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

The Senate is dealing with the Long Service Leave (Commonwealth Employees) Amendment Bill 2006. Labor supports this bill, which was introduced into the parliament last week. While Labor does not support the sale of Telstra, Labor does support protecting those employees who are at risk of being adversely affected by its sale. The purpose of the bill is to extend the operation of the Long Service Leave (Commonwealth Employees) Act’s coverage of Telstra employees for three years from the day on which the Commonwealth ceases to have a controlling interest in Telstra.

Telstra employees currently accrue long service leave entitlements under the Commonwealth long service leave act, which is three months long service leave after 10 years of service. However, the Telstra (Transition to Full Private Ownership) Act of 2005, the transition act, overrides this and means that Telstra employees will stop accruing benefits under the long service leave act from the day the Commonwealth ceases to have a controlling—that is, majority—interest in Telstra and includes savings provisions for Telstra employees’ long service leave entitlements accrued up to that day. 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 of 2005 already protects pre-privatisation long service leave entitlements accrued by Telstra employees, and this bill does not affect that. The intention of extending 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 to those employees who have not yet concluded alternative long service leave arrangements post-privatisation.

The 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 in Telstra to come up with alternative arrangements. While ultimately the form of arrangement that Telstra and its employees decide is up to them, Labor would certainly encourage Telstra to continue to offer employees—certainly existing employees—long service leave entitlements at the existing levels once the transition period has expired unless Telstra employees agree otherwise. A promise has been made—effectively a contractual obligation that should be met.

Telstra staff are currently employed under either a certified agreement which expires in August 2008 and provides for long service leave at the Commonwealth long service leave act rate or AWAs which provide long service leave which will be paid in accordance with Telstra policy but which cannot be lower than the relevant state legislative minimum. The amendment will provide certainty for employees, both for those who are under the existing certified agreement and for those who are currently engaged on AWAs, that their entitlements will not fall below current levels for the next three years. However, unfortunately, this approach is not being replicated by the government’s approach to the superannuation entitlements of some existing Telstra employees. The Liberal government has failed and is continuing to fail to guarantee the rights of, and the pension promise made to, approximately 1,800 Telstra employees who, as a result of the sale of the Commonwealth’s majority interest and as a consequence of a government policy decision, will be required to terminate their ongoing membership of the Commonwealth Superannuation Scheme, known as the CSS.

On 7 September last year Labor asked in the Senate the Minister for Finance and Administration, Senator Nick Minchin, explicitly about this issue and he replied: ‘Superannuation conditions would continue.’ That was a response in respect of Telstra workers once the company was sold by the government. But he has misled the Senate on this issue. The T3 prospectus states on page 51:

Telstra employees who are members of the Commonwealth’s Superannuation Scheme will cease to be eligible employees for the purposes of the Superannuation Act 1976 and will no longer be entitled to contribute to the CSS.

This will have significant—it will vary from employee to employee—adverse financial consequences for those 1,800 Telstra employees. In a number of questions to the minister for finance last week on this matter I, on behalf of Labor, drew the attention of the Senate to the adverse consequences for these 1,800 employees.

The CSS is a defined benefits scheme which provides a pension promise at a given age—55 or beyond—based on a formula of years of membership. The CSS was available to Commonwealth government employees and closed to new entrants in 1990. In Australia, when a defined benefits scheme in either the public or the private sector is closed, existing member benefits and the pension promise made are maintained in principle. It is new employees from the shutdown date who enter the new, usually lower level defined benefit contribution scheme or fund; hence, the pension promise that has been made is kept and preserved for the member.

Labor believes this is a sound approach both in principle and in law. A promise made, particularly one concerning a retirement benefit pension, should be kept. Labor believes that this is not just an important principle but also the correct legal approach. I pose the fundamental question: can a guaranteed benefit made under contractual obligation be removed without compensation or a comparable alternative superannuation benefit being offered?

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

That’s a constitutional issue.

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

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

Senator Murray interjecting—

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

Over a future benefit—you are quite right, Senator Murray.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

And the future fund is liable.

