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Monday, 7 November 2005
Page: 132


Dr EMERSON (9:20 PM) —The previous government speaker spent all her time reassuring business that the Workplace Relations Amendment (Work Choices) Bill 2005 would not be too bad and they could quite possibly be happy with it. That says it all, doesn’t it. The previous speaker was reassuring business that this legislation will be okay. The previous speaker spent no time reassuring working Australians that this legislation would be okay for them. Certainly, for bigger businesses in this country, the legislation will be just dandy, because that is what they wanted—this legislation and more. For small businesses, there will be problems. Small businesses that are not incorporated will be obliged to incorporate within the next five years in order to be covered compulsorily, against their wills, by this legislation. But my greatest concern and that of the Labor side is for the working men and women of this country, most particularly for the vulnerable workers of this country.

The member for Riverina, when she did refer to working people ever so briefly, conceded that some will fall through the cracks. She said, ‘Some fall through the cracks now, so what is different?’ What is different as a result of this legislation is that there will be bigger cracks and no safety net to prevent them falling through the cracks. That is the problem with this legislation. She also then went on to say that there was a worker who came up to her who used to vote Labor and who was now very happy because 20 years ago he signed an AWA. AWAs were introduced by this government in 1996. She was speaking straight out of the Ministry of Truth—which is where this legislation comes from and where the government’s $55 million propaganda advertising campaign comes from—authored by George Orwell.

Let us spend a little time understanding what is contained in this legislation without going through some sort of legalistic discourse. The best way I thought I could do that was to envisage the drafting instructions from the Prime Minister. Make no mistake: the instructions for this legislation did not come from the Minister for Employment and Workplace Relations but from the Prime Minister. This is his 25-year-old dream. Paramount amongst those instructions, was that AWAs—individual contracts—must have primacy over collective agreements.

This government is desperately disappointed that, after nine long years of vigorously promoting AWAs, to this day AWAs cover less than three per cent of the Australian work force. If these AWAs were such marvellous instruments for lifting productivity, boosting profits and boosting wages, wouldn’t you think that 97 per cent of working Australians would be on AWAs as they all got together in these productive, harmonious workplaces? But it has not been the experience. This government is very upset and very frustrated about that. Already AWAs are very easy to introduce because the Office of the Employment Advocate need only tick and flick, which is what happens. They are not negotiated; they are imposed. They are uniform. The Office of the Employment Advocate have conceded that they use a streamlining process. That is, they look at one and approve 100.

The only restraint on AWAs, as a result of Senate insistence back in 1996, when this legislation was first introduced, is that they must comply with a no disadvantage test. That is, overall they must not provide a disadvantage in net terms to the employee. This frustrated government has said, ‘How can we make AWAs the vehicle of choice, the instrument of choice? We have the answer. We will remove the no disadvantage test.’ That is what this legislation does. It is what John Howard wanted to do in 1996. He did not want to have a bar of the no disadvantage test. Now in parliament when we ask, day after day, ‘Will the Prime Minister give a guarantee that no working Australian will be worse off?’ he says, ‘My guarantee is my record.’ He will not give that guarantee.

He says that his record in relation to vulnerable workers is clear, and that is that the minimum wage has risen substantially since 1996. But the fact of the matter is that, if the government had got its way in relation to the minimum wage, today it would be $50 a week lower. So here we have the Prime Minister, who loves these AWAs, making it even easier to introduce AWAs. But there will not be a no disadvantage test. That was the Prime Minister’s second instruction to the 11 law firms who were commissioned to produce this piece of ideological obsession.

That instruction also included removing the role of the independent Australian Industrial Relations Commission in setting the minimum wage and replacing it with the highly dependent Australian Fair Pay Commission. The fact is that these commissioners will be beholden to the government because they will be on fixed-term contracts. They will not have tenure. They will do what the government wants them to do. I understand that the chief commissioner has said he will seek inspiration from God. I hope God is benevolent and will tell him it is decent and fair to increase the minimum wage. But the fact is that this government, in setting up the Fair Pay Commission, believes that the minimum wage is too high. Why would you set up a Fair Pay Commission and remove the power of the Industrial Relations Commission to set the minimum wage if you thought that the minimum wage was too low and the Industrial Relations Commission had not been increasing it by enough? The only logical explanation—and it is staring us in the face—is that the government believes the minimum wage is too high.

