Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

I move:

That the Workplace Relations Regulations 2006, as contained in Select Legislative Instrument 2006 No. 52 and made under the Workplace Relations Act 1996 and the Workplace Relations Amendment (Work Choices) Act 2005, be disallowed.

It will come as no surprise that Labor opposes these regulations just as we oppose the legislation that they sit under. These regulations give effect to much of the government’s extreme industrial relations changes. Over the weeks and months since the government’s extreme changes have been in place, we have started to see the effect on Australian workers and their families. These regulations followed the proclamation of the government’s legislation. They were dropped late in the afternoon of Friday, 17 March. It was only later over the course of that weekend that the government sneakily published these regulations with the Minister for Employment and Workplace Relations finally publicly drawing attention to them on the Sunday, which happened to be the same afternoon that the Commonwealth Games women’s marathon was determined.

Those regulations and their related explanatory materials bring the government’s so-called single system and simplified legislation to a total of more than 1,800 pages—1,252 pages of legislation and explanatory materials and 592 pages of regulations and supplementary materials. This is their so-called single, simplified system. It is more than 1,800 pages of complexity and complication that Australian business, Australian industry, small business and employees had to come to grips with with less than a week before it came into effect on 27 March. Like everything with this government and industrial relations, the devil is in the detail, and with more than 1,800 pages of complexity and complication there is a lot of detail—and there is a lot that Labor opposes.

I want to first talk about the issue of prohibited content. This is probably the area where the extent to which the government is willing to go to impose its extreme and radical agenda on Australian workers and their families is most clearly shown. The prohibited content provisions, apart from their philosophy being problematic, are extraordinarily complex. They alone are enough to make a sick joke of the claimed simpler, fairer tag line that this government continues to use to promote its radical changes in industrial relations. The regulations in relation to prohibited content are nothing but a crass and overt reduction of the bargaining power of employees in the workplace.

Given that this government trumpets the freedom of the individual and the freedom of contract as the basis of the way they wish to move forward in industrial relations, it is extraordinary that they are imposing through legislation and regulations such powers on a single person, the minister for workplace relations, to intervene in the negotiations between employees and employers so as to ensure certain things cannot be discussed, cannot be included, and that certain rights cannot be agreed to be given to employees. The prohibited content regulations severely restrict legitimate workplace-bargaining activity. They severely restrict what can legitimately be negotiated between employees and employers. In particular, they limit the capacity of trade unions in the workplace to act as the legitimate and chosen representative of employees, even if those employees wish that to be the case.

Let us go through some of the prohibited content in agreements which will be defined as such as a result of the regulations: deductions from wages of union dues or the provision of payroll deduction facilities for union dues; leave to attend training provided by a trade union, even if it is occupational health and safety training; paid leave to attend meetings conducted by or made up of trade union members; the renegotiation of a workplace agreement; the rights of an organisation of employers or employees to participate in or represent an employer or employee bound by the agreement in whole or part of a dispute-settling procedure unless the organisation is the representative of the employer’s or employee’s choice; right of entry; and the provision of information about employees bound by the agreement to a trade union or a member acting in a representative capacity unless provision of that information is required or authorised by law.

However, the prohibited content provisions do not just limit themselves to restricting the activities of unions as representatives in the workplace. They also extend to ensuring that workers in this country do not have access, if they are with an employer of less than 100 employees, to remedies for unfair dismissal, even if, as I indicated, this is agreed between employer and employee. This government is so worried about employees in this country being able to challenge a dismissal that is unfair that not only are they content to remove it from the legislation but they actually want to prohibit such rights being included in an agreement.

Regulation 2.8.5 contains the following:

A term of a workplace agreement is prohibited content to the extent that it confers a right or remedy in relation to the termination of employment of an employee bound by the agreement for a reason that is harsh, unjust or unreasonable.

Just to make sure employers and employees do not seek to have these matters included in an agreement, this government is imposing a penalty for breaching the prohibited content regulations. In effect this means that, if an employer or employee seeks to have an unfair dismissal provision in the agreement, they can be hit with a $6,000 fine. If a union seeks a similar provision, the union can be hit with a $33,000 fine. If this is not bad enough, schedules 4 and 5 of the regulations ensure that the minister will now have a direct role in the oversight of every agreement made in the country. Through schedule 4, the Australian Industrial Relations Commission is required to provide to the minister detailed information, including relevant documents, names of parties, individuals and organisations et cetera, in relation to agreements.

Schedule 5 is similarly heavy-handed. It provides that the Office of the Employment Advocate provide to the minister information and copies of documents that relate to employment relationships. According to schedule 5, the minister is now to receive copies of agreements, variations to agreements and orders terminating agreements, all within three weeks of the making of the variation or the making of the agreement. As well, detailed information about agreements, including the title, number of the agreement, date of lodgment, description of the work undertaken and the names and addresses of the business to which the agreement applies, are now all to be supplied to the minister. Just what this is trying to achieve on a practical level is unclear. But one thing is clear—that is, that the government wants a direct and interventionist role by the minister in the operation of each and every workplace across the nation. This is direct interference by the minister and his office, and such direct interference by the minister and his office into the content of individual agreements is an appallingly bad example of public policy. The decision to give this minister or any minister executive power over what can and cannot be included in the agreements through prohibited content is extraordinarily bad policy.

