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Wednesday, 29 April 1987
Page: 1981

Senator CHILDS —My question is directed to the Minister representing the Minister for Employment and Industrial Relations. Has the Minister's attention been drawn to an article in today's Australian newspaper regarding a strategy being drawn up by the Confederation of Australian Industry to mount a test case in the Conciliation and Arbitration Commission to exclude small businesses from award provisions, such as annual leave loadings and certain penalty rates? Will the Minister tell the Senate whether the Minister he represents, or any officer in his Department, has had discussions with the CAI about this proposal? Does the Government support the CAI proposal?

Senator WALSH —I certainly have not had any discussions and nor, as far as I am aware, has Mr Willis or indeed anyone from his Department. But it is not surprising that the CAI is pursuing this line because it put submissions to the national wage case early in 1985 which were designed to reduce penalty rates. It also submitted to the national wage case in 1986 that there ought to be an inquiry into the level of penalty rates. As for the small business exemptions, or special treatment for small business, if these were accepted it would introduce a number of anomalies and economic distortions. If arbitrary distinctions were made between employers simply on the basis of the size of the firm it would obviously give a cost advantage, which could be hard to justify over one type of business or another, or could promote the fragmentation of businesses into artificially defined smaller units. It could be a disincentive to increasing employment and expanding business above any arbitrary threshold. It would be unrelated to capacity to pay, and it runs counter to the general CAI wages policy, although a footnote to that could be that some concessions are already provided under State taxation laws and, in the case of the Australian Capital Territory, under Commonwealth tax law as well from payroll tax for small business.

On the question of whether the Government will be supporting the application, I do not have any definitive opinion or response from Mr Willis. From those facts and the information that I have given, I think the answer would have to be no.