Bruce Billson (Dunkley, Liberal Party, Minister for Small Business) Share this | Hansard source

I am pleased to sum up on this debate on the Paid Parental Leave Amendment Bill 2014. Those listening must be a little bewildered about what the debate is on. It actually relates to an administrative or pay clerk burden that the current scheme imposes on employers, but it seems to have been a good opportunity for members to take some broader arguments out for a run. I thank them all for their contribution—and I particularly thank those who were relevant to the bill. There was a spiritual connection, at best, to some of the remarks, but I will try to confine myself to the bill as the responsible minister summing up and look forward to the broader debate on having a paid parental leave scheme that supports smaller and medium-size enterprises in the same way that large corporates and the public sector have enjoyed for many years, and that will be a debate I will relish.

But my purpose for rising tonight is to sum up this Paid Parental Leave Amendment Bill 2014. To remind the House and those who are listening of what the bill is actually about, it is about amending the paid parental leave legislation to remove the current requirement for employers to be the pay clerk for the government-funded Paid Parental Leave Scheme to their eligible long-term employees. I will go through some of the detail of that, because its thoughtfulness seems to have been lost, going by some of the contributions. This bill actually aims, from 1 July 2014, to see that employees are paid directly by the Department of Human Services, the very arrangement that operated for the first period of the former government's scheme, a period in which the former Labor government claimed enormous extraordinary success. We are seeking to re-establish those arrangements unless an employer opts in to provide paid parental leave to its eligible employees and an employee agrees for their employer to pay them. This is about an opt-in machinery. Those employers that have already incurred considerable expense to change their payroll and their accounting systems, who are of a mind to carry out that pay clerk function on behalf of the Commonwealth and whose employee wishes that to be the case will be able to continue to do so.

So for those examples raised by members opposite where people seem to be busting for this opportunity, that is not denied them. I have not found anybody that actually feels that way, although I will keep looking. I certainly have not heard of any employer organisation that is adamant that this imposition and burden should continue. But for those who are so inclined this bill enables that to continue. So there is no disadvantage to anybody, particularly mindful that a number of employers have already incurred considerable expense at changing their systems in response to the former government's mandated requirement.

This bill will implement the government's election commitment to reduce the red tape burden and compliance costs on business and on the not-for-profit sector by ensuring that they are not required to be the paymaster for the government's Paid Parental Leave Scheme as a matter of course. It will benefit employers of all sizes, big and small, and importantly the not-for-profit sector as well. But small business, I am pleased to say, will be particularly pleased to know that it now has an opportunity to not incur the costs and compliance burdens by this imposition mandated by the previous Labor government. That will be a reduced compliance burden on the administration of the Paid Parental Leave Scheme. All of us know that when we have an employee taking paid parental leave it is a time of considerable adjustment. I think the Productivity Commission report characterises it as a period of dislocation. It is a time where much adjustment is already needed, and this is an unnecessary and unjustified imposition of yet another further burden on the workplace.

By cutting compliance costs, businesses large and small will have more time and resources to focus on what they do best and what we are encouraging them to do—that is, to develop their business. That is what they are there to do because that is their spirit and their purpose. We want to support that enterprise and support the creation of wealth and opportunity in employment. This is an obstacle that we can we move out of the road of employers big and small, and the not-for-profit sector.

I also table minor corrections to the explanatory memorandum. I would like to spend a few minutes touching on the particular points that have been raised. First of all there are the red tape reduction savings of $48 million—that is, on average, $1,783 per employer. That is could be well deployed into other activity—into other investments, into other opportunities for work or even into thoughtful gifts and best wishes to the lucky family. That is a serious saving. That is real. I heard some of those opposite challenging where that number came from. Ironically, it was in the former government's own report. The former government undertook a paid parental leave evaluation. Phase 2 was done by the Institute for Social Science Research for the University of Queensland. For all of the hand-wringing and bewilderment by the Labor Party about where this number has come from, it is their own number. That shows on average a $1,783 direct cost to employers. I would encourage those opposite to take account of them.

The critique went further. Wading through the contributions, I see there was the odd remark that actually related to the bill. I will seek to discuss some of those. It is worth remembering where we have come from. This measure is something that the coalition has put forward twice. It was voted down by the former government. On 20 February 2011 and 24 May 2012 we were seeking to reduce the red tape and compliance cost burden of the government's Paid Parental Leave Scheme, and we were voted down by the Labor Party. Now it is in opposition that blanket opposition has changed. Now the Labor Party seeks not to oppose this measure in a blanket sense but to reshape it so that the benefits are reduced to one-fifth. One-fifth of the benefits is all the Labor opposition is prepared to accommodate, which is quite ironic. Having been in blanket opposition and complete denial of the cost impact of their scheme on employers, Labor seem to have changed their mind. I believe the coalition has won the argument. We have made it clearly and consistently, and we have provided evidence to support it.

We are also pleased to recognise the support of the Australian Chamber of Commerce and Industry and the chamber movement more generally in their Too Big to Ignore campaign. After six years under the former Labor government, where small business and family enterprises were incredibly neglected and ignored, they sought to elevate concerns. What was one of the key issues? This very measure that we are now implementing consistent with what we have advocated previously. And what did Labor do? It was on 5 March 2014. It again opposed the implementation of this coalition election commitment. This time it was not a blanket opposition but a bit of a change. What they were advocating was that that red tape reduction should be devalued to one-fifth of the benefit that we have identified.

