Jamie Briggs (Mayo, Liberal Party) Share this | Hansard source

The member for Deakin made some interesting remarks about allegedly representing working people, although he could only manage seven minutes on this bill. The usual attack on the former government is that they were about ripping off wages, attacking working people and so forth. It is on the record that the Howard government created over two million jobs and had real wages rise by nearly 25 per cent. Compare that to the previous governments’ record, the Keating and Hawke governments—the so-called friends of the workers—which had a wage freeze, in effect, due to a deal done with the ACTU in the late 1980s and early 1990s with the wage accords.

The Howard government policies of allowing workers and employers to deal with each other without requiring the handholding of unions or indeed of employer organisations meant that more people were employed and meant that wages rose quicker. We will constantly hear this attack from those on the other side, because that is what the hollowmen have written in their speeches to come into this place and talk about. But the truth of the matter is that the Howard government’s record for working Australians was outstanding.

What we are going to see with the introduction of this bill, which gives effect to the bill that we debated earlier in the year, is lower employment, lower wages and fewer opportunities for the future for Australians. And it will all be blamed on this global financial crisis; everything will be due to the impact of the global financial crisis. But truth be told, it is policies implemented by this government—including this policy—that will impact enormously on the opportunities for Australians to get work in the future so that they can pay the taxes to pay off the debt that these people are leaving us.

We are not going to stand here and put up with lectures from the member for Deakin and his cronies in the ETU—Kevin Harkins and those sorts of people—because what we did in government was good for working Australians. Let us just deal with that in the first place. Now I will calm down and get back to the purpose of these bills.

These bills give effect to the changes that we saw in this place earlier in the year. That was a strongly debated bill. Workplace relations or industrial relations, whatever you like to call it, is a matter which divides this House. It always has and probably always will. That is not necessarily a bad thing. It is good to have different perspectives on how you should manage the Australian economy. This area of Australian law will always be one that is quite contentious.

The main features of these bills are to change the institutional arrangements in relation to previous agencies, which had various names, and bring them under the Orwellian Fair Work Australia title. I want to comment on one point in particular. Those of us on this side and well-qualified industrial lawyers who know a lot more about the constitutionality of these sorts of matters than I do have very big questions about the demarcation or the line between those who seek to investigate claims of industrial abuse and those who seek to implement that law, the umpire. There is a major question as to whether these two functions can be carried out by the same organisation. The issue that we will keep an eye on is how that operates. There is a question, which was raised during the election campaign in 2007 and during that year and never satisfactorily answered, about where the demarcation is and whether it is in fact constitutional in that respect. We will be watching that.

It is a big mistake to remove the divisions in that area from the Federal Court and the Federal Magistrates Court. The Federal Magistrates Court has worked well. We understand that those on the other side are implacably opposed to the Federal Magistrates Court and that there will be another bill in this place that will give us the opportunity to debate that.

The last thing that I will say in relation to the new Fair Work Australia is that it will be a monstrous agency. It will be somewhat along the lines of the National Health Service in the UK, I suspect. I understand that its new head, Justice Giudice, will be available for estimates later this year. We look forward to that.

One of the bills talks about processes commencing on 1 July 2009; transitional rules for National Employment Standards; the status of old existing agreements; variation, termination and replacement of old agreements; award modernisation, which I will come to in more detail; enterprise awards; registered organisations, such as unions and employer organisations; and representation orders. We are proposing an amendment to the part of the bill to do with representation orders as I understand it.

The other bill that we are debating in this cognate debate is theFair Work (State Referral and Consequential and Other Amendments) Bill 2009. I said during the Fair Work Bill debate earlier this year that one of the very important aspects of the previous government’s reforms was to create a national system of workplace relations. I stand by that. It was a very important move. It is one issue on which the Parliamentary Secretary for Climate Change and I are of a single mind. This is a very important economic reform. It makes no sense in a modern economy to have six, seven or eight different systems of workplace relations around the country when so many small businesses operate over state borders. I am a supporter of one national system. I understand the arguments of those who say that it is always good to have a competitive environment, with one state competing against another. I do not think that holds, though, in a modern economy.

