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

Exactly. Labor believes not just morally but also legally that there is a significant constitutional question as to the appropriation or, effectively, misappropriation of a property or benefit provided to an individual unless just terms of compensation are provided in the removal of that benefit. Yet, what do we have with the T3 privatisation of Telstra? We know as a matter of fact that there is an effective reduction of the promised pension benefit for approximately 1,800 Telstra employees who are CSS members. As I said earlier, this is due to a policy decision—not a legal requirement—of the Liberal government that on T3 privatisation this group of employees must cease ongoing membership of the CSS and from that date revert to a lower superannuation benefit offered to other Telstra employees—and, I might emphasise, this is without their ceasing employment with Telstra.

The benefits of these employees will be maintained up to the date of cessation of their membership. The Minister for Finance and Administration, Senator Minchin, has emphasised this time and time again. However, the pension promise made if those members had continued in CSS will be broken. This is due to the nature of a defined benefits scheme. A reduction in benefits occurs if you do not reach the required qualification period. So all 1,800 employees will effectively have a cut in the pension promise made. In one case communicated to Labor, a supervisor linesman who commenced employment with Telstra at age 16 and is a member of the CSS will suffer a pension cut of $11,000 a year. I have already drawn attention to the promise made by the minister for finance, Senator Minchin, that superannuation conditions would continue. We now know that this will not be the case.

Senator Minchin has attempted to explain away this by referring to the circumstances of employees at Qantas and the Commonwealth Bank, privatised by a Labor government, who were treated in the same way. This is not the case. Whilst employees of both Qantas and the Commonwealth Bank were required to cease membership of the CSS, as is required in the case of Telstra employees, new provisions were inserted in the superannuation funds covering both the Commonwealth Bank and Qantas that ensured a comparable benefit was maintained. So both Senator Minchin and Senator Coonan—goodness knows what the minister directly responsible and a shareholder minister was doing in this regard—have not ensured that there will be a continuation of a comparable superannuation benefit for the 1,800 Telstra employees. This is yet another example of the botched regulatory and privatisation plan that has been erected around Telstra.

Telstra itself has legal doubts about the government’s handling of this matter. In recently released correspondence—it was secret correspondence—that I tabled in the Senate last week between Telstra and the T3 sale task force, Telstra itself argued:

Our legal advice is that the Deed of Release under which the Commonwealth assumed liability for Telstra’s CSS members, is a legally binding document on the three parties.

In Labor’s view, both the government and Telstra are exposed to possible legal action by the employees of Telstra whose pension promise benefit has been cut as a consequence of the Telstra privatisation.