By Gerard Butler

Community services organisations will take a $14 million to $23 million annual hit if the portable long service leave proposal by Public Employment Minister Selena Uibo proceeds.

Minister Uibo announced the proposed new scheme in the last parliamentary sitting. The minister took the opportunity to outline her support for community services workers who work throughout the Territory in aged care, social work, youth justice, and other personal services work.

The minister foreshadowed the introduction of the new community services portable long service scheme, which she claims will provide portable long service leave to community workers who, for a variety of reasons, do not usually work long enough with a single employer to qualify for long service leave after 10 years.

A portable scheme, NT Build, was successfully introduced for the NT construction industry in 2005. NT Build now covers approximately 4,500 construction workers and has more than $85 million in cash assets that are used to pay long service leave to eligible construction workers both in the NT and interstate as they become eligible.

Construction workers, like community workers, do not stay with one employer long enough to be eligible for long service leave. NT Build was designed to keep costs down, but it has now developed into a mature scheme. It has even managed to reduce the levy paid by developers on multiple occasions.

The minister also suggests that the new scheme for community services will be based on, and possibly managed, by NT Build.

Unfortunately, the minister has been misinformed. The community services scheme is to be funded by a $1,470 annual payment per worker by sector employers, paid in four quarterly instalments.

The minister claims there are 10,000 community services workers in the NT, so based on her own figures, community sector employers will have to find $14.7 million in their already stretched budgets.

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The ABS estimates that in 2022, there were 16,800 community services and personal services workers in the NT. This means that the sector’s likely annual cost will be $24.7 million, or even higher, as the number of workers has increased significantly since 2022.

The minister also claims the new scheme is based on the NT Build scheme. This is incorrect, as NT Build is funded by a levy on construction projects, which the project developer pays. Neither the employer nor the workers pay any contribution to NT Build.

Employers lodge quarterly reports on days worked with NT Build, who update each worker’s employment records. No worker payments are made, and developers must pay the levy when requested by NT Build.

The NT Build scheme has been successful because it was designed to make collecting the levy straightforward with minimal record keeping.

Alternatively, the proposed community sector scheme is based on an employer-pays scheme that requires employers to provide details of each worker’s hours worked, calculate the quarterly payment, and remit the monies and records to the scheme. Obviously, if a worker is part-time or leaves the employer, extra individual calculations and records will be required.

Using the minister’s figures, 10,000 workers will mean 40,000 plus quarterly reports, even more, if workers are part-time or have changed employers. If the ABS figure of 16,800 workers is used, there will be 67,000 reports required.

NT Build operates with good industry support and minimal staff. To become responsible for collecting money from community service employers and maintaining and acquiring the hours worked records, significant extra administrative finance and governance support will be needed. It currently has about 4,500 worker records that are updated quarterly. The community services scheme will have at least 40,000 annual records or, more likely, 64,000 to 72,000, which will have to be updated to show hours worked and monies paid.

The proposed scheme will also have to meet the additional administration record-keeping costs, which will be significant. Now is the time for the minister to rethink the proposal and develop a workable solution that will not reduce the hours worked or services delivered by community service workers.

Common complaints about the schemes in other states are that they are difficult to administer, do not recognise prior service, collect substantial sums while paying minimal benefits, and cost millions to administer.

Community sector workers deserve better than political spin and false promises. Perhaps the minister could support an extra week’s annual leave payable immediately. It would probably cost less and be of immediate benefit.

Gerard Butler was chairman of the NT Construction Industry Reference Group 2004-2005, who led the development of NT Build.