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

I move:

That all the words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House calls on the Government to:

(1) abandon its support of the decision of the Fair Work Commission to cut penalty rates because it will mean nearly 700,000 Australians will have their take home pay cut by up to $77 a week; and

(2) legislate to prevent the decision from taking effect to stop Australians from having their penalty rates cut".

I rise to oppose the Fair Work Laws Amendment (Proper Use of Worker Benefits) Bill 2017 and speak in favour of the amendment. It is fair to say that this is a very considerable bill, as far as its size is concerned. The first I saw of this proposed piece of legislation was Thursday, last week. The bill has 80 pages and, of course, has an accompanying explanatory memorandum. There was no consultation with the opposition before it was introduced into this place last Thursday. A whole range of issues arise from the proposed provisions of the bill that the opposition will want to examine. I want to thank the department, which yesterday briefed my office and me on the bill, but that has led to as many questions as answers. No doubt there'll be a chance for the Senate committee to examine this bill, but, nonetheless, there are some things I want to put on the record. As I say, at this point the federal opposition is not in a position to support the legislation.

The Fair Work Laws Amendment (Proper Use of Worker Benefits) Bill 2017 was introduced in the House last Thursday. This bill has five schedules and runs to 80 pages. It amends five pieces of legislation: the Fair Work Act 2009, the Fair Work (Registered Organisations) Act 2009, the Fringe Benefits Tax Assessment Act 1986, the Income Tax Assessment Act 1997 and the Tax Administration Act 1953. It has significant implications for unions and employer bodies, some of which will only be able to be identified following detailed examination of the technical provisions of this bill. It has significant implications for workers who benefit from their entitlements being protected through these funds and from the counselling, training, occupational health and safety and support services that those funds invest in. Notwithstanding this, we would contend that the government is rushing this bill through the parliament without proper scrutiny and without sufficient stakeholder consultation, and that's unfortunate. If the government wants to work with the opposition to improve laws in this area of public policy or, for that matter, any area of public policy, it would do well to consult and seek to find common ground rather than just expeditiously introduce legislation of this significance without that consultation and engagement.

I understand that, with the support of the Nick Xenophon Team, the government defeated Labor's attempts to have a thorough Senate employment committee inquiry, which would have examined the bill over several months. Instead, a reporting date of 10 November this year was imposed. We would argue that sets a very difficult time line for stakeholders to prepare submissions and present evidence. The time line for submissions is coming up, so there was very, very little time for stakeholders and affected parties in general to cooperate and produce submissions for that inquiry. We just note that that's characteristic of this minister, who doesn't seem to know what the word 'engagement' means.

The government's purpose is to use this bill to limit the legitimate activities and sources of income of employer bodies and unions. Partly, I think, that's a result of them not understanding the genesis of worker entitlement funds, their history and the important service they provide thousands and thousands of workers in this country. The minister's press release claims:

Through cosy deals with big businesses, unions have become a big business in their own right and more focused on making profits than representing people.

I would argue that that's unmitigated rubbish. Worker entitlement funds—which, by the way, are jointly established by unions, employer bodies and employers—operate firstly to ensure that workers' entitlements are protected, and secondly to provide important services to workers such as, as I said earlier, training, counselling support, suicide prevention, and funding of OH&S officers, just to name a few.

We think that it would have been useful if there had been a genuine engagement with those affected to consider the history of the funds and what purpose they serve, and to give a brief history of some of the funds. Some of these funds were set up decades ago, and were set up arising out of genuine complaints about phoenixing companies—that is, companies that were not paying entitlements and were winding up, avoiding obligations to creditors and, in particular, their workers, and then starting up again and maintaining a similar business debt-free. And for that reason and others, employers and unions wanted to provide greater security to their employees and members respectively by allowing such funds to continue and to afford that protection to workers.

The construction industry represents unique safety risks to workers. It is one of the most dangerous industries in this country and is characterised by high levels of worker vulnerability. For example, construction workers face one of the highest risks of injury and death of any industry; the highest level of suicide of any worker group; high levels of labour mobility and insecure work; long periods of unemployment; and high levels of redundancy. One of the funds in the construction industry, Incolink, provides a safety net which protects vulnerable construction workers by investing in workers' training, health, wellbeing and safety to tackle the issues. It is an important fund which brings workers and employers together to solve industry problems.

