11 May 2016

2nd Reading Speech

The Hon. ADAM SEARLE ( 16:05 ): I lead for the Opposition on the Superannuation Administration Corporation (Pillar) (Authorised Transaction) Bill 2016. The Opposition does not support the legislation.

We oppose the legislation. I move:

That the question be amended by omitting “be now read a second time” and inserting instead “be referred to General Purpose Standing Committee No. 1 for inquiry and report”. 

With that I also flag that, should we be unsuccessful in moving this legislation into a committee to be examined in more detail at a more leisurely pace, we will be moving some amendments to the bill, in particular around increasing the commitment to the Illawarra region and the continued location of the Pillar operations in that region and also directed to providing greater protection to employees of Pillar. These are the same amendments that were prosecuted by the Opposition in the other place. Notwithstanding the fact that the amendments were not successful in the other place, we will again submit them to this House of review in order that all honourable members from a broader range of parties have the opportunity of examining them and adopting them, which would improve the legislation.

Pillar Administration is a New South Wales State-owned superannuation member administrator. In particular it is a Wollongong based company with about 700 employees. It has two main clients are First State Super and State Super. Approximately 1.5 million people have their superannuation funds administered by Pillar. Pillar has a chequered history in which governments, including the previous Labor Government, have considered selling or offloading responsibility for Pillar at one time or another. It was found at that time that it was not going to return a significant amount of money and that was not proceeded with. In November 2013 Deutsche Bank was asked by the current Premier to complete a scoping study into the potential sale of Pillar after the company put up its hand for a $30 million cash injection to fund a technology upgrade. The scoping study was completed. As at December 2015 the State provided $12 million to improve the platform. That scaled back program is now apparently half complete.

There was no mention of the privatisation of Pillar prior to the 2015 State election, but now it is up for sale to the private sector. The New South Wales Treasurer has said that a condition of the sale would be that Pillar would be required to stay in the Illawarra for another 10 years, whoever buys the business. Some of the provisions in this bill include giving an employment guarantee of two years for existing staff. As I indicated, the Labor Opposition will be moving a number of amendments to address the situation in the Illawarra region. First of all we want to ensure that the private sector entity that becomes the owner of Pillar pursuant to the authorised transaction provides a guarantee that Pillar’s existing operations immediately before the completion of the transaction will continue to be conducted in the Illawarra for at least 20 years after the completion of the authorised transaction.

In addition to this commitment to the region, we will also be seeking an amendment that the Treasurer of the day, whoever he or she may be and whichever political party he or she is from, will submit a report to Parliament each year, updating the House on the status of those operations in the Illawarra region. We are pursuing those amendments in relation to regional commitment and employment commitment because a number of specific factors are occurring in the Illawarra economy that must be addressed. 

There are significant issues facing the region. A loss of hundreds of jobs has occurred in the past few years in key industries, such as manufacturing, heavy industry and the mining sector. We are seeking to reinforce the relocation of Pillar to the Illawarra, which was instigated by the former Labor Government. We want to ensure it remains a permanent part of the social and economic fabric of that region. We want to make sure, given the uncertainty of jobs and the big transition that the region is experiencing, that there is more certainty around the longevity of that organisation and its operations in the region. As I indicated, it was a Labor Government that relocated Pillar to the region. We want to extend the regional commitment that the Government is making from 10 years to 20 years. We also wish to make sure there is a proper monitoring system. We want to ensure that existing employees are given an employment guarantee of more than two years. We say five years is a more appropriate length of time if this Parliament is to approve this legislation. 

The reason we seek the more extensive commitments is because this Government in the past promised that the region would receive $100 million from the sell-off of Port Kembla. The region is still awaiting that $100 million, notwithstanding the fact that that authorised transaction, the sale of Port Kembla, has well and truly been exercised—

Mr Scot MacDonald: Point of order: I understand wide latitude is extended in debate, but the Hon. Adam Searle is talking about a completely different fund, which is a completely different issue and has nothing to do with this bill. 

The Hon. ADAM SEARLE: To the point of order: I was expounding that one of the reasons we are seeking those guarantees is because of our concern about has happened in the past. It is elucidating a key aspect of our approach to the bill. 

DEPUTY PRESIDENT ( The Hon. Trevor Khan ): Order! There is no point of order. 

The Hon. A DAM SEARLE: The Illawarra is still waiting for the $100 million from that other authorised transaction. We seek the additional guarantees for the region in this transaction, if it is to go ahead, which we oppose. One example is the Bulli Hospital. That was said to be funded under the Illawarra Infrastructure Fund, and it has not occurred. We will also seek to move an amendment to clause 17 and the transfer of staff from the public sector to the private sector. Under the proposed amendment we have lodged with the Clerks, a transfer of employment would require a transfer payment of 30 weeks, although it would still not require the consent of the employee. The employment of a transferred employee with a new employer would be on the same terms and conditions as applied under the relevant award enterprise agreement or contract of employment that a Pillar employee had immediately before the transfer of employment. 

In addition, under part 4, clause 17 (6) (a), for permanent employees we propose that the employment guarantee be lifted from two years to five years, and under clause 17 (6) (b) for temporary employees we propose that employment should be guaranteed for the remainder of the employee’s current terms of employment as specified in the arrangements under which the employee was engaged as a temporary employee immediately before the transfer date, or the period of five years after the transfer date, whichever period would end first. 

At the moment the Illawarra, through no fault of its own, is going through an economic transition similar to that which has occurred in Newcastle over the past 12 or 13 years. It is shifting from a manufacturing and heavy industrial base to a more services, health and education base. During that transition, the region is trying to retain persons in employment so that the regional economy does not feel the shock of so many job losses. We do not want to see a large number of workers lose their jobs and for those wages go out of the local economy. The knock‑on effect would have a tragic effect on the economy, which would lead the region into a downward spiral of economic activity. 

I remind members that the Labor Opposition fought hard to secure the future of BlueScope Steel in the region. On behalf of the Labor Opposition, I propose that we will increase the certainty and the fairness for workers by ensuring that Pillar remains a strong presence in the regional community in the longer term. We want to ensure that the workers that members on this side of the House have advocated and fought hard for receive the protections they need to secure their long-term future. We think these measures are sensible and balanced. They are in the same vein as those contained in the bill, although they do not quite go sufficiently far enough. We think the appropriate course of action is for General Purpose Standing Committee No. 1 to inquire into and report on the subject matter of this bill in more detail. If we are not successful on that front, we urge members to support the amendments that I have foreshadowed and lodged with the clerks.