Stephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | Hansard source

It is with great pleasure that I rise to speak on the Fair Entitlements Guarantee Amendment Bill 2014. This matter is one that is a passion of mine, for reasons that I will set out in a moment. I also understand that industrial relations is a passion of members of the government. However, it must be said that in this particular debate that it is a private passion—a very private passion, because there has only been one member of the government willing to come to the chamber today and defend their legislation. Indeed, if there were a standing order that said a government bill had to have a minimum number of government speakers who were willing to stand and speak in defence of it then I am quite certain that this legislation would not get out the gate.

Legislation—the business that a government brings before the House—is a statement of its values and a statement of its priorities. I would like to address some of the priorities and the values that are resplendent within this legislation. As the member for Fowler has just told the House, we are debating this legislation in the very same week that one of the most important reports, that goes to the heart of who is paying tax and who is not paying tax in this country, was published.

Readers of the Sydney Morning Herald woke with quite some alarm when they picked up the front page of the Sydney Morning Herald yesterday and saw that almost one-third of the nation's top 200 companies are paying less tax—in fact, they are paying less than 10c in the dollar—and that if you put end-to-end the amount of tax that has been evaded as a result of these deliberate decisions by some of the largest companies in the country, you would have an additional $80 billion in government revenue.

I ask you think about that for a moment, Mr Deputy Speaker, because we have a bill before the House today which finds its genesis in the Commission of Audit—the massive beat-up by the government to try to alarm the population that there was somehow a budget emergency. Hidden within the report was the proposition to wind back the provisions within the Fair Entitlements Guarantee Act to a bare minimum because we had a budget emergency.

Nowhere in the Commission of Audit did we find the commissioners drawing attention to the tax avoidance and tax evasion which has led to over $80 billion not finding its way into government coffers and not finding its way out of those coffers again into important public spending programs—roads, infrastructure, education, hospitals and important employee protection schemes such as those before the House today. Again, I make the point that the legislation before the House today is a statement of values and priorities. Instead of pursuing measures which would help the government buttress the problem that we all know is the problem, and that is a problem of revenue, they are going after basic entitlements.

This matter is one that is very close to my heart because before coming into the parliament I spent more than a little bit of time working in the area of insolvency and helping workers to chase down their entitlements that had been lost once a business went into liquidation. It was more than a little bit of time on them and in some quite high-profile matters indeed. So it is an important scheme. It is one that I have more than a little bit of knowledge of and I wish that those members opposite informed themselves a little bit more about the legislation that they are all going to career in here to vote in favour of—without having read it and without having spoken in favour of it, because that might change their minds.

We know that there are around 7,000 businesses which fail every year. About half of those businesses cause their employees to lose entitlements—entitlements such as long service leave, holiday and sick pay and redundancy payments—things that provisions have not been made for. We know that there have been around 885 business related bankruptcies cases in the June quarter alone. Total debtors exceeded 1,100 for the same period and between 2001 and 2013 more than $260 million had been advanced under the FEG scheme and its antecedents, the GEER scheme, to over 16,000 Australian workers. So, it is an important scheme. It deserves to have more attention than the House is currently affording it today by the fact that only members of the opposition are speaking on the legislation.

The history of this scheme is well known to many. Mr Deputy Speaker, you may recall that back in 2000 a company known as National Textiles—coincidentally, a company that was owned and operated by the then Prime Minister John Howard's brother, Stan Howard—went into liquidation owing around 340 employees accumulated entitlement, including redundancy pay. This group of employees were amongst the lucky ones. I should say that if anyone who is about to lose their job could be classified as 'lucky', here is a group of employees unfortunate enough to lose their jobs, but 100 per cent of their entitlements were paid eventually; not by the business but by the government moving in and underwriting the bills that were owed by the Prime Minister's brother. Many said at the time—many other employees who had lost their jobs—'If only we could have been so lucky as to have been working for a company that went bust and the owner of that company happened to be a Prime Minister's brother.'

Wind the clock forward to 2001 and to a company by the name of One.Tel. This time the collapse was not a relatively small textile company but probably the fourth-largest telecommunications company in the country at the time, stranding around two million customers and, importantly, owing something in the vicinity of $600 million to over 3,000 creditors. Included within those creditors were the 1,400 employees of One.Tel.

