Christopher Back (WA, Liberal Party) Share this | Hansard source

I am sure that Senator Farrell himself stands as testament to the fact that competition is far and away the best outcome for employees, for employers and for those who provide the services.

As has been said in the last few minutes, the MySuper legislation has passed through this place this week. And yet, perversely, we are not going to see the full allowance of competition in superannuation finding its way into this legislation proposed today. Indeed, it should. There were circumstances put to us the other night that there will be instances with some small employers where there will only be a choice of two and up to a maximum of 10. I ask: if an insurer is fully compliant under the MySuper provisions, why should the full range of competition not be available so that employers and employees alike can benefit from those superannuation provisions? I see no reason for it; no logic has been presented and, of course, we know that it has been roundly argued and disputed, including by those who appeared as witnesses.

Incidentally, the superannuation industry were denied the opportunity. So in the hearing the other night, it was only the Australian Chamber of Commerce and Industry and the Australian Mining and Metals Association that were able to contribute to that discussion on their behalf. But openness, transparency and the full competitive process should be the guidance by which this legislation goes through. I look forward to support from all sides of the chamber to ensure that full competition does find its way, and so the flawed legislation may be a little less flawed at the end of it.

The Financial Services Council said:

We believe the market structure proposed in this Bill for default super/MySuper will limit competition in the $1.4 trillion superannuation industry and result in reduced fee pressure and innovation for consumers.

There are the two characteristics, the two indicators: reduced fee pressure and innovation. And who might be the winners? Of course, we all know: the union-dominated super funds. That is not acceptable. As we know from the OECD, all OECD countries fundamentally rely on competition in product markets to organise production. Those are the justifications for the reason we must proceed.

I turn to the Fair Work review itself. Whilst I do not want to go back at great length, I could be reminded of Mr Rudd's comments about not stacking with endless tribes of trade union officials or ex-trade union officials, or indeed those sympathetic only to one side of the political process. But we know that in December last year Minister Shorten announced the details of the review of the Fair Work Act. In doing so, he was at a position where two things at fault happened: the first was in his choice of those who were to do the review, and the second was the very, very limited scope which he gave those people. Indeed, he insulted them; he insulted their professionalism in so limiting them.

As it is known, the coalition has flagged its general support for the review. But look at those reviewers—Professor Ron McCallum, Dr John Edwards and the Hon. Michael Moore. As I said, they were given skewed and limited terms of reference. In fact, I think we used the analogy from the situation of a horse on a race track; that is, with their blinkers on. The terms of reference failed to address the essential ingredients of productivity, flexibility and union militancy. Those areas were deliberately denied the reviewers. You have to ask why that could be the case in the first review.

Because I have introduced it into the written report, I do not propose to comment adversely on the participants themselves, except to say that they could hardly, at least in two cases, have been regarded as fully independent in terms of what they have said or written in the past about the process, and except to say that Professor McCallum raged against the use of the corporations power by the coalition when in government, but he has been strangely silent on its use under the Fair Work Act. In these circumstances an opportunity was lost—an opportunity to look at productivity, flexibility and union militancy. And this bill will be the poorer because of it.

If I may turn to the question of productivity, I will quote a Western Australian colleague, Michael Chaney. Chaney chairs Woodside Petroleum, he chairs the National Australia Bank, and he was the chief executive of WesFarmers when he took that organisation into ownership of Bunnings and when he extended the WesFarmers organisation considerably. As we know, under his successor, Richard Goyder, that organisation has gone further and taken over Coles. He is the sort of person one would listen to—the sort of person who has created the employment opportunities around this nation that everybody so proudly trumps as their own. It is the Michael Chaneys of this world who are the ones who are the champions when it comes to creating long-term, high-quality, high-value employment. What is Chaney saying? I quote:

Australia will find it difficult to achieve meaningful economic growth without boosting productivity through micro-economic reform.

'Labour market reform urgently needed,' says Chaney:

I'm concerned that if we don't manage to lift our productivity, we are going to find it very difficult to achieve any real economic growth.

He was talking about high terms of trade, high levels of investment up to now, strong population and workforce growth.

This is not the sort of the man who ought to be ignored. He should not have been ignored by Minister Shorten. Nor should the review panellists have been denied the opportunity to actually examine some of these issues.

