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The madness of government run long service schemes coming home to roost

By johnboy - 27 August 2013 22

Simon Corbell is sounding the alarm that the hare-brained scheme to give long service leave to people performing no long service is about to run out of money as construction workers fall back on it.

To “fix” this he’s bumping up the employer levy:

The ACT Government has agreed to increase the levy for the portable Long Service Leave Scheme for workers in the building and construction industry to help protect their entitlements, Minister for Workplace Safety and Industrial Relations, Simon Corbell, announced today.

“From 1 October 2013, the employer levy will increase from 1.75% to 2.5%,” Mr Corbell said.

“The decision to increase the levy was not taken lightly and was based on independent actuarial advice.

“It’s important to increase the employer paid levy to ensure that the Long Service Leave Scheme can cope with demand in the event of a downturn in construction activity in Canberra, when more workers may need to access their entitlements.

“This in turn will protect the long term viability of the local industry, by allowing skilled workers to remain in Canberra supporting our city’s economy, rather than seeking work outside of the Territory.”

Mr Corbell acknowledged that while the increase in the levy may result in a flow on cost to consumers, it should be minimal.

“When the impact of the levy increase is spread across all of the projects of a construction company, the cost increase per project will be minor,” he said.

“There are 1600 employers registered in the portable Long Service Leave Scheme – 900 of those companies employ four or less workers. The average cost of the increased levy to them will be about $40 a fortnight per employee.”

UPDATE: The Oracular Mark Colvin has tweeted a much appreciated correction to my grammar.

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22 Responses to
The madness of government run long service schemes coming home to roost
BimboGeek 10:30 am 28 Aug 13

Without putting words in his mouth (I would never try to put anything other than a crisp cold cider there) I can’t imagine John has much sympathy for the poor struggling builders of Canberra. If you want to be underpaid in Canberra, try being a journalist. Or join the RiotACT team. I don’t have premium membership because it’s bad enough that John and Barcho can see my Gravatar without you lot getting a glimpse. What’s your excuse?

At least as a waitress I can do double shifts and earn silly money if I want. Writers just have to hope they get successful enough to make a big name for themselves elsewhere, which is no good if they actually like it here or happen to like their friends and family here.

Waitresses don’t get long service leave, either. Not everyone wants to be a public servant and have their entire life revolve around the fear of losing their license to work, the dreaded security clearance. If all that extra money is what it takes to get people to sit in little cube farms, then hurray for them, but are builders underpaid? Different question.

p1 10:29 am 28 Aug 13

Tetranitrate said :

Most of the workers in these contract-based industries are paid significantly less than ‘typical’ Canberra wages…..

gungsuperstar said :

The nature of contracting in these industries – particularly in construction – is such that people would never, ever receive the long service leave entitlements that the majority of Canberrans receive….

The other way of looking at this Long Service Leave question, is to consider it to be simply a part of a persons overall salary package, and ignore for the moment the “long term” nature of the arrangement.

If I do that, then I can consider that long service leave arrangements are a nanny state way of forcing me to save money to cover a holiday in ten years time.

If we think that long service leave is a sufficiently important condition of employment that it should be universal, why not roll it into the superannuation system and make it genuinely compulsory, universal and portable (like super).

rosscoact 10:17 am 28 Aug 13

davo101 said :

johnboy said :

When you’re the most influential Australian on twitter I guess I’ll be more flattered you’re taking the time to read my copy and suggest improvements?

What? Rupert Murdoch reads the RiotACT…

Almost 30 years since Rupert was an Australian

bundah 10:12 am 28 Aug 13

johnboy said :

If rupert corrects my copy I’ll be sure to let everyone know.

Well he’s always on the lookout for compliant journos..

johnboy 10:07 am 28 Aug 13

If rupert corrects my copy I’ll be sure to let everyone know.

bundah 10:06 am 28 Aug 13

davo101 said :

johnboy said :

When you’re the most influential Australian on twitter I guess I’ll be more flattered you’re taking the time to read my copy and suggest improvements?

What? Rupert Murdoch reads the RiotACT…

Ah but Rupert’s spies are ubiquitous..

davo101 9:49 am 28 Aug 13

johnboy said :

When you’re the most influential Australian on twitter I guess I’ll be more flattered you’re taking the time to read my copy and suggest improvements?

What? Rupert Murdoch reads the RiotACT…

poetix 9:43 am 28 Aug 13

As opposed to a humble but awfully literate poet.

Snobby JB! Snobby!

johnboy 9:41 am 28 Aug 13

When you’re the most influential australian on twitter I guess I’ll be more flattered you’re taking the time to read my copy and suggest improvements?

(snobbish, unfair, sad, but true)

poetix 9:37 am 28 Aug 13

Nice to see Mark being thanked so politely for his correction (which was not, incidentally, a correction to grammar, but pointing out a misused homophone).

Using Twitter obviously makes a huge difference. (-:

IrishPete 9:29 am 28 Aug 13

Not sure about the stated purpose of LSL at post #4. I believe it was created to allow people time to travel “home” to the British Isles every few years, in the days when it was by ship. I don;’t think it was ever intended to reward loyalty to a single employer. It has since just become absorbed as an entitlement. In WA I think you get it at 7 years, elsewhere it is usually 10 years.

I have worked about 12 years in Australia and have never received LSL, because I’ve stayed in each job a little under four years (initially for visa reasons, so not my choice). Nor have I been “paid out” my LSL when I left employers (not that I noticed anyway). So I’ve given a whole lot of free money to my employers.