I want to return to the issue of transitional arrangements. This is an area where the complexity of the government’s legislation, frankly, is quite breathtaking. This government has made a complete jurisdictional dog’s breakfast of its so-called single industrial relations system. Whilst the High Court will clearly determine the jurisdictional coverage of Work Choices, even by the government’s own admission only up to 85 per cent of the country’s workforce will potentially be covered by the government’s changes. That will mean that around 1.5 million employees will remain outside the jurisdictional coverage of the government’s changes. Irrespective of the High Court’s outcome, which could in fact reduce the number of people potentially covered by the government’s changes, all this will mean is more incomplete and more inconsistent coverage across the nation’s workplaces. The process of moving state awards and agreements to the federal jurisdiction is so complex that, frankly, many employers and employees will be unsure precisely what their rights and responsibilities are. But that is not stopping this government. The regulations confirm this government is intent on overturning the states’ recent attempts to preserve the pay and conditions of employees under state industrial relations systems.

The issue of part heard matters, which was an issue raised by Labor on a number of occasions in the committee discussion on this bill, is no clearer either. The transitional provisions provide that part heard dispute matters before the commission either lapse entirely or at least lapse in relation to employers defined under the act as corporations. However, appeals against awards and orders can continue as per the old state industrial system, while part heard equal remuneration applications are to be heard under the government’s new provisions. This will be a field day for the lawyers.

Despite all this complexity and confusion, the government simply keeps claiming that all these changes—all 1,800 pages of complete legislation and associated explanations—are necessary for the continued economic health of our nation. Let us look at precisely what we do know about Work Choices. Let us look at what the Office of the Employment Advocate has told us. Of the 6,263 Australian workplace agreements lodged since Work Choices commenced on 27 March, this is what it can tell us about what is contained in them: 100 per cent excluded at least one protected award condition, 64 per cent removed leave loadings, 63 per cent removed penalty rates, 52 per cent removed shift work loadings, 40 per cent lost gazetted public holidays and 16 per cent excluded all award conditions and replaced them with the government’s legislated minimum standards. We already know what the impact of Work Choices is. It is clear from the government’s own figures and its own data from the Office of the Employment Advocate. These are figures and statistics which confirm exactly what Labor has been saying all along: that the agenda behind this so-called Work Choices, this radical industrial relations agenda, is the driving down of the wages and conditions of Australian workers and their families.

Sixty-three per cent of AWAs removed penalty rates. This government may be so out of touch it does not realise this: there are a great many families which rely on penalty rates, overtime and shift loadings in order to meet their financial requirements. That is what many people rely on to make sure ends meet. Under your system, the vast majority so far of Australian workplace agreements exclude penalty rates and remove leave loadings. We heard the minister today in question time using some very dodgy statistics in which he included managerial employees. I invite him to correct the record and tell us what the ABS actually says about the experience of non-managerial employees. Take managerial employees out of the equation and have a look at what the AWAs deliver. Have a look at what Australian workplace agreements deliver for women. Women on AWAs will receive 11 per cent less than those women on registered agreements. That is how much less Australian women are going to be paid as a result of this government’s extreme agenda.

You do not have to believe me and you do not have to believe your own figures from the Office of the Employment Advocate. Let us look at what Freehills have said. Anybody who has hung around the Senate estimates knows that this is a law firm that this government uses a lot. It is certainly not a law firm you would regard as a Labor law firm. What do Freehills say? This is their snapshot of the current arrangements: average annual wage increases in June 2004-05 in agreements generally, four per cent; union collective agreements, 4.3 per cent; and AWAs, 2.5 per cent. Looking at the 2004-05 figures, which is before this government’s extreme agenda actually got going, you will see that even Freehills say that essentially workers are better off when they are on collective agreements, much better off when they are on union collective agreements and far worse off when they are on AWAs.

What we know about this government’s extreme agenda is this: workers in Australia are being asked to trade away shift penalties, overtime rates and rostering certainty for the princely sum of 2c an hour. That is this government’s great economic contribution through the Work Choices legislation. The choice for Australian workers is that they have to give up their penalty rates, their overtime, their shift loadings and rostering certainty for the princely sum of 2c an hour. We will see between now and the next election how many more Australian workers will be put in that position and will face the fate of the Spotlight employees, which has been publicised in recent times.

The fact is this government has long held an ambition to reduce the minimum wage. It appears to be the government’s view—and this is consistent with the position that the Prime Minister and his ministers have been taking—that, if you reduce the minimum wage in real terms, this will lead to an increase in employment, particularly at the lower end of the scale. The reality is, had the government got its way and had each of its submissions to the Industrial Relations Commission from 1997 to 2005 accepted, there would have been a cut in real terms of over 1½ per cent to the minimum wage: $50 a week, or over $2,500 a year, less than the current minimum wage. That is the government’s actual position when it comes to those Australians who struggle on minimum wages.

