The Hon. R.I. LUCAS (16:57): The Liberal Party supports the second reading of the bill. It seeks to extend the board’s power to vary the levy rate within prescribed parameters. The levy is defined in the act as a percentage of the total remuneration of employers and construction workers. Currently the levy rate can be adjusted on the advice of the actuary who must be a fellow or accredited member of the Institute of Actuaries of Australia. Any adjustment is then subject to the board providing a report to the minister recommending a change to the levy rate. The levy rate is then prescribed by regulation. A copy of the report must be laid before both houses of parliament.
This bill gives the board the capacity to vary the levy rate upon the recommendation of the actuary so long as the variation does not take the levy above 3 per cent. The proponents of the legislation believe that this will increase efficiency in changing the levy rate, providing greater flexibility for the board to protect the fund from potential losses of levy income and ensuring employers are paying levies appropriate to the relevant financial position of the fund.
The board will be required to inform the minister of its intention to vary the levy rate and there will be a 14-day grace period to allow the minister to seek any clarification from the board, if necessary. The government has advised that, since 1 January 2008, the levy rate has been fixed at 2.25 per cent and has never been higher than 2.5 per cent. Under this bill, the levy rate can go up and down, but it cannot go above 3 per cent.
The opposition has been advised that the bill is supported by Business SA, the Australian Industry Group, the Master Builders Association and the Housing Industry Association. Whilst we contacted SA Unions looking for their response, we did not receive any response from SA Unions, but the government and others who claim to be aware of SA Unions’ position indicate that they also support the bill.
AIG did indicate to us that it had had some concerns in the lead-up to the introduction of the bill. They included the process by which the levy increases are implemented and the prevention of expansion of the coverage of new areas. In relation to the process to increase or decrease the levy rate, AIG noted that any recommendations of the board need to be approved by the minister and proposed that, once the minister receives such a recommendation, he or she should conduct a wider consultation process. This was because not all stakeholders are represented on the board, despite being asked to put forward nominations to the board. The final decision remains that of the minister.
AIG also asked that the minister’s second reading speech, as well as the explanatory memorandum of the bill, would outline that the express intent of new schedule 5 would ensure that the coverage of the Construction Industry Long Service Leave Act 1987 was not expanded from its coverage prior to amendment by the bill. AIG has informed the Liberal Party that it is satisfied that these matters were satisfactorily addressed by minister Wortley’s second reading speech on 18 October. For those reasons, the Liberal Party supports the legislation.