It was a confused and complicated—in fact, a cobbled-together—position that Labor advocated. There is no clarity on who would be in or out. There are no costings. It will simply add to the burden that is carried, as the Commonwealth and the employer wonder who is going to decide whether they are in or out under the uncertain and confusing alternative that Labor advocated when they joined with the Greens to vote against this measure in the Senate. I am pleased that in this chamber Labor will not be voting against this measure. That is a wise move, but I wonder how they will again explain their conduct as they partner with the alliance team of the Greens to oppose this sensible measure.

Labor then said that in some of the research employers were not that unhappy about what was going on. That is an interesting argument. When you impose the risk of a fine of many thousands of dollars on a mandated requirement, small business and in fact all employers just get on with it. It does not mean they like it. When asked whether they liked it, I think about 85 per cent thought it served no good purpose. But these fines are significant, because, in the Labor cobbled-together alternative, there remains the risk of a $10,200 fine for individual breaches of confusing rules that Labor has yet to define or a $50,000 fine for corporates if someone cannot understand or find their way through the confusing and cobbled-together position that Labor has brought forward. So why deny the benefits? That is a clear question that Labor has failed to answer.

Labor go on to say that their position is evidence based, which is not right either. In the Productivity Commission report in chapter 8, there are contested views on the benefits of the pay clerk burden being imposed. The report asserts that there is some value, some upside, in the signal of 'the payment as a work related entitlement', but there is no evidence to back that up. It says that it would 'encourage greater employee loyalty'. That is again something that is not evidenced. And then it says it would 'improve workforce and workplace attachment'—again as a 'framing device', which is the way it is characterised in the Productivity Commission report. It is an on-balance conclusion that is hotly contested. Now we have the evidence to show what the actual costs are, and there is no evidence to support the Labor position—no evidence whatsoever. Therefore it is bewildering to hear Labor saying they are strictly adhering to the PC report, which did not give the clarity of recommendation that Labor are asserting, only then to try to amend in the Senate the very measure we are trying to put forward and then move, in Labor's terms, further away from the Productivity Commission report. They cannot have it both ways.

The staying-in-touch provisions that are part of the scheme at the moment are unaffected by this bill, so that workplace attachment argument seems to have very little merit. In terms of engaging meaningfully between the employer and the employee, no-one has ever explained to me how an electronic funds transfer amounts to a substitute for a relationship. That is essentially the argument: an EFT payment processed at the expense of the employer would somehow build the relationship and the rapport with the employee. It is an absolutely ridiculous argument.

On the issue of the dissenting groups in the Productivity Commission report being criticised for not being able to quantify the costs associated with the paymaster function, again, things have moved on and we actually have those factual datasets, organised and provided for under the previous government. So, again, Labor has nothing to support its position other than simple obstruction of the government's trying to get on with its election commitments. The evidence backs that measure. The facts are on the table. The arguments—in amongst the practice runs for a debate for another time—have not illuminated any of the claims that there is some deficiency in the measure that the government is putting forward. Now we have evidence to show that the on-balance conclusions from the Productivity Commission report were not wisely arrived at, and Labor itself has moved away from what the Productivity Commission report recommended by its amendments in the Senate, which I understand it will continue to pursue.

In terms of consultation, again, ACCI, the New South Wales Business Chamber, Business SA, VECCI, the ARA—any list of organisations—are saying that the government should get the clear air to implement its election commitments. It is clear that that chorus is consistent. It was clear at the time of the introduction of the scheme. It was clear at the time when the coalition twice sought to amend Labor's scheme, and it is clear now. Labor should simply get out of the road.

Finally, there was some spurious suggestion that this bill amounts to a transfer of responsibility from business to government. Let me remind this House that, in its own report—this is the Productivity Commission report—Labor is happy to overlook the fact that, on page 8.33, the Productivity Commission makes the point that both a direct payment from the Commonwealth and a payment double-handled and via the employer will not have any significant bearing on the costs that the Commonwealth needs to confront. Why? I quote the report:

… both involve a similar process for payments just with different destinations.

That evidence was backed up by FaHCSIA's presentation to a Senate inquiry at the time, which said it did not matter where it was going; the process of generating those payments was the same. What we have done conservatively in the explanatory memorandum is recognise that there will be a need for some communication and some systems changes, but in terms of the transaction cost there is an immaterial difference. So for Labor to say we are transferring the responsibility from business to government ignores the fact that the government are processing these payments anyway; they are just not sending them to the eligible employees. They are sending them to the employers, who then have to double-handle those payments, incur the costs of systems changes and try to ensure that they get it right because there is a serious threat of substantial fines if they get it wrong.

This is a clear-cut case of an opportunity to reduce needless red-tape and compliance burdens. The Leader of the Opposition, Bill Shorten, said on 19 March 2014:

We—

this is Labor—

are committed, in a bipartisan spirit, to the organised and ongoing effort to minimise, simplify and create cost-effective regulation.

Well, here is an opportunity to do that. I urge Labor and the Greens not to stand in the road of this again. There is no basis for doing so. Our evidence is compelling. Our advocacy is consistent. The consultation is absolutely of one voice, and that is: let the government get on with its task. I commend this bill to the House.

Question agreed to.

Bill read a second time.

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