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House of Assembly - Fifty-Second Parliament, First Session (52-1)
2011-02-10 Daily Xml
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Ministerial Statement

PUBLIC SECTOR LEAVE ENTITLEMENTS

The Hon. J.J. SNELLING (Playford—Treasurer, Minister for Employment, Training and Further Education) (17:28): I seek leave to make a ministerial statement.

Leave granted.

The Hon. J.J. SNELLING: Today in question time the member for Davenport asked a question concerning a Treasury minute dated 12 January 2010 about long service leave payouts under the Public Sector Act 2009. I have sought some initial information from my department and I wish to take this early opportunity to inform the house what I have been advised to date.

Part 6 clause 9 of the Public Sector Act 2009 provides for payment in lieu of long service. As members would be well aware, the long service leave liability for all public servants is fully accounted for in the state's balance sheet. The issue of whether or not employees can access a payment in lieu of long service does not affect the size of the liability.

In the case where payment in lieu of long service may occur, this does not impact on the net operating result or net lending because under accrual accounting the expense is recognised when the long service leave is earned, not when it is actually taken. A payment in lieu of long service leave merely results in a reduction in the leave liability and a commensurate increase in net debt, which reflects the payout of the cash.

Contrary to the claims of the member for Davenport, I am advised by my department that there is in fact no shortfall in the budget. It is all properly accounted for. Payment in lieu of long service leave can only be approved by the department chief executive under the Public Sector Act or, in the case of chief executives, the minister.

I have been further advised that there has not been a significant take-up of the changed arrangements since February last year. Payments in lieu of long service are made in limited circumstances. Accessing payment of long service leave before retirement or termination means that the benefit of future wage increases such as promotion or CPI increases would be forgone by the employee and be made without access to the concessional tax arrangements available from the commonwealth for long service leave payouts on termination.

Based on the information that I have before me, Treasury have been doing what I would expect them to do, and that is expressing their concerns in an abundance of caution, but these concerns have not materialised. I think the only person who needs long service is the member for Davenport's long-term research assistant, the Hon. Rob Lucas.

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