As I understand it, the coalition will move five broad amendments to the bills, which include amendments to do with union representation orders. I understand that the shadow spokesman has dealt with these in some detail, so I will not bore the House by going through them again. In our amendments, we are dealing with the operation of the National Employment Standards, take home pay orders and finally default superannuation, which is something that in government we moved time and time again to change so that Australians could choose where their superannuation went.

The issue I want to talk about in some detail today, however, is award modernisation. The award modernisation process is important for the economy and for the system if it is to operate most effectively. Awards over time have become inconsistent and, particularly with the melding of the state systems and the federal system, in some cases there are 70 awards covering similar industries. That brings with it various allowances, scope of hours and simple things like that that make it harder for small businesses to understand. Particularly the businesses that do not have human resources or industrial relations practitioners in their organisations find it difficult to understand how the awards affect them and which awards they are covered by.

This is an important process. It is a process that we in government began to undertake. The 1997 reforms had award simplification. They reduced the number of matters to 20. Largely, that process went on, but the next step is to meld the state and federal awards in a national system. That is no easy task. I have great sympathy for those undertaking that task because you have to have in the end someone who will be worse off. There is no possible way you can do this without changing the cost structures in awards or reducing someone’s entitlement along the way. It is impossible.

This is where the Deputy Prime Minister has been quite misleading. She has claimed, quite publicly, that the award modernisation process will not leave workers or businesses worse off. In her initial instruction to the commission on 18 December 2008 she said that the process must:

• be simple to understand and easy to apply, and reduce the regulatory burden on business;
• together with any legislated employment standards, provide a fair minimum safety net of enforceable terms and conditions of employment for employees;
• be economically sustainable and promote flexible modern work practices and efficient and productive performance of work …

She then talked about it not disadvantaging employees nor increasing costs for employers. That is simply not possible. We found that out in the last few weeks. It has become quite obvious.

The Deputy Prime Minister, who is very intelligent and a good operator—there is no question about that—would have known that this report sits in the Department of Education, Employment and Workplace Relations. The Award review taskforce report on award rationalisation was finalised in July 2006. It was conducted by a senior deputy president of the Australian Industrial Relations Commission Matthew O’Callaghan. The task force included employer representatives and union representatives. They set about conducting a review to advise the previous government, and the department, on how the award review task force would occur, how it could possibly be done.

There are some interesting matters raised in this report. The first which should have sent an alarm bell to the Deputy Prime Minister when she issued her first instruction that said that no employee or employer would be worse off is in section 8.4.3.2 entitled ‘Approaches to neutralising overall costs and benefits’, which states:

262. Changes to current award provisions will, by definition, occur as part of the award rationalisation process. To balance as far as possible the overall distribution of costs and benefits between employers and employees, an overall approach should be adopted. Individual award provisions should not be considered in isolation, rather the overall impact of the rationalised award provisions should be taken into account. The discussion below proposes possible approaches to the neutralisation of cost and benefits.

In other words, you cannot go through award by award and compare the conditions, because they are so varied. Probably the greatest example of that is the retail industry where you have different hours. You cannot define which provision is best or worst. It affects the overtime payments in each award and relates to the state trading hours regulations in each state. It is a confused mess. I am not saying the task is easy; however, to suggest to the Australian public that you can have an outcome where there is no cost increase for either the employer or the employee is misleading in the extreme, and she knew it because this report told her that.

The second aspect of the report which should have raised alarm bells—and I am sure she is aware of it as I am sure she has seen this review; her departmental staff have certainly seen this review—is section 3.2 entitled ‘Issues’, which states:

52. The task of rationalising awards is of itself a complex one which will require the judgement and expertise of the AIRC—

and you would expect a senior deputy president of the AIRC to suggest that. It continues:

Inappropriate groupings of awards will make this task effectively impossible or result in rationalised awards which are either too vague to perform their fundamental function or that import arrangements simply not suited to a particular segment of industry.