In this piece of ideological obsession the government does set the current minimum wage at $12.75 an hour. But that is all it does. What it really wants, and what it knows will happen, is for the real value of the minimum wage to fall over time. Let me explain that point. The government has said that this new Fair Pay Commission is not scheduled to bring down a decision on the minimum wage until spring of 2006. The last decision on the minimum wage, which was a $17-a-week increase, was in June 2005. That means that the minimum wage will be frozen for 15 months. In the meantime the price of petrol is going through the roof, the price of child care has been rising sharply, the price of health care has been rising too and today the Reserve Bank has warned that inflation at three per cent is at the upper band of the range of acceptability.

So we have the Reserve Bank confirming that we are confronting higher inflation than we have experienced in the past, and we have a minimum wage freeze for 15 months. That means one thing and one thing only: the real value of the minimum wage will fall over the coming 15 months. That is just as the government wants it. That is why it has established the Fair Pay Commission. The Reserve Bank today has also raised the prospect that if high petrol prices persist and if further price rises occur then it may increase interest rates. So we will have Australia’s most vulnerable workers facing a 15-month wage freeze, higher than usual inflation and the prospect of interest rate rises—and this is just the way the government wants it.

In my state of Queensland, the situation is even worse because Queensland has a bigger share of vulnerable, low-paid workers than do most other states. The average weekly earnings of all employees in Queensland—$740 per week—are almost $53 a week lower than the national average. Lower paid Queenslanders will be the big losers from the government’s policy of a 15-month freeze in the minimum wage, rising fuel, health and child-care costs and a possible interest rate rise.

My electorate of Rankin, which covers most of Logan City, is especially vulnerable because there are so many low-income earners in Logan City. That is one of the reasons why I am so vehemently opposed to this legislation.

If vulnerable working Australians want to get together and improve their bargaining position by bargaining collectively, their position is undermined by this legislation because the third instruction given by the Prime Minister to the 11 law firms that drafted this legislation was to make collective bargaining very difficult, if not impossible.

We know that the government does not want wage outcomes to be based on bargaining strength. We know that the government wants to take away the capacity of unions to effectively represent their members. It is doing that through very nasty right-of-entry provisions, about which there has been inadequate debate so far. This government does not like collective bargaining, and it does not want unions effectively representing the working people of this country.

We hear so much out of the ‘ministry of truth’ on the government side. When the Minister for Health and Ageing was the Minister for Employment and Workplace Relations, he was talking to a Vietnamese worker who was standing in line after having been locked out in the Morris McMahon dispute. The Vietnamese worker said, ‘We just want to be able to have a collective agreement,’ and the then minister for workplace relations very cleverly—very trickily—said, ‘You have every right to ask for a collective agreement.’ They do have a right to ask for a collective agreement, but the employer has a right under the legislation to veto it—to say no. Sometime later, when the present Minister for Employment and Workplace Relations was talking about the wisdom of the government changing the Trade Practices Act, which Labor supported, to allow small businesses to bargain collectively in supplying larger businesses, I asked him, ‘Why don’t you extend that same right to working people?’ The minister for workplace relations said, ‘They already have an automatic right to bargain collectively.’ Untrue, untrue, untrue.

It has been repeated even more recently. A spokesman for the Minister for Employment and Workplace Relations, Kevin Andrews, said:

Collective bargaining has always been protected and will remain so in the future.

Untrue, untrue, untrue. That is straight out of the ministry of truth.

The fourth instruction of this government was to remove protection for working Australians from being unfairly dismissed. It has done that for businesses with fewer than 100 employees and, through a very clever device relating to operational requirements, it effectively has done so for businesses with more than 100 employees.

Having a bit of economics training, I thought that there was some responsibility on my part to try to understand whether there are any economic arguments in favour of the government’s legislation. Mr Deputy Speaker Causley, you probably expect me to conclude that there are no economic arguments in favour of this legislation, and you probably would not place very heavy weight on my word in that respect, because you might think I am slightly biased as a Labor member of parliament. So I have drawn on some independent advice from highly trained, traditional, orthodox, market based economists. I refer to Professor Mark Wooden, who has long been an advocate and a supporter of the government’s deregulation of the labour market, and to Saul Eslake, Chief Economist, ANZ Banking Group. I will refer to some of the statements made by Mark Wooden. It is clear that he is a fan of collective bargaining and a fan of collective agreements. He said:

On balance therefore the position advanced by Greg Combet seems a reasonable one—workers should be offered the right to enter into a collective agreement and employers should be obligated to bargain in good faith.

