Page 5926 - Week 14 - Thursday, 8 December 2011
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entitlements for workers in the construction and cleaning industries; adjustment to entitlements on retirement, incapacity and death under all schemes; and a range of technical amendments to the overall administration of the act.
Madam Deputy Speaker, I must stress today that the adjustments to worker entitlements do not have retrospective application. Workers currently in the portable long service leave schemes will not have their entitlements affected because of these amendments. No current worker will be worse off as a result of these amendments. I repeat: no current worker will be worse off as a result of these amendments.
It is important that I introduce this legislation today with a view to passage and commencement early in the new year. As members here today are no doubt aware from the authority’s annual reports, there has been a large increase in the number of workers in the scheme over the last three years. Such an increase in workers in the scheme is a positive one and it reflects the strength and resilience of the construction industry in the ACT and the effectiveness of the operations of the authority. Unfortunately, however, this increased liability has not been matched by an increase in assets in the scheme over the similar period of time.
While employer levy contributions, based on employee wages, have increased with the numbers of new workers in the scheme and higher wages in the industry, the authority’s equity investments have fallen as a result of the global financial crisis and a faltering recovery due in particular to Eurozone debt concerns. Whilst there has been a modest recovery, the capacity for these investments to contribute significantly to the annual draw-down on reserves to meet claims against the fund will be limited for some time to come.
In addition, the value of the scheme’s investment property, the Manning Clark building in Tuggeranong, has been affected by the short-term lease with the building’s current tenant and an overall drop in the value of older buildings with low energy efficiency ratings throughout Canberra. The board has committed considerable funds to a renovation of the building in order to add to its value and secure a long-term tenant.
The board has also made a recommendation to me to increase the levy. While the construction industry levy was increased marginally from one per cent to 1.25 per cent earlier this year, the first increase in 13 years, I recognise the need for a further examination of the levy rate and other matters impacting on the schemes. To that end I am committed to working with the board to explore all options to address the health of the scheme, including alternative investment strategies, and I have recently written to the board for this purpose.
However, the construction scheme is very generous in comparison to other portable long service leave schemes, and this bill aligns some aspects of this scheme to the other schemes in the interest of protecting its integrity and to address its deteriorating financial position.
The construction scheme basic entitlement of 13 weeks long service leave after 10 years of service will be retained. This generous entitlement is greater than that
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