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Tuesday, 22 June 1999
Page: 7000


Mr REITH (Workplace Relations and Small Business) (3:45 PM) —This is a difficult issue. There is no doubt that this is an issue that the Australian community needs to confront. In that sense, I am pleased that the opposition has been prepared to raise the matter today as a matter of public importance. I am today meeting with my ministerial colleagues and with representatives of the CFMEU to discuss the particular circumstances of the colliery and also to talk more generally with them about the policy response that may provide assistance in the future in similar circumstances. It is disappointing, though, that the opposition in raising the matter has provided absolutely no policy response whatsoever to this issue.

Mr Bevis interjecting


Mr REITH —You have two private member's bills. As we have substantiated in the parliament before on the debate on those bills—

Mrs Crosio interjecting


Mr REITH —In respect of the bill from the member for Prospect, the fact is that aspects of it are unconstitutional.


Mrs Crosio —That is not true.


Mr REITH —I am sorry, it is true, and you ought to face the—


Mr DEPUTY SPEAKER (Mr Nehl) —Order! The minister should address his remarks through the chair and ignore the member for Prospect.


Mr REITH —We have had legal advice on it, and it is a pity the member is more interested in making a political point than actually trying to grapple with the issue. Aspects of it are unconstitutional, it does not achieve its stated objectives and it fails to safeguard against vexatious and frivolous claims, just to mention some of the major problems with her proposal, her so-called solution.

The Bevis bill is the second bill. The Corporations Law changes he proposes are either redundant or unworkable, and we have had advice that the bill is probably invalid. This is a difficult issue. It does require people to actually put some work into what might be potential solutions to it. It is no surprise to us to get this vacuous response from the Labor Party to this issue. That was exactly the response we had from the Labor Party when they were in office for 13 years. They had a chance to do something about this. They never actually grappled with this issue to produce a constructive response. I will say something about their attitude when they were in government because the charge that they are making of us is that we have not dealt with this issue quickly enough or sufficiently in a substantial manner.

The fact is that we have been dealing with the issue. We have already proposed amendments to Corporations Law to deal with certain aspects of it. We have undertaken genuine consultations. We have discussed the matter with the states, who have acknowledged that they have a responsibility. The truth of the matter is that the states, including the Labor states, are not interested in this issue, although they have at least acknowledged publicly that they have a shared responsibility for part of the solution.

The fact is that we are working on this issue. We are concerned about it. We are prepared to sit down and genuinely discuss the issues. That is in very sharp contrast to Labor's attitude when they were in government. They had the Law Reform Commission report on a wage guarantee system back in 1988. They attack us for not dealing with the issue expeditiously. We have already moved on the Corporations Law in the last 12 or 18 months. It took the Labor Party five years to deal with the Law Reform Commission report, and then they rejected it, except they did make one change: they gave priority to employees over the tax office. Quite frankly, so what! Giving employees ranking over the tax office in my view is the least they could have done.

Do not come in here and say, `You ought to act faster.' You took five years to deal with that recommendation from the Law Reform Commission. You rejected its principal proposition, which you are now telling us we ought to adopt. Talk about hypocrisy! Tim Pallas was a bit more honest about it. The former Assistant Secretary of the ACTU was on Lateline last year and he said it was a missed opportunity. He also admitted that:

. . . it's a national disgrace that we haven't put in place some mechanism to address it.

That is right, and that was a commentary on Labor's failure to deal with this issue for many years. You say we should deal with the issue expeditiously. Let us look at what you yourself said when you were in government. Accord Mark VII, entered into in June 1995, said:

. . . and, if practicable and desirable, move to improve the protection of employees entitlements in the event of the insolvency of the employer.

So, when you actually turned your mind to it back in 1995, two years after having spent five years replying to the Law Reform Commission, you had a deal with the unions. Does that suggest any urgency? Absolutely none whatsoever. You could not even come to a commitment to do anything. It was only if it was desirable, if it was practicable, put it off for the next millennium. Then you attack us for not having dealt with the issue, as you would claim, expeditiously in the last 18 months. We have done more on this issue in 18 months than you did in 13 years, and we are still now looking at the issues and trying to grapple with them.

I am happy to meet with the unions. I am happy to meet with the CFMEU—I have met with the CFMEU before—but I say to them honestly and bluntly that the fact is that they need to lift their own game a bit when it comes to concern about employees entitlements in this industry. Some of us do remember Bill Kelty of the ACTU writing to Japanese coal buyers warning them that Australia was strike prone and unreliable. That was in 1996. John Maitland, the President of the CFMEU, in 1997 was writing to Asian customers telling them not to deal with an Australian producer of coal. What do you think that does to employee entitlements? I never heard the Labor Party get up and support the Australian industry and our capacity to be a reliable supplier.

