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Wednesday, 30 May 2007
Page: 17


Mr McARTHUR (10:14 AM) —I have been listening closely to the member for Lalor and some of the comments she has been making. I observed two things, one of which is that she is going to remove the industrial relations legislation put forward by the Howard government lock, stock and barrel. She is putting forward in the parliament that that would be the intention of the Labor Party if, by chance, they came to the government benches. My second observation is that the member for Lalor does not have a clear proposition to put before the Australian people as to what she would put in place of the current industrial relations legislation. So that is quite clear from her remarks, and her amendment before the House also reflects the opposition’s woolly and unsubstantiated view of industrial relations legislation.

I am delighted to speak on the Workplace Relations Amendment (A Stronger Safety Net) Bill 2007, which will ensure that the government’s objectives of improved wages and flexible employment conditions under our workplace relations reforms are achieved. This bill is front and centre in the public debate about whether the national government is going to help move Australia into the future or whether we are going to hold back our country, our people and businesses with policies of the past, just as the member for Lalor has enunciated in the last 30 minutes. The amendments put forward in this bill are intended to help ensure that Australia’s workplaces are a constructive part of the modern, dynamic, flexible economy and that the Australian people, who work hard to help build this nation through their enterprise, skills and efforts, are appropriately rewarded.

Before I make specific reference to the bill, it is important to emphasise the clear philosophical objectives of the bill and the core vision that underpins the government’s efforts to improve the working conditions of Australian families. The first objective is that a worker and an employer should be able to sit down and agree on terms and conditions of employment that are to the mutual benefit of both parties. I emphasise that. (Quorum formed) Individual workers and employers are in the best position to decide what employment conditions, wages, hours of work, flexibility and bonuses will deliver a suitable reward for effort, provide encouragement and get the job done. Some people suggest that politicians in Melbourne, Sydney or Canberra should set wages and conditions, but there is no way the parliament or the bureaucracy can dictate the best set of wages and conditions for all of Australia’s 10 million workers.

Some people think the industrial relations commissioner should set wages and conditions by reaching some compromise between the ambit claims of unions and businesses that are fought out in the adversarial environment of the Australian Industrial Relations Commission. That process has been a proven failure in addressing the needs of individual workplaces and individual workers.

There can be no-one better placed to know the interests and needs of individual workers than the workers themselves, and there can be no-one in a better position to understand the needs of the business than the employer. This is why the government has taken action to make it easy for employees and employers to sit down and negotiate their own terms and conditions of employment that are mutually beneficial. The second objective is that the government wants to create an industrial relations system that encourages higher wages, better pay and more profitable businesses that can generate new jobs. Better wages and higher pay are the objectives in introducing flexibility to the industrial relations system. No-one wants wages to go down or families to be put under increased pressure.

The Labor Party and the unions, who have bankrolled the Kevin Rudd election campaign, have talked a lot about the unfairness of the flexible workplace system but they have struggled to come up with concrete, real-life examples of where Australian workers are worse off. Labor and the unions have tried to create a perception through advertising—a major advertising campaign, I might say, with huge amounts of dollars involved—that some working Australians in lower income jobs might be worse off under a flexible industrial relations system. They have failed to produce hard evidence both here in the parliament and in their public relations campaign.

The reality of Australian workplace agreements is that an employee will only sign one if it is in their interests and if it is more attractive than their current award conditions. That is my fundamental tenet. That is what I fundamentally believe, and I know the evidence on the record suggests that is the case. Why should any worker sign an AWA when legally they do not have to if the AWA is for less pay or less suitable conditions than the pre-existing award? The changes that are brought forward in this bill will address the uncertainty that has been generated by the ACTU advertisements and the Labor Party. These changes will introduce a legislated safety net provision to ensure that any AWA agreed from 7 May 2007 must provide for fair and reasonable compensation when protected award conditions are traded off. All this is for the benefit of the worker—and I again emphasise that.

When I rose in this place in November 2005 to speak on the Workplace Relations Amendments (Work Choices) Bill 2005, I did so with a belief that these reforms would improve the conditions of Australian workers and create extra job opportunities for unemployed Australians and also for people who had been out of the labour market and would like to do more work. When I look at the actual job outcomes over the last 13 months, I note we can see that the early experience of life under the more flexible IR system is more jobs and higher pay. Over the year since March 2006, more than 326,000 new jobs have been created. This means 326,000 Australians and their families are now earning more and are in a more stable financial position than was the case prior to these reforms.

I would not be so bold as to claim that the IR changes are the sole causal factor of these positive job outcomes, but I have no doubt that our reforms have been a very positive factor. Of particular interest is the fact that 85 per cent, or 277,200, of the new jobs generated in the past year since the implementation of flexible workplace relationships have been full-time jobs. That is a remarkable achievement in an economy that on some occasions has been moving towards casualisation. Prior to the government’s changes, unions were concerned about casualisation of the workforce. The experience of the past year would indicate that employers have responded to the new workplace relations and the abolition of Labor’s flawed unfair dismissal system by offering full-time jobs instead of casual options. That emphasises the point that changes to unfair dismissal encouraged full-time jobs rather than casual jobs that were not subject to unfair dismissal provisions.