It goes, of course, to the fact that we asked the department during the inquiry about two key performance indicators. We asked about productivity, especially as measured through work days lost due to industrial action, and it was not possible in the committee hearing to learn of any improvements in productivity as a result of the Fair Work Act coming into existence. At a time when Europe is in its demise and when so many countries in Europe would be bankrupt if they were companies, at a time when the United States of America is looking very, very jaded in terms of its economic outlook, and at a time when even China—that powerhouse that has kept Australia alive and its head above water over the last few years—is now looking at a downturn, it is an opportunity lost that this review did not address itself to those issues associated with productivity improvement and union militancy.

The issue of the vice-presidents of Fair Work Australia has been canvassed here this afternoon. As was said a few moments ago, it was originally the view that there was a no-cost implication to this particular legislation. Of course, when I asked the representative from the department, he concurred with me that there was an estimated $1.5 million of added cost as a result of this introduction. Senior Deputy President Kaufman wrote to the President, Iain Ross, recently, questioning the need for two new vice-president positions, saying that it was reintroducing a level of seniority at the tribunal that was removed under the Fair Work Act in 2009. Senior Deputy Presidents Watson and Richards have written to Justice Ross of their concerns that the government will use the opportunity to install government-friendly appointees. The review panel themselves were not of a view that there should be new appointees.

A commitment was given to us in the hearing the other night that this process would be open and transparent and that there would be advertisement undertaken. The officer said to me, 'No, the department has not given any advice to the minister and, as far as the department is aware, the minister has not started the process because he wants it to be seen to be as at arms-length.' Let us work out into the future whether that is the case. It was Mr Knott from AMMA who, appearing before us, said:

I think this does give the opportunity … to really damage the independence or the perceived independence and impartiality of the tribunal. We have senior appointments made to the tribunal which, through the political cycle—there are people who are appointed by one side who may not be appointed by another side, but that is the way it goes over the fullness of time in the political cycle.

And, as Senator Abetz quoted from the submission of the Law Council of Australia:

As a general principle, once a person has been appointed to sit on a Court or independent Tribunal with designated powers and privileges, any change that would have the effect of removing or reducing that particular person’s powers or privileges while not affecting the powers and privileges of other Members of that Tribunal—

and this is the key point—

has a tendency to undermine the independence of the Court or Tribunal.

These are very important points. They go to amendments that will be debated later in this place, and I look forward to there being agreement based on those concerns of very, very diverse and independent people.

There has been discussion of the term 'the Fair Work Commission'. We know that the panel recommended that there be a change, that the words 'fair work' be removed. I believe the MUA recommended a change. AMMA and other employer based groups have recommended that there be a change, and it will be the recommendation of the coalition that the term 'the Australian Workplace Relations Commission' or similar becomes the title. It is interesting that the most simple of the panel's recommendations, being the change from Fair Work Australia to something akin to the Australian Workplace Relations Commission, has been rejected by the Labor government, despite its support from a broad sector, including the President of Fair Work Australia, the Law Council, the maritime workers union, the Australian Chamber of Commerce and Industry, and the Australian Mines and Metals Association. They have all recommended the change but we know, of course, that it is Prime Minister Gillard, whose quotes I commenced my contribution with, who is the one who has demanded that we continue that circumstance.

There were opportunities lost in this review. Senator McKenzie mentioned the case of Barclay v Bendigo TAFE. It was the High Court which came down with its adjudication and decision in this area. There were recommendations that could indeed have found their way into these changes we are talking about today. It is most interesting that Justice Heydon of the High Court said in his judgement, speaking about the intervention by the responsible minister, Minister Shorten:

… the Minister's stance before and during the oral hearing was not that of an intervener, but that of a partisan. For example, some of the Minister's oral submissions were directed to factual material. This is hardly the province of an intervener.

What a damning statement about the minister responsible for this portfolio.

'This is hardly the province of an intervener'—I would certainly not want that said about me.

Recommendation 47 of the review panel, which time prevents me from reading out, went to the very points of Barclay v Bendigo. The other one of course was the full Federal Court in JJ Richards and, again, the review panel itself made recommendations to deal with that inequity, which of course played its way out through the courts, and, again, at the direction of the minister, this also failed to find its way into the recommendations. I commend the amendments that we are to deal with and I certainly do not like the text of the bill.