The government has not been content with simply making submissions to the Industrial Relations Commission. Through its Work Choices legislation, it is imposing the so-called Fair Pay Commission—probably better known as the low-pay commission—which will have legislative parameters that are clearly designed to keep downward pressure on the minimum wage. Unlike the Industrial Relations Commission, this new unfair pay commission is not required to take into account ‘the need to provide fair minimum standards for employees in the context of living standards generally prevailing in the Australian community’. Who can forget the government voting against an amendment moved by the opposition during the Work Choices debate because they did not want the word ‘fair’ in the legislative parameters for the Fair Pay Commission. They voted against making sure that the Fair Pay Commission’s job was governed, at least in part, by a notion of fairness.

How can you have a Fair Pay Commission when you do not even have the courage to include fairness in the legislative parameters? You voted against Work Choices having fairness in the legislative parameters because you do not want a fair minimum wage—that is not what you want. If you did want it, you would not have voted against fairness being one of the criteria that this commission has to have regard to when setting the minimum wage. Essentially, the principle of fairness has been stripped from consideration of the level of the minimum wage, as has the question of living standards generally.

I want to briefly talk, in the time remaining, about the government’s assertion that this is the way forward for the Australian economy. The way forward is the 2c an hour that a number of Australians have already faced. The way forward is no rights with regard to unfair dismissal for many millions of Australian workers. The government’s assertion that higher minimum wage levels inevitably lead to higher levels of unemployment simply does not stack up.

Let us have a look at some of the overseas examples: Denmark, Iceland, Norway and Sweden all have lower levels of unemployment than Australia despite the fact they have so-called high levels of employment protection. They are also ranked as more competitive than Australia by the World Economic Forum’s global competitiveness ranking and, on OECD figures, they all have higher productivity levels compared to Australia. And in the United States, the economic pin-up model of the government, the experience over the past five years has seen jobs growth rise by only 2.9 per cent while the minimum wage, in real terms, has fallen by 12 per cent.

If we now look to the budget papers, it is pretty clear that the government is even expecting employment growth to fall over the forward estimates period. These regulations are just more bad news for Australian employees and Australian workplaces. The government’s approach underlines the true nature of its agenda and its legislation—an ideological removal of choice. The government simply does not trust employers and employees to reach the most appropriate agreement for their circumstances. The government only wants them to reach an agreement with which the government is happy. That is what this legislation does: it is all about ministerial intervention; it is all about prohibited content; and it is all about the government imposing its view and its will on Australian employees and Australian workplaces. The government only wants people to reach the agreement that the government is happy with.

The government’s assertion that these changes will fix all the economic problems Australia faces is not just simplistic; it ignores the real drivers of productivity in our economy: the knowledge and skills of our workforce, the adequacy of our infrastructure and the ability of industry to meet emerging pressures through innovation. As a nation, we will not be internationally competitive and achieve sustained high levels of growth off the back of reducing wages and stripping conditions. Two cents an hour is not the way forward for the Australian economy. Unfortunately, the government simply does not get this. The government simply does not comprehend that down the path they choose lies a low-skill, low-pay and low-productivity economy that ignores the long-term requirements for a prosperous Australia.

What Australia needs is policies which are about building an economy that is productive and internationally competitive. And Australia needs a government that will do that while ensuring that the working conditions of Australian employees are fair. Everybody knows what this government wants. It wants Australian employers to be able to require their employees to give away all of their entitlements: give away your leave loading, give away your rostering certainty, give away your penalty rates, give away your overtime for 2c an hour. (Time expired)

Eric Abetz (Tasmania, Liberal Party, Minister for Fisheries, Forestry and Conservation) Share this | Link to this | Hansard source

The government opposes the motion. We were just told that the government is seeking to impose its will in relation to these matters and what the government wants in this debate. Let me confess right up front that the government does want to impose its will—its will that there be more people in jobs, that people have higher wages, that people have more flexibility in their employment situation and that there be more family-friendly provisions in workplace agreements that are entered into.

As with every significant reform that has been undertaken over the past decade, the Australian Labor Party have stood in the way. Each and every time they have said: ‘It will create an economic Armageddon. People will be thrown onto the unemployment scrap heap. People will be worse off.’ They said it about GST. They said it about our first wave of industrial relations reform. They said it about waterfront reform. They said it about welfare reform.

But of course, each and every time, the exact opposite has occurred. Unemployment has decreased. Real wages have increased. Unlike the situation under Labor which had one million of our fellow Australians on the unemployment scrap heap, we are now down below five per cent unemployment for the first time in three decades. Also over Labor’s 13 years in government real wages increased by—what was it?—1.2 or 1.3 per cent, compared to our 10-year period where real wages have increased by well over 10 per cent. In fact, 16 to 17 per cent is the figure. The workers of Australia know this, and that is why the workers of Australia have continued, very kindly, to support the Howard government: they realise and understand that our policies are designed to assist them in their aspirational approach to life.

Nowadays, not even one-quarter of the workforce are members of the trade union movement; it is about 20 per cent. The Labor Party are still stuck in the rut of representing those workers who are members of trade unions, as they should, and we of course seek to represent those workers as well. But we also listen to the other 80 per cent of workers who have made a conscious choice not to be members of the trade union movement. Unlike the Labor Party, who exclude the 80 per cent of workers who are not members of a trade union, we actually embrace them, we listen to them and we encourage them to fulfil their aspirations.

