Scott Morrison (Cook, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Hansard source

I rise to speak on the Migration Amendment (Reform of Employer Sanctions) Bill 2012 and indicate that the coalition will not be supporting this bill. The coalition will not support, on principle, a bill that seeks to impose unreasonable regulatory burden on Australian employers, the vast majority of whom are honest and law-abiding.

For five years Labor have mummified employers, tying them up with their never-ending rolls of red tape. Labor have strangled productivity and stifled ingenuity of business—micro, small and large. Since 2008 more than 18,000 additional regulations have been created by the Rudd-Gillard governments. Labor made a promise when they were elected that they would introduce a one-in one-out scheme—the first broken promise, and sadly not the last. In 2008 Labor added 5,284 regulations and repealed just 33; in 2009 Labor added 7,329 regulations and repealed just 21; in 2010 Labor added 3,386 regulations and repealed just four; and in 2011, for the 2,797 regulations added by Labor, they repealed 28. In the space of just four years that amounts to more than 18,700 regulations in with just 86 taken out. Forget one-for-one: this government's legacy is 218 regulations for every single one that they have taken out. They are a government who have turned Australian businesses into compliance officers for the federal government as part of their regulation binge over the last four to five years.

It is a tough time to be running a business, as I know the shadow minister for small business sitting at the table, the member for Dunkley, understands better than anyone in this place. Retailers are struggling. Confidence is low. People are having to find room in their budgets to pay for increased electricity bills courtesy of this government's carbon tax—the carbon tax which was never going to be introduced under a government this Prime Minister said she would lead. Resources and mining companies are facing critical decisions about future investments in the pipeline, having now been subject to a tax on mining that drove a wedge into sovereign risk investment in their sector and yet has failed to raise a dollar for the government in revenue. The mining tax has proved to be the flightless bird of taxation, and it has not gotten lift off. The only thing it has lifted off has been an increase in sovereign risk for those seeking to operate in the mining sector. Doing business is tough enough as it is, let alone doing business under Labor, and having to run the gauntlet of an overexpanding maze of red tape does not make that any easier. Labor's approach to regulation is not making people jump through a few well-placed hoops; they are sending business men and women on a steeplechase of regulation that seems to have no end.

Of course the exploitation of foreign workers is a serious issue—there can be no argument there. An immigration program must be robust and fair. The coalition has always maintained that compliance is critical to ensuring the integrity of our migration streams and to protect Australian jobs and industries. If the government want to understand why Australians have lost confidence in Australia's immigration program, they need look no further—not through increased regulation on business on foreign workers; they should be looking at their failure on our borders. And today I note that more people have arrived by boat in 2012 than turned up under the entire period of the Howard government—extraordinary failure. No wonder people have lost confidence in this government's ability to manage a migration program.

But the debate today is not about the need for compliance. Today this government is asking for more red tape to hang on business. This debate is about Labor's habit of slapping employers with ever-expanding tomes of regulation in place of finding real solutions or providing real governance through better risk management strategies and through better use of the powers they already have rather than seeking to ease their consciences for their own failures by just slapping more regulations and more laws through this parliament.

Labor's insatiable appetite for more regulation on business should not be dressed up as getting tough on immigration. A crackdown on illegal workers should not come at the expense of, in Minister Bowen's very own words, 'the vast majority of Australian employers who do the right thing and are reputable and law-abiding businesses'. A risk management response should differentiate and deliberately target those who intentionally set out to exploit others rather than overloading all employers with an expensive and excessively regulatory burden.

The coalition will not support heavy-handed regulation across the board, and that is why we will not support this bill.

That is the key difference between the coalition and this government. Time and again this government fails to understand, let alone address, the challenges facing the Australian economy. Time and again, Australian taxpayers, Australian employers and Australian small businesses pay the price for Labor's wilful mismanagement. They pay for it in the taxes that this government seeks to impose upon them. They saw it most recently in MYEFO. They see it in the levies the government imposes on them in terms of self-managed super. They see it every single day in the time robbed from them to run their businesses, time they could have used to come up with the innovative products and ideas to determine and secure new markets which would grow their businesses and create jobs. That is what this over-regulation does—it robs them of their revenue in robbing them of their time.

Time is precious to anyone running a business, particularly a small business. Time spent filling out paperwork for this federal government, which has an unending appetite for it, could be better spent by these businesses doing what they do best, doing what they love and doing what they want to do—the reason they put their houses and their financial futures on the line. They do not run businesses to keep this government happy with paperwork; they do it to create a better future for themselves, their families, their communities and our economy. It is businesses that create jobs. It is not governments—although, with more regulation, they have to employ people to receive the bits of paper from businesses and endlessly collate them. At the end of the day, this paperwork offers very little in terms of making a difference to the economy.

