Luke Hartsuyker (Cowper, National Party, Assistant Minister for Employment) Share this | Hansard source

I take this opportunity to thank members who spoke on the Fair Entitlements Guarantee Amendment Bill 2014. Before I turn to the bill itself I would like to clear up a few misleading points that have been raised by the members opposite. The member for Gorton claims that the FEG is under attack. This is not the case at all. The government supports FEG but, to ensure its future, this bill makes the FEG scheme sustainable. Sustainability of the FEG scheme is crucial—and this is something that the member for Hume raised in what I believe was the best contribution to this debate. The member for Fowler continued the Labor Party's scaremongering campaign saying this bill strips entitlements from workers. This is simply not true. Nothing in this bill strips workers' entitlements. Workers can continue to gain access to all entitlements, including those not already covered by the Fair Entitlements Guarantee Act, through the normal winding up processes.

What this bill does say is that the taxpayer should only be responsible to pay entitlements up to the community standard of 16 weeks. This is one thing that has been missing from the opposition in this debate—the fact that Labor's Fair Work Act and the National Employment Standards set the maximum redundancy amount payable at 16 weeks. If 16 weeks is good enough for the Fair Work Act, why is it not good enough for the Fair Entitlements Guarantee? This bill does not change entitlements; it merely sets the safety net at 16 weeks, in line with the National Employment Standards. The government is committed to ensuring the future sustainability of the Fair Entitlements Guarantee. The scheme provides vital financial assistance to Australian workers who lose their accrued employment entitlements as a result of the liquidation or bankruptcy of their employer. The bill implements an essential budgetary measure needed to ensure that this protection for employees' entitlements can continue.

Demand for assistance under the scheme has increased over the years with a corresponding escalation in costs. These costs cannot be sustained and so it is essential that the changes are made now so that the scheme can remain in place over future years. Reinstating a 16-week cap on the amount of redundancy pay that can be paid under the scheme aligns payments with the maximum amount payable under the National Employment Standards. As well as securing the sustainability of the Fair Entitlements Scheme, this will ensure that redundancy payments made under the scheme are in line with the community standard; and it will remove the moral hazard that can exist where the employer, rather than the employee, comes to rely on the Fair Entitlements Guarantee as a way to ensure their employer obligations are met.

I reiterate that this bill does not reduce employee entitlements or change the amounts employees can pursue through the winding up process. The 16-week cap applies only to the redundancy component of an employee's entitlements. The Fair Entitlements Guarantee will continue to provide protection for all annual leave and long service leave entitlements accrued by an employee, subject to the maximum weekly wage cap. The 16-week cap will apply to employer liquidations and bankruptcies that occur on or after 1 January 2015.

The bill has also clarified the Fair Entitlements Guarantee legislation to make clear that, firstly, payments can be made to the estate of a deceased employee or claimant; secondly, a debt owed by a claimant for a particular entitlement can be offset proportionally against other entitlements payable to the claimant under the scheme if the debt exceeds the entitlement to which it relates; and, thirdly, amounts required to be withheld by law, such as pay-as-you-go taxation, will be deducted from payments when they are made to the claimant.

The bill also amends the act so that the issue of whether a person has reasonably pursued a debt owed by the employer is not a consideration for eligibility for each category of employee entitlement covered under the scheme. This will now be more properly considered when calculating the amount a claimant is owed.

Finally, the bill establishes arrangements for costs associated with appeals to the Administrative Appeals Tribunal to be drawn from the special appropriation. This amendment will take effect form 1 July 2015 to align with the commencement of the new financial year. This bill is an important step in securing the future of the Fair Entitlements Guarantee and ensuring employees are protected when their employers fail in their responsibility to meet the cost of their employees. It addresses the increasing costs being borne by the scheme and paves the way for greater sustainability into the future. This bill does not strip entitlements; rather it protects a scheme and aligns the redundancy payments in the Fair Entitlements Guarantee safety net to existing community standards. I commend the bill to the House.

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