Yes, there are 1,800 pages to these regulations and yes, there is some complexity in this legislation. But Senator Wong knows full well and the Australian Labor Party know full well that under the former regime, with all the different state government legislation on top of the federal legislation, together with all the awards, you would have had hundreds of thousands of pages to deal with, not the hundreds of pages that we are dealing with now.

Mr Acting Deputy President, you will recall, as will others in this chamber, that when the Work Choices bill was being debated in this place—for 23 hours, I think, in the House of Representatives and for 32 hours in the Senate chamber; hours and hours of debate—there were these gross predictions that, as of 27 March, when the Work Choices legislation came into being, there would be wholesale sackings all around the country, the unemployment rate would go up and we would have a veritable economic Armageddon. Well, what has happened in the two months since Work Choices came in? After having hovered between five and 5.3 per cent for 20 months, the unemployment rate, according to Labor and union predictions, should have spiked up to 5.5 or six per cent. What did the unemployment figures do? They in fact went down to 4.9 per cent. The reason the unemployment rate actually went down was that, in the month of April, 22,000 new full-time jobs were created and, in the month of May, 55,000 new full-time jobs were created. Their predictions were wrong. Will they apologise to the Australian people and the workers that they sought to spook? Of course they will not. They did not do it on waterfront reform, they did not do it on industrial reform, they did not do it on GST reform, so why should they do it on this occasion?

Senator Wong told us that the minister could ‘interfere’ in relation to certain aspects of workplace relations. That is quite right: he can under this legislation. But this is where the dishonesty comes into this debate, because the power of intervention that is part of sections 102 and 103 of the Workplace Relations Act as amended is a replication of sections 43 and 44 as they used to be. There was no mention of that—no mention that this was simply a replication of that which existed before. It is another case of the Australian Labor Party being willing to say anything and do anything to run a scare campaign.

We are also told about prohibited content in agreements. This is very dangerous ground, I would have thought, for Senator Wong to traverse. She was humiliated at the Senate Employment, Workplace Relations and Education Legislation Committee budget estimates hearing when she asserted as fact that occupational health and safety training by trade unions would be banned. Mr Smythe, senior legal counsel—who is now off to the International Labour Organisation because he is so highly regarded—had to disabuse her of that view time and again until she finally got it, and then she said, ‘Well, can you understand why workers are confused?’ I will tell you why some workers in the community are confused: because people like Senator Wong have gone around the community peddling the misinformation that she has now unwittingly put on the Hansard record for all to see and read, when of course she was wrong. That is why she did not pursue that line today in this debate. She was very foolish to have even reminded me and others of it.

In relation to occupational health and safety, a matter of great concern to every Australian, whose jurisdiction is it? Everybody knows, or should know, that it falls fairly and squarely within the jurisdiction of the states and territories. Yet it did not stop the flip-flopping Mr Beazley from trying to make cheap political capital from the Beaconsfield mine tragedy when he was in Brisbane by suggesting that it might not have occurred if trade union training had been allowed, knowing full well that—well, chances are he did not know. I do not think he knew. And that is the problem with Mr Beazley: he will say anything at any time if it suits him. Having said that, just to make the point, let us have a look at what he has been saying about Australian workplace agreements. Here you see Mr Flip-flop in action, par excellence. On 4 July 2005, the Age newspaper reported that Mr Beazley said:

I dislike AWAs but—

listen to this—

there’s always been individual contracts ... and huge numbers of Australian workers have signed up to that.

Well, I can understand he dislikes AWAs, but I fully agree with him that there have always been individual contracts and a huge number of Australian workers have signed up to them—in fact, over 500,000 have.

Some 26 days later, on 30 July, he told another newspaper, the Australian:

We are going to abolish the capacity of AWAs to undermine collective awards. We are going to weight the balance of this in favour of collective agreements …

Then, on 2 August, to the Australian Financial Review, there was another version:

What I’m saying on AWAs is that nobody is going to bother with them once they are not in a position to.

Then, three days later:

But Mr Beazley argued that while unions wanted to ‘destroy’ AWAs, he wanted to ‘strangle’ them.

How hairy chested can you get? He wanted to strangle them! But then on 9 October, on the Sunday program, Mr Oakes asked Mr Beazley:

So you no longer subscribe to the policy Labor took to the last election, which was effectively to abolish AWAs?

Mr Beazley replied:

I subscribe to what I just said. There’ll be a million of those things in place when we come into office, and you can’t wander round cancelling contracts.

I would say ‘amen’ to that. It was one of those rare, lucid moments in Mr Beazley’s involvement in the IR debate. ‘You can’t wander around cancelling contracts’—I fully agree with him. Yet what did he say on 11 June to the New South Wales state Labor conference, without consultation with the caucus or with his shadow minister? He said:

So today delegates I announce that a Beazley Labor government will abolish John Howard’s Australian Workplace Agreements.

Remember those contracts that you could not go around the country ripping up? All of a sudden you can go around ripping them up. Why is that? Because Mr Beazley did yet another flip-flop.

