Michael Johnson (Ryan, Liberal Party) Share this | Hansard source

As always, it is a great pleasure to speak in the House of Representatives chamber of the Australian parliament, where I represent the wonderful people of the western suburbs of Brisbane in the electorate of Ryan. I am delighted to speak in the parliament today on a very important bill, the Independent Contractors Bill 2006, and a related bill. While I am in the chamber, I would like to bid a very good afternoon to any of my Ryan constituents who might be listening. I think there are a couple; they emailed and phoned earlier to say that they would be listening to my speech because they have a very great interest in this legislation, which is all about jobs, economic prosperity and economic opportunity. So I want to say ‘good afternoon’ to all my constituents who might be listening—in particular a friend of mine, Mr Novak Petrovic. He has, with great regret, been taken out of the Ryan electorate because of the recent redistribution. In any event, a very strong Liberal supporter is Novak Petrovic.

This legislation is about jobs and about maximising economic opportunities for Australians right across the country, particularly those who are practitioners of small business. I am delighted that the Minister for Small Business and Tourism is in the chamber, because she not only is doing an outstanding job in her portfolio; she also has a very strong interest in meeting Ryan businesspeople. I had the great pleasure of hosting her in Brisbane recently and she met many of my constituents. They were very impressed by her stewardship of her portfolio.

Small business is often described as the engine room of the Australian economy. It accounts for some 95 per cent of all business and employs 3.3 million Australians. Since 1996, some 110,000 new businesses and 1.9 million new jobs have been created. This has fostered an increase in the culture of enterprise and innovation, which is one of the hallmarks of our country and which we must continue to promote here in the parliament. Why is this relevant to the Independent Contractors Bill 2006? It is relevant because many independent contractors are small businesspeople. They are the innovators, the entrepreneurs and the builders of business in this country. They are running their own small businesses and they want to be treated as businesspeople. They do not want to be treated as employees. That is why this legislation is important, and that is why I referred to small business at the outset of my speech.

Before I come to some of the details of this legislation, I want to paint the picture of the Australian economic landscape as it really stands, not as the desperate Labor opposition seeks to paint it. The Labor member who spoke before me talked about minimum wages being a problem in this country. I ought to remind her and others opposite that, in fact, Australia has the second highest minimum wage of any developed country. That is something that this government is very keen to ensure is secured. We are in the business of looking after the workers of Australia. I know that this really does irk the opposition, but I am afraid that the people of Australia have spoken at successive elections and they have voted with absolute confidence in the Howard government and its representation of their interests as workers of Australia. The government is reaching out not only to the traditional supporters of the Liberal Party and the Prime Minister but also to Australians right across the democratic spectrum of this country.

We all know that oppositions try to paint a picture of doom and gloom and claim that the landscape is very poor. They claim that people are facing mass sackings and that employers are all out to get the workers, but of course we all know that the reality is very different. The Australian economy is worth almost one trillion dollars. In every year of the Howard government, we have had positive economic growth and record levels of employment and participation. In August, the Australian Bureau of Statistics released its latest labour force figures, which gave an indication of the latest unemployment figures; and they are 4.8 per cent—the lowest in 30 years. I think that is something that we should all be very proud of. I know that it is very difficult for those in the opposition to fly this flag, but I do encourage them to do so, because it means that people in their electorates are also getting jobs. They are getting into the workforce and are able to provide for their families and their local communities. It is community-minded constituents who are doing a good deal to add to the economic prosperity of this country.

Work Choices was introduced in late March. Now, almost six months later, do we have the doom and gloom scenario that the Labor Party portrays? Of course we do not. Since 27 March, some 175,800 new jobs have been created. That is more than 1,000 new jobs a day since the Work Choices legislation was introduced into the parliament. In August alone, 23,400 jobs were created, of which 22,600 are full time. There are more jobs in the community, and they need to be filled. So I would say to anyone who is seeking to reconnect with the workforce: the jobs are out there, and I would encourage you to get a job, because the employers of Australia are desperate for your services.

Jobs are being created all over the country. Since the Prime Minister took office in 1996, 1.9 million new jobs have been created and wages have risen by some 16.4 per cent. It should be noted that the only time wages have gone down was when Labor was in government. Between 1983 and 1996, wages actually fell by 0.2 per cent. So let us have none of this doom and gloom from the Labor Party. Let us have none of this portrayal of the economic landscape as being desert-like. This is an employees’ market.

