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

It is my great pleasure to be speaking on this matter. The Fair Work Amendment (Bargaining Processes) Bill 2014 was introduced into parliament, into the House of Representatives, last year, before Christmas, and a lot of water has passed under the bridge in terms of the policies and subject matter of the bill but also in terms of the political process. Of course, this morning we witnessed the spectacle of a party room meeting where certain members of the government, 39 of them, declined to endorse the policy direction of the existing government—a full two-thirds of the backbench, I am advised. Perhaps it is that same life-shortening instinct that moved those 39 MPs to vote that way that has so abbreviated the speaking list on this particular subject matter before the House today, because normally, when a matter dealing with industrial relations regulation comes before the House, we see coalition member after coalition member stumble into this place, waving their arms around about the tyranny of unions, waving their way through last year's talking points—

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

Well, there's not very many on your side speaking on this legislation!

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

failing to address the subject matter before the House.

Darren Chester (Gippsland, National Party, Parliamentary Secretary to the Minister for Defence) Share this | Link to this | Hansard source

Which you're about to do!

Natasha Griggs (Solomon, Country Liberal Party) Share this | Link to this | Hansard source

Yes, which you are about to do.

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

The subject matter before the House concerns amendments to the Fair Work Act which would change the bargaining processes. Those from the coalition ranks who often speak on these matters feel that their contributions are the first time that a ray of sunshine has visited the House and visited the subject matter, but they always refuse to acknowledge that this is probably the most contested area of public policy debate, a matter that has been the subject of every federal election since Federation and a matter that is genuinely reviewed in fine detail once or twice throughout the term of every government. Those facts generally escape members of the coalition when they contribute to these debates.

What does the bill do? First, it puts in place a statutory mandate that parties engaging in collective bargaining negotiation for an agreement to be registered under the Fair Work Act talk about productivity. You could almost imagine, if this is something that warrants the legislature's attention, that we might also insert an amendment into the act that parties engaging in workplace relations negotiations should breathe oxygen, because it is that level of paternalistic nitpicking that finds its way into this legislation.

I can understand why members of the coalition are intensely embarrassed about their failure when it comes to productivity, because during their time in government we have seen, and particularly during the era of Work Choices we saw, one of the most abominable records of any federal government when it comes to productivity. They promised, in introducing Work Choices into the House, that productivity would soar. It did not. It plummeted. They promise that the single link that is missing in the chain that will drive productivity enhancements in this country is not investment in infrastructure and it is not investment in education; it is going after workers' wages and conditions and, if only those on this side of the House would get out of the way and enable the coalition members to go after workers' wages and conditions, we would see productivity in this country saw.

We disagree with that. We disagree with it on the basis of the facts and on the basis of the hard yards that Labor have done when it comes to productivity-enhancing changes, even in the area of workplace relations. Let us not forget it was a Labor government, throughout the 1980s and early 1990s, that oversaw a significant rewrite of the 1904 Conciliation and Arbitration Act, resulting in the 1988 Industrial Relations Act, which introduced for the first time a statutory provision for collective bargaining that would be recognised by the act, and then again the 1992 reforms, which further enhanced the capacity for collective bargaining. Then, after the failed experiment with Work Choices, it fell again to Labor to introduce changes to the industrial relations laws, to ensure that the coalition's allergic obsession with collectivism was replaced with a sensible, effective, moderate proposition which enabled effective bargaining through collective representatives.

Deputy Speaker, if ever you want one example of the coalition's wrongheaded obsession in this area, just attend yourself to this fact: under the Work Choices legislation, there were no fewer than six different forms of workplace agreements provided for, each with their own scientific tests for regulation and each with their own byzantine regulations and processes for certification and regulation. There were six different types of agreements provided for under the workplaces relations act. When we came to government, we swept aside all of that and put in place a streamlined process for a single form of agreement making, with collective representation and the processes overseen by the Fair Work Commission, and let the parties get on with the business of negotiating and driving productivity and fair wage outcomes in a workplace.

If you want an example of the coalition's wrong-headed obsession with overregulation and the wrong sort of regulation, just turn your mind to that: six different forms of collective agreement when they last had their opportunity, with a Senate which would give the green light to anything they put up. There were six different forms of collective agreement making with all sorts of different and difficult regulatory arrangements in place before the workers and their employers could get on with business.

