CLP Scraps Labor’s Pricey Portable Long Service Leave
Territory parents will not face higher childcare fees, thanks to swift action by the Finocchiaro CLP Government to reverse another costly mistake made by the previous Labor government.
Next week, the government will introduce a Bill to repeal the Portable Long Service Leave (Community Services Sector) Act 2024, which Labor rushed through Parliament before the election.
At the time, the CLP strongly opposed the scheme, and now, under the new government, it will be scrapped.
Minister for Public Service Jo Hersey said Labor’s scheme would have increased the cost of living for Territorians.
“If the Labor party had its way, Territorians would have been forced to pay more for childcare, at a time when they are already struggling to pay their bills,” said Mrs Hersey.
“We are taking immediate action to ensure this poorly planned and ill-thought-out scheme is scrapped for good.”
Labor’s Portable Long Service Leave scheme would have enabled employees in the community services sector including childcare, aged care, disability services to accumulate long service leave benefits based on their total years of service in the sector, without the requirement to maintain continuous employment with a single employer.
The scheme was to be funded by a new wage levy that would have been passed on to employers, who would, in turn, increase prices.
“Childcare centres told us this would cost them $50,000 extra a year, a cost that would be directly passed onto parents in the form of increased fees,” said Mrs Hersey.
“With about 10,000 employees impacted, Treasury estimated Labor’s scheme would have increased community service sector costs by $20 million annually in the Territory.”
As the main funder of these services, the Territory government would have been left to bear the brunt of the cost, at a time when Labor’s catastrophic debt levels were already putting significant strain on the budget.
Mrs Hersey also highlighted that, in typical fashion, Labor’s Portable Long Service Leave scheme was not properly budgeted for and would have relied on a Treasury loan to cover its setup costs, with no ongoing funding assigned for its operation once active.
“The setup costs alone were estimated to be between $4 million and $12 million, with millions more required annually to operate the scheme,” she said.
“This is money the Territory simply doesn’t have, especially with the financial pressures caused by Labor’s debt.”
The proposed scheme also involved a complex system, where long service leave benefits would have been based on a median weekly pay rate determined on the advice of an actuary.
Employers would have been required to pay a levy to a central fund each quarter, and employees would have accessed their long service leave from this fund.
Sarah Lloyd from Territory Childcare Group, who operate several daycares across Darwin, welcomed the CLP Government’s decision and said education and care service operators were breathing a sigh of relief at the news.
“When new initiatives are introduced, it’s critical that the true costs are factored in from the outset,” said Ms Lloyd.
“In this case, the additional financial burden would have ultimately been passed on to families, which in the current economic climate would have placed even more pressure on parents.
“The sector is already facing significant workforce challenges, and policies need to support stability, not create additional barriers.”
The change will not affect employees’ existing long service leave entitlements under enterprise agreements, awards, or the Long Service Leave Act.
https://nt.gov.au/