The challenges that the Australian economy faces now are the challenges of prosperity. The challenges we face are happy challenges. Rather than the million unemployed under Keating and Hawke, we now have a situation in which companies, businesses and employers are desperate for people with skills and qualifications to enhance their businesses. The Howard haters are going to continue to preach doom and gloom; they will be negative; they will be pessimistic. But the Australian people are very much aware of what is really happening in the Australian community. They are not influenced by those who run the Labor Party—which of course is the unions. The Labor Party is dominated by the unions. The Australian people should keep in mind that reference from a very senior union figure about union control of the country. I know that in the Ryan electorate they will very much keep that in mind.

I am delighted to speak on the bill. This is all about economic choice and freedom. It is all about economic justice. We quite often hear the Labor Party talking about social justice. What about economic justice? What about jobs? What about the economic injustice of a million people out of work when Labor was last in government? What about the economic injustice of 11 per cent of the nation unable to get work under the stewardship of the current Leader of the Opposition? What about the economic injustice of high interest rates under Labor? What about the economic injustice of mortgage repossessions? It is very disappointing that those opposite do not talk about this. The Australian people know what the right thing to do is and which government has the policies and the ideas to ensure that the Australian economy continues its prosperity.

Independent contractors have traditionally been the forgotten people of the industrial relations sector, and yet they are very much the rising stars of our workforce. They consist of some 800,000 to two million Australians, and they are a growing force of entrepreneurs and innovators which is revolutionising the nature of business in this country, and particularly small business. They permeate virtually every sector of the workforce. They are the Australians who install your hot water system, fix your computer, do your landscaping and lay the foundations of your new home. The benefit that these independent contractors provide to business in Australia is immeasurable in dollar terms. In sectors such as the building industry, in which almost 25 per cent of the nation’s independent contractors are employed, they provide the flexibility needed to sustain such a highly fluctuating industry. For small businesses, they provide an avenue to outsource non core or temporary services, allowing the small business operators to better concentrate on the business’s essential operations.

The benefits that independent contractors provide are not just for business. Operating as an independent contractor also gives workers tremendous flexibility—the flexibility to choose how they work, when they work and what they work on, enhancing family life and work satisfaction. In particular, it gives workers the chance to operate as microbusinesses, to be their own boss and to gain the expertise needed to become the employers and small businesses of tomorrow.

I want to take the House to a very interesting speech that a former hero of the Labor Party, the former federal Labor leader Mr Mark Latham, gave to the Tasmanian state conference following the defeat of the Labor Party at the last election, in 2004. Deputy Speaker Adams, it is quite timely that a Tasmanian is in the chair, because I am sure that you will be very interested in the words that I am about to deliver to the House. On 30 October 2004, following the defeat of the Labor Party under Mark Latham’s leadership, Mr Latham made these remarks to the Tasmanian Labor conference, and they bear quite interesting reading:

We urgently need to establish a new basis for the economic purpose and legitimacy of the Labor movement. We need to be realistic about the changes happening around us right around the country.

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The conventional working class—in steady, semi-skilled and low-paid jobs—has declined. Just look at the affluence of the traditional trades in the mining, construction and service industries. In many cases, they make enough money to be investors, not just workers—this is the nature of the new economy.

The new middle class is here to stay, with its army of contractors, consultants, franchises and small businesspeople. This reflects the decentralised nature of the modern economy, where flexible niche production has replaced the organising principles of mass production.

The implications for the Labor movement are quite obvious. Workers are more independent and self-reliant. Large, centralised institutions and policies are less relevant. Our economic policies need to be based on the principles of flexibility, enterprise and upward mobility.

They are very interesting words, and they could easily have been delivered by someone from the coalition ranks. The Labor leader—who has our good wishes for his post-political life—delivered a very important message to the Labor Party.

It is a shame that here we are in 2006 and the Labor Party still cannot accept those words: ‘the principles of flexibility, enterprise and upward mobility’. I refer again to Mr Latham’s words: he talked about the ‘army of contractors, consultants, franchises and small businesspeople’. These are here to stay. These are people in the modern Australian economy who are doing their bit to make this country prosperous, to give opportunities to their fellow Australians and to create a greater and more flexible economy so that others in their circumstances might be able to join the modern Australian economy. That is what this bill is all about. This independent contractors bill is all about trying to give flexibility, opportunity and scope to people who are not employees but businesspeople; they want to be treated as businesspeople. They want the flexibility to choose how they work, when they work and what they work on so as to enhance their own family lives and their work satisfaction.