We understand that there is intense embarrassment on that side of the House about their failed productivity agenda. We were not surprised that they have effectively outsourced it to the Productivity Commission. Make no mistake about this: in deciding to refer workplace relations matters to the Productivity Commission, where everything is on the table, what the coalition and the government are saying is, 'We have outsourced our thinking on this because we do not have a clue and we cannot carry the public debate.' That is what they did when they outsourced policy development and research to the Productivity Commission on this matter. They were throwing in the towel and saying, 'We are clueless when it comes to workplace relations reform.' When you look at their record on this matter, is it any wonder that they have had to do that?

I now talk about some of the other specific provisions within the bill. You have to wonder what has motivated the government. A close reading of the legislation and the explanatory memorandum, particularly the sections of the bill that go to protective action ballots, you have to ask yourself, 'What is motivating this?' because it is certainly not clear on the face of it. As the explanatory memorandum points out, the purpose of this part of the amendments within the bill is to put in place additional statutory tests before the Fair Work Commission certifies or permits a protected action ballot to proceed. The first of these arises from the decision of the full bench of Fair Work Australia in TMS and the Maritime Union of Australia. The legislation effectively takes the decision of the full bench and places it within the legislation. On the face of it you might say, 'What's wrong with that? Why aren't we doing it?' Because each and every application for a ballot before Fair Work Australia must meet the test that was set down. This is not a new decision. It is now 2015. This was a decision of the full bench in 2009. So you have to wonder: 'What is it that has driven the urgency of having this particular part of the bill before the House'—completely otiose in our opinion.

The second part of the bill goes to a new test that Fair Work Australia must satisfy itself when determining whether a protected action ballot should proceed. The new test is that it must be satisfied that the applicant's claims are not manifestly excessive, having regard to the conditions at the workplace and the industry in which the employer operates. I want you to think about this for a moment. The whole notion of the collective bargaining stream within the Fair Work Act was effectively to get Fair Work Australia out of the bargaining room and let the industrial parties, the employer and their employees get around a negotiating table and negotiate these agreements. If they should fail, they may have resort to protected industrial action—either the employer or the employee. But, when you are putting a provision within the legislation which asks the tribunal to make a binding determination on whether the provisions of a claim are manifestly excessive or not, you are providing a de facto arbitration on the matters which are subject of that dispute. Make no mistake about it: when you are putting a provision within the legislation that says that a protected action ballot may not proceed, if, in the opinion of Fair Work Australia the claims that are at dispute between the parties are manifestly excessive, you are giving Fair Work Australia the right to determine that matter and to arbitrate on a subject matter between the parties.

The penny may not have dropped on the other side that that is effectively what they are doing, but, make no mistake about it, in the rough and tumble of industrial relations and in the way these things play out in the workplace, that is exactly what will happen: there will be a dispute between employer and employee. The employer may refuse to accede to the claims or the employees may refuse to accede to the claims of the employer. One or the other may seek a protected action ballot. You can bet your bottom dollar that one of the objections to that protected action ballot proceeding will be that the claims of one party or the other are manifestly excessive. In determining that part of the dispute, they will in effect be determining the whole of the dispute and will be inserting themselves into the bargaining process.

I am almost certain that those on the other side—who will come in here and wave their hands around, using last year's speaking points and talking about the evil of red tape in industrial relations legislation in this country—will not have picked this up. They will not understand it. In spite of all the division that has gone on in their party room today, what binds them together is their abhorrence of anything that has to do with collectivism and their abhorrence of fair work protections in this land. They will not have thought about the pitfalls and that is why these bills should be referred— (Time expired)

Andrew Laming (Bowman, Liberal Party) Share this | Link to this | Hansard source

Maybe we will swing back to reality here and talk about just how important it is when bosses and workers get together and are mature enough on both sides to come to agreements in 99 per cent of cases—how that focus has to be on productivity. That is the future.

I have made many statements in the last couple of weeks about the increased challenges in 2015. Australia is not alone, but obviously we are moving from a mineral-dependent economy—rocks and crops—to a post-mining future. Having young Australians carve out a living in reasonably-earning professions outside of mining is going to be an enormous challenge for whoever is in power. Certainly, as we see developing economies with a subsiding appetite for our commodities that chastens us deeply to make sure that we have jobs for the 140,000 young Australians leaving school and who cannot even pick up a broom or find a job to do. That has to be a massive social challenge for any government, regardless of which side of the fence it is on.

