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Hall Call to Slash Superannuation Must Be Rejected

A CALL by Legislative Councillor Greg Hall for a future Tasmanian government to slash the superannuation entitlements of 22,000 former and current public sector workers is a disgrace and should be strenuously rejected by all parties.

Prior to the defined benefits scheme being closed in 1999, public sector workers were entitled to join the program as part of their package of employment arrangements.  It placed obligations on them in that they were required to make personal contributions fortnightly throughout their career. It also placed obligations on their employer who needed to fund the difference between the employee contributions, earnings on the employee contributions and the final defined benefit.  Government chose not to fund their contributions on a regular basis but instead to fund them on an emerging basis, that is to fund them when the employee retires or as pension payments are made.

Despite this being the about the third time Mr Hall has floated this thought bubble in recent years he has failed to provide any detail.  He says “In my view, the Defined Benefits Scheme should be axed and everyone put on a level playing field – the accumulation scheme.”  What exactly does this mean?

• Is he suggesting the government should transfer actuarial calculated defined benefits entitlements to the accumulation accounts of DB scheme members so the scheme could be closed?  All this would do is bring forward the unfunded liability as borrowings and send the state’s credit rating to junk bond status.

• Is he suggesting the government unilaterally change the scheme architecture to reduce the entitlements of members when they retire?  This would effectively be a breach of contract and would no doubt see the government dragged through the courts and would raise other sovereign risk issues.

The proposal he puts forward is naive, unrealistic and yet another example of his dislike of public sector workers.  His warped view of the world was on display only a few months ago in debate in the Legislative Council when he said:

‘It is almost like there are two Tasmanias.   One Tasmania is inhabited in many cases by well-paid public servants, living in Hobart on very good workplace entitlements.  They pretty well have job security for life, regardless of the value they provide and whether their employer, taxpayers, can afford them and no matter how bad the economic circumstances are, you could argue. They may not have a job to do, but still get paid at a high salary for 12 months, even if they are doing tasks well below their pay grade because their original services are no longer required.’

We wonder if Mr Hall realises that the workers at the Ashley Youth Detention Centre, at the Deloraine Service Tasmania shop, at the Westbury Primary school, at the Deloraine Police station, at Cradle Mountain National Park, at the Mole Creek Caves and the Liawenee fisheries station – all in his electorate of Western Tiers – are also public sector workers.  Does he feel their superannuation entitlements and job security should be slashed or is his criticism targeted specifically at public sector workers based in Hobart.

Thankfully nobody takes Mr Hall too seriously.  The CPSU received correspondence from the Labor party yesterday (Monday Feb 24) again ruling out making any changes to the DB scheme or the entitlements of its members.  In the letter the Premier, Lara Giddings states:

The Tasmanian Labor Party’s clear and unqualified position is that Public Sector superannuation entitlements will always be met as they fall due.  I can categorically rule out any change to entitlements for members of the Defined Benefits Scheme.  The full letter from the Premier can be read below.

Tom Lynch — 24 February 2014

The Tasmanian Liberals have previously indicated they would not support Mr Hall’s proposal.  In correspondence from Will Hodgman dated 7 February 2014 on another matter he stated that:

‘The Liberals have no plans to make other changes to the superannuation arrangements of public sector workers.’

A letter recieved from Shadow Treasurer Peter Gutwein today (25 February) states:

The Liberal Party will not charge entitlements of current or former public sector employees under the Defined Benefits Scheme.

Find the full letter below.

Lynch Tom- Defined Benifits Scheme

You can also find a response from Palmer United Party candidate Kevin Morgan below, where he writes: ‘Whether there is an election or not, we should not play with peoples retirement, my party would not consider any such move as advocated by Greg Hall MLC.’


Greens Leader Nick McKim said ‘The Greens  once again commit to ruling out supporting any changes to  the defined benefits scheme.’

Find his full response below.

Response to CPSU re Superannuation_N McKim_Feb2014

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