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

Yes. Whoever is liable, the fact of the matter is that there is potentially legal obligation and legal litigation in the wind on behalf of these 1,800 employees. Labor believes that, given the agreement between Telstra and the government and also the constitutional issue that I referred to earlier, whoever is responsible for this action—and we believe the primary responsibility for it lies with Senator Minchin and Senator Coonan—should be aware that it is probably illegal. Of course, that is to be established if the matter goes to court.

Further, I asked Senator Minchin in the Senate last week whether he had sought advice from the government pension regulator, the Australian Prudential Regulation Authority, known as APRA, on the legality of cutting a promised pension benefit. Labor is certainly aware that where cuts to pension promises have been made with the closure of defined benefits in other circumstances—and there was a recent circumstance involving AXA, a well-known private superannuation fund which cut benefits to their employees—the regulator has stepped in and ensured corrective action was taken.

Accordingly, Labor will move a second reading amendment to this bill. It is the only mechanism we have before the Senate to attempt to deal with this matter. The amendment states that we regret the fact that the government has offered no such protections to the up to 1,800 existing Telstra employees who are currently members of the CSS and will have their membership terminated as a result of Telstra 3 privatisation; we consider that the pension promise made to those employees will not be met as a consequence and we believe that is a matter of fact; and we note that comparable provisions have been made to ensure the pension promise is met, for example, with respect to the Qantas privatisation.

We condemn the government for their failure. They have had this matter drawn to their attention on a number of occasions, yet they have not acted in this regard. They have acted with respect to long service leave entitlements but not with respect to the pension promise made for the 1,800 employees who are still in the CSS. We call on the government to immediately rectify the position for these disadvantaged Telstra employees. I have been dealing with superannuation issues for a lengthy period. I cannot recall a case either in the private sector or in the public sector where, as a consequence of a change of ownership of a company or authority, the pension promise made in a defined benefit fund has been cut in the way we are considering here today. I cannot recall a case where this has occurred, and for good reason: I suspect it is unconstitutional to remove a benefit without compensation or some effective comparable alternative being offered. I think the government could find themselves in very significant legal hot water as a consequence of the course they are determined to embark upon. Telstra could possibly find itself in hot water as well, but I do not blame Telstra. In this process they are following the command of the incompetent ministers, Senator Minchin and Senator Coonan.

Frankly, I cannot understand why the Minister for Finance and Administration, Senator Minchin, has not sought to address this issue. Senator Minchin well knows that, if he had attempted to deal in the same way with parliamentarians’ entitlements on the closure of the defined benefits scheme, he would not have left this place alive. Yet here we are dealing in a manifestly unfair manner with the pension promise made for some 1,800 Telstra employees. Whatever we think of the merits—in Labor’s case, the lack of merit—of the privatisation of Telstra, there is an important issue in principle here: a promise made with respect to a pension benefit in particular must be kept. Not only is it unethical not to keep the promise by ensuring that there is a comparable benefit offered or at least compensation but Labor believes that this matter poses a serious question legally for the government and for the Telstra corporation down the track in the commitments given when the government signed its memorandum of understanding with respect to Telstra employees’ superannuation benefits and the possible constitutional question that surrounds the manner in which these Telstra employees are to be treated.

As I said, we have not had a response to my question to the minister about whether this matter was referred to the pension regulator APRA. I think we will hear more about this particular issue. It is a further example of the botched regulatory issues around the T3 privatisation. Frankly, it is an added uncertainty that will put a question mark over Telstra going forward once the T3 privatisation process is concluded. It is an added uncertainty which should have been dealt with in ensuring not only the preservation of a promise made to employees going forward but also certainty for shareholders and potential shareholders who will become engaged in the T3 process. On behalf of the Labor opposition, I move:

At the end of the motion, add “but 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 Senate:

        (a)    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;

        (b)    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;

        (c)    notes that: no comparable provision has been made to ensure the pension promise is met, as occurred in the Qantas privatisation;

              (i)    Notes that no other compensation is provided for;

        (d)    condemns the Government for its failure in this regard; and

        (e)    calls on the Government to immediately rectify the position for these disadvantaged Telstra employees”.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

As already noted in the Senate, the Long Service Leave (Commonwealth Employees) Amendment Bill 2006 extends the operation of the Long Service Leave (Commonwealth Employees) Act 1976 in respect of Telstra employees for a period of three years after the day on which the Commonwealth ceases to have a controlling interest in Telstra. ‘Controlling interest’ has great legal meaning and should be noted for the debate. As with other organisations that have shifted from Commonwealth owned to privately owned or publicly listed on the Stock Exchange, a savings provision was included in the Telstra (Transition to Full Private Ownership) Act 2005 to protect employee long service leave entitlements arising from pre-sale service that otherwise would be forgone due to the sale of Telstra.