As I said, when bosses and workers get together it is our belief that for 99 per cent of the time they can do so in a mature and good-faith way. But—let's face it—there is a little bit of evil on both sides and, at the extremes often that cannot occur. That is why we rely on fair work legislation and on the commission in particular to assist that process forward. In doing that, this side of politics worries about productivity and that side of politics relies on beating up one side of the argument and doing their best to run interference on what are the mature decisions made by workers. That is a very patronising view of the world but one that is deeply ingrained.

Obviously, we would like to see a chance for mature adults to talk first and come to some kind of reasoned agreement. We would like to think that when offers and responses are put on the table that, to the average read by an ordinary Australian, it seems to be done in good faith—that they are not unrealistic or completely implausible. We are not talking about 30 per cent pay rises over four years, or being able to stop work at a moment's notice and hold your boss hostage and all that sort of stuff. That is all patently ridiculous but, strangely so, still possible under Labor changes. I guess that what we want to see on this side is that when there is protected industrial action it does not just happen before negotiation even begins—the sort of 'go directly to jail and pay $200' approach that we saw from Labor where there is really just no proper and meaningful consultation. And we had plenty of evidence of union bosses regarding themselves as above the law. Once you start with one party with that view it is almost impossible to come to these productive arrangements that other economies overseas seem to be able to do because they have moved on from this highly immature, two-party approach. There is one approach that says people can come to these agreements—and we see workplaces where that occurs—but as I do concede, there are the rare examples where we are going to need legislation and we are going to need a Fair Work Commission to assist in that process.

So the Fair Work Amendment (Bargaining Processes) Bill 2014 simply says that if you are going to apply for a protected action that there are going to be a few basic requirements. We know that the ballot is still held by the Fair Work Commission but, more importantly, we need information provided to the commission about exactly what is being sought in protection action ballot orders. To do that, I think it is utterly reasonable that the union has to demonstrate the steps that it has taken. After all, it is the unions that are the pros in these arrangements, right? They go from workplace to workplace with fully-rehearsed arrangements. Often, these bosses only renegotiate these arrangements every two, three or more years; for them, this is an occasional occurrence. But for the hard-core pros it is their full-time business, making life as miserable as possible for those who are trying to strike otherwise productive agreements.

So we want to see from unions that appropriate steps have been taken, that they have at least tried to engage the employer. No matter where you go, you have these stories where they barge into the office and unilaterally stamp down their arrangements on the table and say, 'We're the boss. This is what's going to happen. If you try and fight us it will only get uglier for you,' and all this sort of stuff. Whether that is all just apocryphal, you would have to ask bosses. But there are plenty of stories where the whole negotiation process starts off on the wrong foot.

Secondly, of course, the case has to be stated. What we are asking for is for unions actually to demonstrate that they have told the employer what they are chasing before they have embarked on this process. Then, of course, you would expect that if you are going to make an initial offer—and often what we see is copycat pattern bargaining within a sector and between workplaces. The old union tactic, of course, is to negotiate an agreement, go to the next worksite, start from that agreement and ratchet it up a little bit more. If anyone wants to know where the boom time was squandered, it was squandered by doing these agreements that did not relate to productivity at all but just related to how much people could be paid for doing as little as possible. That is obviously what got us into the pickle we are in, paying people working in our mining sector almost double what the United States pays for an equivalent-trained miner doing exactly the same job. It is an average of $68,000 in America compared to $108,000 in Australia. Good luck competing under those conditions!

Of course, the union has to respond to offers or counterproposals. In many cases the unions just cannot wait to get into the business of tearing up agreements, creating destabilisation and pulling everyone off the worksite, because that is what they do best! But I think that what we are asking for here is utterly reasonable; that we give reasonable people who have an open mind to striking an agreement a chance to get that to happen. This is all based on a leading decision of the Fair Work Commission, based on what the relevant considerations are that they think should be looked at before authorising an industrial action ballot.

Up till now we have seen these unrealistic claims too many times for us to completely ignore them and too many times for us to do nothing about them—manifestly excessive. There will be a number of those examples given by those who, while having a seat in this place, are more intimately acquainted with experiences with the unions. Now, we are not about to say that they are all bad and we are all good. I conceded at the start of this speech that there is a range of participants in this, just like we generally find in the world that there are people who exploit the system on both sides of it. We are just trying to allow for the sensible centre to get on with doing what they do best, which is drawing up arrangements with their bosses and getting mutual agreement first of all on the way in which they spend their hours at the workplace, what they do and what the agreed targets are between them and their employer about productivity and contribution to the workplace.