On the wages front, Australian Bureau of Statistics wage-price index data shows that on average wages have increased 4.1 per cent since March 2006. I emphasise that point: since the introduction of the government’s workplace relations system wages have increased, especially when compared to the rhetoric of those opposite. Real wages have grown by 19.8 per cent since 1996, the result of the greater flexibilities that the government has introduced into the industrial relations system progressively since that election in 1996. By comparison, the value of real wages under the previous Hawke and Keating governments decreased by 1.8 per cent. That is the system that the Leader of the Opposition and the member for Lalor want to take Australians back to, the award system that has been advocated by the member for Lalor, whose intent is emphasised by the amendments tabled in the House this morning.

Workers have taken the opportunity to have flexibility, they have taken the opportunity to negotiate their own wages and conditions, and they have negotiated higher and better wages and conditions. Information provided by the minister shows that employees on AWAs are earning on average nine per cent more than employees on collective agreements and 94 per cent more than employees on award rates.

So we have the situation that AWAs provide a greater productivity than the former award structure. We see this in the factories, in the workplaces and in those plants that I visited. We know that mining industries in the Pilbara region of Western Australia have now become highly profitable apart from the commodity prices that are being received. They are highly productive. The culture that pervaded those industries for 20 years before the introduction of the AWAs has been overcome. The situation in Western Australia is that those employees have cashed out their award conditions and have found themselves remarkably well ahead and enjoying the prosperity of the commodity price boom. No centralised wage-fixing system could have provided that productivity and profitability.

We find that the profitability of the better industries is not being spread across Australia, as was the case with the centralised wage-fixing system and as we found in 1981 under the Fraser government when the centralised wage-fixing system brought about an explosion of wages. Because one sector was doing well it was considered by the centralised wage-fixing system that everyone else in Australia should enjoy that so-called prosperity. It proved a false dawn. In fact, that was a key factor in both unemployment and increases in inflation. The strike rates since figures have been held, since 1913, indicate virtually no strikes in the Australian economy under the current arrangement. That is a far cry from the 1950s and 1960s under the centralised wage-fixing system.

This bill provides some surety as to fair pay and conditions for those workers receiving under $75,000 per annum. This ensures that those workers who might be at the lower end of the spectrum will be protected by the law of this parliament. (Quorum formed)

The existing workplace laws provide protected conditions under the Australian fair pay and conditions standard: minimum wages set by the Fair Pay Commission; a maximum of a 38-hour ordinary working week; four weeks annual leave; personal and carers leave, including sick leave; and parental leave, including maternity leave. The expanded safety net provided by the fairness test will make sure that there is a fair and reasonable compensation payment built into individual AWAs in recompense where the following items are traded and cashed out: shift and overtime loadings, annual leave loadings, public holidays, monetary allowances, incentive based payments and bonuses, penalty rates and rest breaks. This safety net will ensure fairness for workers who are in a vulnerable position—fairness for workers who are signing up for jobs in low-income roles where there might be little bargaining power. Some people have expressed concerns about the fairness of young workers, 16-, 17- and 18-year-old first-time workers, negotiating pay and conditions with a potential boss. The fairness test and safety net will ensure fairness for our young Australians.

The fundamental test of AWAs has been that workers get paid more; otherwise they choose to remain on award conditions. The safety net will ensure that people are better off if they choose to sign an AWA. This legislation demonstrates the strong commitment by the government that a more flexible industrial relations system should work to the positive benefit of workers. Industrial relations is not a winner-take-all environment, as the class war relics of the labour movement would have us believe. Instead, employees, employers and the whole country should benefit from cooperative industrial relations where higher pay and improved profitability are the natural outcomes for workers and employees working hand in hand on shared goals for mutual benefit. The Labor Party and unions should always remember that even under a class warfare model of industrial relations there is no job in a bankrupt business. Those opposite do not fully understand that.

The legislation will establish a Workplace Authority—replacing the Office of the Employment Advocate—which will assess AWAs for compliance and fairness. Where a new AWA that has been entered into from 7 May 2007 does not meet the fairness test, the Workplace Authority will work with employers to ensure that the agreement is upgraded to meet the fairness test requirements. In such a situation, employers will receive back pay. An employee cannot be sacked because an AWA has been found not to comply with the laws and fairness test. The assessment of AWAs under the fairness test will not involve legalistic hearings. This will not create an onerous red tape burden on businesses. There must be identifiable parties. An unfair test cannot be run on mythical arrangements.

The new industrial relations system under the Howard government will replace the 4,000 awards. This is what the member for Lalor would return to. I note the very good work of the Alcoa plant in my electorate and, in the coastal resorts, the flexibility that has resulted for the smaller restaurants and motels from the workplace changes. I strongly commend this legislation, even given the interruptions I have had from those opposite, who are rather unhappy that we are introducing sensible, carefully thought through legislation. (Time expired)