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Legislative Council - Fifty-Second Parliament, Second Session (52-2)
2012-05-17 Daily Xml
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PUBLIC SECTOR SALARY PACKAGING

The Hon. R.I. LUCAS (15:06): I seek leave to make an explanation prior to directing a question to the Minister for Industrial Relations on the subject of salary packaging.

Leave granted.

The Hon. R.I. LUCAS: A while ago, questions were asked of the minister in this chamber in relation to the government's decision to make a monopoly provider of salary packaging for public servants in South Australia. There has been very strong opposition from unsuccessful tenderers in relation to the government's decision.

I have received in recent days a copy of a strongly worded protest from one company—Smartsalary Pty Ltd—addressed to both the Premier and the Chief Executive of the Department of the Premier and Cabinet. It says, in part:

Our concern relates to the lack of transparency that moving to a single provider will provide sustainable benefits to SA Government public sector workers over the term of the new agreement, which is an extended period of six years.

I note the government has a predilection to monopoly providers, for example, the claims manager in relation to WorkCover and a range of other contracts and tenders which have proven to be singularly unsuccessful. The letter continues:

In particular, we have not been provided with evidence as to:

In part, I quote two sections:

How costs for employees will be improved, as it seems apparent that the SAGSSA did not consider the total cost of salary packaging to employees. Specifically, with novated leases, brokerage and other lease expenses comprise a much higher cost to the employee than the associated salary packaging fee. This critical information was not sought from Smartsalary during the tender process.

I repeat that: they say that critical information was not sought from Smartsalary during the tender process. The letter goes on:

How the service offering will be improved for employees. The SAGSSA required us to send our SA Government salary packaging employees an inaccurate communication about 'new' initiatives allegedly initiated by the new sole provider and thus representing their offer as superior. The reality is that a number of these new initiatives were either mandated by the Department in the tender documents or were already offered by Smartsalary over the previous four years.

The strongly worded protest letter does list other details, but I won't put all those on the public record at the moment. The government obviously has a copy of the letter. My questions are:

1. Is it correct that critical information, such as brokerage and other lease expenses, such as vehicle pricing and interest rates, were not sought from some or all of the tenderers for the salary packaging service tender?

2. If this is the case, does the minister accept that the South Australian government, in assessing tenders, was unable to consider the total cost of salary packaging to employees because, for example, novated leases, brokerage and other lease expenses (which comprise a much higher cost to employees than the associated salary packaging fee) were not sought from tenderers?

3. Can the minister, given the decision to provide the contract to a monopoly supplier, guarantee that the total cost of salary packaging to all employees under the government's monopoly supplier will be lower than might have been provided by any of the other tenderers?

The Hon. R.P. WORTLEY (Minister for Industrial Relations, Minister for State/Local Government Relations) (15:10): This is quite a complex issue. I think it would be irresponsible of me to get up and just give an answer to those questions. I will take them on notice and get back to the member as soon as possible.

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