Southern State Superannuation (Parental Leave) Amendment Bill

Second Reading

Adjourned debate on second reading.

(Continued from 8 March 2016.)

The Hon. R.I. LUCAS (17:33): I rise on behalf of Liberal members to support the second reading of the Southern State Superannuation (Parental Leave) Amendment Bill. This is one in a series of bills where the government has introduced legislation, got the parliament to pass it, then changes its mind and either seeks to rescind it, withdraw it or, in essence, repeal it. As I said, we have had another recent example of this in the current session of parliament.

The explanation for this particular bill is that up until 2012 superannuation had been payable to members of the Triple S scheme on parental leave payments.

However, in 2012, the state Labor government introduced a bill into the parliament which amended the definition of 'salary' so that superannuation did not have to be paid on parental leave payments. That legislation, as I said, was introduced by the government, it was supported by the opposition and, whilst I have not checked the actual debates, I do not believe it was opposed by any of the minor parties or Independents in the parliament in 2012.

At the time, the government argued they had to introduce the legislation because of the requirements of the commonwealth Superannuation Guarantee (Administration) Act 1992. That is the background. The government introduced the bill, the parliament supported the bill, the government said they had to introduce the bill because it had to be brought into line with the requirements of the commonwealth legislation and, on that assurance, the parliament passed the legislation.

This bill was introduced just over three years later and it seeks to reverse the 2012 decision by reinstating superannuation to members of Triple S on parental leave payments. We are given very scarce information on the reasons why, and I understand this is going through tonight, and I guess we will be able to explore some of these questions in the committee stage of the legislation. In the second reading, the government claimed that some states (and they listed Queensland, Tasmania and Western Australia) had continued to pay superannuation on parental leave despite the federal legislation.

One can only assume on that basis that, whilst we were told here that we were required to be in accordance with the federal legislation, clearly other states had different legal advice, I assume, or they were acting unlawfully, and I guess the minister can outline the reasons the government was given as to why three states (Queensland, Tasmania and Western Australia) operated outside the provisions of the federal legislation. One can only assume, although it is unstated in the second reading, that the other states (that is, New South Wales and Victoria) complied with the federal legislation, as we did in the 2012 bill.

The second argument—and, again, we can explore this in committee—is that the government claims that various enterprise agreements that existed at the time of the 2012 bill included provisions that existing conditions of employment would not be reduced. Whilst that was clearly understood at the time, I am assuming the government, when it acted in 2012, was aware of the provisions of the enterprise bargaining agreements that existed at the time and it obviously had legal advice at the time, but I would assume that the parliament is paramount—that is, if the parliament legislates for something, it overrides various enterprise agreements. I can only assume that was the advice that the government had in 2012 when it asked the parliament to pass the legislation.

Whilst I see the reference in the second reading, I will be seeking answers from the minister as to what the legal advice to the government was in 2012 and what the difference in the legal advice was in 2012 which has led to them putting that in the second reading explanation as one of the reasons this needed to be reversed. The government also proposes that the bill be made retrospective to November 2012, and I seek an explanation from the minister on why that is the case. In a very curious explanation, the government claims that this 2012 decision will have no budget impact. On the surface, that is hard to understand because, clearly, if you are paying superannuation on a broader definition of 'salary', clearly you need to find additional money to do that.

There are a number of persons who are on parental leave arrangements, as well as agencies, and I will ask the minister questions in terms of what advice Treasury has given them. One big agency is the health agency, and the Hon. Mr Ngo, with his past experience as a very senior adviser to the Minister for Health, would be very familiar with the length and breadth of the health portfolio and the importance of parental leave arrangements in that portfolio, particularly with the significant volume of nurses and other staff and allied health professionals in the health agency. The education department, for that matter, has a very large percentage of teachers and support staff in schools who are female. That might be another agency that would have a very significant usage of parental leave arrangements.

The government claims that there will be no budget impact from this reversal of the 2012 decision, which is a curious claim. As best as we can understand it—and there is only a little bit of detail provided in the second reading, and again the minister, I am sure, will be able to provide answers in the committee stage—no budget reductions were made to agencies in 2012, which is again curious.

For anyone with any knowledge of treasuries, under either a Labor or Liberal government, if a decision is passed by the parliament which clearly has a savings impact because it has reversed a previous situation in relation to the payment of superannuation for a large number of people, it seems curious that Treasury would not insist on those savings being either recouped back to general revenue or at least accounted for in some way during the budget bilaterals between those agencies and Treasury. But, no, the government claims that no budget reductions were made.