Too often, this starts from a completely bellicose and hostile arrangement. I think this bill makes an important step. It focuses on what I think is the No. 1 word for the next 12 to 24 months: in this country it will be about 'productivity'. It is going to be about how we can get the best possible outcomes in the workplace, the best possible outputs and, of course, the strongest possible sectors to compete with—and let me be frank—international competitors: our trading competitor economies, which are at every step prepared to take our markets.

There have been some changes with the changes to currency but there will be no substitute for getting Australia back on the productivity track, being as competitive as possible and, where we can, allowing bosses and unions to strike their own agreements without molestation and interference from trade unions.

Adam Bandt (Melbourne, Australian Greens) Share this | Link to this | Hansard source

Just imagine if the government said to every small business in this country, 'You are not allowed to enter into a contract with a supplier unless you have discussed with that supplier the impact of that contract on how you run your business,' if this government said, 'We are going to say to every milk bar you cannot enter into a contract with a local bread supplier unless you have discussed with the bread supplier the impact of that contract on how you run your milk bar,' or if they said, 'We are not going to let you enter into any contract unless you have discussed the impact on your business and you front up to the ACCC and prove that you have done it with a stat dec or by jumping in the witness box to explain to a third-party regulator that you have discussed this matter,' you would have every small business in this country and probably every like-minded person lining up to condemn the government—not only condemn the government; they may in fact quote some of the government's words back to them. They may say to the government, 'It is not your role to come in and tell us how to conduct our businesses.' They may say to the government, 'You've told us that deregulation is your agenda and you are getting rid of laws that tell us how to run our business so you should not be going ahead with this.' That is exactly what this government is doing with respect to workplace relations with this bill, the Fair Work Amendment (Bargaining Processes) Bill 2014.

This government is saying you cannot strike an agreement in your workplace between an employer and employees unless you have talked about the things that we, the government, want you to talk about and you can front up and prove it to a third-party umpire. This bill shows the utter hypocrisy of the Liberals when it comes to questions of looking after people's rights at work, because every other day the government comes in here and says 'We have to repeal every law that tells people how they run their businesses,' yet when it comes to laws that might give workers some rights, they cannot come in here quick enough to make sure the government has a seat at every negotiating table in every workplace negotiation around this country and that the government is there ticking off on what people can and cannot say in their workplaces. Not only does it expose the utter hypocrisy of the Liberal Party when it comes to so-called small government; it also exposes their willingness to extend the reach of government right down into every discussion in every workplace in this country, if that is what their masters ask them to do.

All you have to do is have a look at what this bill does not talk about. The government is quite happy about saying, 'We are going to tell you what you are allowed to discuss in your workplace.' Does it say you have to have a discussion about safety, about how to make sure people's rights are protected and that everyone who turns up to work at the start of the day knows they are going to be able to go home to their family safe and uninjured? Does it say you have to discuss that? No. Does it say every workplace has to discuss how it is going to close the gender pay gap between men and women, which we know exists in this country and which report after report tells us about? No. They are not interested in that. Does it say you have to discuss how to look after child care in your workplace? No. Does it say you have to discuss work-life balance? No. It does not say that. We know work-life balance is one of the pressing issues and what former Prime Minister John Howard called a barbecue stopper, and we know that in this country we do a very bad job at matching up the hours people want to work with the hours that they actually work. Does it say you have to discuss how you are going to give training to young people to help address youth unemployment? No. It does not say you have to discuss that. The Liberals do not care about any of those things. What it does say is that before you can approve an agreement, you have to make sure that people have not asked for too much money. It says you cannot approve the right for people to take action in support of an agreement if you think they are asking for too much money. Well, thank you, Liberal Party, for looking after people's rights at work!

You will notice that it is only one-sided. What we have seen when this government is in the position of employer is that they are quite happy to turn up to public servants and say: 'We want you to work an extra half an hour for free. We want you to work extra hours for nothing.' Why is it that if an employee asks for a pay rise the commission is able to judge whether or not it is too excessive, but there is nothing in this bill to stop an employer asking someone to work more for free? That speaks volumes of the agenda of this government: there is nothing manifestly excessive about asking people to work extra hours for free, but there is, apparently, if you are working in the resources sector in a mining boom, asking for a share of the spoils. Let us just look at that for a moment.