A requirement to bargain in good faith not only is missing from this legislation but was removed in 1996. There is no requirement to bargain in good faith, yet a market economist has said that there should be a right to bargain collectively and that there should be a requirement to bargain in good faith. He agrees with Greg Combet. I agree with Mark Wooden, and I agree with Greg Combet. It is about time this government revisited that issue, but I would not hold my breath. In relation to the minimum wage, Mark Wooden said:

A stated objective of the reform agenda is to provide more jobs, but then is unable to deliver any proposal that will fundamentally help the unemployed to secure employment.

That is a damning indictment of this legislation. On the fourth point that I raised, unfair dismissals, he said:

The cost on the other hand is greater uncertainty and insecurity for some Australian families, directly contrary to the aims of the reform agenda.

That is hardly an embracing of the effective abolition of the unfair dismissal laws. He goes on to say:

... the Prime Minister and his Government has consistently stated that an objective of its reform agenda is to increase the choices provided to Australian workers.

Let us just listen to this:

Some of the rhetoric here is clearly ‘political speak’; for example, the reference to workers having “the choice of remaining under the existing award system or entering into workplace agreements”. Surely this is not much of a choice given the Government intends to continue to undermine awards, both through further restriction on the types of matters that can be considered in awards, and through the abolition of the no disadvantage test.

It says it all. This is not some pinko socialist; this is a dry market economist who has long been a supporter of further labour market regulation. He said enough is enough. And it is. This legislation is hopeless, it is worthless and it should be thrown out of this parliament. I will finish with one more statement from Professor Mark Wooden. He says:

Far more worrying though, it is not at all clear that the reform agenda is one which is particularly interested in promoting collective agreements. The Government has been concerned with the low level of coverage by AWAs and thus intends drafting legislation to encourage further interest in them by employers.

He does not say ‘by employees’. He goes on:

But what if AWAs are not desired by workers? Currently, there do not appear to be measures that ensure that workers have the ability to choose between individual agreements and collective agreements. If the aim is to provide employees with real choices, then I am on Greg Combet’s side—the right to bargain collectively needs to be protected. Further, the Government should have a vested interest in ensuring collective bargaining continues to flourish if it believes, as it is stated so often in the past, that enterprise bargaining has been fundamental to the productivity gains of the 1990s.

Hear, hear! Enterprise bargaining, introduced not by the coalition but by Labor, has produced 14 years of strong economic growth, a 30-year low in unemployment and a historic low in industrial disputation—and the government says, ‘We need to fundamentally change the labour market regulations in this country.’ You would think that they would be pretty happy with those results, especially given that those results were built on the economic reform programs of the Labor government and accelerated through the move to enterprise bargaining by the previous Labor government in 1993. Here we have Professor Mark Wooden saying that we should have collective bargaining, we should have enterprise bargaining and we should have choice. Yet this legislation, outrageously called the ‘Work Choices’ legislation, is no choice for workers at all, because they can be forced onto instruments that they do not want to go onto. I will refer briefly to some of the statements by Saul Eslake. He says in relation to enterprise bargaining, picking up the point of Professor Wooden:

Since the 1993 Keating Government reforms, Australia’s labour market has delivered strong jobs growth ... falling unemployment and under-employment; rising productivity (at least until the end of 2003, since when productivity growth has gone into reverse) and real wages; well-behaved real unit labour costs ... and ... low levels of industrial disputation.

Here he is, saying that those reforms have produced these results; and yet the government wants to fundamentally overturn this system that has been so effective. In relation to the whole issue of whether more centralised or less centralised bargaining produces more employment, he points out, through some very rigorous analysis:

... there is no obvious correlation between the degree of centralization of wage-setting arrangements ... and employment growth over the past decade.

Indeed a simple regression of the latter on the former produces a co-efficient with the ‘wrong’ sign—

bad news for the government—

from the perspective of those expecting to find an inverse correlation between these two variables ...

He then goes on to say in relation to employment protection legislation:

Australia’s employment protection legislation is ‘one of the least restrictive’ in the OECD.

The OECD has confirmed that. There is no case for this legislation. It is ideology gone mad. The real target is the union movement and, through the union movement, the ALP. Working Australians, especially vulnerable working Australians, will be caught in the crossfire of the Prime Minister’s blind, ideological obsession—a 25-year sour old dream about to be visited on the most vulnerable people in this country. This legislation is a disgrace and it should be thrown out of this parliament. (Time expired)