Mr HENRY (9:38 AM) —From the viewpoint of the very many small business holders in my electorate of Hasluck, the Workplace Relations Amendment (Small Business Employment Protection) Bill 2004 is very welcome, removing as it does onerous and unacceptable burdens placed upon them by the Australian Industrial Relations Commission. The bill will amend the Workplace Relations Act 1996 to ensure that those small businesses covered by federal awards will continue to enjoy an exemption from the need to provide redundancy payments—an exemption, I might add, which they have enjoyed since 1984.

If the AIRC’s decision imposing such a burdensome obligation of redundancy payments is allowed to stand without challenge, it will directly impact on the ability of many thousands of small businesses to continue to operate and provide, as they do, much needed employment opportunities for local people in the community of the electorate of Hasluck. Members may recall that in my maiden speech to this House in November 2004 I made a commitment to small business within the electorate of Hasluck to work on their behalf to reduce the excessive burden placed on them by bureaucracies such as the Australian Industrial Relations Commission. I am therefore delighted to be able to stand here today to provide those small businesses with a loud voice to protect their interests.

Local businesses stand at the heart of many local communities, including my own, adding vibrancy, and providing valuable services and, most importantly, employment to the many constituents of Hasluck. This sector of our economy is one that truly underpins our economic capacity and, indeed, our Australian way of life. The 1.1 million non-agricultural small businesses that are spread throughout Australia are responsible for employing over 3.3 million people, and the role they play in economic growth and job creation within this nation should not be underestimated or go unrecognised. Any measure that threatens the viability of small business is therefore unwelcome and will have many undesirable consequences.

The small business sector is filled with some of our nation’s most self-reliant, innovative and entrepreneurial people. Small businesses operate the length and breadth of our country, from the smallest country town to the largest of our capital cities. For me, and indeed for the majority of people within my electorate of Hasluck and within this country as a whole, the decision of the Australian Industrial Relations Commission overturning the exemption from severance pay for businesses employing fewer than 15 employees is very baffling and puzzling in the extreme.

The exemption was granted with good reason by its predecessor over 20 years ago. It is therefore truly mystifying why the Australian Industrial Relations Commission should introduce a requirement that has the very real potential to result in the insolvency of many small business holders. It is a flawed decision, and one that must be extinguished by this bill. The decision of the Australian Industrial Relations Commission has caused alarm and consternation. We must not allow excessive regulation and compliance standards to stand in the way or crush the aspirations of those hard-working and committed people who run small businesses and contribute so much to the communities in which they operate.

For many years I was the Chief Executive Officer of the Master Plumbers and Gasfitters Association as well as the Master Painters, Decorators and Signwriters Association. They served the interests of many small business operators in the building and construction sector, so I know from personal experience the difficult environment that many small businesses have to work in. The decision of the Australian Industrial Relations Commission to impose the requirement to take on the obligation for redundancy payments stifles free enterprise and has the potential to be the proverbial straw that broke the camel’s back for many small businesses.

It is interesting to note that both the Queensland Industrial Relations Commission and the New South Wales Industrial Relations Commission have reaffirmed the need for small business exemptions in this regard. It is also interesting to note that none of the four state governments that participated in the Australian Industrial Relations Commission test case supported the removal of the exemption. Indeed, my own state of Western Australia actively opposed the measure—why?—because it just does not make economic sense.

The Australian Industrial Relations Commission imposes a ridiculous and unreasonable financial burden on businesses that operate in often difficult circumstances and with tight margins. Typically, a small retailer employing just six or seven people could potentially find itself having to put aside many thousands of dollars into a contingency fund to cover its liability for severance pay. It is a cost that few if any but the most prosperous of small businesses can afford to bear. Those affected by this decision are not the BHPs or the News Corps of this world, with their multimillion- or even multibillion-dollar turnovers; they are often family owned businesses that, while paying their way, are not in a position to take on redundancy liabilities that can run into the tens of thousands of dollars.

The coalition and indeed the majority of reasonably minded people within this country oppose any unnecessary restraints on small business operators that make it more difficult for them to employ people. This government has consistently made its support for small businesses known and has translated that support into action. This bill shows that we will continue to oppose absurd and unwarranted impediments that will make it much harder for small businesses to provide jobs and contribute to the health of local economies.

The opposition is opposing the bill—not because the bill doesn’t make good sense, but rather out of political dogma and, I suspect, a desire to be seen to support the ACTU’s opposition to the exemption. In reality, it is also about protecting the Labor Party’s bottom line and the $47 million that the union movement has donated to the opposition over the last 10 years. It seems that Labor is prepared to leave small business operators and the millions of people that they employ out on a limb in order to line its own pockets.

The Labor Party is proposing a system whereby small businesses will have to make individual applications to the Australian Industrial Relations Commission for exemption from redundancy payments. The proposal is unreasonable—indeed absurd. It imposes an extra and totally unnecessary burden on small businesses and a degree of uncertainty that at the end of the day is just unacceptable. The Labor Party’s expectation is that small business owners should jump through hoops to deal with the bureaucracy of the Australian Industrial Relations Commission. The reason for doing so is to restore an exemption that should never have been removed in the first place.

Small business owners have neither the time nor the money to devote to such a farcical system, a system which previous experience has shown just does not and will not work. Such a system has been in operation for larger businesses for around 20 years; in all of that time  there does not appear to have been a single exemption granted. The Labor Party is once again failing small businesses in Australia in a deplorable and absolutely abysmal way. While at least the ACTU’s support for the Australian Industrial Relations Commission’s decision is understandable—it is after all a morally bankrupt institution—I find the Labor Party’s slavish following of the ACTU’s position repugnant.

It should be noted that this bill will not affect any redundancy pay provisions that were in awards prior to the Australian Industrial Relations Commission’s decision. Nor does the bill prevent small businesses from reaching an agreement with their employees on redundancy payments should they wish to and should they be able to afford to do so. Rather, the bill extinguishes an entitlement which previously did not exist and which small businesses were unable to plan for.

By introducing this bill, the coalition is going some way to deliver on its re-election promise to continue to pursue changes to take the unfair dismissal laws burden off the back of small businesses and protect small business from redundancy payments. In my view, the Australian Industrial Relations Commission seriously underestimated the adverse impact its decision would have on an important sector of the Australian economy. The Australian Industrial Relations Commission’s imposition of a ‘one size fits all’ regulation flies in the face of economic reality and small business imperatives. It also very seriously ignores the fact that small businesses simply cannot afford the financial burden it has imposed upon them. I wholeheartedly support this bill and recommend it to the House.