This government have done nothing during the course of a once-in-a-generation—if not once-in-a-lifetime—mining boom to say, 'We are going to take a share of the spoils that are currently going largely to overseas owned companies.' Therefore, the profits are going overseas. They have done nothing to say, 'How do we take a share of that and work it to the benefit of the Australian people?' There is nothing to say, 'We are going to stop people making excessive profits by diverting some of it back to the public good.' No—if you are in the resources sector or in the mining sector, under this government you can make as much excessive profit as you like. It just means that if you are a worker in that sector you cannot front up and ask for a share of it. You cannot, in a once-in-a-generation mining boom, put your hand out and say, 'We can see you wealthy mining companies are getting most of this and we want a share.' No, that would be unlawful under this bill. You will not be entitled to bargain in that way under this bill.

This is another very clear expression of the government's agenda that the resources boom is only to go to those who own companies, not the people who work in the sector. If you ask for a share of the boom, you are asking for too much. Excessive profits elsewhere? Sure. But excessive—so-called—wages? No, that is not on. That is not on.

Not only that but, when you look at the minister's second reading speech, you can see the fallacy that this bill is built on. The minister in his second reading speech referred to so-called activity in Western Australia, and he said this:

For example, we have recently seen reports of protected action ballot orders made and protected industrial action threatened in pursuit of claims that would increase the salary package of marine engineers in Port Hedland by around 38 per cent over four years. The reports indicated the claim, which includes an additional month of annual leave, is on top of existing salary packages of between $280,000 and $390,000, where employees work six months of the year.

So the minister said, 'You should pass this bill because we've seen reports of protected action ballot orders made where there've been claims of 38 per cent over four years.'

Well, that is wrong. That is wrong, and the minister should have known it was wrong because he was relying on reports that were simply not true. As the Institute of Marine and Power Engineers has made absolutely crystal clear, the dispute that was being referred to—and he was referring to marine engineers, remember—was resolved with pay claims of zero per cent, two per cent, two per cent and two per cent over four years. That was the agreement that was reached. The claims that were made in the reports were wrong from the beginning, and a complaint has been made to the Press Council about it.

What does the minister do? Does the minister say, 'Well, I've seen this report; I'm going to inquire as to whether it's true before I get up in parliament and tell people they need to pass a bill to restrict people's rights at work because of a report that I've read'? No, he does not. He gets up here and makes claims about 38 per cent pay rises which are simply not right. A complaint has been made to the Press Council about this report, and we will see what the adjudication of that is.

But the minister—and I will be pursuing this during the consideration in detail stage if we get the opportunity—needs to come back in here and correct the record on that, because he is saying to the parliament, 'Pass this bill on the basis of reports of 38 per cent,' when there is a very real question mark over that, and the unions and the employees there will tell you that that is simply not right. I suspect that, when the minister does a bit of digging and looks at that, the minister will also realise that he was relying on a report that did not accord with the facts in that dispute at that moment. When the minister comes in and admits that, a plank underpinning this whole bill falls down. That, in the second reading speech, is the best that he could come up with as to why we need this bill, and there is a very big question mark over the reliance on that.

So I say this to the government: don't expect us to ever take you seriously when you talk about deregulation and getting government out of the operation of people's businesses, when you come in here with a bill like this. You come in here with a bill that says: 'We are going to sit there at every negotiating table and tell you what you can and can't talk about. We're not going to do anything about superprofits being made that don't come back and benefit the Australian people, but 83 per cent of the profits in that mining and resources sector find their way overseas. We're not going to do anything about that, but, if you're a worker who says, "I want a share of the good times as well," we're going to come down on you like a ton of bricks, and we're going to make sure that there's effectively a government official sitting at every negotiating table.' When you do that, don't expect us to ever take you seriously about deregulation. And you say you are concerned about manifestly excessive claims, but there is nothing in here stopping a government or an employer, or the government as an employer, coming and saying to public servants, 'We'd like you to work for free.' That is not excessive! There is no bar against that. Don't expect us to ever take you seriously when you say that you care about deregulation or you care about fairness.

