Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

I rise to raise some specific matters, particularly in relation to the summing up by the minister at the table in response to genuine concerns by a number of stakeholders, not least of all state and territory governments that have raised questions around the impact of this legislation. Let's be very clear here: this legislation, in terms of its impact, is broad and deep if enacted and, therefore, it is absolutely critical that the government fully understand the implications of this legislation upon those jurisdictions.

Whilst I accept that the minister, on behalf of the minister acting on behalf of the Employment Minister, in summing up, responded in the most oblique and brief way to the questions about the impact on other jurisdictions, there needs to be a better understanding, and indeed a better inquiry, as to the impact. I, therefore, rise to make reference to a submission made by the Queensland Newman government in relation to this bill.

There was a Senate inquiry in relation to this bill, and the Queensland government stands opposed to this bill for a variety of reasons. In that inquiry they submitted that, if enacted, the bill has:

… the potential to lead to increased red tape, increased costs and reduced productivity resulting from duplication and overlap in the regulation of work health and safety arrangements.

So the Queensland government has said: rather than reducing red tape, this legislation will increase red tape and will increase costs for employers in the state jurisdiction and reduce productivity. The Queensland government's submission also went on to say:

… small businesses may not be in a position to absorb premium fluctuations from a reduced premium pool.

The minister at the table referred to a Productivity Commission report conducted about 10 years ago, but these are submissions that were made this year in response to this bill because of the adverse impacts they anticipate in the state compensation schemes if this bill is enacted.

I appreciate the fact that the minister may have been sincere in connecting, for example, the home insulation program issues and reviews and the terrible consequences, the deaths of those four young men, to this bill. I would contend that this bill is in direct contradiction to the submissions made by the minister in summing up, because this would take away the oversight of inspectors of workplaces. There are only 44 inspectors in Comcare and hundreds of inspectors in the state compensation scheme. I ask the minister, on behalf of the government, to answer the question as to why he believes there is greater oversight, greater protection for workers and greater likelihood of prevention of an accident or of injury—or, even worse, of death—as a result of the enactment of this bill. I think that is absolutely vital. If one were to support this bill, one would have to believe the minister's assertions that, indeed, Australian workers would be better off. Yet, of course, that is not borne out by the lack of inspectors currently employed under the Commonwealth scheme.

I also ask the minister, on behalf of the government, to answer the questions put by the Queensland government—namely, that this is indeed an increase in red tape, an increase in costs, a reduction in productivity and an increase in duplication between the jurisdictions. It is the case that the Prime Minister likes to refer to Federation, the federal structure, the regard for state powers and the responsibility of state governments to conduct their own affairs. It would seem that, if enacted, this bill would fly in the face of the Prime Minister's own views about ensuring that state governments are responsible for their own jurisdiction and therefore the responsibilities they have held since Federation.

These are some of the questions I would ask the minister at the table, on behalf of the government, to answer. These are serious questions, and they have been raised by the Queensland government. I think they deserve an answer.

Greg Hunt (Flinders, Liberal Party, Minister for the Environment) Share this | Link to this | Hansard source

Let me initially deal with the second of the issues, in relation to the states. Concerns have been raised by the opposition about the impact on the viability of state and territory work health and safety and workers' compensation schemes due to the potential exodus of large employers from the scheme. Let me say this: the Productivity Commission inquiry into national workers' compensation and occupational health and safety frameworks specifically noted that any concerns that exiting premium payers would lead to volatility was not supported by the evidence. In addition, what we have is the review commissioned by the Gillard government and led, of course, by Allan Hawke, who was strongly supportive and in fact provided the basis for the actions we are now taking. So, both the Productivity Commission and one of Australia's most distinguished public servants have provided advice over time in this space.