That obviously begs the question: the parliament passed the law in 2012; did agencies such as education and health just ignore the rule of law? Did the government of the day and Treasury just ignore the decisions the parliament took? That is, the parliament said, 'Thou shalt not pay superannuation on certain aspects of salary.' Is the government saying to the parliament that those agencies, CEOs and others acted outside the law of the state; that is, they just ignored it and continued to pay superannuation? I think that is an important question that needs to be answered before debate on this bill is concluded this evening.

There is nothing new in these questions. I am sure that the minister's advisers, who are here, will be well briefed and able to provide the minister with answers to these questions. I would like to know, for example, what the potential budget impact would have been on the education and health portfolios on the basis that the legislation passed in 2012 and, clearly, the reversal of that through this particular legislation.

The other issue—and again, those familiar with budget bilaterals will understand this—is that even though Treasury might not have clawed back the savings, to use a Treasury phrase, let's say that as a result of the 2012 change of law by the parliament which saved potentially $5 million over a financial year because they did not have to pay superannuation on the parental leave payments, the government is claiming in the second reading that no budget reductions to Health were made.

Again, anyone who understands bilaterals will understand that if, for example, Health is required to achieve $150 million in savings because of efficiency dividends and a variety of other things, they will have to sit down and try to come up with $150 million worth of savings. Part of those savings might have been attributed to $5 million of superannuation payments as a result of the parliament's decision. That is, it was used by agencies to offset their savings task. While it was not clawed back to Treasury by a reduction in their appropriation, Health would argue to Treasury, 'We have achieved our $150 million in savings and $5 million of those savings are as a result of this new legislation, which means we do not have to pay superannuation on parental leave payments.'

I think they are the simple questions that the minister and his advisers need to respond to this evening as we go through the committee stage of the debate. They are not unreasonable questions, given that within the space of three years the government says, 'We need to pass the legislation,' and we do, because of federal requirements, and then three years later it says to us, 'Well, no, we have changed our mind. We are not going to comply with the federal arrangements. We want to reverse the decision that we asked you to take just three years ago.'

In the consultation the Liberal Party has undertaken, limited as it may have been, as one would expect the PSA supports the bill. From my recollection, I assume that back in 2012 the PSA opposed the bill; I have not had the opportunity to go back and check my files on the 2012 debate, but I would assume that was the case. However, even if it were the case, the government decided to proceed in the knowledge that the PSA would have opposed the legislation back in 2012. With that, I indicate Liberal Party support for the second reading but outline the wish to pursue some of those questions and seek some answers during the committee stage.

The Hon. T.A. FRANKS (17:46): I rise very briefly on behalf of the Greens to indicate our support for this bill, the Southern States Superannuation (Parental Leave) Amendment Bill. This bill relates to the industrial relations portfolio, of course, and seeks to reverse the 2012 decision which resulted in public sector employees not having any superannuation payments made while on paid parental leave. This unintended consequence had a significant negative impact, on women in the public sector, in particular, who accessed parental leave.

This bill will ensure that any affected employees will have an outstanding superannuation payment paid following the passage of the bill, and we acknowledge that is retrospective legislation in that way. We have had information from the Public Service Association that it does support this bill, as do the Greens. We think it is only fair and just that those workers have their just entitlements.

Bill read a second time.

Committee Stage

In committee.

Clause 1.

The Hon. R.I. LUCAS: I put a series of questions to the minister. I am happy to repeat them, but the advisers were in the chamber at the time so I invite the minister to respond to some of the questions I put.

The Hon. P. MALINAUSKAS: There are a number of questions that the Hon. Mr Lucas, I understand, referred to recently. I will attempt to deal with advice that I have received in respect of the budget, which was, I think, a significant component of the honourable member's questions. My advice is that back in 2012, when this change initially took place, Treasury did not account for any positive budgetary impact as a result of the payment of superannuation on parental leave concluding, and therefore that has been a prevailing logic in respect to what is occurring this time round with respect to any prospective budget impact.

That said, I have been advised to give the honourable member some clarity in terms of the number of people who are likely to be affected in any one year across the Public Service. Our advice is that that number is in the order of 990 FTEs who would have this new amendment apply to them across the public sector in any one year. If there are any other specific questions that the honourable member had, I am more than happy to answer them as he goes through them.

The Hon. R.I. LUCAS: I am happy to go back through the questions. Perhaps we can stay with the budget questions firstly, I guess. Can the minister confirm whether, when parliament passed the decision in 2012, agencies complied with the law of the state and stopped paying superannuation on parental leave payments?

The Hon. P. MALINAUSKAS: I understand that the honourable member has asked these questions in writing previously. The appropriate department has indeed received correspondence to that effect, answering those questions, but nevertheless I will attempt to answer them consistent with the advice that I have received.