I know that you keep going back to the Productivity Commission and to others to try and get the answer that you want, to suggest that somehow it is the industrial relations laws of this country that are standing in the way of productivity gains. But you ignore the very, very clear analysis that shows, when you look back over recent Australian economic history, that the period of the lowest—in fact, almost zero per cent—productivity growth, the cycle of zero per cent productivity growth that happened in recent Australian economic history, was the period of Work Choices. The period that we had Work Choices in was the period of zero or close to zero per cent productivity growth over the productivity cycle. And I know you keep going back, and now we need another review because you did not get the answer that you liked last time, because the facts do not speak to it. I know you will keep trying, but that is the reality.

If you were serious about improving productivity in this country, you would look at all the things that—in my instance, in my electorate—help make a city productive. Things like people being able to get around by good public transport so that they do not spend an hour stuck in traffic improve productivity. People being able to fit their working hours to their lives and to the hours that they want to work helps improve productivity. People then, when they are at work, are there for the hours that they need to be, and then they get to go home, look after the kids and look after their other responsibilities on their own time at the time that they need to do that as well. You would build an NBN to help us improve productivity. You would plan our cities better so that people are not being continually plonked on the outskirts of our city, where housing might be cheaper, but you end up paying just as much in petrol coming into the city as you save on your mortgage. You would plan our cities better if you were really interested in improving productivity.

The government has no vision for our cities. The government has no vision our country—for doing the things that would improve productivity. All they are capable of doing is coming back here without evidence, time after time, and saying, 'We need to remove some of the basic protections that people have at work.' I am all for improving productivity, but this bill will do nothing for that. This bill is just another attempt to remove people's rights at work, and that is why it will not be supported.

Craig Kelly (Hughes, Liberal Party) Share this | Link to this | Hansard source

It is a great pleasure to rise to speak on the Fair Work Amendment (Bargaining Processes) Bill 2014. This is another of the coalition's election promises that we are delivering on. Three simple things: firstly, it requires discussions about improving productivity in our workplaces during enterprise bargaining; secondly, it ensures that applicants for protected action ballots have first sought to engage in genuine and meaningful talks; and thirdly, that the claims that are being advanced are not unrealistic.

Very surprisingly, currently under our Fair Work Act, amazingly, there is no requirement for productivity to even be discussed. This bill is all about productivity. It simply requires the Fair Work Commission to be satisfied that productivity improvements were at least discussed during the bargaining process before it can approve an enterprise agreement. The way it does that is through amending or adding a new section—section 187(1A)—into the act with the effect that, before approving an agreement, the Fair Work Commission must be satisfied that during the bargaining for that agreement improvements to productivity in the workplace were discussed; simply discussed—nothing more, nothing less. Because, at the end of the day, the wealth of our country and our future prosperity is all about productivity.

I would like to borrow a quote used by my good friend, the member for Hume, when he referred to Paul Krugman, who again is not on our side of politics. Krugman said about productivity:

Productivity isn't everything, but in the long run it's almost everything. A country's ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker.

This is not about cutting workers' wages. It is about the productivity of our nation. That is key to our wealth and our prosperity. We heard the rant from the Greens' member for Melbourne. It took almost his entire speech before he could even mention the word 'productivity'. It was only in the last minute that he started to mention the word 'productivity', and we know why—because everything the Greens do, every one of their policies, actually harms the productivity of this nation. By simply opposing everything, our productivity goes backwards, our wealth goes backwards and it harms the average citizen.

I would like to pick up a quote made by the member the Scullin in this debate—this goes back to December last year, before parliament rose. The member for Scullin said:

… I ask this question: what is the problem that this bill is trying to solve?

I do not know what rock the member for Scullin lives under if he does not know the problems that we have in this country and the problems this government must address. Only last week we had the Governor of the Reserve Bank warning about the debt and deficit problems we have in this country and saying that, unless action is taken to address those, we may never get back to surplus. That was what the Governor of the Reserve Bank raised.

To put our debt and deficit issues in some perspective, I will start with the deficit. Currently, because we have so much legislation blocked by Labor, the Greens and the other Independents in the Senate, we are, as a nation, spending $110 million every day more than we are raising. If you put that back to the average citizen, government spending is currently running—that is, $1,700 per person to every man, woman and child in this country—faster than what we are raising in revenue. If we go doorknocking around our electorates, for the average household of four, government spending is $6,800 higher than revenue. That is why there are very difficult decisions to make—because if we do not wind that spending back we simply borrow more and more money, which creates a greater interest bill next year and the year after, and we simply pass that debt on to our children and our grandchildren.