We were told by Senator Wong about penalty rates, and how evil it was that penalty rates could be removed. Can I say this: they can only be removed by agreement with the workers.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

Senator Marshall interjecting—

Eric Abetz (Tasmania, Liberal Party, Minister for Fisheries, Forestry and Conservation) Share this | Link to this | Hansard source

And some old union official across the chamber laughs and scoffs! Allow me to quote this to the honourable senator:

The result is that most employees in Australia are not paid penalty rates, but are paid more than the base wage. Even though unions don’t like to admit it, many have been involved in these agreements.

I remind honourable senators of the date here: 1991, which was some five years—half a decade—before John Howard was elected to government. It continues:

In 1991 I helped negotiate an agreement with—

wait for it!—

the Shop Assistants Union in South Australia to get rid of the 25 per cent late night penalty rate, the 30 per cent night shift penalty rate, the 25 per cent Saturday morning penalty rate and the 50 per cent Saturday afternoon overtime rate, in exchange for a payment of 5.25 per cent on the weekly wage. It was an agreement that worked well …

In other words, if unions can negotiate away penalty rates that is okay; but how dare individual workers ever think about doing that without the imprimatur of the paternalistic trade union movement!

Annette Hurley (SA, Australian Labor Party, Shadow Minister for Citizenship and Multicultural Affairs) Share this | Link to this | Hansard source

That was enterprise bargaining. It was the union, not some hapless shop assistant. I bet it was for more than 2c an hour.

George Brandis (Queensland, Liberal Party) Share this | Link to this | Hansard source

Order! Senator Hurley, you are out of order. The minister will be heard in silence.

Eric Abetz (Tasmania, Liberal Party, Minister for Fisheries, Forestry and Conservation) Share this | Link to this | Hansard source

And the person goes on to say:

It was an agreement that worked well even though some casual employees at the time lost more money in penalty rates than they gained in base salary.

Some workers were even worse off, and the trade union movement sanctioned it, five years before John Howard was elected to government. And yet they run around this country suggesting that this is somehow an extreme agenda, when the trade union movement itself negotiated these sorts of agreements because it knew that the workplace was changing and people’s habits were changing. The article continues:

So long as penalty rates can’t be taken off people against their will, the fact that penalty rates don’t have to be paid or equivalently cashed out in every situation is fair, and will help create more jobs.

Why did they do this? Because in this day and age employing people on Saturday afternoons or on late-night trading is hardly strange or unsociable, especially where the employee is, say, a university student for whom those hours are actually preferred.

So a case is made out that Australian workplace agreements trade off penalty rates—and they may well do. Of course, what Senator Wong told us about aspects of the Australian workplace agreements was only half the story. Yes, conditions were traded off, but she did not tell us about the increase in wages, the increase in family-friendly provisions and all the other benefits in those agreements.

Glenn Sterle (WA, Australian Labor Party) Share this | Link to this | Hansard source

I sat in Senate estimates and I did not hear much about the benefits.

The Acting Deputy President:

Order! Senator Sterle, you are out of order. The minister will be heard in silence.

Eric Abetz (Tasmania, Liberal Party, Minister for Fisheries, Forestry and Conservation) Share this | Link to this | Hansard source

On these statistics, I will repeat what I said at Senate estimates: statistics are a bit like skimpy bathers—what they show is interesting; what they hide is vital. But might I say that in Senator Sterle’s case I doubt whether it would be either interesting or vital. But, that aside, you can make the statistics say what you want and you can say penalty rates were taken away. But there were wage increases in lieu, and to only paint half the picture is to tell a falsehood to the Australian people.

We also got the hoary old argument that we had removed fairness from the legislation—that the word ‘fair’ used to be in the preamble and its removal meant that we no longer believed in fairness. The old preamble did not have the word ‘harmonious’ in it; the new preamble does. So, if you accept the Australian Labor Party logic, the old act did not seek to create harmonious workplaces and the new one does. That sort of immature use of semantics is, unfortunately, the depths to which the Labor Party has had to sink to try to get an argument to fly with in this debate.

If you were to ask a worker, ‘Do you want a fair workplace?’ they would say yes. If you asked, ‘Do you want a harmonious workplace?’ they would say yes. Then if you asked the worker, ‘What do you think the difference is between a fair and a harmonious workplace?’ I reckon they would be left, like me, scratching their head wondering what the difference was. Of course, it is the same terminology to express the same sort of thing. We are about harmonious workplaces, and it is clear that is what we are delivering because industrial disputation under the Howard government is now at the lowest rate it has ever been since records were first kept. If workers are so much worse off under the Howard government, why is it that the rate of industrial disputation has fallen, like unemployment has fallen, and the only thing that has risen has been real wages, something that 13 years of Labor could never deliver?

There are other people in this debate. They will undoubtedly continue and follow the line of their leader, Mr Beazley, and Senator Wong and mislead and misrepresent this legislation. But at the end of the day these regulations are designed to put in place the Work Choices legislation—legislation that will ensure that the Australian economy and the people of Australia can prosper. Without the economy prospering, individual Australians cannot and will not prosper. We do not pursue economic reform because we are committed to economic reform per se; it is what economic reform can do for our fellow individual Australians, and that is to make a better life for them. The best social welfare policy a government can deliver is to ensure that every one of our fellow Australians that is capable of undertaking a job actually has one.

