Senator FISHER (6:11 PM) —It is with significant concern that I rise to speak and contribute to the debate about the Fair Work (State Referral and Consequential and Other Amendments) Bill 2009 and the Fair Work (Transitional Provisions and Consequential Amendments) Bill 2009. This government promised that the award modernisation process, as part of its workplace relations reforms, would not increase costs for employers and would not disadvantage employees. When this place previously considered another piece of legislation and attempted to prevail upon the government to legislate that promise, government senators voted the promise down. If the government meant that promise at the time that it made that promise then why won’t the government legislate that promise? Unfortunately, the proof is now becoming part of the pudding, and the pudding is before us as part of the transitional legislation and the bill that we are about to consider in this place.

The government’s transitional bill may be seen by some to be legislating about half of the government’s promise, and that, of course, is the ‘about half’ that maybe addresses some of the concerns of workers, the concerns that the government keep its promises to workers that workers will not be disadvantaged by the government’s workplace relations reforms. The so-called fair work transitional bill attempts to reassure workers by making provisions for workers to obtain things like take-home pay orders. On the say-so of the union movement, representing employees, those proposed take-home pay orders are in themselves not only (1) a concession that workers do stand to be disadvantaged by the award modernisation process but (2) inadequate for a range of reasons. One of the most compelling reasons is that take-home pay orders are about cash and supposed loss of financial benefits—in other words, workers being supposedly financially worse off.

The union movement has been very clear in saying that the Labor government’s award modernisation process stands to disadvantage workers in ways well beyond financial disadvantage and that these supposed take-home pay orders spectacularly fail to address the disadvantage to be suffered by workers in ways other than financially. We have the government conceding that, on the face of its workplace reforms, yes, employees do stand to be disadvantaged by the award modernisation process, hence some mechanisms may be in the transitional legislation.

But what about the other side of the promise: that award modernisation will not increase costs for employers? That feeds straight back into the promise about workers, because, if costs are increased for employers, the testimony of employers is that unfortunately the jobs for workers will suffer. What do the government propose with this transitional bill? Oh, they propose a couple of things. They propose that, in certain circumstances, at the whim of the Australian Industrial Relations Commission or Fair Work Australia, there may be a delay of up to five years in implementing the pain and the increased cost of award modernisation. The very clear and compelling evidence from business is that delayed pain is still pain, and it will still result in death—albeit delayed.

The Deputy Prime Minister, in her second reading speech and in the explanatory memorandum, concedes yet again that the award modernisation will fail to keep part of the government’s promise. She concedes that the award modernisation process will increase costs for employers. In a further and failed attempt to address that, the transitional bill provides that if a business considers that its viability is threatened by the impact of award modernisation then that individual business may have the opportunity to put itself under public scrutiny and argue: ‘If this award modernisation process takes place and applies to me and my business, then the viability of my business will suffer.’ What business worth its financial salt is going to feel free to make a submission in public along those lines? A submission that ‘my viability is threatened’ is little less than sure to bring about the demise of the viability of that business. We have token solutions from the Deputy Prime Minister, token solutions from the government and, most compellingly, a concession that they have failed to keep their promise.

In the last couple of weeks, there has been an interesting development. The Deputy Prime Minister has said that award modernisation is going to have a particularly detrimental effect on some parts of the economy and has decided to vary her administrative request to the President of the Australian Industrial Relations Commission in respect of the restaurant and catering sector. She says in a letter:

from the restaurant and catering sector

There is, she continues:

The letter goes on to list eight grounds upon which she says she is relying in justifying her protection—understandable protection—of the restaurant and catering sector from the brunt of her award overhaul. She talks about things like the spread of businesses to be covered by the hospitality award operating on different business models and typically having streams of revenue from other activities, such as gaming and accommodation. She talks about high labour costs and about high award reliance. It should be little surprise to the government to know that there are many other sectors operating in Australia that consider that they face the same challenges as the restaurant and catering sector. They want the same as what the Deputy Prime Minister has given the restaurant and catering sector, yet the government has steadfastly refused, thus far, to give them the same.

