Luke Hartsuyker (Cowper, National Party) Share this | Hansard source

I rise to speak on the Independent Contractors Bill 2006 and the Workplace Relations Legislation Amendment (Independent Contractors) Bill 2006. I welcome this opportunity to address the House on a measure that is extremely important to working men and women throughout Australia. I use the phrase ‘working men and women’, though some may find it strange in this context, because I wish to highlight the changing nature of employment in the Australian economy and the change in attitude that has enabled us to make so much progress in the last 10 years. I believe that the phrase ‘working men and women’ now covers a far wider section of society than some of the old class warriors on the other side of the House and in the labour movement would have us believe.

It is worth noting the figures given to the House earlier this week by the Minister for Education, Science and Training and Minister Assisting the Prime Minister for Women’s Issues. More than one million new jobs for women have been created since 1996, and there are now 4.6 million women in employment—a 28 per cent increase since 1996. The working men and women of Australia are increasingly grasping the opportunities and the benefits of the modernisation of the Australian economy. They realise that old definitions and the old ways of doing things are no longer good enough. They realise that they cannot stand still while the rest of the world shakes off the old attitudes that have retarded growth. They realise that, if we ignore what is happening in the rest of the world, we do so at our peril.

Let me remind members why this government brought in the Work Choices legislation—part of the government’s reform agenda, of which this bill is a further element. The reason was that an increasingly global economy is also an increasingly competitive international scene. The benefits that we have seen since 1996—namely higher wages, more jobs and better living standards—have come from successfully dealing with competition. We all recognise that we have a huge opportunity in selling our natural resources into the rapidly growing economies of India and China, but not everyone seems to recognise that we could not have taken advantage of that opportunity if our ports and docksides were still crippled by a range of restrictive work practices. We have to recognise that, as these economies grow, they will not only take our resources but also compete with the wider range of sectors in our own economy, and they will be competing against companies within this economy from a far lower cost base. This is not to say that we should, or can, compete with them on the basis of cost alone. But what we have to do is remove the impediments that restrain us from achieving our full potential. We have to be lean, fit and fast on our feet.

As I have said in this House before, we are a country of only 20 million people. In a global economy, we simply cannot afford to have six separate industrial relations systems. China’s population is estimated at more than 1.3 billion. We have only 20 million. The European Union does not have six separate state systems. It has 25 member nations, and they are considering harmonising toward a central workplace relations system. Resisting or ignoring these trends is pure folly. Of course, many in the union movement resist out of pure self-interest. The thrust of Work Choices and the Independent Contractors Bill is to provide flexibility with safeguards. So let me now turn to the union reaction to one way in which flexibility is provided for both employees and employers.

As I have said, our future prosperity depends on being able to compete in international markets. I think we would all agree that Qantas is certainly a company that has to do this. Against a background of sharply rising fuel costs and operating in a market which is threatened by terrorism, Qantas is provided with quite a challenge. Qantas realises, if it is going to compete in an international market, it has to have world competitive practices in every aspect of its operation, and that means in relation to its workforce as well. The company has signalled that one of the remaining ways in which it will be able to compete more effectively is to have a look at the way that it has 38,000 employees on 45 different enterprise agreements. I know Qantas is very keen on, and sees very much the benefits of having, Australian workplace agreements.

This issue has also arisen in relation to Jetstar. Jetstar would be provided substantial benefits through the use of AWAs. But we know what the unions’ attitude is to AWAs. We know what the opinions of the Australian Labor Party are towards AWAs. Their approach to this is to rip them up, if they ever get the chance. I would be interested to know what the Australian Labor Party and the unions would say to the some 2,800 applicants who have sought the 200 jobs at Jetstar on AWAs. Would they be wanting to tear up those AWAs that have been provided with those 200 jobs? I think they would.

As we have heard recently in the House, almost one million AWAs have been entered into. The Australian Labor Party and the union movement would have such AWAs torn up. It is interesting to note that the mining industry—one of our most successful export earners—attributes a substantial proportion of its success to the labour flexibility that is offered by AWAs. It is estimated that the abolition of AWAs would cost some $6.54 billion, according to the Mines and Metals Association. It would be interesting to see the impact of a loss of $6.54 billion on the bottom lines of companies which are employing Australians, paying tax and producing the wealth which enables this country to prosper.

