Kevin Andrews (Menzies, Liberal Party) Share this | Hansard source

In the ongoing struggle between those who believe in the freedom of the individual, including his or her economic freedom, and those who seek to protect vested interests, the Fair Work Bill 2008 represents the latter. It is a clear signal of the protectionist outlook of the Rudd government. In fact it is no coincidence that the government is also escalating industry protection to the car manufacturers at the same time as reviving industrial relations protection for the union movement.

Respect for the dignity of the individual and his or her freedom has been the harbinger of human, economic and political progress. Only self-doubt will defeat this struggle. I make these remarks at the outset because there is confusion about what this bill does and does not do. That confusion is fanned by the government’s rhetoric. Consider, for example, the assertion by the Deputy Prime Minister Julia Gillard when introducing the government’s new labour laws. She said:

… Work Choices is tantalisingly close to being gone forever …

If Ms Gillard means that the government is proposing major changes to the existing workplace relations legislation then she is correct. If however she means that every aspect of the existing workplace relations legislation is being changed or removed, which is the impression she is seeking to create, this is factually untrue.

Let us consider the main components of the Howard government’s legislation and Labor’s response to them. Firstly, Labor will retain the national system, a system which prior to the previous election they had opposed all the way to the High Court of Australia. Secondly, Labor said they would ban individual employment arrangements—and they have prohibited the making of new individual Australian workplace agreements generally. But the Australian Industrial Relations Commission has approved a new individual agreement clause for awards which is very similar to an AWA—in other words, an individual contract in another guise. The difference, however, is the role of the union. Being subject to an award negotiated by the union means that real flexibility and therefore productivity is unlikely to be achieved.

Thirdly, Labor complained that minimum employment standards had been decimated under Work Choices. A new set of minimum employment standards will apply from 2010. Yet most of these standards replicate existing requirements. In fact employers successfully argued for the right to request ‘reasonable’ working hours beyond the standard 38 and the right to refuse requests for flexible working hours or a second year of unpaid maternity leave. The Australian Industrial Relations Commission resisted the union proposal for mandatory union involvement in such individual arrangements.

Fourthly, the Labor government will retain some unfair dismissal exemptions for small and medium businesses. The threshold will be set at 15 employees for the first 12 months of employment. This is a concession by Labor that employment protection laws actually depress employment in the small- and medium-business sector. I say that because we should recall that previously the Labor Party voted against any exemptions for small business—on over 40 occasions in this parliament.

Fifthly, the inquisitorial approach of the Fair Pay Commission, which replaced the old arbitration system of minimum wages, is being retained. Minimum wage increases will continue to be made after study and research, not as they were in the past by arbitration between the parties. Finally, the ban on industrial action during the life of an agreement will be retained. Secret ballots will also be kept. If these tenets of Work Choices remain as they do—they are not being abolished by this piece of legislation and I do not see any proposal from the Australian Labor Party, the government, to abolish what I have just spoken about—then what is this bill really about?

The real change in this bill is the re-empowerment of the union movement through a combination of imposed collective bargaining, so-called good faith bargaining, default union representation, expanded right of entry and other provisions. The real message of the bill is that the unions are being repaid for their massive investment in the ALP’s campaign by being given access to almost every business in Australia. Let me illustrate this. Firstly, the government is re-empowering a central industrial relations body to be known as Fair Work Australia. This is based on the belief that a centralised wage-setting dispute resolution body is best for the nation—yet is an idea that governments since the early 1990s on both sides of politics in Australia have moved away from. Unions will utilise mindless costly proceduralism to advance their causes while business, small business in particular, will pay the price.

Secondly, through this bill the unions will reassert a monopoly bargaining position in the workplace. A union will only require one member in a particular workplace to become a bargaining party. With the so-called good faith bargaining in place employers will be forced into a prescriptive system complete with the provision of considerable information about the business to the unions. Thirdly, the expansion of compulsory arbitration and pattern bargaining re-creates the conditions under which wage inflation flourished in the past. Despite denying numerous times that the bill would reintroduce compulsory arbitration and pattern bargaining, they are being revived.

While inflation may not be an immediate concern in Australia, these changes will be detrimental to the nation in the longer term. I hardly need to remind the House of the economic history of Australia—that wage inflation has been the precursor to outbreaks of inflation generally and the boom-bust cycles that have occurred periodically in this country.

Australia will experience a period of creeping re-regulation under the new government, especially as the industrial relations tribunal imposes unnecessary procedural burdens on business. That has been the history of the AIRC, and no doubt that will occur under the new body in the future. And the old destructive pattern of wage rises from a successful sector of the economy flowing through to less buoyant sectors is being revived. This will occur by bargaining across multiple employers within an industry sector. Industry-wide arbitration will therefore become commonplace.

Fourthly, union right of entry is being significantly expanded, despite Ms Gillard claiming that the existing provisions would be retained. Add to this the increase in demarcation disputes that will arise under this bill and you can see how industrial action will increase in the future. Indeed, over the course of this year alone there has been something like an eightfold increase in industrial disputation in Australia.

Instead of proclaiming what this bill is really about—namely, re-empowering the unions—the government hides behind the rhetoric of abolishing Work Choices. It knows that when Australians voted against Work Choices they did not necessarily vote for the unions. That is why Labor will not acknowledge what the bill really does, trusting that most people will never hear any more than the five-second sound bite on their television news.

The government is financially and morally bound to the union movement, and this bill is the latest consummation of that arrangement. It is an attempt to reverse the declining membership and significance of unions in Australia. By imposing the collective agreement as the standard, Labor seeks to insert the union into every workplace arrangement. Indeed, it is clear from what is in the bill, compared to the statements that were made in the middle of the year by the Deputy Prime Minister, that there has been a significant expansion of what has been provided in this bill, which could not have been inferred from what Ms Gillard had said then.

What is surprising is the alacrity with which some business organisations seem to have welcomed the return of the old industrial relations club. Many small and medium businesses will come to see that they have been poorly served by those who lead their organisations.

The test for this bill is what happens not just in the next year or two but over the medium term. The government talks about productivity but provides no evidence that this massive reregulation will achieve it. Indeed, all available evidence indicates the opposite—by allowing flexibility, subject to appropriate safeguards, workers, businesses and the economy would be better off. This has been the clear outcome of industrial relations reforms in Australia over the past 15 years.

Let me remind the House, then, of the benchmarks upon which Labor will be judged. On Labor coming to power the unemployment rate in Australia was 4.3 per cent. Real wages under the Howard government grew by over 20 per cent and more than two million new jobs were created. Only 2.6 working days were lost on industrial disputes per thousand employees. These are the benchmarks upon which the Labor Party in government will be judged. And they are the benchmarks by which Australians in the future can judge the efficacy of this piece of legislation.

Using public dissatisfaction about one or two items in Work Choices—such as penalty rates and overtime—as a guise for the massive re-empowerment of the unions will prove counterproductive for the Australian economy and the jobs of many people in this country. As business costs rise and unemployment soars, Australians should look back on this exercise as folly driven by ideology. Those who continue to believe in the individual and the national benefits of economic freedom will have to rejoin the struggle.

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