What did we see on Saturday? On Saturday we saw the first backflip of the award modernisation process. There was an article in the Australian entitled ‘Julia Gillard in restaurant penalties backflip’. The AIRC, on her instruction, grouped awards which were inappropriate to group together. So we saw a new instruction to the commission on Saturday, even though we obviously knew this was going to be a problem and even though on the 891 morning program in Adelaide last week with Matt and Dave the Deputy Prime Minister desperately denied that there was an issue. She claimed there was a five-year transition period which was not applied to these awards.

On the following day Matt and Dave followed up with an interview with Patrick Newenham from the horticulture industry, who said:

It’s going to hurt Matt, there’s no doubt about that, but first apropos what Nick was saying—there is no appeal. So in other words when this is handed down by the Workplace Authority … faceless people in Canberra, there’s no appeal.

He goes on with how much it is going to cost the industry. Matt and Dave then move on to Ms Sally Neville, the CEO of the Restaurant and Catering Association of SA, who said:

Yep … the increase in the casual loading from 20% to 25% so that … 5% across. In South Australia, we’ve got over 50% casual labour force …

There are young people in that industry who are at university. They do some work in restaurants and catering, in pubs and so forth. There will be at least a 15 per cent increase in labour costs in South Australia. That will destroy thousands of jobs and deny young people opportunities. She went on to say:

With all due respect to the Deputy Prime Minister, I think that she’s lying. I think she knows full well that there is an increase in cost to employers, and I think that she is ignoring that fact …

I would never suggest that the Deputy Prime Minister is lying; that would be unparliamentary. However I do suggest that the Deputy Prime Minister knew that this was an issue beforehand, because it was spelt out in this report. She knows about that report; it has been in her department since July 2006. She is a smart lady and she knew it was there.

This is badly thought through. It is rushed and we are seeing the impact on the Australian economy because of it. It is a very difficult process but an important process. It has to happen. You cannot have a situation where there are so many different awards applying across the country under a national system—we all agree on that—but the system is badly thought through.

The amendments proposed by the shadow minister are the right amendments. Amendments (1) and (2), going to the no detriment rule, seek to remove the line-by-line approach to the concept of detrimental as it relates to the interaction in the NES with the transitional instrument. The amendments will ensure that the interaction between the NES and the transitional instrument is such that it is now assessed on an overall basis when the comparison occurs, just like Mr O’Callaghan told us to do in the first place.

This situation is trying to spin something which is not possible to spin—someone will be worse off in this process, they have to be. There are so many different structures in these awards. This issue is so difficult to understand that most normal people do not understand it, and nor should they. But the Deputy Prime Minister does. Her very intelligent staff in the department understand this issue. The AIRC understands this issue. She should have known. She misled the Australian people and it is going to impact on people’s jobs and on people’s businesses. I have had complaints from restaurants in my area, raising this issue. At a time when we are in the middle of an economic downturn, this is government policy gone mad. It is badly thought through and the best thing that the Deputy Prime Minister could do is to apply the amendments suggested by the shadow minister.

The shadow minister has also proposed an amendment going to relief from increased labour costs. These amendments seek to insert a new provision that provides the equivalent employer version of the take-home pay orders outlined in the preceding part. The provision recognises and seeks to enshrine a provision with the existing award modernisation request that promises no increase to an employer.

So in the last few months we have seen those employer organisations who represent their members—and there are still a couple out there who seek to represent their members and not just seek to represent themselves and try to get some appointment in the future—outlining this very clearly to the government. The Deputy Prime Minister should sit up and listen, because this will cost jobs. We have major concerns with the Fair Work Act itself and we have outlined those. This is a provision she can stop today. She can make some changes to it which reduces the cost to Australian business and which will reduce the impact on Australian workers. I urge her to do so and not to be stubborn. This is a mistake and she can fix it.

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