Despite the benefits that independent contractors bring to the economy and to themselves, this sector of the workforce has been stifled by Labor state governments—Labor governments which, in order to appease unions with declining membership rates, have dragged independent contractors back into the realm of employees. I want to remind the Australian community, and those who live in the western suburbs of Brisbane in the Ryan electorate, of something that they might find interesting if they do not already know: 17 per cent of the Australian workforce is unionised, and I suspect that this is quite an inflated and unauthentic figure. I am sure that many of those ranked or classified as part of the union workforce would not really want to have that tag on them. They are probably small business people in their own right and want to be employees without the heavy hand of the union movement on them. Anyway, 17 per cent of the workforce—less than one-fifth—is officially part of the union movement.

Rather than embracing and nurturing these entrepreneurs, the state governments have stifled the individual and flexible contracts of these workers and have arbitrarily drawn them back under the guise of industrial law. In Queensland, for example, the Industrial Relations Act 1999 deemed outworkers, apprentices and trainees, and workers in the security industry, to name a few, as employees, despite the presence of contracts which specifically state they are independent contractors. In addition, the Queensland Industrial Relations Commission has the power to declare a class of contractors to be employees based on such criteria as the relative bargaining power and economic dependency of a class of persons and whether the contract is designed to, or does, avoid the provisions of the industrial instrument.

We have the ludicrous situation in Queensland where two parties can enter into a commercial contract for service with one party operating as an independent contractor and taking advantage of the freedom to negotiate the contract according to their terms and conditions. However, under current state legislation, that contract is assessed by the Industrial Relations Commission according to standards required for an employment contract, including minimum award conditions, rather than as a commercial contract. So, despite a clear intention on behalf of the two parties to the contrary, the contract falls back within the scope of the state industrial relations legislation. This is absolutely absurd. It is high time it was changed, and this legislation will address that.

The absurd situation was succinctly highlighted in another example, the case of Mr Simon David, who made some interesting comments in the Australian on 27 July 2006. Mr David, who is a computer programmer in Melbourne and an independent contractor, says he pays WorkCover and limited insurance liability, like any other small business, but was disadvantaged by being treated as an employee under industrial law. He said:

I treat myself as a small business, and I expect that everybody that deals with me also treat me as a small business ...

But, in reality, he is not because of the way the Victorian legislation embraces him. Well, Simon, the good news is that the Howard government has heard your pleas, along with the hundreds of thousands of other independent contractors in the workforce throughout Australia, and we will legislate here in the parliament of Australia to correct this injustice.

The independent contractors bill will remove the uncertainty and confusion of state regulations to bring all independent contractors under the certainty and security of a federal system. It will ensure that agreements entered into by independent contractors are correctly classified as commercial contracts and not contracts of employment, thereby allowing independent contractors more flexibility in negotiating the terms of such contracts rather than being forced to have them satisfy stiff award conditions. Deeming provisions in state legislation will be overridden. A three-year transitional period will apply, during which workers previously deemed by state legislation will have the opportunity to clarify their position within contracts as either an independent contractor or an employee.

In the time I have left, I want to read a couple of comments from key stakeholders. I think it is important that those who are right at the heart of this area have their words reflected in the parliament. Mr Norman Lacey, who is the director of the Information Technology Contract and Recruitment Association, said:

The bill is a great step forward for us as an industry and for independent contractors ... It’s not going to change their lives tomorrow, but it creates an environment in which independent contractors will flourish and enjoy a measure of protection and recognition that they would not otherwise have had ... It legitimises their place in the workforce.

To that I say: hear, hear! Thank you, Mr Norman Lacey, for your remarks supporting this important legislation. With one in four in the building and construction industry operating as independent contractors, Chief Executive of the Master Builders Association of Australia, Wilhelm Harnisch, said of the bill:

The Government’s legislation means that contractors will be able to operate without the workplace relations system dampening their entrepreneurial spirit ...

This is a very good bill. It is a very important bill. I am delighted to be part of the Howard government and, of course, to support this bill very strongly. Today’s reforms the Howard government is putting in place in the parliament will set up tomorrow’s prosperity. I know that people find change difficult, but strong and confident government is in the business of important reform that will set this nation up for prosperity in the times ahead. Independent contractors deserve our thanks and congratulations for being very committed Australians in terms of their contribution to our national economy, prosperity and record low levels of unemployment that we are enjoying in this country today. I thank all the independent contractors who live in the Ryan electorate. I know that they will be working very hard. I salute them and the prosperity that they bring to the western suburbs of Brisbane. I hope that they will be delighted to continue to support me. I will ensure I continue to work hard for them. (Time expired)

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