Furthermore, actuarial assessments commissioned by the Productivity Commission concluded that the larger the employer is, the closer the premium is to the true cost of claims and expenses such that the exit of such large employers would be relatively neutral to the state and territory schemes. In the department's assessment and in the advice that we have, the circumstances have not changed since the Productivity Commission report in any significant material way. Against that background, we have the advice of the Productivity Commission, we have the advice of the Gillard government commissioned reviewers and we have the advice of the department. Unlike—and here I turn to the issue of safety—the previous government, which ignored the advice of the states, of the industry and of the unions in relation to safety under the home insulation program, we have listened to the advice of the Productivity Commission, of the reviewers and of the department. That is why I am confident that not only have we learned from their mistakes on the home insulation program—and we are in the process of having to fix and rectify those tragic errors—but we are making real and significant efforts across the whole of government to ensure that safety and structure are protected in the way in which the reviewers and the Productivity Commission envisaged.

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

I am not convinced by the minister's views that there will be no impact. I think it is fair to say that the Queensland government is also not convinced, given the extensive submission they made to the Senate inquiry. There are, of course, other concerns that have been raised with respect to the bill by other jurisdictions. I turn to, if I can, the Northern Territory government, which made a very significant submission to the Senate inquiry in relation to this bill. It included:

It is difficult to estimate how many employers would pursue an option to participate in the Comcare scheme but the potential consequence could be:

something, of course, the Queensland government raised in their submission as well—

These are clearly concerns that the Northern Territory government, a conservative government, along with another conservative government, the Queensland government, have raised with the federal government. I would have to argue that in relation to the summing up and in the second reading speech by the minister there has been no attention to many of the matters that have been raised in the submissions by these two jurisdictions in terms of the potentially adverse impacts of this bill on their jurisdictions, on small and medium enterprises, on premium costs, on the way in which those schemes will operate and on job losses that may arise. I ask the minister, therefore, to respond, on behalf of the government, to those specific concerns that have been referred to by the NT government in terms of the impact that may arise if this bill were to be enacted. Clearly, the Northern Territory government has serious concerns not only for workers in that territory but also for businesses that are likely to be adversely impacted upon as a result of this bill being brought into law.

I ask the minister to respond to those matters raised by the NT government. There are currently 44 inspectors in the Comcare scheme. If large employers flee their obligations in the state and territory jurisdictions and go to the Comcare scheme, can the minister on behalf of the government explain the extent to which there will be an increase in inspectors under the Comcare scheme? Inspectors do the very important job of preventing injury in workplaces. Is the minister aware of the detail on whether that would be commensurate with the number of workplaces added to the Comcare scheme insofar as their responsibility to inspect sites? In other words, if Comcare were to double, would that mean Comcare inspectors would double, at the very least?

It is fair enough to ask a question about what impact there will be on preventing injury and death of workers under this scheme. There is nothing more important than health and safety in workplaces. When you are dealing with employment matters, there is nothing more important than preventing the serious injury or death of a worker on a site, and yet there have been no answers in the submission made by the NT government and no answers about resources dedicated to preventing industry in Comcare, if it were to increase in size, if large employers fled state schemes and joined the national scheme.

Greg Hunt (Flinders, Liberal Party, Minister for the Environment) Share this | Link to this | Hansard source

We are traversing ground which has been discussed at length and in repetition. Let me make this point absolutely clear. In relation to the states—as we have said on multiple occasions and as the responsible minister has said—the 2004 Productivity Commission inquiry into national workers compensation and occupational health and safety frameworks specifically noted that concerns that exiting premium payers would lead to volatility in premium rates are not supported by the evidence. That was backed up by actuarial assessments commissioned by the Productivity Commission itself. They found that the larger the employer the closer the premium is to the true cost of claims and expenses, such that if there were to be any exit of large employers this would be relatively neutral to the state and territory schemes.

That is the answer. Further, the departmental assessment is that circumstances have not changed since the Productivity Commission report in any material way and any impact would therefore be minimal. This is, of course, drawn upon and based upon the work of the widely recognised, esteemed and respected Allan Hawke. In addition, I will say this in relation to safety. The last people to be raising safety issues—given the manifest failures during their last term of government—in the face of statements from industry, unions and the states, to talk about safety, are the now opposition, the then government.