I know a lot about this because I was representing the employees at the time. I remember writing to the then minister for workplace relations, one Tony Abbott, and asking him to intercede on behalf of the workers in a matter that I had before the then Australian Industrial Relations Commission to get some justice for these workers. The then minister for workplace relations refused to do that. Of course a campaign then ensued, a campaign that was supported by the majority of right-thinking Australians, and the then minister for workplace relations got rolled by the then Prime Minister. It was the only occasion in my working life as a lawyer, practising in that particular practice, where I could say I was standing on the same side of the bar table as a member representing a coalition minister for workplace relations. It became clear to all that a general scheme was needed and, as the shadow minister for workplace relations has explained, an administrative scheme was set up, known as the GEER Scheme, and it paid a minimum entitlement to workers in the event that their company went bust and provision had not been made for their accumulated entitlements.

An important point to make, one which is lost on many, is that the payment of the minimum entitlements to the worker who has lost their job is not the end of the story. What happens is the right to pursue the assets of the company, the right to become a creditor of the company, is then assigned to the government. So the government, presumably through the auspices of the tax office or of the department of employment and workplace relations, is assigned the right to pursue those owed entitlements instead of the employee—a matter that is lost on many. And when you are looking to provide a revenue stream and you are looking to address issues such as moral hazard, I would argue that this is an important place to start looking—that is, putting more effort and more resources into the chasing of the assigned debt.

The scheme has been operating since then. It was improved under the former Labor government, to a point where the FEG Act now sets out maximum entitlements and how they are to be calculated. They include up to 13 weeks of unpaid wages, annual leave that has accrued but not been paid, long service leave, a maximum five weeks payment in lieu of notice, and redundancy pay of four weeks per year of service. It is important to make the point that these are not award or agreement rights themselves; these represent the caps or maximum entitlements that may be paid to an employee where they have been unable to recover those entitlements from a collapsed company. The wages were capped at a minimum weekly rate of $2,364 when the scheme began. It has been frozen at $2,451 until 30 June 2018.

You have to ask yourself who has benefited from this scheme. Because the courageous member for Hume has been willing to stand up and defend the scheme, has put his hand up, we know that at least 33 workers from the business National Engineering in his electorate benefited from the scheme. I congratulate the member for Hume for having the courage to come in here and stand up and defend his government's legislation. I warrant you that he would not have had the courage to give that same speech prior to the last election. He would not have been out there promising those 33 workers, 'If you vote for me, I can guarantee you that if your company goes bust you'll get less money under my government than you will under a Labor government.' He would not have given that speech. And I can also guarantee that of all the people that the member for Hume mails his courageous speech out to today, he will not be mailing it out to the 33 workers who had their benefits paid under the existing FEG scheme.

I happen to know a bit about the National Engineering company. It has been in existence for more than 120 years. It is a metalworking company, a blacksmithing company. And I know that its being a business, what was a reasonably good business, in a country town meant it was some of the best work going and that the people who got jobs there, if they were skilled tradesmen, hung on to those jobs; they would work there for a long, long time. So the member for Hume will not be mailing out his speech saying, 'If I had my chance, I would've been cutting your rights to get your wages recovered.' I guarantee he will not be doing that.

Who else has benefited from the scheme? If you have a look at the submission of the department to the Senate inquiry into this scheme you will see that more than 41 per cent of total redundancy payments made have been paid to employees in the manufacturing industry. But you have to ask yourself: why do the government hate workers in the manufacturing industry so much? What is it that they have got against workers in the manufacturing industry? I see the member for Wakefield in the chamber today. He has a keen interest in this issue. I see the member for Hotham in the chamber today; she also has a keen interest in this issue. They are members who have stood up in defence of the manufacturing industry in their electorates—as have the members for Blair and Hunter, who are also in the chamber today. They have been willing to stand up—in fact, one of the most passionate speeches I have heard by a member in this parliament, in the 44th Parliament, was the speech by the member for Wakefield imploring the government not to chase the automotive industry offshore.

So against that background, and knowing that the single biggest group of workers who have benefited under the FEG scheme—more than 41 per cent of workers have benefited—are workers in the manufacturing industry, you have to ask yourself: why does this government hate them so much? It chases their manufacturing jobs offshore and then, at the first opportunity it gets, it seeks to reduce their rights and entitlements and the benefits that could be payable to them under a scheme has worked for close to a decade. We should reject the bill. It is not fair, it is not right and we will be voting against it. (Time expired)

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