I have been advised that employees were still being paid the superannuation guarantee contribution up until 2015, when it was picked up that these payments were not being made, and hence the need for the bill that is before the parliament at the moment. I am advised that up until 2015 Shared Services continued to pay the superannuation guarantee for those people on paid parental leave.

The Hon. R.I. LUCAS: I am sure that even though the minister is a new minister he would recognise that that is an extraordinary response that he has been given to give. I accept that it is not his answer; it is the nature of the advice the advisers are providing. But, put simply, what the minister is saying on behalf of the government is that the parliament passed legislation and government departments and agencies just ignored it.

He says that there are nearly 1,000 full-time equivalent public servants who would benefit from this, so the parliament, on the recommendation of the government said, 'Stop paying superannuation to these 1,000 people for their parental leave payments because that is what the federal legislation requires.' The government comes in, the Liberal Party supports it—and, as I said, I think the Independents and minor parties supported as well or did not oppose it—and what the minister is saying to the house is that the chief executives, the Treasurer, the Shared Services group, just said, 'Stuff you, we're going to continue to pay the superannuation to these 1,000 people even though the parliament said no.'

As I said, the minister is relatively new in the chair and I make no criticism of him personally for the response he has put on the record on behalf of the government. He was not here in 2012 and I think he is probably grateful that he wasn't, but this is an extraordinary position that the government has now acknowledged. There is no reference at all in the second reading explanation to this. There are weasel words and there are mealy-mouthed explanations. I was provided with advice from a whistleblower who indicated there is something that needs a closer look at in relation to this legislation and the reasons why the government has reversed it and, as a result of the questions that we have put, the government acknowledges now that for three years Public Service bosses, Treasury, Treasurer—I mean, clearly Treasurer Koutsantonis was just asleep at the wheel.

Parliament passes the legislation, he is in charge of the Treasury, he has chief executives and departments just saying, 'Stuff you, I am not going to abide by the law of the land. Just because the parliament tells us to stop making these payments to these 1,000 public servants, we are not going to abide by that decision. Who does the parliament think they are? We are the public servants. We are the Treasury. We are the ones who run the state. The Hon. Tung Ngo, the Hon. Russell Wortley, the Hon. Rob Lucas, just because you pass a law and change it, does not mean that we have to comply.'

It would be a good way to run your business wouldn't it, Mr Chairman? The parliament passes a law and you just say, 'Well, stuff you.' Then what happens is the government, under Treasurer Koutsantonis and Premier Weatherill, comes into the parliament and tries to cover up the breach of the law by reversing the decision and making it retrospective to 2012. That is what they are asking us to do, to in essence say, 'Look, we passed the legislation in 2012, but they all refused to implement the legislation in 2012, without actually telling you this.'

As I said, if the government fessed up in the second reading explanation or in the debates and said, 'Look, we passed the legislation but the Public Service bosses refused to implement it,' or if there were some other explanation, we could have had, 'There was an amazing mess-up with Treasurer Koutsantonis, that is, the Treasurer made a huge blunder, he forgot to implement the legislation, even though he voted for it, but as the Treasurer, he forgot to implement it. As he went through the budget processes in 2014 and 2015 with his Treasury officers, he forgot to implement it'—as opposed to deliberately ignoring it.

The parliament would have at least been apprised that we had further evidence that we had an incompetent treasurer and incompetent Treasury officers, or Shared Services officers within the government, and accept the responsibility, 'We would like you to help us; you, the parliament, to help us fix up the mess,' but we get none of that. We get these mealy-mouthed weasel words in here which say that there were various enterprise agreements in 2012 which included provisions that existing conditions of employment would not be reduced.

The government knew that in 2012. The Hon. Tung Ngo would have been aware of that in relation to enterprise bargaining agreements in the health sector or the PSA agreements—all of those were known at the time. There is nothing new that has been introduced into those agreements. I would like the minister, as a result of those decisions, and the fact that it is 6 o'clock now, to report progress.

I would like to receive from the government a fuller explanation, now that this truth has been revealed, of how we got ourselves into this situation. I want to know whether any agency actually complied with the law, or is Shared Services and Treasurer Koutsantonis saying to us now that every agency in the state just refuses to abide by the law of the land? Is it just some of them that refuse to abide by the law of the land? I would like to know—and clearly Treasury would know, if they had done the figures, that there are nearly 1,000 public servants who are impacted—what the annual budget cost is, the budget differential of this particular issue. What is the annual figure that we are talking about?

Progress reported; committee to sit again.