In relation to inspectors, and I quote specifically on advice from the department: 'Comcare has shown over the past decade it can increase its capacity to regulate non-Commonwealth licensees, including self-insurers, from a wide range of industries, including banking, Defence, transport and communications.' That is the express, clear and absolute advice we have.

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

I was going to leave it there, but given the minister has said there will be no impact on state and territory schemes, if national employers join Comcare, it is very important that we drill down a bit on this matter.

If it is more efficient for national employers, because of the density of employees under their employ, the logical extension of that is if large employers leave a state or territory scheme to just small and medium enterprises it leaves those remaining enterprises worse off under that state or territory system. They do not have the economies to reduce costs.

That is why the Northern Territory government has raised concerns. That is why the Queensland government has raised concerns. That is why employers have raised concerns. Small and medium enterprises are concerned about the commercial impact on their businesses. For a government that likes to say they are the government for small business there are adverse impacts that will arise if this bill is enacted. I do not believe the minister on behalf of the government has adequately justified and explained the impact on the remaining enterprises that will not be eligible to shift from the state and territory jurisdictions to Comcare.

I invite the minister to add to his answer. If you take out of the state jurisdictions the more efficient, larger employers that have economies of scale and which are more efficient because of those economies of scale, you will leave the smaller and medium enterprises having to pay, per capita, greater amounts to sustain a compensation scheme.

Let's be honest here. We know that the biggest advocates for the changes to this bill are not conservative or Labor governments at the state and territory level and they are not small and medium enterprises. This is something that Coles and Woolworths and other large employers want, to escape the obligations of superior schemes in terms of entitlements for injured workers and in terms of more resources to prevent injury and death in workplaces. This is something that has been demanded of the government by larger businesses but it will leave small and medium sized enterprises having to pick up the slack, having to pay for the costs associated with those larger enterprises leaving the state and territory jurisdictions. Again, I invite the minister to explain. On the face of what he has said, it does not make sense that large employers will leave and the costs will not go up. Indeed, they will go up. The organisations affected will be small businesses, mum and dad businesses, enterprises that do not have the capacity to pay and, unlike larger enterprises, do not have the capacity to have more efficient means to resource compensation for workers in the event of injury or death.

Greg Hunt (Flinders, Liberal Party, Minister for the Environment) Share this | Link to this | Hansard source

Out of courtesy we agreed to work through a consideration-in-detail process which would actually have represented a consideration in detail. We are now embarked upon repetition and recitation. The opposition may choose to ignore the advice of the Productivity Commission and the advice of their own reviewers, including, I repeat, the eminent Allan Hawke and the advice of the department. They have history and form in having done so, in terms of the home insulation program, which sadly and tragically, as the royal commission found, had the most profound of human consequences.

By contrast we have laid out before the House the sources of advice—the Productivity Commission, the reviews commissioned by the Gillard government and the department. We will simply have to disagree as to whether the Productivity Commission, the reviewers, including Allan Hawke, and the department are credible and authoritative sources of advice. We stand by all three of those sources. It is up to the opposition to reject them.

The fundamental point here, which has been set out by the Productivity Commission and others—indeed, it is the latest advice that I have—is that scaling, whether it is the federal or state systems, will come through the insurance process itself. The more there are in one, the more it is scaled up. The fewer there are in others, the more it is scaled down. That is the simple answer. I repeat that the actuarial assessments commissioned by the Productivity Commission concluded that, the larger the employer, the closer the premium is to the true cost.

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

The inverse is true.

Greg Hunt (Flinders, Liberal Party, Minister for the Environment) Share this | Link to this | Hansard source

No. It is not about scaling of costs; it is about scaling so there are sufficient inspectors available in each jurisdiction to cover those that are currently within those systems. Our position is clear and that is final. We are the party that has put in place safety measures. As the home insulation program showed, the previous government for, sadly, the worst of reasons took the worst of processes with the worst outcomes. That is my final word.

Question agreed to.

Bill read a second time.