But what does the Australian Labor Party do? It just resolves to simplistically tear up these arrangements—to tear them up and retreat behind the walls of Fortress Australia, to bury their heads in the sand and to ignore the way in which the rest of the world travels. Unfortunately for the Australian Labor Party, Fortress Australia is not a refuge any more. The global economy means that we have to compete. We cannot put up barriers. The Independent Contractors Bill is very much a part of ensuring that we have the sort of flexibility that enables people to contract, to come up with efficient outcomes for their customers and to provide a much more efficient economy.

The writing is on the wall. We cannot afford to tear up AWAs. We cannot adopt the strategy of Fortress Australia. The Australian Labor Party in their stance choose to ignore the evidence which they have before them. They choose to ignore the government’s record unemployment. Our record unemployment is most impressive. We have unemployment at record 30-year lows. We are achieving higher wages. We are achieving higher standards of living. The government have achieved much of this through reform of the labour market—reform that is being fought by the Australian Labor Party and the union movement every inch of the way.

The unions and the ALP have said that the sky will fall in. They have said that there will be mass sackings. They have said that a whole range of adverse consequences would occur through the introduction of Work Choices. They indicated that it is a bit like putting termites into your house. They cannot ignore the fact that in the order of 50,000 jobs are being created a month. The sky has not fallen in. Mass sackings have not occurred. The empty rhetoric which has been put forward by the Australian Labor Party and by the union movement is being exposed for what it is—nothing but empty rhetoric. Whether we are talking about AWAs or provisions for independent contractors, the rhetoric is the same. It is nothing but scaremongering. They believe that something that is good for employers cannot possibly be good for employees. They say that a provision that helps small business, just by its very definition, has to be somehow bad for employees.

But we as a nation have moved on, including the 1.9 million working men and women who have chosen not to be union members but to manage their affairs as independent contractors. There are now more independent contractors than there are union members in the Australian workforce. This government, through this legislation, is going to help those people by giving them the freedom to run their own businesses as they see fit, not being dictated to by a union which they do not wish to be a member of. As with Work Choices, we need to rationalise the current situation by removing the inconsistencies that currently exist between the states, by removing the barriers that state legislation presents to those wishing to set up their own business as contractors and by reducing compliance costs, which place a proportionally larger burden on the small business sector.

The current system tends to try to force independent contractors into the traditional industrial relations system, which is simply not appropriate. If an individual has taken the decision to become a contractor or an entrepreneur, they should be free to negotiate their own terms and conditions. Both they and their business partners should be able to reach an agreement without the restriction that a contractor should be treated as an employee, with all that that entails. It is only by providing this kind of freedom to negotiate that both partners can take advantage of the flexibility that independent contractors can offer and that is necessary for us to remain a globally competitive economy.

So the bill will ensure that independent contractors operate under commercial arrangements, rather than employment arrangements. It will override state and territory legislation that deems contractors to be employees for industrial relations legislation, and it will ensure that sham arrangements are not—and, I repeat, not—legitimised. It is clearly a nonsense that in New South Wales, for example, a carpenter could be regarded as an employee, whereas elsewhere in Australia the same carpenter may choose to be an independent contractor. That also applies to another 12 categories of workers. Just as Work Choices banned clauses in awards and agreements which set out to prevent the recruitment of contractors or to impose conditions upon them, this bill will override state legislation to ensure these deemed workers operate in a less restrictive environment.

Those currently deemed to be employees under state law will continue as such for three years, unless they decide to become an independent contractor in the meantime. This will give them a chance to consider the new arrangements and, if they wish to, make the necessary changes. As I said, we should reduce the burdens on those running their own businesses as much as possible, and this breathing space will give them plenty of time to make that transition.

On the one hand, then, the bill will enable those who wish to operate as independent contractors to derive the full benefit from their independent status, to take full advantage of the opportunities of the dynamism of the Australian economy and to strike whatever agreements best suit their personal and working environment. On the other hand, it also offers protection to those who might suffer by being forced into a position of independence and provides restraints on employers seeking to avoid their obligations.