Mr Beazley said that the reform lemon of industrial relations had been squeezed dry and no more could be done. In other words, he was happy to have long-term losers on the unemployment benefit, and he admitted as much on TV. We say that is not good enough. Every single Australian deserves a job. We are very pleased that unemployment has now fallen below 4.9 per cent and we look forward to many more of our fellow Australians getting jobs as a result of Work Choices.

Andrew Murray (WA, Australian Democrats) Share this | Link to this | Hansard source

The regulations being debated before us today, while containing little different than what was foreshadowed late last year, do confirm the Democrats’ worst fears—that is, that the Liberal and National parties’ industrial relations changes are extreme, complex and unfair and will detrimentally impact on vulnerable or disadvantaged employees and job seekers over time.

Of course, the minister is both right and wrong. He is wrong in thinking that the Work Choices legislation is some kind of economic nirvana and that there will be no social effects. But he is right in believing that the sky has not yet fallen in. It has not yet fallen in for the very reason that many agreements that were struck under the old legislation have a long time to run. The other point is that anyone who is in an advantaged position in the job market is not going to be impacted negatively whilst there is a shortage of labour in certain sectors.

The regulations coupled with the Work Choices legislation are highly interventionist and one-sided, and our belief is that in the end they will hurt Australian society and the economy. Because of that, we think it inevitable that this government, if it remains in power, will have to amend them, and amend them significantly. Of course, if Labor achieve power, they will be thrown out altogether and a new system will be put in.

The sky might not have fallen in yet, although for those who are unfairly sacked or lose penalty rates or public holidays for the famous extra 2c a week I am sure it will feel like it. But these changes overall over time will radically alter our work and systems values and may end up creating a dog-eat-dog environment for those with low bargaining power, and they will suffer accordingly.

I am not deliberately exaggerating the impact of these reforms. In fact, it is not my style to do so. It must be remembered that these are fundamental reforms. These changes are nothing like those in the 1996 act that was produced, even before it was amended by the Democrats, because that 1996 act was the second wave of legislation built on the same foundations as the first wave, which was the 1993 act. These changes, in contrast, assault the cultural, economic, social, institutional, legal, political and constitutional underpinnings of work arrangements in Australia. Since the legislation and the regulations came into force, there have been cases that have received media attention of employees sacked for smirking, for restructuring purposes or for being too ill and of 60-year-olds being offered individual contracts that cut wages by $40 a shift, and so on and so forth.

In the Senate budget estimates committee hearing last month, federal Employment Advocate Peter McIlwain revealed that of the 6,263 individual contracts, known as AWAs, lodged with his office since the Work Choices legislation began, every one of the 250 analysed by his office did exclude at least one award condition. Sixteen per cent of Australian workplace agreements lodged under the new laws had dropped all award conditions and replaced them with the government’s five minimum conditions. They had gone down from 20 to five, if you looked at the maximum. Forty per cent of those AWAs dropped gazetted public holidays. Leave loading was erased in 64 per cent of agreements while penalty rates disappeared in 63 per cent. Fifty-two per cent of AWAs got rid of shift allowances.

These are major social impacts. These are things which affect how families live their lives, for example, when children are able to play sport or be with their families. It very much affects the social fabric. Pay increases over the life of the AWAs were provided for in 78 per cent of agreements, while 22 per cent had no change in pay. While a large percentage of the AWAs may have provided a pay increase, the actual level of increase commensurate with other benefits lost needs to be taken into account. In the recent and infamous case of Spotlight, Spotlight offered 2c more an hour to new employees to enter workplace agreements which were without penalty rates, without public holidays or without leave loadings. This is why the Prime Minister refused to guarantee before the legislation was passed that no worker or set of workers would be worse off. He knew he could not guarantee it, because large numbers of workers would be worse off and are worse off.

The Spotlight case highlights that these changes will have a disproportionate effect on women. Because women are in and out of the workforce as a result of caring responsibilities, women are a large proportion of low-income earners in Australia and are disproportionately employed in industries such as retail, clerical and community services and in part-time and casual work. When the Western Australian industrial relations system was deregulated during the Court government, which provided the template for these changes, those changes resulted in a decrease in wages, increased inequality and saw women in particular worse off. In February 1992, the Western Australian gender pay gap was 22.5 per cent. By May 1995, it had widened to 27.8 per cent. As HREOC noted during the Senate’s inquiry into Work Choices, the capacity for more vulnerable employees to bargain effectively and to choose their employment arrangements is impinged upon by the existence of so-called take it or leave it individual bargaining arrangements. The consequences are felt not only by workers but also by their children and families. It is the social effect which is very damaging from this legislation.

Under the new Work Choices legislation, these AWAs are unacceptable. Under the old Workplace Relations Act, while AWAs needed improvement and greater protections built into the system, they were workable. It is at that level that we parted company with the Labor Party, because we supported AWAs under the old federal act. We do not support the new AWAs under the Work Choices legislation. They are almost always take it or leave it contracts. Duress is not policed. There is no global no disadvantage test. There is no requirement to bargain in good faith, and the minimum conditions underpinning the contract are derisory. While it is unlikely that all Australians will be detrimentally affected by these changes, we do believe they will erode conditions for significant numbers of Australians over time. Because of that, we are hopeful that the government will take a step back from its very strong defence of these unfair laws and move to amend them before the community endures too much pain.