The protection applies generally to Telstra employees with at least 10 years service. However, provisions are also made for employees with less than 10 years service to receive benefits commensurate with the long service leave act standard when they either complete 10 years service with Telstra or cease to be employees in circumstances under which the long service leave act entitlements would have applied but for the sale. The saving provisions for long service leave operate in relation to the ‘designated day’, that is, the day which, in the minister’s opinion, is the first day on which the majority of the voting shares in Telstra are, or were, acquired by persons other than the Commonwealth such that the Commonwealth ceases to have a controlling interest in Telstra. So the minister’s determination is not able to be made isolated from the legal consequences of that particular description.

The amendments proposed in this bill would defer the operation of the substantive and saving provisions for a period of three years after the ‘designated day’. As noted by the Bills Digest, this would have the effect of ensuring that Telstra employees will continue to accrue benefits under the long service leave act for a period of three years after the day on which the Commonwealth ceases to have a controlling interest in Telstra, and deferring the operation of the transitional provisions relating to Telstra employees’ long service leave entitlements for a similar period. So far, so good. The Democrats support this bill because of those provisions, because they do improve the circumstances for Telstra employees.

The shadow minister has drawn attention to other issues which surround this matter. These are not simple transmission of business issues. When the government sells a major corporation like Telstra, in part or in whole, the normal transmission of business issues which are covered off in workplace law and in jurisprudence are complicated by the fact that the Commonwealth has certain constitutional and contractual obligations and liabilities which do not replicate those which are apparent in private transactions.

The shadow minister drew attention to the potential for legal action in this area, where groups of employees—a substantial number; 1,800, I am advised—may join together in a class action to determine just compensation if they feel that their entitlements as promised to them in a contractual sense have been unjustly taken from them. Again, the shadow minister made the point that that would have to be determined in the courts. I have sensed from some—certainly not all—members of the coalition that they think they may have the High Court in their pocket because of the appointment system. I do not agree with that. I think the High Court, if the matter ever got there, would have a mind of their own on this matter.

The liability, of course, may be seen to apply to both the government and Telstra. But I wonder whether it will also apply to the Future Fund. That was the point of my interjection to the shadow minister, which I do not think he picked up. My memory of the Future Fund Bill is that the government has given the Future Fund some legal reassurance that it will be protected from liabilities and indemnified to some extent. But if, subsequent to that bill passing, directors and managers of the Future Fund are aware of a circumstance which they could have intervened on, I wonder whether they will not be exposed to a little more liability danger than we might otherwise think. I am not a lawyer; I am a practical man. I would suggest that the liability issue might be wider than just to the government and to Telstra—which, of course, means that eventually taxpayers will pay.

While the Democrats did not support the Telstra (Transition to Full Private Ownership) Bill 2005, because we felt that the way the bill was structured was not in the national interest, it is my belief and that of my party that the government have mismanaged elements of the interconnections between Telstra, the telecommunications industry and the media industry with respect to competitive and community matters. One of those is with respect to the recent media package, which failed to acknowledge the pivotal role of the telecommunications industry in the provision of media content and access in the future. This is a big hole that should have been addressed. Much of the technology for media delivery in the future—and that future is not far distant—will be on telecommunications platforms. That being the case, it is essential that, for telecommunications and media, Australians, both metro and regional, have access to high-speed broadband.