The issue that we have with the debt, and why on this side of the House we talk about it all the time, is that every time we borrow money to fund our expenditure today, it means that tomorrow we have a liability to pay the interest on that debt. If we go back to 2007, only a short time ago, our Commonwealth government had no debt. We were actually receiving money. We were receiving interest on the money that the Howard and Costello governments had put aside. Six years later, we are now paying over $1 billion in interest on that debt every month. You may well argue that it was the economic genius of the former government that sent off the $900 cheques and organised the pink batts schemes and the set-top boxes and so on. You may well argue that was economic genius, but that was done with borrowed money. And now we have to pay the interest on that debt.

Another way to put it in perspective: we are now nine days into February. This month, for those nine days, we have had to find $333 million just to pay the interest on the debt. And today, the first day of parliament this year, we are 40 days into the year. In those 40 days already this year, our interest liability that we have had to find the money for is $1.4 billion—that is, $1,400 million in interest on Labor's debt. It is money that could have gone into schools, into hospitals, into aged care, into kids with disability, into our roads and so on and so on. But it cannot go into those things because it needs to go in to the interest payments on Labor's debt. The worst thing is this goes on forever until we can start to pay it back. But at the moment, we are struggling even to pay the interest on that debt. The real concern is how the other side is in complete denial about this problem.

Over Christmas, you may have seen that ad for Nimble smart loans where there was a young woman sitting on the couch with a mobile phone who gets her mobile phone bill. All of a sudden she realises that her spending is completely out of control and goes into shock about that spending. Rather than admit that she has a problem and needs to bring her mobile phone use back to a sustainable level—what she can actually afford—she runs off and throws a tantrum. And then you see, to the rescue, comes a cool looking character dressed in a rabbit suit. His solution is not to say 'Your spending is out of control and you need to wind back your expenditure. You need to make your expenditure match your income.' No, the rabbit's solution is to simply 'nimble it' and move on . And then of course the young lady takes some celebratory selfies and everything is fine. But what the ad does not mention is there is a cost for borrowing that money. The cost in this case is a 20 per cent establishment fee and four per cent compound interest per month, which actually adds up to almost 60 per cent per annum.

Likewise, that is what the opposition fails to understand. When they go out and say, 'Spend this, spend that and keep spending,' there is an ongoing obligation not only to repay that debt but to continue to pay the interest. The opposition leader hears that guy in the rabbit suit running around telling Australians that we can keep on spending and just 'nimble it' and move on.

Another way to put our debt and deficit issues in this nation in context is to read about Greece and how after a decade of their back-to-back to budget deficits the country is on the brink of economic and social meltdown. So often we hear our debt and deficit deniers making a comparison between Australia and Greece saying, 'It is okay, we are not as bad as Greece. We can keep spending and just move on.' The way they do it is they look at our Commonwealth debt as a ratio of our GDP and compare it to Greece. Yes, using that parameter, it is low. But that parameter does not give the full context of our debt. It is misleading because GDP is not taxation revenue from the government and it certainly does not look at what the most important thing is—the cost of servicing the debt. The Greeks, for all their problems, have been able to finance that debt under the umbrella of the EU, so the effective interest rate on the Greek debt is about 1.7 per cent to 1.9 per cent. But the debt we have in this nation is the amount borrowed by the previous government by selling government bonds and those bonds have been sold somewhere between three per cent and five per cent or, on average, at around four per cent. So as amazing as it seems, the interest repayments per person in this nation are actually 20 per cent higher than what they are in Greece.

I will give you the numbers to show you the problems we have. The interest repayments on Greek debt are the equivalent of a crippling A$736 per Greek citizen. But in Australia, if we add our Commonwealth debt to the debt that our state governments have also incurred and we look at the interest obligation per Australian citizen, every year that is running at close to $900. So the interest repayments on Greek debt for every Greek citizen is $736; in Australia it is $900. We have a 20 per cent higher cost of servicing our debt than does Greece—to try and put some context around the mess and difficulties that we are in.

The debt and deficit deniers simply say, 'We can keep on spending, and this debt and interest repayments should be paid for by business—therefore the average citizen can avoid it. But what happens when you raise taxes on business? It is often said businesses and corporations are not people. In this respect it is very true. Because if you raise the taxes on companies, one of five things happen. Firstly, depending on competition in the market, business increase its prices, so it will be consumers that pay the increased tax through higher prices. Secondly, if you raise the tax on businesses, the only thing businesses can do is cut their wages and salaries they give to their employees, so it will be their employees paying the price. Thirdly, they may not take on new employees, so it will be the unemployed that pay the price. Fourthly, they may pay reduced dividends to their shareholders, many of whom are superannuants, so average Australian citizens will be the ones who pay the price. It is a combination of all of the above.