This bill, it's been put to me, may well have very significant impacts on this and other funds. It would prevent these funds investing in key occupational health and safety initiatives. It is unclear as to whether these funds could continue to subsidise members' insurances such as funeral cover, accident, dental, ambulance, portable sick leave and income protection. If they cannot continue to provide some of these services, I don't doubt that employers will bear the cost because there will be claims in subsequent enterprise negotiations asking employers to pay through those negotiations the shortfall that might arise if we allow for the unfair limitation of the purpose of these funds, which is to provide general protection for working people in the construction industry. Incolink, for example, worked alongside industry associations to establish a program of industry occupational health and safety grants when WorkSafe removed funding for these roles in 2002. Funding these OH&S roles helped to ensure good OH&S practice across the commercial building and construction industry.

That fund invested $4.8 million in 2016-17, I'm advised, to fund the occupational health and safety program. In order to be able to provide a range of additional benefits and support services to workers and their families in the building and construction industry, I'm advised that that fund invests to generate a return. Some of these funds are used to provide important wellbeing services such as supporting workers with mental health and DNA problems; attending critical incidents and providing suicide prevention; funding training for over 16,000 workers per year; counselling over 3,000 workers each year; and undertaking almost 4,000 health checks for workers. These are some of the really important services provided by these funds. If the government came from the view that they wanted to resolve any regulatory matters but understood the importance of the schemes, if they had at least some sense of the importance of consensus that exists in the construction industry with respect to these funds—that this is about workers, their representatives and employers working together to afford protection to workers in the industry—if the Minister for Employment thought through that prism rather than the constant partisan, extreme language that she uses when talking about organised labour, then I think the government would have a different view about these funds and would probably deal with the bill in a different manner.

We'll be looking at the bill to see how it might affect very important services to workers, to see whether in fact there'll be adverse consequences that flow, intentionally or otherwise. The government claims that this bill implements 10 recommendations of the Heydon royal commission. I accept that that may in part be true, but, as we know, that was a discredited royal commission led by a discredited commissioner. He is a former High Court justice but wanted to raise money for the Liberal Party while he was sitting in that position and presiding over the commission's conduct. He tried to deny it. Then he realised: 'I'd better think about this,' and judged that he was not partial and that there was no apparent conflict of interest. He sat in judgement of himself, found himself clear of all allegations and continued to act in that role, even though, if you look at his own judgements as a High Court justice, you would find he was completely contradicting his own reasoning when he was a justice of the High Court. Nonetheless, he proceeded, and that really discredited the findings of the commission. We also know that the commission was a political witch-hunt headed up by the commissioner to whom I just referred, who was willing to attend Liberal Party fundraisers and whose sole aim was to do the government's bidding. Nonetheless, even if the reasoning behind this legislation had a rocky start, we're examining whether some of these provisions are reasonable and would lead to better reporting and better disclosure provisions and whether the penalties are reasonable.

History teaches us that we can't trust this government to introduce legislation that does what it claims and that does not have serious overreach and flawed drafting. Labor will properly and thoroughly examine the provisions of the bill. Accountability, transparency and good governance are important. However, we must be vigilant to ensure that, in the name of these principles, this bill doesn't impose such a heavy regulatory burden that worker entitlement funds are not able to function.

I turn now to the range of matters that are the substance of the bill. The bill would put additional requirements on governance, financial reporting and financial disclosure requirements of worker entitlement funds. It would prohibit awards or enterprise agreements from requiring or permitting contributions to any fund other than a superannuation fund, a registered worker entitlement fund or a registered charity. It would prohibit awards or enterprise agreements from permitting or requiring employee contributions to a union election fund. It would prohibit coercion of employers to pay amounts to a particular worker entitlement fund, superannuation fund, training fund, welfare fund or employee insurance scheme, which is unlawful already. It would put additional financial management and disclosure obligations on registered organisations. It would introduce new penalties for registered organisations' noncompliance with financial management disclosure and reporting requirements.

A 'worker entitlement fund', according to the bill, is defined as 'a fund which is for the purpose or purposes of paying worker entitlements and death benefits'. 'Worker entitlements' are defined as including payments in respect of leave, payments in lieu of leave, payments in relation to termination of employment and any payments that contracts, awards or agreements provide for an employer to make to an employee. A superannuation fund, a registered charity, a discretionary mutual fund, a fund established by state, Commonwealth or territory law, and a fund controlled by a fund member are not included; however, the minister may prescribe additional funds as worker entitlement funds.

Given the conduct of the minister in these matters generally, and the government's intentions to attack unions at every turn, we do have a concern. I can say from the outset, without having it referred to the Senate committee, that the idea that we would allow for a minister to prescribe additional funds and deem them worker entitlement funds is of concern to the opposition. We can imagine in the hands of the current minister what sorts of malevolent acts might be perpetrated upon such funds and, therefore, we are concerned about allowing the minister to have a disallowable instrument—even if it is a disallowable instrument, we're concerned that regulations will allow for the broadening out of the definition of the funds and we will be examining that.

