Michael Keenan (Stirling, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Hansard source

I cannot think of any other time in recent memory where the importance of having a job was more paramount to the minds of Australians and their families. It is very unfortunate to observe that we live in an era where we hear and read virtually every day about company closures, layoffs and sackings. The Rudd government inherited record low unemployment when it came to office in 2007. The previous Howard government created 2.2 million jobs and, basically, every Australian who wanted a job could find one. Since the change in government, of course, we have seen unemployment start to rocket back up. Unemployment currently stands at 5.4 per cent and is forecast, perhaps optimistically, to peak at 8½ per cent in 2011, which means one million Australians will be out of work. This is a staggering figure particularly when considered against the record low levels of unemployment left for this government.

Labor seems to take absolutely no responsibility for the Australians who are losing their jobs on a daily basis since Labor came to power. They just shrug their shoulders and say that every job destroyed is just a result of the global financial situation. Yet Labor’s policy is making what is obviously a difficult situation far worse, and this bill is a perfect example of that. Yes, we have a global economic downturn and, yes, it does create serious challenges for this country, yet Labor’s reregulation of the labour market will make it harder for the private sector to create jobs and will make sure that Australians lose their jobs in increasing numbers.

We on this side of the House recognise that jobs and jobs growth are the single most important issues facing Australia at this time. Everything we do in this parliament, every arm of policy, should be aimed at Australians who want a job to have a job. Labor will come in here and they will say that jobs are their No. 1 priority—although with this government, of course, you see many competing priorities. But then we see job-destroying legislation like this which shows how hollow their slogans on jobs are. This side of the House realises that it is enterprise that creates jobs, not government. To keep people in jobs and to create jobs, enterprise must be encouraged to grow and given the confidence to employ. When enterprise suffers, jobs and workers suffer.

We have previously stated that the Fair Work Act is bad law. It gives enterprise and business reasons not to employ people, reasons not to grow and reasons not to prosper. It discourages Australia from moving forward. It forces workplaces back in time to the 1970s and blissfully ignores the challenges and realities that face Australian workplaces in this new millennium. This is an act which penalises innovation, which discourages workers and business from directly talking to each other and which gives unions and the industrial umpire a bigger say in employment relationships than those who actually matter: workers and business.

The worst thing about this legislation is that it directly destroys jobs. There is no doubt that it will, along with most of Labor’s bungled and botched policies like saddling Australians with the highest level of peacetime debt, make the challenge of economic recovery far more difficult. Therefore this bill, in its current form, will make the disastrous effect of the Fair Work Act on jobs far worse. Perhaps the best example of its job-destroying capability is the so-called modern award system. The changes as they are proposed in this bill will directly destroy tens of thousands of Australian jobs. The coalition has been and will continue to be supportive of a simpler and more modern and relevant system of awards; indeed, we proposed simplifying that system when we were in government. But we are not supportive of the rushed, botched and bungled way in which Labor seeks to achieve what is an admirable end. Both unions and business alike have described this award modernisation process as soul destroying, rushed and nightmarish. Of course it was Minister for Employment and Workplace Relations Julia Gillard’s own award modernisation request that promised us that her system of new modern awards would ‘not disadvantage employees or increase costs to business’.

Clearly, it is a promise she has been unable to keep. The union movement tells us that employees will be disadvantaged and that workers will be worse off. Those representing industry say that business will face massively increased costs and they will simply have to pay more to keep existing staff in jobs. Nobody believes that this minister’s request can be implemented. Even the minister herself has now come to recognise how hollow and ill-conceived her promise to Australian workplaces has been.

The coalition tried to amend the Fair Work Bill when it was in the Senate to include the minister’s own words, when she made the award modernisation request, that it would not disadvantage employees nor increase costs to business. Astonishingly, Labor senators voted that down. These were the minister’s own words but Labor senators voted down that amendment. With that in mind, the coalition has called for this whole process of award modernisation to be suspended until the minister can find a way to honour her commitment to Australian workplaces.

Failing that, we will move amendments to this legislation that address the worst aspects of this bungled policy. This bill must surely be embarrassing for the minister as it contains provisions that specifically acknowledge that employees will be disadvantaged by the modern award system. It even goes so far as to create a way for employees who are worse off to have their problem fixed. This is a remarkable legislative recognition by the government and this minister that her grandiose modern award promise was false, misleading and nothing more than a pipedream.

