Telstra 2007 Annual Report Download - page 35

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Telstra Corporation Limited and controlled entities
Full year results and operations review - June 2007
(i) Excludes offshore, casual and part time employees.
(ii) Includes all domestic and offshore employees, including those of our subsidiary entit ies.
(iii) Includes all domestic and offshore employees, including subsidiary entities as well as contractors and agency staff.
(iv) The reduction in tot al workforce since June 2006 excludes the impact of our divestment in Australian Administration Services Pty Ltd and our
acquisition of SouFun Holdings Ltd, bot h of which occurred in August 2006. Fiscal 2006 excludes the impact of CSL’s merger wit h NewWorld PCS
Mobility.
During the full year ended 30 June 2007, our total workforce decreased by 3.2% or 1,603 full time equivalent
staff, contractors and agency staff. This decrease is predominantly due to specific efforts across the
business to rationalise the number of people working for the company as transformation initiatives take
effect. During the year, we also acquired SouFun Holdings Ltd which contributed 1,194 full time equivalent
staff and we sold Australian Administration Services Pty Ltd, which reduced staff numbers by 910. As
highlighted in the above table, excluding the impact of these investment changes, total workforce numbers
have declined 1,887 from 30 June 2006.
Our labour expense decreased by 8.0% to $4,017 million mainly due to:
• increased levels of redundancy resulting in lower staff levels and therefore a reduction in salary costs;
• a reduction in redundancy costs;
• lower overtime payments; and
• a reduction of worker’s compensation costs based on a decrease due to a lower number of claims and
claim payments and an increase in the bond rate.
We incurred redundancy expenses of $149 million for the year ended 30 June 2007 compared with $534
million for the comparable period last year. As part of the business restructure, we raised a provision for
restructuring and redundancy at the end of fiscal 2006 which included a redundancy component amounting
to $186 million of which $148 million has been utilised in line with the level of transformational redundancy
activity that has taken place in the current year.
The above decreases in labour expense were partially offset by an increase due to pay rises resulting from
Enterprise Agreement increases for award staff and contract staff rate increases, higher contractor and
agency payments and the impact of a lower proportion of labour costs capitalised.
We are required to make future employer payments to the Telstra Superannuation Scheme (Telstra Super)
as may be required by the funding deed with the trustee of Telstra Super in relation to the defined benefit
plan or as legally or constructively obligated for the accumulation scheme. The latest actuarial
investigation of Telstra Super reported that a surplus in this fund continues to exist. In accordance with the
recommendations within the actuarial investigation, we were not expected to, and did not make employer
contributions to Telstra Super during fiscal 2007. The vested benefits index (the ratio of fund assets to
members’ vested benefits) is 117% and our contributions will recommence when the index falls below 103%.
Labour
Year ended 30 June
2007 2006 Change 2007/2006
$m $m $m (% change)
Labour . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,017 4,364 (347) (8.0%)
Domestic full time employees (whole numbers) (i). . . . . . . . . . . . . . . . . . . . . . . . . 35,706 37,599 (1,893) (5.0%)
Full-time employees and employed equivalents (whole numbers) (ii). . . . . . . . . . . . . 43,411 44,452 (1,041) (2.3%)
Total workforce , including contractors and agency staff (whole numbers) (iii) . . . . . . . 47,840 49,443 (1,603) (3.2%)
Current year reduction in total workforce excluding acquisition/divestment activity (iv) . (1,887)
Reduction in total workforce in fiscal 2006 excluding acquisition/divestment activity (iv) (3,859)
Total 2 year reduction in workforce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,746)
Note: statistical data represents management's best estimates.