Legislative Council, Thursday 8 September 2022

Ms FORREST question to LEADER of the GOVERNMENT in the LEGISLATIVE COUNCIL, Mrs HISCUTT

TasBuild was created to manage the portable long service leave scheme for eligible employees in the Tasmanian construction industry by registering records of any reported relevant employment undertaken by a worker in a single account so that employment reported across multiple employers counts toward achieving an entitlement.

(1) With regard to the TasBuild 2021 financial statements, the balance sheet shows assets of $184 million, but the liability for long service leave is only $134 million. The balance of $50 million is retained revenue.

(a) To whom does the retained revenue belong?

(b) What will happen to surplus funds if ever the Trustees ever believe they have sufficient funds to discharge any future liability?

(2) Where employers, not ordinarily in the building or construction industry, make contributions to the fund for activities which are deemed to be building and construction activities, say an engineering company installing a plant on a building site, does the employee for whom the long service leave contributions have been made have any access to amounts in the fund if they no longer work for the building and construction industry?

If so, what are the access possibilities?

(3) Does the employer have any entitlements to a refund of long service leave amounts in cases envisaged by question (2)? If so, what entitlements?

(4) In cases where employees for whom contributions have been made to the fund are no longer employed in the building industry and unlikely to return, can the employees gain access to his or her long service leave entitlements? If so, under what conditions?

(5) Does the employer have access to any entitlement funded by his or her contributions on behalf of employees no longer employed in the building industry and unlikely to return, and if so, what are the conditions?

(6) What assumptions has the actuary made when estimating future long service leave liabilities, including:

(a) What assumptions has the actuary made about the numbers of members who will never be eligible to receive payment from the fund; and

(b) What assumptions has the actuary made about amounts which have been contributed in respect of members who will never receive a payment from the fund?

ANSWER

(1)(a) TasBuild was established as a private trustee company to administer the construction industry's long service leave scheme. The rules of the scheme are determined by the board, which has equal representation from employers and unions, together with an independent chair.

(1)(b) The Construction Industry (Long Service) Fund Trust Deed determines that:

Except for reasonable fees for acting as a director of any Trustee or of any Corporation owned or controlled by any Trustee or for the provision of other services to or for any Trustee, the Settlor may not receive any benefit or property of any kind from the Fund or the Income nor from or under any other of the powers, authorities and discretions conferred by this deed or by the proper law of this deed from time to time in force.

Schedule 1 of the Trust Deed clearly outlines the powers and responsibilities of the Trustee in management of the assets.

(2) An employee has a long service leave entitlement once that employee has reached 10 years of relevant employment, which can be achieved through a number of different periods of construction work, employment with different employers throughout this scheme. To be covered by this scheme, a person must not be an employee for the purposes of the Construction Industry (Long Service) Act 1997. The scheme is administered through TasBuild through the Trust Deed and the Rules of the Construction Industry Long Service Fund. The act provides for reciprocal arrangements (section 21) which, in some circumstances, allows for a payment to be made either wholly or partly in respect of a period of service in the construction industry in Tasmania. For example, this could be utilised where an employee moves between states and territories for construction work, where a reciprocal arrangement is made by the relevant minister.

The scheme provides an incentive for employees to continue construction work by providing the opportunity for long service leave accrual, even if moving between employers or leaving the industry for periods of time. The Trustee may determine that any specified work is, or is not, construction work, as outlined in part 8, general to the rules. The Trust Deed and the Rules also have a provision for hearing decisions, objections, and arbitration, providing opportunities for both employers and employees to seek an outcome which considers their unique circumstances.

(3) Generally speaking, an employer would not be entitled to a refund. However, if at any time the employee returned to construction work, they would continue to accrue long service leave entitlements if eligible for the scheme.

(4) Employees who are no longer employed in construction work, and unlikely to return to this work, may be eligible, dependent on their personal circumstances, to apply for a pro rata long service payment. The Trust Deed and the Rules provides for hearings, decisions, objections, and arbitration, providing opportunities for both employers and employees to seek an outcome which considers their unique circumstances.

(5) Generally speaking, an employer would not be entitled to a refund. The Trust Deed and the Rules have provisions for hearing, decisions, objections, and arbitration, providing opportunities for both employees and employers to seek an outcome which considers their unique circumstances.

(6) TasBuild makes available a comprehensive annual report on its website, which is www.tasbuild.com.au.

Ms Forrest - That is where I got the information.

Mrs HISCUTT - Oh, I do not need to do this answer.

The report is quite transparent and provides statements of comprehensive income, financial position, changes in equity, and cash flow. The act places the operation and administration at a scheme at arm's length from the government of the day.

TasBuild administers this scheme through its Trust Deed and Rules. It sets a contribution rate that employees may pay in relation to each of their employees in relevant employment. This is a percentage of the employee's ordinarily weekly gross wages, and is currently set at two per cent.

TasBuild invests the long service charges paid by employers to generate investment and growth. This approach ensures that workers in the construction industry are able to receive a long service benefit and the employer long service charge is maintained at the lowest rate possible.

Ms Forrest - Through you, Mr President, I asked what assumptions the actuary made. There was no mention of the actuary in that last question. The question was completely ignored. Question six talks about the assumptions made by the actuary. That is what the question was.

Mrs HISCUTT - Through you, Mr President, I will make sure that part goes back in.