A risk management response should differentiate and deliberately target those who set out to exploit others. Time and again, the Australian taxpayer will have to pay this bill. Businesses should not be made to do the government's work for them or be squeezed to make up the difference in terms of the $120 billion budget black hole that Labor have because their accounting went wrong. Frankly, the government do not understand the underlying challenges for the Australian economy. They just don't get it.

All Labor has done is make it harder for businesses and employers to keep their doors open. We are facing a significant productivity challenge in this country that the government has shown itself incapable of responding to. This was an issue it made much of prior to 2007 but has delivered nothing on in its time in government. In the past five years, under this government, our productivity performance has plummeted. Multifactor productivity dropped 4.2 per cent over the five years from July 2007, driven largely by a fall in capital productivity. This has a direct correlation with regulatory burdens, which chew up time and money.

A recent McKinsey study showed that, of the $200 billion increase in national income between 2005 and 2011, some 90 per cent was due to the improvement in the terms of trade and capital investment. There was an 11 per cent decline in our productivity that actually took away, stole, from our national income. The balance of the 20 per cent make-up to achieve that increase in national income was delivered by increases in the size of the workforce, particularly through a growth in the Migration Program and through an increase in workforce participation. So this government has not delivered on the productivity improvements that it said it would prior to 2007. That should come as no surprise. I am at a loss to understand what they have delivered on since that time.

Australians go into business because they believe they have something to offer. They have a vision and an idea. They go to work to do a job, not to do paperwork. According to the Productivity Commission, real GDP growth has averaged 3½ per cent over the last 35 years, with labour productivity accounting for 1.7 per cent or more than half of this growth; population accounting for 1.4 per cent; and participation, for just 0.4 per cent.

The key is to focus on reforms that are achievable and practical. One key aspect of reform highlighted by both the coalition and the Productivity Commission to improve our productivity is to remove unnecessary regulation. The Productivity Commission estimates that a 20 per cent cut in compliance costs can add 0.8 per cent to GDP growth. In dollar terms, they estimate the value gained by cutting red tape could be as much as $12 billion a year.

Over-regulation is killing business innovation across the board. It is crowding out the most important activity a business can undertake—developing the new products, services and markets that will fuel future growth and employment, and looking after its customers. We should be reducing business compliance costs and stripping back unnecessary regulation, not adding more.

The coalition will allow businesses to be businesses again if we are elected at the next election, rather than continuing to be compliance officers like this regulation-hungry government. Businesses and employers understand the cost of unnecessary complexity and regulation, including in our migration programs, and especially in the critical areas of skills, labour and business migration. Sadly, the government does not—nor will it listen to the concerns of those who experience this firsthand. Australian entrepreneurs and companies have told the Coalition Deregulation Taskforce that the cost of doing business in Australia is now anywhere between 20 and 40 per cent higher than it is for doing business with our major international competitors. For that reason, many businesses, especially in the manufacturing sector, have moved their operations offshore, to countries that are more competitive. According to the Business Council of Australia, when compared with the United States, resource projects are about 40 per cent more expensive to run in Australia, Australian airports are 90 per cent more costly to build and Australian hospitals cost 62 per cent more. The government's answer to everything is to hit the panic button and invent extra regulations to try and compensate for their own incompetence.

The National Red Tape Survey released this month by the Australian Chamber of Commerce and Industry found almost three-quarters of the 870 businesses surveyed are spending more time on regulation than they were two years ago. It found that 44 per cent of businesses are having to spend between one and five hours a week complying with government regulations—filling out forms, applying for permits, and reporting business activity at a local, state or federal level. It found that one in three businesses is spending more than five hours a week on regulation. That is five hours locked up in the office, off the shop or factory floor each week, which works out to be around 30 working days each year—30 days taken up just with paperwork and compliance. And I am sure that for many it is a lot worse than that. Eleven per cent of those surveyed spent more than 20 hours a week on regulation. That is more than half the working week every week.

Not surprisingly, it is costing more, too, with 73 per cent of businesses reporting that their overall cost of compliance had gone up in the last two years; 42 per cent of businesses estimating that they had spent more than $10,000 on compliance with regulation; 80 businesses spending between $50,000 and $100,000; and an astounding 60 businesses spending in excess of $100,000. Around 60 per cent of businesses said that red tape had a moderate to major impact on their businesses, while 54 per cent flagged that the effort taken to comply with the regulations had prevented them from making changes to expand or grow their businesses.

The productivity revolution—I know that the government apply the word 'revolution' to anything that falls out of their heads—that needs to take place has to operate and occur within businesses. It is about how they manage themselves and how they operate themselves.

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