So it’s clearly a broken system. Employers can count on a large number of staff never accessing it, so they don’t need to fully fund it. But it can still become a major financial liability for them, unfunded if they have failed to accurately predict its use. It would probably be better all round if it was just absorbed into Annual Leave, an extra week a year perhaps, maybe with a right to save it up over several years if you want (which Annual Leave doesn’t really allow you to do, even though many staff and employers do just through poor management).

Australia’s standard of 4 weeks annual leave per year is lower than many other countries (though higher than the USA, which is not a country whose employment standards we should aspire to).

LSL is also more expensive than it needs to be, as the leave is taken at a higher salary after 10 years than it would be if it was taken a week at a time each year.

IP

Affirmative Action M 9:02 am 28 Aug 13

Tetranitrate said :

Johnboy, your attitude to this really is puerile.

Most of the workers in these contract-based industries are paid significantly less than ‘typical’ Canberra wages. Their lack of ‘long service’ is due solely to the structure of the industries in question and it’s quite possible for them to work in the same job in the same place for 20 years and go through a dozen different ’employers’ as contracts change hands. Unskilled work or not it’s pretty unfair for them to be denied long service leave solely because of the structure of the industry.

There’s so much BS that goes on in construction/security/cleaning/ect as it is with sham contracting and the sort of nasty moves that led to the recent ‘garbo’ industrial action as well.

The government’s approach on this, while likely badly planned, is clearly motivated by a desire to give workers in these industries some small fraction of the conditions that most Canberrans take for granted. It’s the sort of position that a social democratic party is supposed to take and I wish the ALP would stick their necks out like this more often.

What a load of carp. Long service leave was supposed to reward people who stayed with a single employer for 10 years or more. Like annual leave loading it has totally lost its original meaning and rubbish like this is why European countries are bankrupt.

People in the Building industry get paid a lot more than people doing equivalent work in the Automotive, retail, security or transport sectors which more than compensates them for any shortcomings in LSL entitlements.

Talk to employers and you realise why they are loathe to take new people on.

gungsuperstar 3:12 am 28 Aug 13

Tetranitrate said :

Johnboy, your attitude to this really is puerile.

Most of the workers in these contract-based industries are paid significantly less than ‘typical’ Canberra wages. Their lack of ‘long service’ is due solely to the structure of the industries in question and it’s quite possible for them to work in the same job in the same place for 20 years and go through a dozen different ’employers’ as contracts change hands. Unskilled work or not it’s pretty unfair for them to be denied long service leave solely because of the structure of the industry.

There’s so much BS that goes on in construction/security/cleaning/ect as it is with sham contracting and the sort of nasty moves that led to the recent ‘garbo’ industrial action as well.

The government’s approach on this, while likely badly planned, is clearly motivated by a desire to give workers in these industries some small fraction of the conditions that most Canberrans take for granted. It’s the sort of position that a social democratic party is supposed to take and I wish the ALP would stick their necks out like this more often.

Damn that’s a good post. I was going to write something similar – but I can’t do any better than that.

(And if you’d seen me around Riot Act, I’m much more likely to be critical of someone for their stupidity than I am to be complimentary about someones intelligent response).

Your comment on “sham industries” is particularly appropriate.

JB – you seem pretty well informed on most issues, but your response here smacks of complete ignorance of the sectors that you’re talking about. The nature of contracting in these industries – particularly in construction – is such that people would never, ever receive the long service leave entitlements that the majority of Canberrans receive.

Worse than the fact that they would never actually get to take LSL – but 10 years later, which is the point at which most people realise they’re probably due for LSL, the contractor that should’ve paid out LSL in lieu of actually providing it is long gone.

It’s unfathomable given the spate of failed construction companies in Canberra over the past 18 months that anyone with the slightest bit of concern for working people would be critical of anything that grants them the very reasonable entitlements that most of us take for granted.

bundah 11:08 pm 27 Aug 13

Hairbrained vs. harebrained

Hares are known for their jumpiness, and they’re also not the smartest creatures on Earth. This is how we get the adjective harebrained, which refers to these perceived qualities of the hare and usually means flighty, reckless, or badly thought out. Some writers hyphenate it—hare-brained—but the one-word form is noted in dictionaries, for what that’s worth, and is more common.

Most authorities on these things regard hairbrained as a misspelling. It has been a common one for centuries, though, and it does sort of make sense when we consider that someone with hair in their brain probably isn’t much smarter than a hare. Still, harebrained is the conventional spelling.

Many thanks must go to Mark Colvin for Poetix would’ve been pulling her hair out had she seen that..

Tetranitrate 8:56 pm 27 Aug 13

Johnboy, your attitude to this really is puerile.

Most of the workers in these contract-based industries are paid significantly less than ‘typical’ Canberra wages. Their lack of ‘long service’ is due solely to the structure of the industries in question and it’s quite possible for them to work in the same job in the same place for 20 years and go through a dozen different ’employers’ as contracts change hands. Unskilled work or not it’s pretty unfair for them to be denied long service leave solely because of the structure of the industry.

There’s so much BS that goes on in construction/security/cleaning/ect as it is with sham contracting and the sort of nasty moves that led to the recent ‘garbo’ industrial action as well.

The government’s approach on this, while likely badly planned, is clearly motivated by a desire to give workers in these industries some small fraction of the conditions that most Canberrans take for granted. It’s the sort of position that a social democratic party is supposed to take and I wish the ALP would stick their necks out like this more often.

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