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

I would like to add to an answer I gave to Senator Sherry with respect to Telstra’s superannuation arrangements. As I explained to the Senate yesterday and today, the CSS is of course a superannuation scheme for public sector employees only. When a government business enterprise is owned by the government, then membership continues; but if that GBE is privatised and government ownership falls below 50 per cent, then of course those employees can no longer be part of the CSS—and that is exactly what Labor in government did with respect to the 1993 sale of Qantas and exactly what it did in 1994 with the sale of the Commonwealth Serum Laboratories.

Senator Sherry has tabled a letter today from the chief financial officer of Telstra. In that letter, Telstra sought to argue that the Commonwealth should change its policy and continue CSS membership for employees who are members of that scheme even after the full privatisation of Telstra. That was an attempt to seek a change in policy, and you can see from the point of view of Telstra why they would love it if the Commonwealth would continue to pay for membership of that scheme.

Telstra did try in that letter to link this CSS issue with an unrelated superannuation issue—that is, the payment by the Commonwealth in 2004 to the Telstra superannuation scheme to settle the Commonwealth’s outstanding liabilities to that scheme—a very good proposal that the Labor Party supported at that time. But there was no basis whatsoever to link the two proposals. Telstra’s argument had no foundation, and Telstra had no legal case. As can be seen from the response to Telstra by the Department of Finance and Administration, which Senator Sherry has also tabled, Finance, after due consideration, completely rejected Telstra’s argument.

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. There is also no obligation on the Commonwealth to continue CSS membership arising from that unrelated 2004 deed of release, which was, as I say, a completely unrelated super agreement.