But this award modernisation process is far worse. It will result in massive increases in costs to business at a time when enterprises throughout the country are already struggling to prosper and grow. Estimates vary from industry to industry, but there is an overwhelming body of evidence that shows that business will have to pay more to keep their workers. In some sectors it will be by amounts of up to 50 per cent. This will be a disaster for Australians who hold a job or who want to get a job. I want to turn to what some of the industries are saying about this policy and what it will mean for them. The Australian Retailers Association said:

With unemployment at 5.7% and rising, retailers don’t need the pressure of increased labour costs which will force many to cut jobs.

The Australian Retailers Association is saying that this policy will force their members to cut jobs. They went on to say:

Smaller retailers will not cope with the collective pressure of increased labour and compliance costs in the modern retail award and the Fair Work Bill. They will restructure their workforce, shed staff or close shop.

So this policy will make retailers restructure their workforce, sack some of their workforce or close their doors completely. The Australian Retailers Association costings indicate an increased wage bill of up to $28,500 to an average retail business, once the financial impact of the new award system hits the bottom line of retailers. They said that this would be ‘like a Mack truck driving through the shop window’.

The Pharmacy Guild of Australia holds grave concerns about what these new modern awards will mean for pharmacists. In my home state of Western Australia, in a sample of just three pharmacies that employ 31 people the proprietors said that their combined wages bill will increase by $228,000 per annum. The proprietors of these pharmacies advised that this cost impact will force them to sack workers, resulting in the loss of four full-time jobs. This will result in three pharmacies with $228,000 in extra wage bills a year, which will make them lose four jobs. If we were to take those figures and extrapolate them across Western Australia, we would see that this would mean that in Western Australia alone pharmacies would be forced to get rid of 680 jobs. If we were to look at New South Wales, where a similar exercise was carried out, we would see that the resulting job losses are expected to be almost 1,400. Just in Western Australia and New South Wales, 2,100 jobs will be lost in the pharmacy sector alone. So 61 per cent of pharmacists expect to change their staffing levels as a result of the new pharmacy modern award. That means that 61 per cent of pharmacists will employ fewer people directly as a result of this policy. The President of the Pharmacy Guild of Australia has said that pharmacies will go the way of after-hours GP surgeries.

Clubs NSW called the government’s approach to modern awards apocalyptic. The aged-care sector has indicated that costs will rise by between 10 and 20 per cent. So the aged-care sector across Australia could be facing cost increases of 10 to 20 per cent. The National Retail Association estimated that in New South Wales the cost increases will be from almost eight per cent up to almost 15 per cent. In Queensland they will be over 14 per cent. Newsagents in Queensland have contacted me. A small business employing five full-time staff said that they will face a 14 per cent increase in labour costs. That means that, out of five staff, they will be forced to sack one staff member. An independent supermarket proprietor in Western Australia wrote to me, and I think this is worthwhile quoting directly because it shows how damaging this policy will be. The letter said:

I operate a small business, which is an independent supermarket. I employ full time, part time and casual employees who currently work across a six day working week. Many of them are working mothers and students who rely on flexible hours and casual work.

As a concerned employer I do not want to reduce staff but I fear this may be one of the inevitable consequences of the introduction of this new Award.

The Australian Hotels Association in Western Australia has indicated that a combination of penalty rates and overtime loadings will result in an eight to nine per cent increase in labour costs in Western Australia’s hotels. Western Australia does not have gaming in its hotels—it is the only state that does not—and, as a result, it has less capacity to absorb this increase. What this will result in is, of course, massive job losses. The AHA estimates that some 3,000 to 4,000 jobs will be lost just in Western Australian hotels. Who will these people be? They will be young people, students and people who are already suffering because of this global downturn.

The Adelaide Advertiser yesterday quoted two of Australia’s largest employers—that is, Woolworths and Coles. They have warned that up to 5,000 jobs are on the line because of these changes. The retail sector claims that its wage bill will rise by well over $100 million a year. The Advertiser also quoted confidential modelling by retailers that shows that added wages burdens will be massive across the country. In New South Wales alone, extra overtime payments are forecast to hit $75 million.

