuation Scheme. As we all appreciate, when we have these responsibilities to make some changes—putting aside whether they are the right changes with respect to the sale of Telstra—we must have regard to the entitlements of workers and their families. Long service leave is important, but just as important is the right of workers to retire with some dignity. These workers joined the Commonwealth Superannuation Scheme in good faith. They expected to see out their working life as full members of the scheme with appropriate entitlements.

The failure of the Howard government to provide in a similar way to which a Labor government provided for the entitlements of Qantas workers when Qantas was privatised just shows the unhealthy attitude of the Howard government to the needs and aspirations of Australian workers and their families. I commend the second reading amendment to the House and simply say to the Howard government: it is about time you started to think more about not only the rights of workers and their families with respect to long service leave entitlements and guarantees into the future but also the existing superannuation entitlements of some Telstra employees. I commend the second reading amendment to the House.

Kevin Andrews (Menzies, Liberal Party, Minister Assisting the Prime Minister for the Public Service) Share this | Link to this | Hansard source

I thank all honourable members for their contribution to the debate, and I shall not delay the House with a lengthy summing-up. Telstra employees currently accrue long service leave entitlements under the Long Service Leave (Commonwealth Employees) Act 1976. Long service leave entitlements accrued up to the date that the Commonwealth ceases to have a controlling interest in Telstra are already protected by the Telstra (Transition to Full Private Ownership) Act 2005. Telstra has requested that they be allowed to remain under the Long Service Leave (Commonwealth Employees) Act provisions for a further three years and the government has agreed to meet the request; hence this bill.

In relation to the in-principle amendment, moved by the honourable member for Perth, the Minister for Finance and Administration has previously announced that the government would not be maintaining Commonwealth Superannuation Act coverage of Telstra employees after Telstra is sold. As Minister Minchin advised the Senate on 11 October 2006:

The Commonwealth is clearly entirely within its rights—as was the then Labor government—to stop membership of the CSS. Once the company is in majority private hands, that responsibility should no longer fall on taxpayers but on the new owners of the business.

The Australian government has already paid out in full its liabilities to Telstra Super to the tune of $3.125 billion. When the Australian government majority ownership of Telstra ceases, superannuation arrangements for Telstra employees will be a matter for Telstra and its workforce.

Finally, in closing, the previous speaker, the honourable member for Batman, was talking about job losses in Australia. Can I remind him and the House that, in the last 10 years, 1.9 million new jobs have been created in Australia. Indeed, in the last six months, 205,000 jobs have been created, 184,000 of which are full-time jobs. I commend the bill to the House.

Harry Jenkins (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

The original question was that the bill be now read a second time. To this the honourable member for Perth has moved an amendment that all words after ‘That’ be omitted with a view to substituting other words. The question now is that the words proposed to be omitted stand part of the question.

Question put.