Mr Acting Deputy President, with respect to security matters—and I note that the Minister for Justice and Customs is the duty minister in the chamber—you might not be aware that there is no requirement on Telstra to immediately, urgently and by law provide satisfactory broadband facilities to designated airports. The whole security system is linked in to broadband access—the ability to access CCTV camera material, the ability to interact in telecommunications bases with rapid response groups et cetera. Key regional airports that do not have dedicated broadband access already applied to them would be an issue. So there are all sorts of areas, frankly, that have not been signed off with respect to Telstra and its sale.

Anyway, the deals have been done. The National Party negotiators did not understand that telecommunications is the way to deliver media diversity in the 21st century, and the sale of Telstra is now a foregone conclusion. The moneys that could have been available for infrastructure, water and other things which the government is now waking up to were not secured from the sale of Telstra. There are all sorts of areas of negotiation which represent a missed opportunity.

I return to what is contained in the bill. The transition from Commonwealth employees to private employees is inevitable for Telstra personnel and will be triggered by the date, the shareholding and the circumstances when the Commonwealth ceases to have a controlling interest in Telstra. That will not necessarily be established by legislation but may well be established by courts, if it is ever challenged.

The bill, in effect, tries to minimise any negative impact that the full privatisation of Telstra may have immediately on Telstra employees’ long service leave entitlements. The amendments will provide certainty to employees beyond the term of the existing certified agreement and for those on AWAs that their entitlements will not fall below current levels for the next three years. This is a sensible position for the government to take and we are pleased, by and large, with their support for this position.

Labor has raised the inconsistent treatment the government has applied to Telstra employees when it comes to other employee entitlements—specifically, superannuation. The government’s bill, passed last year, included a clause that prevents new Telstra employees from being members of the Commonwealth Superannuation Scheme once the Commonwealth is no longer the majority shareholder—and we come back to that issue of when does the loss of controlling interest kick in. Specifically division 3 9L of the Telstra (Transition to Full Private Ownership) Act 2005 states:

If an employee of a Telstra body was an eligible employee for the purposes of the Superannuation Act 1976 immediately before the designated day, the employee is taken to have ceased to be an eligible employee for the purpose of that Act on the designated day.

In other words, that is the day on which the Gordian knot is cut.

Senator Sherry told the chamber very recently that the reductions in the promised defined benefits scheme are significant, although the impacts may vary depending on the circumstances of the 1,800 employees. He has given us a figure—I presume it is not a median or an average figure but an estimated figure—of an $11,000 cut in eventual superannuation entitlement. That is a matter of great concern to anybody who is going to retire. Senator Sherry gave the example of a foreman-linesman who, because of the sale of Telstra and the new pension arrangements that will have to be entered into, will have that cut in his promised pension benefit of $11,000 a year. I therefore assume that, if you did calculations for others, some could have a greater cut and some could have a lesser cut. I note for the purposes of Hansard that the shadow minister has nodded his head. So there could be people who will be more affected than his example.

Senator Minchin told the chamber last week that the Commonwealth is within its rights, as was the then Labor government, to stop membership of the Commonwealth Superannuation Scheme. Once the company is in majority private hands, that responsibility should no longer fall on taxpayers but on the new owners of the business. It is a perfectly reasonable attitude to take with respect to the transmission of business, but the important aspects for the transmission of business with respect to Commonwealth obligations are that those who are transferred have their contractual benefits met.

Superannuation is increasingly a big issue for all Australians. Many Australians will have to live in retirement for a greater number of years, thanks to the better health that so many now have to look forward to, so to be told that you will not get the substantial amount that you expected would obviously be disappointing and frustrating. As the shadow minister rightly says, that might lead to litigation because, when people’s rights are taken away, they will turn to the courts—if there are enough of them and if they can afford it.

Clearly, this is a complex issue. I recognise the government’s arguments and the way in which it has tried to deal with this, but I think the precedent for dealing with these matters was established with the way in which Qantas was dealt with. The point that the shadow minister and others have made is that this matter has not been dealt with on that same basis. In that respect, I draw the attention of the chamber to some remarks made by Mr Stephen Smith, the Labor member for Perth and shadow minister in the House of Representatives. On 17 October he said:

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.