Similarly, in the Australian yesterday, Brodies Mealmakers in Queensland—a franchise that has 14 outlets—said that they will have to close seven of those outlets if this modern award goes ahead. This is one franchisee who owns 14 outlets and because of Labor’s policy he is going to have to close seven of those outlets. He said:

We have crunched the numbers; it is going to mean an increase of over 20 per cent in wages and it just will not be viable in our stores, so it will mean a loss of jobs and longer hours. We were just shocked when we found out that this was going to be a reality. Half our stores will not be able to survive. That is a lot of jobs gone.

It is astonishing that this minister and this government do not understand that increasing costs in this way will cost jobs. How does it not compute that making it more expensive to employ people will mean that fewer Australians will be able to find work? How will burdening struggling mum and dad shop owners with 50 per cent higher labour costs encourage them to employ people or encourage them to grow? Obviously it does not and it will not; it will cost thousands of jobs and it will directly lead to small business closures.

Bearing this in mind, you could be forgiven for thinking that this bill might contain a provision that would allow struggling businesses to get help if they cannot afford this minister’s high-cost, one-size-fits-all modern award system. But sadly it does not. They have been completely overlooked. If you are a small business that is going to go bust because of these changes, the government just shrugs its shoulders and says that there is nothing we can do for you; this is our ideology and we are not budging. Close your doors, those jobs can be lost and we do not care.

So while employees who suffer under modern awards have a way to get some help and relief—and we welcome that—there has been no equivalent provision for enterprise and business. They just have to cop these increases from modern awards and in some cases copping that increase will mean shedding staff or completely closing their doors. To enterprising small business mums and dads who are struggled to build up their own businesses and who have saved and sacrificed and done the right thing by wanting to create jobs, this government just says, ‘You have just got to cop it sweet.’

I want to remind the House of what I said earlier about this minister promising that this process would not disadvantage employees. That promise has proved to be false. This minister promised that modern awards would not increase costs to business, and this promise has proved to be completely false. Indeed, when the coalition tried to hold her to that promise, when we tried to insert her own words into this act, it was the Labor Party who voted it down. This bill does not give any help to struggling small businesses who run the risk of laying off staff due to these changes. This is a bill that is antijobs, antigrowth and antirecovery.

I want to turn to the minister’s latest gyrations regarding this bill, where she was forced to reissue her award modernisation request to specifically take into account the circumstances of restaurants, catering companies and cafes. They had previously been lumped in one general hospitality award and the results of that for that particular industry would have been catastrophic. The Restaurant and Catering Industry Association commissioned some research from KPMG which estimated that in that industry alone across Australia up to 8,000 jobs could be lost. Again, like in hotels, these are jobs that are held by students, by people who can work part time and, often, by some of the most vulnerable workers in our society. So the draft award as initially proposed by the commission would have decimated this industry, just like other industries will suffer with some of these modern awards. Yet the minister specifically acknowledged her mistake in relation to restaurants, catering and cafes by asking the commission to create another award specifically for this sector.

The coalition applauds what is an uncommon outbreak of common sense from this minister, but surely this is perhaps the most obvious admission of the failure of this policy. What about other industries that are going to be decimated by modern awards? Don’t they deserve equal consideration? Why wouldn’t they be in line for some of this minister’s special attention? So if you are in aged care or horticulture apparently it is fine for costs to be massively increased in those sectors and for those jobs to be lost, yet this minister will rescue certain industries. Sadly, I think it is just based on the politics of it rather than on any sort of sensible policy approach. Why don’t other industries deserve equal consideration?

The results of award modernisation are going to be catastrophic for businesses across Australia. But these are not the only concerns that we hold about this bill and these are not the only amendments that we will be moving to try to take out the worst job-destroying aspects of this bill.

Everyone, unions and industry alike, realise that under the Fair Work Act demarcation disputes and union turf wars are going to be on the rise. It is a way that Labor can arrest the increasing irrelevance of the union movement and it gives the union movement something to do between election campaigns. Once again, this bill explicitly acknowledges this truth by creating a method to resolve disputes about union representation in workplaces, which is a solution to a problem that has actually been created by the Fair Work Act. So the Fair Work Act creates the problem and then the transitional bill has to come in and try to fix it up.