The Prime Minister and his ministers have successfully used doublespeak to conceal the true nature of these changes. Progressive words like ‘choice’, ‘flexibility’ and ‘freedom’ disguise the heavy authoritarian micromanagement and restrictions on collective labour—namely, the unions—and the dismantling of the architecture and infrastructure of our former workplace relations system. While the Prime Minister is correct that most of what is contained in these regulations does not change the intent and direction outlined in the Work Choices bill, the regulations do reveal just how interventionist and dictatorial this government will be. Unwisely, unprecedented ministerial intervention will replace the former sensitively balanced federal system where politicians were kept at arm’s length from work arrangements and disputes. This central planning model has alarmed some of the government’s backers, such as the HR Nicholls Society, who are reported as expressing concern that the new laws are too government-centric. In fact, they have likened the federal government’s new industrial relations laws to the former Soviet system of command and control. That is coming from the friends of the government!

The Industrial Relations Commission is required to report on a weekly basis to the minister on the number and details of applications for protected action ballots, suspension and termination of bargaining periods and applications for right of entry. The OEA must send the minister every workplace agreement within three weeks of it being made. This level of ministerial intervention is unheard of. Surely a senior minister would have better things to do with their time than interfere in the day-to-day workings of business, unless they are in command and control mode. It is quite mind-boggling that part of the justification for the government’s IR changes was to reduce third-party interference—that is, union involvement—yet what has happened is third-party interference in the form of the minister has reached levels which could be dangerous and are certainly unprecedented. This is doublespeak of the like we have never seen before. The now well-entrenched coalition executive style is also likely to mean that bias and secret agendas will contaminate what should be open public processes.

The regulations also appear to have raised more questions than they have answered and, rather than reduce the need for lawyers and third-party intervention, the complexity is in fact likely to result in the opposite. All up, the legislation and the regulations total about 1,500 pages of text to explain, compared to the law in New Zealand, which I am told does it in 20 pages. We are concerned that, in attempting to cover every angle with the intention of hamstringing unions, the government have created an overly complex system with the likelihood of many unintended consequences. I assure you that, if the Democrats had retained the balance of power, this Work Choices legislation would not have been law, although I can also assure you—probably to the consternation of some of my Labor colleagues—that this would have been a national system, because we agree with one system. When Labor reach power in due course, we do hope that you will at least retain that as a centrepiece of your workplace law. Of course, it does need to be agreed with the states. We have always acknowledged that.

We are concerned that, in attempting to cover all these angles, the regulations are creating real problems. For instance, the Australian Medical Association—hardly a hotbed of socialist activists—are concerned that the regulations do not clarify who can legally issue medical certificates for employees’ sick leave. This is an excellent example of how an unnecessary change of requiring employees to provide a certificate after one day of leave compared to two days leave is now having unintended consequences. From the viewpoint of an ordinary person, not leaving that whole bureaucratic function to the integrity and the ethics of the medical profession to decide on is really a great mistake.

There is uncertainty about cashing out annual leave, about whether employees can be paid under the minimum wage if it is averaged over a 12-month period. Rather than help small business, the government have made it more difficult. Many small businesses preferred the previous award system because it enabled them to bargain on a level playing field with other small business competitors, and much of the work in negotiating terms and conditions was done for them. It is self-evident that individual small business employers do not have the human resource capacities required to bargain in these ways themselves.

Not only has the government taken away the certainty and ease, but through the regulations before us it requires small business to keep time and wage records, making personal record-keeping requirements broader and more onerous. It has been reported that a MYOB survey in December last year found that small and medium business owners were more confused than ever about the industrial relations package. They do not know whether they are in or out and they do not know how the systems have affected their legal obligations to their employees. They were familiar with and happy with the previous system.

The mining association have expressed concern about the reforms and the impact it will have on their industry. One major mining company publicly said that they are concerned the changes could wind back the clock 30 years. As journalist Laura Tingle said a couple of months ago in the Australian Financial Review:

It makes you wonder—whatever your ideological position might be on industrial relations—what the government is thinking will unfold politically from these changes, or whether, in the haze of a long-cherished ideological ambition finally realised, it has thought about it at all.

I agree with Ms Tingle. I think these changes, and those likely to come, are too much based on ideology and have not had enough regard to the economic and social aspects. In that respect, they are irresponsible.

When I hear the government ask: ‘Why would we risk power? Why would we risk our seats? Why would we risk our government on a reform which is going to put the back of the Australian people up?’ I sometimes think that we forget that this is a radical government. It is not a conservative government; it is a radical government. It wants to change the Australian economy and society radically. And to do so, it is prepared to take very significant risks with those things that we know have underpinned our society for decades, for generations—those things which have ensured a fair go and fair dealings between employers and employees, backed by a working, flexible and maturing system of workplace law and regulation.

