Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Hansard source

I am also keen to make a contribution to this debate about the Fair Entitlements Guarantee Amendment Bill 2014. I acknowledge the member for Scullin, who spoke a moment ago; the member for Melbourne, who said some very valuable things just now about the bill; your own interest, Mr Deputy Speaker Mitchell, in your other roles in this place on these sorts of issues; and the member for Isaacs.

As members would be aware, among the technical amendments in this bill is the stinking core of the bill, which is the government's plan to cap the maximum redundancy payout provided under the government's Fair Entitlements Guarantee to 16 weeks, which is a dramatic and disappointing reduction from the 52 weeks cap that exists at the moment. I thought Terry Sweetman nailed it perfectly in The Courier Mail a bit earlier this month when he said that the purpose of this bill is to remove the 'fair' from the Fair Entitlements Guarantee. In this way, it is really a piece of the rest of the budget. It is disappointingly consistent with the rest of the budget, which panders to sectional interests, shifts the burden from business and asks the most vulnerable people to carry the can for this government's ideology. As the member for Melbourne said, it is the most vulnerable people in our community—the older workers and the workers who are made redundant—who need the help the most. It should not come as a surprise to us that this proposal began its life in the government's Commission of Audit, stacked as it was with representatives of big business and entirely free of anyone with an alternative perspective on some of these issues. It had predetermined outcomes. It was a cynical ploy used in a cynical way to prepare the ground for the harsh, extreme and divisive cuts that we saw in the budget, the sorts of cuts that the community is lining up to oppose and the reason why the government cannot get its budget through this place. In its implementation, we see yet another attack on working people; people who want to work; people who are made redundant; people who are just trying to get by; people who are doing the right thing and rightly expecting to be paid fairly for it and not to be thrown on the scrap heap when their employment ends; and people who rightly expect that in a wealthy nation like ours—a proud nation with a good history of looking after each other—there would be a safety net if somebody's employment ends through no fault of their own and they are made redundant.

A bit of history and also a bit of context for the House: it was in the interests of working Australians that Labor proudly introduced the Fair Entitlements Guarantee scheme in 2012. That guarantee was a vast improvement on the Howard-era General Employee Entitlements and Redundancy Scheme also known as GEERS. It is better for the three reasons. The first is that the Fair Entitlements Guarantee is enshrined in legislation while GEERS was an administrative arrangement that could be changed at the whim of a minister. The second is that the Fair Entitlements Guarantee covers the whole period to the end of employment, while GEERS only covered the period to which an insolvency practitioner was employed. The third is that GEERS capped a redundancy payment at four weeks, where the Fair Entitlements Guarantee was capped at 52 weeks, which is really the crux of the issue that we are talking about today as the government tries again to diminish and make much less fair the cap on the redundancy payment. Around 70,000 Australians were able to benefit from the government guaranteed redundancy payouts during the course of the last Labor government. That meant that something like $852 million in otherwise unpaid entitlements was paid out to families, families who were put in the most difficult position where they had a major wage-earner out of employment after long periods in the same job at the same company.

This legislation seeks to restrict the Fair Entitlements Guarantee so that the maximum payout available under the scheme is 16 weeks redundancy pay, as opposed to 52 weeks, which is the current maximum payout under the legislation that Labor proudly implemented in our time in government. As the member for Scullin said a moment ago, the excuse for the 16 weeks is that that is the maximum redundancy payable under the National Employment Standards. As experts in the Parliamentary Library and in industry have shown, this ignores the fact that longer payout periods have been agreed to under certain modern awards and enterprise bargaining agreements. In some industries longer payouts are entirely reasonable and appropriate for redundant employees. For example, in industries undergoing substantial structural change, longer redundancy periods may be necessary to cater for long-term employees who need to reskill or retrain. This is a really important issue that has been ignored by those opposite. There is a link between redundancy payouts and the sort of retraining and reskilling that we want to see in our economy when people lose their job through no fault of their own. A bigger redundancy payout for a longer period gives people the opportunity to undertake some of that retraining and reskilling that they need. We know that the labour market is quite uncertain at the moment. Over the first six months of the Abbott government more than 30,000 job losses were announced from Australia's largest employers. The sad reality is that many of those jobs lost or announced to be lost are now likely gone forever—at least in their most recent form. Workers in these industries need greater support to retrain and be redeployed into the workforce, which is why those longer redundancy periods may be appropriate.

In capping the Fair Entitlements Guarantee, the government seeks to blame workers for the cost of their own fair entitlements. This is illustrated best by the language that the Minister for Education used in his second reading speech that the scheme:

… creates a moral hazard. It provides an incentive for employers and unions to sign up to unsustainable redundancy entitlements.

It is an absurd comment for a minister to make about this scheme.