I freely confess that I am no expert in this complex area, but my reading of the situation is that employees in the privatised Qantas who had formerly been Commonwealth employees were not left in as exposed a situation as employees in the privatised Telstra circumstance. That is to be regretted, particularly if there is a precedent which not only was established but after all these years could be verified as to whether it worked. It is one thing to establish a law; it is quite another thing to see how it works out. So I would appreciate the government answering the perception that I have and the allegations made by Labor that, in fact, Telstra employees are going to be worse off shifting into privatised hands than Qantas employees were with respect to superannuation. I do not make a judgement in other areas but just with respect to superannuation.

In summary, the Democrats support this bill because it does improve the situation for employees of Telstra, which is being privatised. We have a concern arising from these matters, as I have tried to outline in my second reading remarks, and for that reason we will be supporting the Labor second reading amendment.

Claire Moore (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

In supporting the Long Service Leave (Commonwealth Employees) Amendment Bill 2006 this morning, I want to take some time to make some comments about the workforce in Telstra. I think all of us in this place know that there are few groups of workers in this country who are more familiar with significant structural change and public scrutiny than those workers in Telstra. We have had seemingly endless debates over the last 12 years about what was going to happen to Telstra in the future. We have debates here, we have had them through the media and we have had large-scale community discussions about the future of Telstra. Throughout that whole process, often the voices of the workers were somehow silenced.

Naturally, the very strong work of the two trade unions—my own union, the CPSU, and the CEPU—came forward consistently with arguments about why Telstra should remain strongly in public hands, the position which Labor continues to promote. But, by nature of being employees of the company, individual workers were often not able to take part in these discussions and debates, although their workplaces and their own working futures were often part of the debate. I think that many Telstra workers have felt quite damaged because consistently throughout the process the working practices, the efficiency and the identity of Telstra were part of the debates.

This piece of legislation actually makes some effort towards providing some security into the future for some of the workers who are currently working in Telstra and what is now going to be their privatised process. That has happened to other chunks of Telstra over the last few years as various business enterprises have been pulled out, sold and moved around. In the past, certainly I as a CPSU official have been part of working with some of the workers as they were making decisions about what was best for them. Throughout that, the Telstra management has often provided great support for individual workers and groups of workers about protection of choices, what they could do, retraining options and so on.

But somehow, in these last few debates, as we have moved grindingly towards the decision on full privatisation, there has been so much focus on productivity and future efficiencies that somehow the workers have become the bargaining chips in this process. When we had the significant announcement of the major job losses which were going to be the first step to the new future of Telstra, that hit home immediately to workers, their families and also their public identity. So I think it is important when talking about this legislation, which is about providing some security around long service leave, that we make some acknowledgment of those workers and their families and also the way they have been almost part of the political fallout of the recent decisions.

It is also particularly important that we mention long service leave because no other entitlement has such a personal link to workers’ longstanding loyalty and service as does the condition which we know as long service leave. Many other countries do not have such a condition. It is something of which we are very proud. When I used to work in the Public Service and also with members in Telstra and, prior to that, Telecom, there was great celebration around giving out long service awards to workers who had been with the company, their employer, for extensive periods of time.

We are going to lose that kind of cultural experience in our current economy. I do not think there will be workers in any organisation, let alone whatever the new privatised telecommunications entity is going to be, who will be celebrating long service, because the nature of the dynamic of the economy is that people come in and out of work. They are on individual contracts. There is not that personal relationship with work, that expectation that someone comes on, learns the skills and enhances their skills over long years of work in the community and that their working life is then celebrated with that employer as well as in their family arrangements and in the wider community which they serve.

So, for me, the whole concept of long service leave is one that is so important and that we should acknowledge. Telstra over many years has been able to give lists of employees who have marked 10, 20, 30 and in some cases 40 years of service to their employer. That is something which I think we as a community should celebrate strongly. In many ways, that is why I was so keen to make some comment today about where, in our debates about the economic realities and the economic futures, we remember the individual workers.