Just as the Work Choices legislation recognised that there were both good and bad employees, and good and bad employers, this bill will provide a civil penalty for those employers who try to evade their responsibilities by declaring genuine employees as contractors through sham arrangements. The Office of Workplace Services will take up the cases of those employees who are disadvantaged in this way. Interestingly, in the light of those false allegations that Work Choices actually set out to abolish awards, there will be penalties for the breach of an award if it is found that a person was treated as a contractor when they were in fact an employee and had not been paid their full entitlements as such. These penalties will also be incurred for breaches of the Australian Fair Pay and Conditions Standard where that applies. These range from $6,600 for an individual to $33,000 for a body corporate.

There will also be safeguards for contractors as the bill will signal a move toward a single system for dealing with unfair contracts and a move away from the duplication and confusion that flows from overlapping state legislation. The corporations power will be used to override state regimes, and the Federal Magistrates Court will be given the power to hear unfair contracts cases, thus giving contractors easier and cheaper access to remedy under the law. This will apply to both incorporated independent contractors, who do not have access to the federal system at present, and to those operating as natural persons.

There are also two groups of workers who, rightly, will receive special consideration under this bill. Currently most states regard outworkers in the textile, clothing and footwear industries as employees. Clearly, those who work on their own, have little opportunity to organise with their coworkers and may be unable to work their way through the supply chain of subcontractors in the event of having to claim any money owed to them, are a special case. The Independent Contractors Bill will therefore not affect state legislation that is specific to outworkers, but the Fair Pay and Conditions Standard will apply to those outworkers where they are not covered by a law providing some form of wages guarantee. This again shows that, far from removing all the safeguards for workers, this government believes in providing protection for workers in a vulnerable situation.

This bill retains the special provisions for owner-drivers in New South Wales and Victoria. Owner-drivers have historically been recognised as having particular vulnerabilities and requiring special protections. Many work for only one commercial partner and face interest payments on large loans needed to buy their vehicles. The provisions that currently stand in the state legislation of New South Wales and Victoria to determine contracts and for dispute resolution will remain. However, it is right that we should try to achieve consistency across the whole country. I welcome the review that will be undertaken with the aim of rationalising these particular laws. It is worth noting the comments by Labor’s workplace relations spokesman, Stephen Smith, who said this morning in his usual uninformed way:

... many owner drivers in the transport industry, for example, it takes away very many of the state-based protections for dependent contractors.

This, in the good opposition spokesman’s inimitable style, is, as usual, completely wrong. As I have just noted, the protections for owner-drivers in New South Wales and Victoria, the only two states which have such legislative protection, will be maintained by this legislation—not taken away but maintained. Once again the shadow minister has got it completely wrong. At least this point has been acknowledged by the New South Wales Transport Workers Union secretary, Tony Sheldon. In a media release on 3 May, he said:

... the Independent Contractors Act will maintain protections for NSW owner-drivers.

It would be good if the Australian Labor Party at least talked to their union mates now and again. This lack of attention to detail by the Labor frontbench is why they seem to get it so wrong. So often on workplace relations they get it wrong—they just do not understand the issues, and they do not understand the debate generally.

In conclusion, these bills, together with many of the provisions of the Work Choices legislation, will benefit many small business people and encourage those thinking of going into business. They offer them more freedom and more flexibility. They reduce the administrative burden. They provide safeguards and redress. For many areas in regional and rural Australia, such as my electorate of Cowper, the vast majority of businesses are small businesses. They make up the bulk of the local economy. The more people we can encourage to set up business—whether they operate as a single independent contractor or whether they employ a number of people—the better. In a modern economy, independent contractors are working men and women. Entrepreneurs are working men and women. Jetstar cabin crew are working men and women. Working men and women need to have the freedom to determine conditions that reflect their particular circumstances and which enable them to make the maximum contribution to the economy and to their own families and finances. I commend these bills to the House.

Debate (on motion by Mr Brough) adjourned.

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