The bill places limits on when a worker entitlement fund can become or stay registered, including what sort of organisation can operate the fund and the make-up of the board of the fund, and the way in which the assets of the fund can be used. The bill also contains provisions that we understand would operate to prohibit enterprise agreements specifying that employers have to pay into training funds. What is the justification for this, given that enterprise agreements are completely transparent? They are voted on by workers, they have to be presented to the Fair Work Commission, the commission has to find that they're fulfilling the requirements of the act, so what would be the need for this potential change to the law? Mr Dyson Heydon conceded that training funds provide a public good. Stakeholders have raised concerns that there's a significant uncertainty about whether worker entitlement funds can continue to provide safety training and wellbeing services, such as suicide prevention support, mental health, and drug and alcohol counselling.

We are concerned about the construction of this bill. These are significant issues. If the government's intention is to stop unions or, indeed, employers from being part of providing these types of services to workers, then we cannot support that proposition. There are too many questions yet to be answered, as I said from the outset, about the details of the bill for Labor to give it support, even qualified support. And, as I also said earlier, I did receive a department briefing. I do appreciate the speed with which the department, with the cooperation of the minister's office I should add, were able to brief me on the bill; however, there were a lot of questions taken on notice. There were a lot of questions—more questions sometimes than answers, which is understandable given the breadth and depth of the bill—and so we are awaiting further information, which I'm sure the department are dutifully considering and I'm sure they will return to us with those answers.

For the record, some of the issues we are concerned about include how do the regulations this bill imposes on registered organisations compare to the regulations in place for corporations? I think that is a very important point. The rhetoric of the government often is that we need to make sure there's a comparable set of arrangements for publicly listed companies on the one hand and registered organisations on the other. They're very different legal personalities, they're very different beasts, but that's the argument put by the government. That's why I never fully understood why the government didn't support Labor's reforms to this area and say that you don't need to establish a registered organisation commission, which I'm sure will have the minister interfering with it every week. I'm sure we'll see more of that soon. That will come to light.

We believe that allegations of serious breaches by officers of registered organisations should be dealt with by ASIC. If you believe that companies and registered organisations should be treated the same or similarly, then surely you would use the same regulator, with a history of regulating such matters and with the capacity to prevent interference by a very interfering minister? ASIC is big enough and ugly enough to resist those interventions by the minister and by this government, who would want to use the Registered Organisations Commission in the same way that they've used the ABCC, which is as their vehicle to attack their political opponents. Strangely enough, I think, whilst they argued that they wanted to treat organisations like corporations, it was Labor who suggested that we actually have ASIC as the regulator, but that was not accepted.

Another question in relation to the bill is: is this bill another layer of regulation over and above what applies already under legislation, such as the Fringe Benefits Tax Assessment Act and the Corporations Act? How do the proposed deregistration schemes compare to what is in place for managed investment schemes? We're particularly concerned that the minister will have the power to flesh out the details of this new regulatory scheme via regulation. We're concerned that we don't know whether in fact there are comparable regulations for corporations, vis-a-vis registered organisations. I think that's an important point given the rhetoric of the government. We think that there is a series of things that we need to do. We're most concerned that the very good work that these funds undertake would be adversely affected by such legislation.

The reason we question the motives of the government is because it spends all of its time obsessing about overregulating, interfering with and attacking unions in this country. A week doesn't seem to go by that we don't have the government introduce another bill in this place seeking to intervene further into the conduct of unions and employer bodies. Employer bodies just happen to be the collateral damage. They're quite happy to damage employer bodies if they can get to the unions. That's what they do; that's their obsession. We saw that with the integrity bill that was introduced some weeks ago, which would have devastating effects upon unions. And we now see that there's another attempt to regulate. We want to make sure that the changes proposed in this bill are in the public interest. We want to make sure that the government, in its attempt to attack unions, doesn't end up damaging the rights of working people.

We do know that the government is very happy to see working people exposed. We do know, through their own history, that the Liberal Party are the party of Work Choices. They may have learned something since then; they know now to start by attacking unions rather than immediately and directly ripping off conditions of employment for workers in this country, as Work Choices did. That is something that the current Prime Minister supported and advanced. And so their relentless assault on unions just goes on uninterrupted, and that's why we have to question the motives behind this legislation.