I have said before that there is something about the workers in Telstra, in Telecom before that and even before that in the PMG, across regional Australia, such that there was an immediacy of relationship between those workers who were part of that organisation and their local communities. In Queensland, how many places could you have visited in the past and seen the proud signage of Telstra and also the workers for that organisation, who were part of the community not just through the immediate work they did in providing telecommunications services but so often through various community activities? The workers in Telstra were part of local service groups, emergency fire services, school communities—I think in future times we will be able to look back with pride on the impact of Telstra employment in local areas across our country as part of a very strong history. I think that is lost.

Only recently, we have seen the first-round casualties of the new privatised environment, with the call centres in Queensland being closed overnight. We have talked here about what that is going to do to those families. No-one on any side of this chamber is pleased about that result, but the impact is that those jobs are lost and that money is lost to the community. Despite protestations that there are other work opportunities around, those workers are not facing those immediately at this stage. Through previous reorganisations, sell-offs and restructurings in Telstra, many workers who received their training and started their working lives under the Telstra umbrella have moved on. Those workers continue to talk to each other, even if their employment status has changed, and they know that the contract arrangements in whatever new places they have gone to do not equate to the conditions, the security and the team spirit which they used to know in the public sector environment in Telstra.

It is not a question of productivity, and I say again: there is absolutely no evidence to prove that people in a private enterprise arrangement are any better workers or any more productive or provide any greater service than those in a public sector environment. People like to make those statements and talk about the security of the process. Those workers who feel secure and valued, who know that there is a personal relationship between them and their employer and feel that they will be able to develop their skills to provide an effective future for them and their families, provide the best possible service and are the ones who give the most back, not just to their employer but to the wider community.

In terms of where we go now, we have this legislation looking after these conditions for a short term—a period of three years. It is good to have it there, but it would be much better if we had those conditions protected into the future. But we have three years and, at least in terms of planning and people being able to look at their futures and seeing that they are going to be able to accrue their long service conditions, it is a step towards saying to the employees: ‘We understand the pain and the insecurity, but we still expect you to continue to do the best possible job you can do for the company so that we will be able to sell you off and get the best profit. In terms of what we do it would be great.’

We have already heard from Senator Sherry and Senator Murray about the deep uncertainty around the workers and their superannuation entitlements—another condition of service which shows a particular relationship between workers and their employer. It is the linkage between valuing the worker, accepting their skills and giving them effective repayment for what they do. In many ways long service leave and superannuation are part of a special bond between the employer and the employee, because it is something that can be negotiated and actually quantified to say, ‘These are monetary repayments for the work that you do and show that we accept that you are continuing to provide service.’ It is not just an hourly rate; it is not just coming in for a certain number of hours or days. It is actually saying, ‘We accept you and the value you are to the whole company.’

It would be very valuable if we could give a commitment to the workers in Telstra that their superannuation entitlements were going to be protected as well. We heard early promises, which were widely publicised to the workers involved, when there was that process of keeping people going. As we know, productivity aspects within Telstra have been a strong talking point about whether in fact the sale was going to be effective or not. So the expectation was that the workers would be doing super efforts to ensure that the commitments made to the community about setting up their telecommunications services were fulfilled. We have had that quite interesting comment about what equals equity and effectiveness of service. I have never been quite sure whether we are going to reach ‘adequacy’, ‘efficiency’ or whatever.

Nonetheless, in terms of the workers of Telstra, they all want to provide the best possible telecommunications for everybody across this country. Their workload and work experiences have become public debate. It is one of the sad aspects that, while we have been looking at the future of Telstra, we have not often said how good and how valuable so many of the services have been. We tend to focus on where there have been inadequacies, problems and delays. No-one is more sensitive or more aware of those issues than the workers themselves. When things are brought to their attention, when delays or crises are identified, they are the ones who work most zealously to meet the requirements and to ensure that not just the work is done but the very strong reputation for them as workers and also for the organisation is protected. I wish that the loyalty and respect the workers often show to the employer was given back to the workers in this case.

As we move forward, again I would like to pay credit to those workers who have provided such great services such loyalty and great spirit to the organisation over many years in this country. I also want to pay credit to my coworkers in the Community and Public Sector Union and also the CEPU who have worked this in struggle alongside their members. Many of them had been Telstra employees, so they knew personally what was going on with the families and with the workers themselves. Whilst the vote has gone through and we believe the prospectus is out there and there have been information sessions about this next round, the T3 sale, when we continue that process I think we should value the work that is done for Telstra, value the employees and try where we can in this place to ensure that their conditions, their security and their future continue to be part of the ongoing debate.