I will illustrate by giving a couple of examples from, in part, my backyard in South Australia. The wine grape growing industry is across states but has a particular part in my home state of South Australia and in my former state of Western Australia. I want to refer to a letter from Mr Neil Delroy, who is Managing Director of Agribusiness Research and Management, which manages a number of vineyards. Mr Delroy has written to me to express his concern about the government, through the award modernisation process, grouping grape growers, farmers and primary producers in the wine industry award with those who process and pack grapes and retail wine. You would think that, based on the words of the Deputy Prime Minister in her letter to the President of the AIRC in the respect of the restaurant and catering sector, there might be some questions about operating on different business models. You would think that there might be some questions about businesses to be covered by the wine award typically having streams of revenue from other activities. Streams of revenue from wine are going to be a bit different from streams of revenue from flogging your grapes—and properly so. Mr Delroy writes about the proposed inclusion of the grape growing industry in the wine industry award having ‘a significant impact on our industry and an increase in labour costs.’ That sounds a bit like the Deputy Prime Minister’s letter to the President of the AIRC in respect of the restaurant and catering sector. He goes on to say:

He then goes on to say:

It sounds to me like labour costs are a significant proportion of the operating cost, as they are in the restaurant and catering sector. He goes on to talk about vineyard operating times that are:

It sounds to me like peak operating times. It sounds to me like penalty hours and penalty rates, not unlike those referred to in the Deputy Prime Minister’s letter to the president of the commission about the restaurant and catering sector. And Mr Delroy says:

Again, it is the same as the Deputy Prime Minister’s letter to the president of the commission about the restaurant and catering sector.

But that is not all. What about the cleaning services sector? Longford Cleaning is a South Australian based cleaning services business which wrote to the Deputy Prime Minister at the end of May referring to the Deputy Prime Minister’s promise that ‘award modernisation should not leave employees worse off or drive up costs for employers’. They are understandably confused about that promise because Mr Gibbie, a director of the business, says to me that the options for his business, in order to sustain the increases from this overhauled award process, will result in the loss of 75 to 80 per cent of their business if they were to pass on to their customers, or attempt to do so, the increased costs. They see no other end result than that their workers will be worse off:

Mr Gibbie goes on to say:

The Deputy Prime Minister, in her letter to the President of the Industrial Relations Commission in respect of the restaurant and catering sector, refers to her own words: ‘comparatively low profit margins and high labour costs as a proportion of total expenses’. She goes on to cite Australian Bureau of Statistics figures, saying that in 2006-07 the average profit margin was 3.8 per cent for cafes and restaurants and 5.3 per cent for catering services. She goes on to compare that with a 12.7 per cent average for all industries. Well, Mr Gibbie says that in the cleaning services sector, industry margins are slim—hopefully five per cent, and that is if they are lucky. It sounds to me pretty much on a par with the restaurant and catering sector. So there are, understandably, other sectors in Australia that consider they have the same challenges as the restaurant and catering sector, and they reckon they deserve the same concessions that the restaurant and catering sector is apparently about to get. They want to know whether the government will give those concessions to them.

It is pretty clear that the government does not have a process to deal with these concerns from industry. They do not have a policy and they do not have a process. That becomes clear because the Deputy Prime Minister cannot clearly tell other sectors how they might stand a chance to get what the restaurant and catering sector seem to have got—industries like retail, fast food, pharmacy and cleaning services. They reckon they share the same reasons that Ms Gillard gave to support her saving of the restaurant and catering sector from the brunt of her award overhaul. But she cannot reassure those sectors, who reckon they face similar challenges, that they will get similar relief, and they do not know how to convince her that they need it. I asked Senator Arbib in question time today about whether the government would give the same to those other sectors who the government knows deserve it. He attempted to reassure the opposition and those parts of industry—horticulture, pharmacy, retail, cleaning services and fast food—with these concerns:

The horticulture, cleaning services, retail, pharmacy and fast food sectors deserve to know exactly what examination and extensive consultation with their sectors is supposedly going on right now because if the government is consulting with these sectors, when, where and how is it happening, and do these sectors know about it? Mr Mark McKenzie, Executive Director of Wine Grape Growers Australia, says to me that ‘wine grape production has not been conferred with by the government’ about the government’s decision to parcel it up in the wine industry award. So if there are examinations and extensive consultations supposedly going on with the sectors right now, it might be a good idea to let the sectors know about it.

If the industries facing similar challenges to the restaurant and catering sector actually get what they think the restaurant and catering sector has got and what the restaurant and catering sector thinks it has got, will it make any difference? Let us look at that. In acknowledging the valid concerns of industry, the Deputy Prime Minister says in her varied award modernisation request to the president of the commission:

She says that the commission should create a modern award. The Deputy Prime Minister knows full well that saying something should happen does not guarantee that it will happen. She then goes on to say, in respect of the restaurant and catering sector, the development of such a modern award ‘should establish a penalty rate and overtime regime that takes account of the operational requirements of the industry, including the labour-intensive nature of the industry and the industry’s core trading times’.

Once again the Deputy Prime Minister knows full well that ‘should’ does not guarantee ‘will’.

Debate (on motion by Senator Stephens) adjourned.