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Thursday, 28 June 2001
Page: 29090


Mrs Crosio asked the Minister for Employment, Workplace Relations and Small Business, upon notice, on 22 May 2001:

(1) Did his statement on the Employee Entitlements Support Scheme say that there is inadequate data collected for the implementation of any insurance option in regard to employee entitlements; if so, does his Department collect figures on the number of corporate insolvencies that occur each year; if not, why not.

(2) Does his Department collect figures on the sum of employee entitlements that are paid out to creditors other than employees in the cases of employer insolvency; if not, why not.

(3) Does his Department collect figures on the amount of employee entitlements which are accrued by employees each year; if not, why not.

(4) Has he considered commissioning his Department to compile figures on insolvencies and employee entitlements; if not, why not.

(5) Has he considered directing the Australian Bureau of Statistics to collect information and statistics on corporate insolvencies and employee entitlements; if not, why not.


Mr Abbott (Minister for Employment, Workplace Relations and Small Business) —The answer to the honourable member's question is as follows:

(1) The Ministerial Statement on the Protection of Employee Entitlements on Employer Insolvency, which I released on 31 January 2001, included the statement “there is also inadequate data for the implementation of any insurance option: insurers would either be unwilling to enter the market or else would have to charge unacceptably high premiums to cover the lack of data.”(p7). This remains the case. The Year One Activity Report for the Employee Entitlements Support Scheme(EESS), which I also released on 31 January 2001 referred to a range of estimates that had been canvassed previously and drew upon the data collected from the first twelve months of EESS to make some preliminary estimates of employee entitlements lost on insolvency. The Report noted that it was too early to predict what the extent of lost employee entitlements in the community might be over the economic cycle. My Department does not collect figures on the number of corporate insolvencies that occur each year. Responsibility for this issue is with the Australian Securities and Investments Commission (ASIC) and ASIC publishes figures on a monthly basis.

(2) My Department does not collect figures on the sum of employee entitlements that are paid out to creditors other than employees in the case of employer insolvency. Under normal circumstances a creditor, who is not am employee, would not accrue employee entitlements.

(3) My Department does not collect figures on the amount of employee entitlements which are accrued by employees each year. Employee entitlements are derived from various agreements, awards and legislation with considerable variation in the rates of accrual. In addition, the rate and method of taking of entitlements by employees varies considerably.

(4) The responsibility for collecting information on insolvencies rests with the ASIC. The continued operation of the Employee Entitlements Support Scheme will result in the most comprehensive data yet available on the treatment of employee entitlements in the context of employer insolvencies.

(5) Responsibility for the Australian Bureau of Statistics rests with my colleague the Treasurer.