In terms of the attitude of the Labor Party more generally, the state ALP governments are full of rhetoric, but I can tell you from dealing with them—and I have been dealing with them on this issue—that they are not a lot of action when it comes to these particular issues. When you look at the policy issues, we have been calling for greater flexibility within this industry and other industries. The fact is that a more flexible system can allow people to actually cash out entitlements and receive those entitlements on an ongoing basis.

I am not saying that that is an answer to every situation, but it is an answer in some situations and yet your policy position is to oppose the very flexibility that could actually provide benefits to employees. Your answer to every one of these problems is to have a central fund, but we know from experience with centralised funds that they rob employers and employees that have a capacity to manage these entitlements in a more flexible way. And who ultimately are the people who are adversely affected by such arrangements? Of course it is the workers, which I think just demonstrates that this is a difficult issue and it needs to be looked at carefully.

You yourselves know some of this because, privately, you have been concerned about the impact of an additional cost burden on industry by the imposition of a levy scheme. The quote we have is from a memo—directly off the back of a truck—to Kim Beazley from one of his advisers. In respect of a levy and with regard to the Crosio private member's bill, Mr Angley said:

The downside of a levy is that it's another cost on jobs. If it's a state wide fund like workers comp the cost per worker in the form of premiums inevitably grows. It also reduces the responsibility of the employers-owners to fix their own affairs rather than fall back on the fund.

What that tells you is that the Labor Party are full of rhetoric of support for the coalminers but privately they actually have a different view to what they are expressing publicly. We know that because when they were in government the concern about the impact of these additional costs on employment generally in the industry was actually what was driving the then Labor government's response to the proposal for a fund. If you go back to the Corporate Law Reform Bill of 1992, Michael Duffy, in the explanatory document he put out at the time, makes the comment in respect of funds:

The recommendation is not implemented as the fund would be a further imposition on existing successful businesses and it would be better to retain—

(Quorum formed)

I am sorry that we have had a quorum to prevent me from properly canvassing all of the options which we as a government are considering. I will certainly be discussing these matters with the coalminers, but I must say I am disappointed that this juvenile behaviour by the Labor Party prevents more opportunity being provided to go through the options. I want to put the problem into context though because, in a search for a solution, some identification of the problem is important. In 1997-98, 3,000 companies were in liquidation, receivership or under deed of company arrangement, but we do not know the value of the lost entitlements. We have a general sense of the proportion of the problem, but I must say the data is generally inadequate other than that more generalised information.

The ACTU claim that annually about 17,000 workers suffer from not receiving their full entitlements of an average of $7,000 each, bringing the total loss, according to the ACTU's claim, to around $100 million to $150 million a year. I do not accept their claim but just put it on the table. I suspect it is a bit on the high side but, as the data is inadequate, it is reasonable to refer to the estimate they have made. In looking at what the possible solutions are, you therefore need to say, `Well, here's the extent of the problem. Let's look at what the cost of the solution might be,' because obviously, if the cost of the solution is more than the actual cost you are suffering, you need to see whether there is a better way.

On the advice to me, a trust fund based on one-half of one per cent of the private sector gross salary and wage costs has been estimated to have a job-destroying impact—a cost in jobs because of the additional burden on industry—of up to 25,000 jobs. That is one estimate, but I think it does give people an order of magnitude. There is a trade-off here which needs to be calculated as best we can so that we understand the dimensions of the problem and the dimensions of any cost of any solution.

There are a number of options which we have looked at. Strengthening the Corporations Law is certainly an option—it is one which we have adopted and one which the Treasurer is moving through the cooperative process for with the states. That is an important step forward which should have been taken years ago and which has seen progress under this government—something that Labor failed to do. Limited priority over secured creditors is another option. This means that a specified amount of employees' claims—between one and five weeks wages, depending on the employees' length of service and age—would rank ahead of both secured and unsecured creditors in the winding up of an insolvent company. The main concern with this option—


Mr DEPUTY SPEAKER (Mr Nehl) —Order! The honourable minister's time has expired.


Mr REITH —I am sorry my time has expired. Hopefully others in the Labor Party will be more interested when a further debate will—(Time expired)


Mr DEPUTY SPEAKER —The honourable minister's time has expired. He will resume his seat.