I am not pretending for a moment—and no-one who has been in my situation for the last decade could—that the previous system was perfect. I am not pretending for a moment that it did not need reform and further change. But what I have seen is such a holistic, radical change that I can only think that those who have driven it are prepared to sacrifice the government to try and secure a change which they hope will be permanent and from which the country can never resile. I do not know if that will be the result of it all. The other point that is very clear to me is that many, many Australians who will be affected by the Work Choice regulations and laws will only feel those effects after the next election. That really does need to be understood by many people. Of the agreements that are extant and operating now, many of them will only end after the next election, so those people will not be affected by these laws at present.

As I have said many times in the many debates we have had on this matter, unless an economy is genuinely in dire straits and unless a society is genuinely in dire straits, and both need radical surgery, risky economic and social change like this is dangerous. It is not more important than social cohesion and a fair progressive society. As a migrant, I came to Australia because of its reputation for fairness and for looking out for the everyman and the everywoman in our society. I am disturbed by legislation and regulations like these because I feel that they attack things which go right to the heart of society as it has been for many decades. And those were hard-won gains that people enjoyed: fair, First World wages and conditions that allowed Australia to grow to be competitive, to be wealthy and to become a country of note in the world. Now they have been overturned.

It is absolute nonsense to say that the latest employment figures or the latest economic figures have anything to do with this legislation at all. It is absolute nonsense to think that law which came into place at the end of March has already had an effect on the national indices that we measure. I think we are yet to see the true effects of this legislation, and we are certainly in the early days of it. The great failure of the federal government is that even to this very day, in my view, it has failed to provide any empirical persuasive economic case for these changes. If my memory is correct—and I hope I get the number of pages right—the total economic case that the Treasury advised us that they put forward to support these changes was four pages long. It is just assumed that this is good for the economy.

I am an economist, and hopefully I have a reasonable understanding of it. It is perfectly true that if you take away people’s wages and conditions, alter them completely and their wages fall, profits will grow because you will get a straight shift into the hands of others. It may be true that an additional worker may be employed on occasions because there is now more money to do that. But the whole purpose of a civilised, First World democracy is not to race people down to the bottom. It is not to compete with the poorest or the least advanced nations. It is to maximise their wages and conditions.

I urge anyone who thinks that that is false economics to look at how wonderful the economies of Scandinavia are. They are built on exactly that proposition. They are high-wage, high-skill, highly competitive, globalised countries. The government’s economic argument is faith based and boils down to this: lower wages, far fewer conditions and more power to employers will equal more jobs. I am not convinced and I do not think the country will be convinced, but we will see.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I also rise to support the motion to disallow these regulations which underpin the Work Choices legislation which Labor vehemently opposes. It is indeed evil and pernicious legislation that will wreck the lives of millions of Australian families. It is the government’s blind ideology systematically destroying the rights and working conditions that generations of Australians have worked and fought for. It is un-Australian and it removes justice and fairness from the workplace.

Senator Murray was dead right in his contribution when he indicated that we have not seen the full effect of this legislation as yet. It will be something that develops over time, but we can certainly see the indicators now. And throughout the Work Choices inquiry we were able to point to examples where similar legislation has in fact been put in place—certainly in Victoria and Western Australia—and we actually saw the race to the bottom happen. We actually saw that—it was presented to the committee in evidence—so it is no surprise to us that already the indicators, only a number of months after the legislation came into force, show that the wages and conditions of working Australians are being stripped away.

Again, Senator Murray was right—we are talking about thousands of workers at this point in time, but we will see hundreds of thousands and millions of workers lose wages and conditions because of this ideological, extreme legislation which this government is putting in place. Labor said during the debate on the Work Choices legislation that this legislation and these regulations will lead to a race to the bottom for the Australian worker. These laws will slowly and insidiously eat away at the family lives and aspirations of millions of Australian workers.

We were not the only ones to say so. The Democrats said so—in fact all parties, apart from the government parties, said so in this chamber. One hundred and fifty-one leading academics in the field of workplace relations also said so. In fact, during the Work Choices inquiry not a single person or organisation apart from employers and employer associations supported this legislation—no-one else. Every other submission opposed the legislation and told us that this will lead to an imbalance in the power relationship in the workplace that will tip that balance, those scales, so far to the power of employers that workers will have no choice but to accept what is put in front to them, or simply not have the opportunity to take a job.

It was not only 151 academics and the Labor Party and the minor parties in this place that said these things—these points were also made by the President of the Australian Industrial Relations Commission Mr Geoffrey Guidice. I probably need to put on record for the Senate that he is in fact an appointee of this government. When speaking at the AMMA national conference on 16 March, Justice Guidice said that the new Fair Pay Commission would undoubtedly slow the rate of growth of minimum wages and that, combined with other income-cutting elements of the new Work Choices, would lead to pressure to cut welfare payments so that incentives to work were not reduced as the rate of wage growth subsided. To quote Justice Guidice specifically, he said:

I think one of the most important issues involved with Work Choices is the reduction of the safety net for the purpose of the no disadvantage test for collective and individual agreements.

That could have a significant effect on incomes of the lowest paid in our community.

I can assure you it’s going to affect our society.

People with low skill levels, low bargaining power, are heading for the Fair Pay and Conditions Standard, which will have an effect on their incomes.

This will be accompanied by a slowdown in the rate of growth of minimum wages—that’s what the Fair Pay Commission is for.

Debate interrupted.