Nola Marino (Forrest, Liberal Party) Share this | Hansard source

I rise to support this bill in its original form, the Corporations Amendment (Strengthening Protections for Employee Entitlements) Bill 2018. This bill is the government's move to better protect employees' entitlements and the Australian taxpayer. We have all seen in our electorates what happens when a company folds or becomes insolvent. It has a particular impact in small rural and regional communities. Most recently, perhaps, we saw the devastation for families and small local businesses and communities with the Queensland nickel refinery issue. But for those of us who live and work in rural and regional areas, it has a real knock-on effect to a whole range of people: the employees are immediately impacted and the creditors, particularly small business creditors, are directly affected. There are times when I've seen small businesses fold as a result of the amount that's owed to them by the company that's become insolvent.

The Fair Entitlements Guarantee scheme follows on from the earlier coalition government General Employee Entitlements and Redundancy Scheme, known as GEERS. It was introduced in 1999. It was a relatively non-controversial measure by the Howard government, a simple protection measure. The importance of it showed in 2001, when Ansett Airlines collapsed with a debt which meant its employees would not have had their legislated entitlements such as leave and long service payments. So GEERS has been in place as an administrative option for government to use for some time.

In 2012 the Fair Entitlements Guarantee was created, putting GEERS on a legislative basis. Subsequent to the collapse of Ansett, FEG has been called on a number of times, and too many times. Like GEERS, the FEG scheme is meant to be a safety net. It's a scheme of last resort, with assistance available for eligible employees. It's vital legislation which really goes to hold to account companies that try to evade their obligation to workers and simply shift the obligation and burden to taxpayers. We see this through employees who lose their wages, their superannuation and a whole raft of other benefits, whether it's their unpaid wages, their lost wages, their super—you name it. Of course, the company then attempts to shift that burden to taxpayers.

The Fair Entitlements Guarantee scheme is not there for the sole purpose of enabling a corporation to avoid their responsibilities. It is not there for corporate misuse. It's not a vehicle for corporate misuse. It does place an unfair burden on Australian taxpayers, who ultimately bear the cost. Companies that choose not to pay their employees correctly are basically, by default, achieving an unfair commercial advantage over their business competitor who is trying to do the right thing by their employers and by the business. So this bill means there will be stronger levers to make sure that employers are accountable for their obligations, including stronger penalties, stronger options to recover entitlements—really important—and stronger powers to deal with directors and companies that deliberately evade their obligation. The FEG is an important safety net for all Australian workers.

We know that while the overwhelming majority of companies are doing the right thing, unfortunately, some employers shift employee costs onto the FEG scheme for their own advantage or simply to exploit the scheme. That, by default, exploits Australian taxpayers.

These changes that the government has introduced are tightly targeted to deter and punish those who seek to avoid their employee entitlement obligations and who simply exploit the scheme. This exploitation is contributing to a significant increase in the cost of the scheme, and that was never the purpose. The average annual costs have more than tripled, from $70.7 million in the four years to 30 June 2009 to $235.3 million in the four years to 30 June 2018. This evidence indicates that misuse of the scheme is rising.

Some of the amendments in this bill strengthen enforcement and recovery options under the Corporations Act, and that's specifically designed to deter company directors who facilitate transactions that are aimed at preventing, avoiding or significantly reducing employer liability for their employee entitlements in the case of insolvency. These changes include extending the fault element necessary to contravene the existing criminal offence in the Corporations Act, and it includes, now, recklessness; increasing the penalties applicable to contraventions of the criminal offences in the Corporations Act and introducing a new civil penalty for entering into a transaction that's likely to avoid, prevent or significantly reduce recoverable employee entitlements, and this is done with an objective test based on what a reasonable person in the circumstance would have known about the transaction. Also they expand the parties who can commence civil compensation proceedings to include the Australian tax office—as they should—the Fair Work Ombudsman and the Department of Jobs and Small Business.

Other amendments in this bill enable the court to make a contribution order against an entity or a corporate group or entities with a closely connected economic relationship with an insolvent company, where that company has unpaid employee entitlements and where the other entity has unfairly benefited—this is from the work done by the insolvent company's employees—and where it would be just and equitable for the court to make the order. These amendments ensure that courts have the ability to order companies that may be misusing the FEG scheme to provide funds to contribute to the FEG scheme, meaning that the taxpayer is then not left with the cost of paying those entitlements. This is a great part of the intent of this legislation.

The last set of amendments in this bill strengthen the ability of ASIC to disqualify company directors either directly or on application to the court where they actually have a track record of corporate contraventions and of inappropriately using the FEG scheme to pay outstanding employee entitlements. It's like repeat offenders.

The reforms are the result of extensive public consultation processes during 2017-18. They've been developed with the government's insolvent trading safe harbour reforms in mind, and are tightly targeted to deter and punish only those who actually do the wrong thing by their employees, the workers, and taxpayers. They will not affect the overwhelming majority of companies who are doing the right thing.

We need to make sure that working Australians have their entitlements protected. They've worked for these entitlements. They've worked for their wages and their super. These reforms build on other actions that the government has taken to protect employee entitlements: amendments to the Fair Work Act to protect vulnerable workers, including increasing penalties up to tenfold for serious contraventions of workplace laws.

We know that those opposite have talked about the unions in relation to this. The union movement has a fair bit to say. But it is an inescapable fact that the policies of this government have seen the creation by business of over one million jobs since 2013, and the opposition leader, with his relationship with the CFMMEU, announced that, if he were elected Prime Minister, he would run Australia like he ran his union. Does this then mean that some of the lower paid workers will find themselves in the same place as those workers? Will they be taken to the cleaners like those workers at Cleanevent? Perhaps they will be treated like second-class workers, kept in the dug and literally fed manure, like those at Chiquita Mushrooms?

This government believes in as many people as possible being able to get a job and keep a job. As we've said repeatedly, the best form of welfare is work. We have policies to help businesses to employ more people. I want to talk, particularly in the moments I have left to me, about the PaTH (Prepare, Trial, Hire) Program and numbers of young people who, as a result of the actions of this government, actually have access to work that they've never had before. We see young people, who have been receiving Centrelink payments, who then have been provided support and nurturing to actually apply for a job. Some young people have come from families where they may be the second generation or the third generation that hasn't worked. The preparation process in the PaTH program is exceptionally good and gives them the ability to have the confidence to actually apply for work in the first place.

There is then trial period, where there's actually a job at the end of it should the employer and the employee find that they work well together and the skills and the intent of both work particularly well together. We have seen this repeatedly. I see young people in my electorate who have got an opportunity that they wouldn't have otherwise had if it wasn't for the policies of the government, particularly around the PaTH program. They then go on to get a job. I was speaking at a school graduation recently. One of the things that I encourage young people to do is to take whatever job they can as a starting point and, equally, to know that there's nothing that gives any of us the self-respect, the independence and the experience that a job does.

I want to acknowledge so many of the small businesses in Australia that often offer our great young people, particularly in rural and regional Australia, their first-ever job. It can often be with a small business. The other side of what small business does well, as we've seen with over one million jobs that have been created, is they often offer senior Australians their last job. With small business, often they will take on people that others will not. They see the value and the opportunity they want to create for young people. They also see the great value in mature-aged workers who have so much experience, often a lot of patience and a real commitment to the job itself, because they understand that on many occasions they find it a challenge to actually get a job in the first place. Some of the measures of this government have made it possible for more older Australians seeking work to be able to find that work as well. It has encouraged employers to consider more mature-aged employees and the amount of experience they actually bring to that job. I'm very pleased to support the bill before the House today.

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