Eric Abetz (Tasmania, Liberal Party, Minister for Fisheries, Forestry and Conservation) Share this | Link to this | Hansard source

I thank honourable senators for their contribution to the debate. I understand the opposition will be supporting the bill, although listening to them you might have thought they would not be. It is good that they are supporting the bill, so I will not delay the Senate unnecessarily. I remind honourable senators that this is the Long Service Leave (Commonwealth Employees) Amendment Bill 2006. We have traversed a few other areas, but allow me to respond. 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, or the transition act. Telstra has requested that it be allowed to remain under the Long Service Leave (Commonwealth Employees) Act for a further three years, and the government has agreed to meet that request. Suggestions to the effect that the government, or rather taxpayers, ought to be paying for the entitlements accrued by Telstra employees post sale are simply untenable.

The Minister for Finance and Administration has previously announced that the government would not be maintaining Commonwealth superannuation coverage of Telstra employees after Telstra is sold. That approach is consistent with that taken regarding other privatisations, including those promoted by the previous government. It is worthwhile noting and reminding those senators who would seek to take us back to the future with some of their speeches that they really want to go back even before the Hawke-Keating regimes and still believe in a degree of public ownership that even the Hawke-Keating governments were not prepared to accept. Indeed, Senator Moore’s contribution, sincere though it was, did not make it right. Her sincere approach unfortunately overlooked the fact that her party presided over the sale of the Commonwealth Bank, Qantas and CSL. Why did her Labor Party do that if they were so strongly of the view that privatisation was not a good thing? Is she now asserting to the Australian people that the Hawke-Keating governments acted against the best interests of the Australian people?

I believe that the Hawke-Keating governments acted in the best interests of the Australian people at that time, and that is why we as an opposition supported the then Labor government. It is just a pity, now the tables have been turned, that the Labor Party cannot, whilst in opposition, show the same degree of graciousness and the same degree of national interest as we were able to show when we were in opposition and supported the government through some of these very difficult decisions.

These decisions are never easy to sell, especially in circumstances where people like Senator Moore very cleverly seek to slip into the debate the loss of a few jobs—not a few jobs, a couple of hundred jobs—in call centres in their home state of Queensland. That is very unfortunate; it is unfortunately part and parcel of the modern world that people’s jobs are not always as secure as we might want them to be. But, while she lamented the couple of hundred jobs lost just recently in Queensland, she was strangely silent about the thousands of jobs that were literally stripped out of Telstra while guess who was minister for communications for a very short period of time? It was none other than Mr Beazley. Those jobs were stripped out of Telstra whilst it was still under full public ownership.

Public ownership of itself does not guarantee job security, so it is a fraction mischievous of the honourable senator opposite to try to somehow link privatisation to job shedding in Telstra. I would have thought she knew—and if she does not, she knows now courtesy of this contribution—that, whilst in full public ownership, her current Leader of the Opposition presided over the mass loss of jobs in Telstra.

Maintaining Commonwealth long service leave coverage for a short transitional period has no cost implications for the Commonwealth. Maintaining Commonwealth superannuation coverage of former Telstra employees for an indefinite period would be at a cost to the Australian taxpayer. As Minister Minchin advised the Senate on 11 October:

The Commonwealth is clearly entirely within its rights—as was the then Labor government—to stop membership of the CSS.

That is, the Commonwealth Superannuation Scheme. He continued:

Once the company is in majority private hands, that responsibility should no longer fall on taxpayers but on the new owners of the business.

Telstra employees will retain their accrued benefits under the Commonwealth Superannuation Scheme up to the date of sale. Those benefits will be paid in accordance with the rules of the scheme and the superannuation regulatory regime. The Australian government has already paid out in full its liabilities to Telstra super, which happens to be a total 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. I commend the bill to the Senate, and I suggest the Senate oppose the second reading amendment.

Question put:

That the amendment (Senator Sherry’s) be agreed to.