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Bonus rort for public servants 'over soon'

Shadow special minister for state Bronwyn Bishop.

Shadow special minister for state Bronwyn Bishop. Photo: Alex Ellinghausen

Wasting taxpayer funds on redundancy packages for Commonwealth public servants who are close to retiring will soon be a thing of the past, according to the federal opposition.

As The Canberra Times revealed on Monday, thousands of public servants who received huge redundancy packages in recent years were close to retiring anyway but hung around to get the extra bonus.

Data over a five-year period during the Rudd and Gillard Labor government shows that of 8760 redundancies, 62 per cent were given to staff aged 50 plus, and more than one in five to employees over the age of 60.

Superannuation specialists have described the practice as a widespread rort wasting millions of taxpayers' dollars.

Special Minister of State and Minister for the Public Service Gary Gray said age was not a factor in managing retrenchments.

Staffing decisions in the public service, he said, were a matter for individual agency heads.

But shadow special minister of state Bronwyn Bishop said under the now-closed Commonwealth Superannuation Scheme, people were encouraged to get out of the public service before they turned 55 in order to maximise their payouts.

''(Former Treasury boss) Ken Henry is perhaps the best known example of that,'' she said.

''A lot of those figures in that report are reflecting the fact that that's the way the old scheme worked. It's now a closed scheme.''

Ms Bishop said a Coalition government would encourage people to stay working in the public service beyond 55.

''We are the people, when we were in government, who abolished the mandatory maximum retirement age in the public service,'' she said.

''We expect people to be working longer and to remain in the public service longer.

''And we value that experience, unlike the current Prime Minister and Treasurer, who don't value that kind of experience.

''We see that in that regard there is no longer a need to have a definition of a working age except for [what] the minimum age is that a pension can be collected.''

By saying the Coalition would encourage staff to remain in the public service, Ms Bishop noted that that did not mean she was backing away from the opposition's plan to slash at least 12,000 jobs from the public sector.

But she said that the positions would not be cut through forced redundancies. ''That old payout system will go by attrition, which is what we say public service numbers will be reduced to - by attrition,'' she said.

13 comments

  • Appently some departments have separation rates at less than 1% at the moment, assuming the cuts are quarrantined to Canberra, that means natural attrition of about 700 a year (1% of 70,000). Hence it could take about 17 years to lose the 12,000 employees. I hope the libs have some other initiatives to fix a 10 billlion budget black hole, other than saving 1 billion over 10 + years.......

    Commenter
    tele12
    Date and time
    March 05, 2013, 8:03AM
    • I don't believe that the separation rate is less than 1%. I suspect it is a nett separation rate. One APS survey conducted last year had 26% of respondents over the age of 50 and 12% over the age of 55. That's 18,000, or 8,000 depending on which group you wish to select. I understand that people under fifty regularly leave the public service too. So cheer up tele12 the future doesn't look so bleak.

      I took a redundancy at 53.5. The huge payout that I received was 48 weeks pay which equalled around 70 weeks net pay. On that basis I believe I almost broke even with the government but they saved a lot as far as on costs were concerned. As far as leave entitlements go hey saved 6 weeks annual leave, 4.5 weeks sick leave, 13 days long service leave and around 16 public holidays. It was a good deal for them. Because I left early my pension is around 2.5% less than it might have been so they continue to save. I could have cashed my pension in and received a lump sum around 14 times my pension. I think I will break even on that score in around 6 years.

      Bronnie is not telling us the whole truth. She is only referring to the CSS. The PSS and whatever followed that still allow for significant payouts. However, I don't think any of them will match hers when she retires.

      Commenter
      Getting Serious
      Date and time
      March 05, 2013, 10:24AM
    • Getting Serious you seem to be forgetting about actual work. You were paid for your final 1.5 years or so in the workforce without actually doing anything.

      "I almost broke even" is a bizarre admission that your value to the Commonwealth was the same, whether you went to work or not, ie zero.

      Commenter
      A stunning admission
      Location
      the coal face
      Date and time
      March 05, 2013, 4:18PM
  • That's crazy - why try and push someone out at 55? You have to be 67 now to get the pension plus there is a plush to keep Australian's working longer and also to encourage employers to hirer older people.

    Commenter
    Tom
    Date and time
    March 05, 2013, 8:25AM
    • I don't think you have read or understood the article. For one the article is talking about people retiring and getting access to Super, so the retirement age for the aged pension doesn't come into the equation as these people would be earning too much from their super to qualify anyway.

      Secondly no one is being pushed out at 55, what the whole article is about is giving redundancies to people who would otherwise have retired anyway. Where the 55 comes into play is the older CSS super scheme gives maximum 'return' if someone reitres before the age of 55, so a lot are walking at 54 years and 11 months and if the article is to be believed many of these 54 and 11 people are ALSO getting redundancy payouts.

      Must admit where I work I don't recall too many going at this age and getting redundancy. It seems the ones getting redundancy are people who changed to the PSS so have hung around longer and in many cases become dead wood.

      Commenter
      Jimmy
      Location
      CBR
      Date and time
      March 05, 2013, 10:22AM
    • Jimmy,

      Many CSS members have been pushed out at ages much lower than 55. Apart from that the age at which CSS members can access their super has been increased. Contributors born after 30 June 1960 have to wait, depending on when they were born, until as late as 60.

      I know people who were forced out before 55 and after the compulsory twelve month break they returned to the PS and started again. The end result is that hey will have two benefits that are lower than if hey had been able to continue.

      Mr Micanopy, you should be less circumspect in your comments. Some people might not pick up on the fact tha you are a little myopic as far as your political views are concerned.

      Commenter
      Getting Serious
      Date and time
      March 05, 2013, 1:04PM
  • I'd like to see retrenchment figures from big private companies. My guess is that the over 50's would be equally over-represented, especially in the case of voluntary redundancies.

    Commenter
    John121
    Location
    Singapore
    Date and time
    March 05, 2013, 8:35AM
    • They need to get the statistic around the number of 54/11's who take that package then come to work the next day as a contractor. Thats the REAL rort!

      Commenter
      Dave
      Date and time
      March 05, 2013, 9:00AM
      • How is it a rort to take advantage of the stupidity of politicians who pander to public prejudice by periodic mass sackings of public servants? Any such waste of public money is usually instigated by short-sighted politicians eager to score brownie points with an electorate that doesn't really understand what's going on.

        Stop making APS numbers a political football and there's every chance the APS could manage things much more efficiently.

        Commenter
        John
        Date and time
        March 05, 2013, 10:30AM
        • Beautifully put, John. Unfortunately, it's wasted on the fools that listen to unconscionable opportunists like Abbott. He's learnt well from Howard in 1996. They know their voters and their targets too well .....

          Commenter
          MIke Micanopy
          Location
          Gnilabura
          Date and time
          March 05, 2013, 11:35AM

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