Construction industry long service leave liability increased more than 17 per cent in WA last financial year, as strong building activity pushed the registered workforce past 123,000 people.
Construction industry long service leave liability increased more than 17 per cent in WA last financial year, as strong building activity pushed the registered workforce past 123,000 people.
MyLeave’s annual report revealed a $65.5 million increase in long service leave liability in 2022-23, to $445 million from $379 million a year earlier.
The government body, which administers portable long service leave for construction industry workers, put the increase down to a range of factors including increased pay and a larger registered construction workforce than in previous years.
The liability increase mirrors a 17.4 per cent jump in wages paid by the industry, reported at $4.2 billion in 2022-23.
The number of workers registered for MyLeave was up 10.6 per cent to 123,100, incorporating a 61.5 per cent surge in interstate worker intake as skills shortages encouraged companies to look further afield.
MyLeave ultimately paid $39.8 million to 4,540 long-service leave recipients, a dollar-value figure up 10.4 per cent from 2021-22.
At the same time, the levy applied to employers was maintained at 0.1 per cent – its lowest level in 20 years outside of a Covid relief levy delivered in 2020.
MyLeave chief executive Jason Buckley said the result was in line with the board’s funding strategy.
“The increase in liabilities combined with a low contribution levy has resulted in surplus funds reducing in accordance with the board’s strategy for funding levels to be closer to target, which includes a margin to accommodate changes in economic condition,” he said in the report.
“In recent years the board has been in a very strong financial position that has enabled it to keep the contribution levy low and absorb the adjustment in liabilities.”
MyLeave said it maintained a surplus funding ratio of 137 per cent, above its target of 130 per cent, with total assets valuing $610 million and overall liabilities at $447 million.
The MyLeave board has withdrawn $75 million from its investment portfolio over the past three years to subsidise payments and operating costs while maintaining a low contribution levy.
The value of the portfolio was $608 million, down from a peak of $689 million in August 2021.
The levy applicable to builders in the 2024 calendar will soon be decided, in consultation with the body’s actuary PWC.
An independent review by KPMG into the Construction Industry Portable Paid Long Service Leave Act, which governs MyLeave, was announced in June and will be tabled for ministerial review in November.
Actuarial analysis of the sector forecast further growth in liability, to $475 million by mid-2027.