But of course Labor only wants to hand power to resolve and address these disputes directly to the union movement. It does not let business have a look in; it does not let the enterprise that creates employment get a look in. It hands power directly to the union movement to address these issues. But it is of course the businesses that suffer at the hands of these demarcation disputes, as do the workers. But the provisions in this transitional bill effectively say that when resolving a union representation dispute unions can have their say but the people who actually run the workplace, the people who actually create those jobs, are not allowed to have their say.

Labor clearly believes that the only people who should have a say about what affects workplaces are the union movement, not the employers or the people who actually create jobs. This is clearly unfair. It is clearly a lopsided approach that panders to Labor’s ideology.

In stark contrast to the government, the coalition believes that all people in the workplace—workers and employers alike—are entitled to have a say about what happens in that workplace. We tried to amend the Fair Work Bill to include more workplace democracy. Of course, that was voted down by the Labor senators in the Senate because they do not believe in workplace democracy; they believe that the unions should run workplaces and that only the unions should have a say. We will therefore move to amend this bill to ensure that fairness is a concept that extends to parties beyond the union movement.

The Fair Work (Transitional Provisions and Consequential Amendments) Bill 2009 also deals with the interaction between the national employment standards, which were established under the Fair Work Act, and existing transitional instruments. This transitional bill is deficient in the way that it deals with this. The bill as proposed deals with this interaction in a manner that is designed to punish innovation and penalise workplaces that have agreed to move away from Labor’s preferred one-size-fits-all approach. It takes a very narrow view of interaction, resulting in outcomes that will be unworkable and unwieldy, taking Australian workplaces back to the 1970s and undoing the hard efforts of workplaces to agree on arrangements that are actually suitable for them.

We propose to amend the bill to ensure that the national employment standards can universally apply, but in a manner that acknowledges detriment on a global basis. We recognise that real fairness should be considered by taking into account the entire circumstances that exist in an employment relationship, not the black-and-white, bureaucratic approach favoured by the Labor Party. I also foreshadow amendments that deal with the issue of modern awards as they relate to state based differences and to their dealings with default superannuation funds.

All of these amendments will, on any fair view of the situation, ensure that the transition to the Fair Work Act can occur in a manner that recognises the needs of both workers and enterprise. They will ensure that the new system can operate in a manner that is balanced and sensible. Most importantly, they will ensure that the worst job-destroying aspects of Labor’s new workplace laws will be somewhat neutralised, making this bad law less bad.

I turn briefly to the second bill we are debating today, which is the Fair Work (State Referral and Consequential and Other Amendments) Bill 2009. This bill is not the subject of any opposition by the coalition in this House. It is interesting, however, to note that a few short years ago Labor state governments took the money of hardworking taxpayers in those states, and throughout the country they joined forces with the union movement to oppose the Howard government’s endeavours to create a national and consistent system of workplace relations. The Labor states were so committed to stopping this national system of workplace relations that they took this fight all way to the High Court, which ultimately ruled against unions and Labor.

Now, a very short time later, we have a federal Labor government which is setting up a national system for the states to hand over their powers to the Commonwealth, and it seems that suddenly these Labor states do not have the same objections to a national system. This is further evidence, as if we needed further evidence, that these state Labor administrations always prioritise the interests of the Labor Party over the interests of the people that they should be representing—the people of their particular state.

This bill will build upon the work of the coalition in 1996 by allowing the state of Victoria to continue its referral of power to the Commonwealth. It will allow consistency of workplace laws in that state and create certainty there for business and workers. It will also provide a model for other states in referring their powers to the Commonwealth, if they choose to do so.

The fair work transitional bill will do nothing more than destroy more jobs in this country. The coalition will move amendments that will restore the notion that workers having a job is actually the paramount thing that a workplace relations system can provide. This is what Labor always forgets—that the purpose of a workplace relations system is workers having a job. We will alleviate the worst aspects of this transitional bill, particularly those regarding this botched award modernisation process.

The government has a choice: it can pursue a bloody-minded approach, as this minister always seems to do, or it can take into account what the opposition, and also industry, is telling them about what is going to result from this botched awards modernisation approach. At a time when finding a job is becoming increasingly difficult in Australia, why would the government make it harder for you to find a job? That is what they are doing in this bill.

I urge the government to sensibly assess the amendments that we are proposing. They will take out some of the worst job-destroying aspects of this transitional bill. I urge the government to have a look at this before they throw tens of thousands more Australians on to the dole queue.

See this speech in context