We need to admit the extent of the problems that we face in this nation. We need to ask the question, 'How can we get out of this mess without making the hard decisions?' We hear the opposition leader saying 'go for growth'. The problem is they are opposed to everything that creates growth in this country. They are opposed to everything that increases our productivity and that is why this bill is important. It gets back the focus on relationships under the Fair Work Act and it puts a focus on increasing the productivity of the nation. Because, at the end of the day, the only way we can dig ourselves out of this hole, the only way that we can ensure that our kids and our grandkids enjoy the prosperity that we have enjoyed is by lifting the productivity of this nation and that is what this bill addresses. I thoroughly commend the bill to the House.

Christopher Pyne (Sturt, Liberal Party, Leader of the House) Share this | Link to this | Hansard source

I rise to close the debate on the Fair Work Amendment (Bargaining Processes) Bill 2014. I would like to thank all the members for their contributions to this debate. The Fair Work Amendment (Bargaining Processes) Bill 2014 implements the government's commitment to sensible, harmonious and productive bargaining. The changes were clearly stated in the coalition's policy to improve the Fair Work laws and will help to restore the balance of the workplace relations system back to the sensible centre.

A key measure of the bill is to ensure that productivity is put back on the enterprise bargaining agenda. Contrary to claims from some of those opposite, improving productivity does not necessarily mean working harder; it can mean working smarter and more effectively. This bill includes a new common-sense requirement. The Fair Work Commission must be satisfied that productivity improvements were discussed in the course of bargaining before an enterprise agreement can be approved. The measure will make sure productivity is actively considered by employers and employees during negotiations for a new enterprise agreement.

This bill does not detract from the good faith bargaining requirements in the act. The requirement to discuss productivity will be subject to the good faith bargaining provisions in the same way that all bargaining discussions are subject to the good faith process requirements.

I reject claims by members opposite during this debate that this new requirement will increase red tape and uncertainty. A requirement to discuss productivity is not onerous. The Fair Work Commission already requires employers to fill out statutory declarations for enterprise agreement approvals so the commission can be satisfied that the constant and numerous requirements in the act are met. To suggest that providing confirmation that productivity was discussed is somehow going to hamper the process is clearly absurd.

Those opposite have also suggested the Fair Work Commission needs a legislated definition of productivity in order to enforce the new requirement. The term 'productivity' already features heavily in the objects of the Fair Work Act, without a legislative definition. So how could it sensibly be said that the organisation which oversees the act would not be able to determine if a measure raised during bargaining would impact productivity? Further data from the Department of Employment indicates that around 48 per cent of enterprise agreements approved between 1 January 2010 and 30 June 2014 contain clauses on commitments to improved productivity. Not only does this demonstrate that the Fair Work Commission is routinely assessing and approving agreements with productivity clauses; it also shows that this amendment will complement what many parties clearly already do.

It has been suggested that an employer might refuse to discuss productivity in order to stall negotiations. This argument is nothing but a red herring. In the event that this unlikely scenario did arise, the other bargaining parties can simply seek a bargaining order to require the employer to bargain in good faith. In this way the productivity discussion is no different to other bargaining discussions under the act.

The Fair Work Act currently provides that industrial action can occur before genuine and meaningful talks for enterprise agreements have taken place. The government's firm view is that protected industrial action should always be considered a last resort; not the first step in bargaining, as the current provisions allow.

The bill will clarify the 'genuinely trying to reach an agreement test' which is a test that must be satisfied before a protected action ballot can occur. By providing more guidance on how this test is to be satisfied, it makes this requirement more transparent. This will create greater certainty for all parties. Contrary to the claims of the shadow minister, it does not limit the discretion of the Fair Work Commission. It is a non-exhaustive list and it is clearly stated the commission must have regard to all relevant circumstances, not just those on the list.

These amendments will ensure a protected industrial action can only be taken where there have been genuine and meaningful discussions between the parties or where the applicant for the industrial action ballot order has made reasonable efforts in meaningful discussions with the employer.

I call on all members to support the passage of this bill and I again thank all members who participated in the debate.

Question agreed to.

Bill read a second time.