It's also why we moved this second reading amendment. We moved the second reading amendment to make very clear that Labor has not given up supporting workers in this country and the more than 700,000 workers who are going to see their wages fall in real terms as a result of the penalty rates decision. Already on 1 July this year, retail and hospitality workers' wages have been cut, with the support of the Prime Minister and this government. They have backed this position and have refused to support the private member's bill moved by the Leader of the Opposition to prevent the effects of that happening.

We have a situation in this country where wages are falling in real terms, and that's being compounded by a government decision to support the Fair Work Commission decision that will cut real wages to some of the lowest-paid workers in this country. There are thousands of workers in every electorate across this country; every member of this place represents workers whose wages are falling in real terms, and it's being supported by a government which had the opportunity to support our legislation and to stop the immediate effect of that decision, not only for this year but for next year and 2019 and 2020. These workers will not get a pay increase for four years, because they're getting pay cuts for four years as a result of the decision that has arisen out of the Fair Work Commission.

At a time when wage growth is at its lowest in a generation, this Prime Minister has presided over the lowest wage growth in living memory, and yet he supports tax increases for low- and middle-income earners, he supports tax cuts for multinationals and millionaires and he supports penalty rate cuts for some of the lowest paid workers in this country. The Prime Minister has no regard for these workers. He has no empathy, because he does not understand. He does not understand the struggle that they have to make ends meet and to pay the bills that they need to pay. He has no idea.

Mr Fitzgibbon interjecting—

The member for Hunter's right: the Prime Minister has no idea what's going on in the real world. That's why he supports tax increases for low- and middle-income earners and penalty rate cuts for some of the lowest paid in this country. At a time when he's presiding over low wage growth, he's got the temerity and arrogance to think it's fair that some of the hardworking low-paid workers in this country should take a pay cut.

Well, that's not what Labor believes. We don't believe that at all. We believe that, at a time when wage growth is falling, you don't increase taxes on low- and middle-income earners. You do not put up their taxes, which is exactly what the Treasurer and the Prime Minister are seeking to do, and you don't support a decision to put a hand in the workers' pockets and take out their wage, which is effectively what's happening with the government supporting the Fair Work decision and not supporting the private member's bill that was moved by the Leader of the Opposition. While the government is obsessed with attacking unions in this country, attacking industry superannuation funds, attacking working people generally and supporting a penalty rate cut decision, Labor will continue to defend workers in this country. We will defend workers in this country. We will change the laws to make sure that people are not unfairly treated at work. We'll make sure that they get their fair share.

We heard the Treasurer only today change his language. Apparently now he's into inclusive growth. He wants to have inclusive growth. He can barely say the phrase 'inclusive growth'. You can't just say 'inclusive growth'; you've got to mean it when you say 'inclusive growth', and when you say it you've got to have policies that sit below it. You have to have something that makes sense and is consistent with that phrase. What he has done is go to a focus group which has said: 'Look, you've got to say "fair" more often, and to other people, to the commentators, you've got to use the phrase "inclusive growth". It ought to go down well if you say it, because the IMF, the OECD and the World Bank say it now, so why don't we say it now?'

The problem is that none of their policies are consistent with the proposition that they believe in inclusive growth. The government are saying one thing and doing another. The Treasurer's standing up today and saying, 'We support inclusive growth,' as he supports tax increases for low- and middle-income earners. The Treasurer's standing up today and saying 'inclusive growth' as he supports a decision that will take money out of the pockets of retail workers and hospitality workers. The government, the Prime Minister and the Treasurer say they believe in fairness and inclusive growth, and yet they want to give the biggest tax cuts we've seen to multinational companies, to the big end of town, and tax increases for people earning over $21,000 a year. What sort of joke is this? Do they really think the Australian people are mugs to believe that's even possible? They must, because I tell you: it is a contemptuous thing to say one thing and do the direct opposite, but that's exactly what this government's doing.

They are obsessed with unions, interfering with organised labour and supporting decisions that are hurting retail and hospitality workers. They say they can't oppose the decision because it's the umpire. Well, quite frankly, they were willing to abolish the Road Safety Remuneration Tribunal as an umpire when they didn't like truck drivers' wages going up. This time they won't intervene, because it's allowing retail and hospitality wages to go down. So it is hypocrisy on the part of the government and the Prime Minister to suggest that they could not have supported Labor. Of course, we should not be surprised. This is the Liberal Party. This is the party of Work Choices. This is the party that has always had a callous disregard for working people in this country and the difficulties that they might confront at times when wage growth is at its lowest in a generation.

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

Is the amendment seconded?

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

I second the amendment and reserve my right to speak.

Debate adjourned.

Ordered that the resumption of the debate be made an order of the day for a later hour.