Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Link to this | Hansard source

My question is to Senator Minchin, the Minister for Finance and Administration. Is the minister aware of the statement on page 51 of the T3 prospectus that ‘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’? Does the minister recall assuring Telstra staff during question time on 7 September 2005, in answer to a question from Labor on this matter, that superannuation conditions would continue once Telstra was sold by the government? Why has the minister failed to honour his commitment to protect the defined benefit entitlements of 1,800 Telstra employees as part of the privatisation process?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

I share Senator Sherry’s concern that the employees of Telstra are appropriately looked after, in the way that all employees of privatised government businesses are looked after. It is a fact that after the sale has occurred the government will no longer be the majority shareholder and so those Telstra employees who are members of the CSS will cease contributory membership. That was provided for in legislation passed last year which authorised the further sale of Telstra and is consistent with longstanding government policy. The contributory membership of the CSS ceases when the government has ceased to control a business. It is exactly the same policy that Labor applied when it sold Qantas in 1993 and CSL in 1994. When a company is no longer in government hands, its employees cannot contribute to the government’s super scheme any longer.

I am advised that currently only 1,788 Telstra employees are still members of the CSS, out of a total workforce of 49,443—so less than four per cent. Those employees will have the option of either joining over 80,000 current and former Telstra employees in the Telstra super scheme or joining another eligible super fund. Most significantly and importantly, the existing benefits of Telstra employees who are still in the CSS will be protected in full. There is no question about the protection of those benefits. I want to assure those employees that, once this sale has occurred, their benefits will be protected. The accrued benefits are guaranteed under legislation and will be paid in full by the government. The future super arrangements that will apply to Telstra employees who will exit the CSS after the sale will be a matter for Telstra.

Like all employers, Telstra has an obligation to make super contributions in respect of those employees. I am advised that Telstra management recently wrote to all employees explaining the arrangement. So I am not quite sure what Senator Sherry is getting at. We have properly and appropriately advised Telstra employees of the situation. The situation with Telstra employees will be exactly the same situation that applies whenever a government exits a business and therefore those employees can no longer be described as being in government employment. That was the case, as I said, in relation to government businesses that the Labor Party sold. We want to make sure that the employees are appropriately protected. We believe they are.

Nick Sherry (Tasmania, Australian Labor Party, Shadow Minister for Banking and Financial Services) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. I will give an example to the minister of a supervisor linesman who has contacted me. He has been employed by Telstra since the age of 16 and, as a consequence of privatisation, his pension at age 55 will be cut by $11,000 per year. Is that what the minister means by ‘appropriately looked after’? Why has the minister broken his promise to Telstra employees? Why did the minister not ensure, as a matter of policy, that such employees would be protected—in other words, that the pension promise made will be met?

Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Link to this | Hansard source

I have sought to reassure all Telstra employees that their entitlements up to the time of sale and up to the time at which their membership of the CSS ceases will be protected. Nothing I have said or suggested implies anything other than that. That has always been the case with employees of government owned businesses, whether they are sold by the Labor Party or by us. Once the government is no longer the majority owner, obviously, by definition, membership of government employee superannuation schemes ceases to exist, but all the entitlements accrued up to that point are protected in law. That is the point we have consistently emphasised. That is what I was talking about. It is wrong to suggest anything else on my part. Those employee entitlements are protected.