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

I move:

That the Senate take note of the answers given by the Minister for Finance and Administration (Senator Minchin) to questions without notice asked by Senators McEwen, Polley and Sherry today relating to the sale of Telstra.

In question time today, my colleagues have been touching on a number of aspects of the botched privatisation of Telstra as handled by Senator Minchin and Senator Coonan. But in question time today I raised an important new issue concerning the defined benefit pension promise made to those 1,800 Telstra employees who are still in the old Commonwealth Superannuation Scheme, commonly known as CSS.

Last year, in September, Labor was made aware by a number of employees that they could effectively lose part of the pension benefit promised to them, as a consequence of the Telstra privatisation. In response to those inquiries from employees, Labor asked in question time on 7 September 2005 what would happen to the superannuation benefits of those 1,800 employees who are members of the CSS and currently employed by Telstra. I make the point that, on the sale of Telstra, their employer does not change. Those 1,800 employees are still employed by Telstra. We asked Senator Minchin quite deliberately the question: what would happen to their superannuation on the sale of Telstra? Senator Minchin, to his credit, in September last year, responded by saying:

... the superannuation conditions would continue ...

But now we know that those superannuation conditions will not continue, because—and Senator Minchin himself admits this—as a result of a policy decision by Senator Minchin and the government these employees will be required to cease membership of CSS ongoing. And that has a very important and significant impact on the future pension promise, because those 1,800 Telstra employees who are currently in the CSS will not receive the pension promise made to them as a member of the CSS when they retire. They will not receive the pension promise that was entered into contractually when they joined the CSS.

I have been contacted by a number of the 1,800 employees who will have their pension benefit cut. Their pension benefit will be cut, and I gave an example to Senator Minchin in question time of a supervisor linesman. This is an individual who has contacted me and told me that, as a consequence of the sale of Telstra, he, along with 1,800 other employees, will not receive the pension promised. In the case of this supervisor linesman, who has been an employee of Telstra since he was 16 years of age, when he turns 55 his pension benefit will be cut by $11,000 per year as a consequence of the Telstra privatisation.

This is a consequence that Labor feared, and that is why we raised it with the minister last year. He gave a promise, he gave a commitment, that the superannuation conditions would continue. And now we know that for 1,800 employees this is not the case. There would be outrage in the general community if the hundreds of thousands of employees who are currently in defined benefit funds faced expulsion from those funds, the closure of the funds and a reduction in the pension promise made. There would be outrage if Senator Minchin applied this principle to the general community and to the hundreds of thousands who have defined benefit pension promises.

And the minister is not right in respect of the Commonwealth Bank or Qantas. He is not right, because in those two cases successor provisions were incorporated by the new entities, the privatised entities, in their pension funds to ensure that there would be no reduction in the pension promise made in the case of Commonwealth Bank or Qantas employees. The minister is not right when he makes that claim, because in those privatised entities the employees did not lose a benefit under the defined benefit promise that was made. That promise was incorporated in the new funds or the existing funds that the Commonwealth Bank and Qantas had. That has not happened with Telstra employees, and consequently 1,800 employees face a pension promise cut. (Time expired)