Apart from being a typical slur on unions who do a much better job representing workers than the government ever will, it is a slur that denies the genuine need for longer redundancy entitlements than those provided under the National Employment Standards. Consider, for instance, the 2,900 workers at Holden, the 2,500 at Toyota or the 1,200 Ford who will lose their jobs in the automotive manufacturing industry over the next few years. Many workers at these manufacturing plants have spent their whole working life in the automotive manufacturing industry and many of them have 20 years or more loyalty to a single car company. It is not like an experienced worker from Ford can go and find similar work at Holden or Toyota or at another car manufacturer when they have all been goaded into leaving town together. We do need to retrain and develop skills for their future employment. That is why those longer redundancies are appropriate—longer redundancies which recognise the skills, experience and the difficult reality of starting a brand-new career at the age of over 40. That is why certain EBAs and some modern awards do provide for redundancy payouts of up to 52 weeks. The government is saying to workers facing redundancy and an uncertain employment future that it will not recognise or value the redundancy period set out in these EBAs and modern awards. They will not recognise their skills, or experience or hurdles to retraining or upskilling and redeploying into the workforce.

We should not weaken employee protection for fair redundancy entitlements. As I said a moment ago, there is a fair bit of uncertainty in the labour market at the moment. If there is one thing that characterises the labour market in 2014 it is that uncertainty. The reality is that our response to the structural change underway in the Australian workforce needs to be a more comprehensive plan for jobs. The government has no plan for jobs whatsoever. Even the member for Eden-Monaro has said, in a burst of honesty, that the government does 'desperately' need a job plan.

There is a range of reasons for this. One of these reasons is that the labour market is changing so rapidly. And one of the reasons for that is automation—the technological progress that we are seeing in our economy, which does mean that increasingly jobs are automated. We are seeing an increase in robotics, artificial intelligence and all sorts of technological advance, which do make some of the traditional industries and some of the traditional tasks of the labour market redundant. That has flow-on consequences for people in the labour market.

The Economist magazine describes this rapid technological advance as 'the oncoming wave'. Their argument is that a combination of big data and smart machines will fully overtake some occupations and allow other firms to do the same job with fewer workers. It is not hard to imagine the impact of that on the workforce. That is why American, Professor Alan Krueger, who advises President Barack Obama, found that 'skill biased technological change' was the dominant driver of inequality, dwarfing other very important factors like declining unionisation or changes in the minimum wage.

To give you an example—and it is an example that I have used in this place before—the average farm in the US makes about $125,000 in revenue for every employee on the books. In comparison, Google makes something like a million dollars per employee. You can see the profitability in a company that is getting that sort of return from fewer workers. That is one indication among many of how technology is changing our industries.

The OECD predicts a 20 per cent rise in jobs requiring highly-educated workers in the future, corresponding to a 10 per cent fall in jobs for the low-skilled. Again, it is not hard to imagine what that means for the make-up of our labour market and the fact that some workers—often older workers—are at greater risk of redundancy. That does remind us of the chilling warnings of a guy called Tyler Cowen, who said that we cannot become a world or a country divided into two groups: those who are good at working with intelligent machines and those who are replaced by them.

Our response to this rapid technological advance needs to be twofold. The first thing is that we need to care for workers who are displaced by technological progress. And the second thing is that we need to ensure the workforce of tomorrow is skilled, creative and dynamic enough to succeed in the face of technological progress. It seems at first blush that these two things are different things: educating for the future and looking after people who have been made redundant in the workforce of today. But in reality they are linked by that idea that I introduced a moment ago, which is that often these longer redundancy periods are what make possible the sort of retraining, reskilling and redeployment that people need to do.

You can imagine, Mr Deputy Speaker, that if you do have a longer redundancy period that you might then take the opportunity, with that financial security in place, to do the course or to do the retraining that makes it possible for you to find a new job, whether it is in a similar industry or in an entirely different industry. And so we need to see those two things as part of the same whole: looking after people who fall out of the labour market but also giving them the ability, the time and the financial security to undertake that necessary retraining.

Some of these ideas about the changing nature of the Australian workforce are what sparked the recently-launched National Union of Workers campaign called 'Jobs you can count on'. The NUW are seeking to highlight the growing problem of inequality and job insecurity in Australia and the urgent need to address this issue as a matter of national priority. The NUW highlights that casual workers made up only 15 per cent of the workforce in 1984, climbing to 28 per cent in 2004 and all the way up to 40 per cent today. What is more, Australia has the second-highest rate of insecure work in the world, beaten only by Spain.

We do need to acknowledge and confront this problem head-on. We need to push for jobs that workers can count on in this country and make sure all workers are able to enjoy the same rights at work. I am really pleased to stand united with Australian workers and the NUW to seek better protections for the huge number of Australians currently in insecure employment. Labor will always be the party that stands for workers, their rights and protections in the workplace, and for jobs that Australians can count on.

So, Labor will be opposing the Fair Entitlements Guarantee Amendment Bill 2014. Workers do deserve the assurance that they will receive all of the benefits they are entitled to if they are made redundant, not just some workers, not just some of the time but all workers who are entitled to it all the time. This attack on workers in this piece of legislation, as I said before, takes the 'Fair' out of the Fair Entitlements Guarantee. It is unfair and it is short-sighted. It does highlight this government's lack of a plan for jobs and lack of a plan for a workforce which is ready for all of the challenges of the future, whether they be technological advance, or automation or all of the other ways that our labour market is evolving. We need to make sure that people are protected from the worst aspects of that change and that they have the financial security, the time, the means and the ability to retrain and redeploy into different roles.

So, Labor will continue to stand up for workers' rights and an education system that will deliver us the smart, dynamic workforce ready to confront the challenges of the labour market into the future.

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