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Wednesday, 30 May 2007
Page: 20

Mr SWAN (10:34 AM) —If Australia is to move forward and prosper as a nation, we need a modern industrial relations system that balances the flexibility required by business with the security needed by employees and their families. This government’s extreme industrial relations system has tipped the balance too far against working families by removing things like overtime and penalty rates, leave loadings, rostering protections, and redundancy pay for many. The amendments contained in the Workplace Relations Amendment (A Stronger Safety Net) Bill 2007 will not—I repeat, will not—restore the balance. They will not restore sufficient basic conditions that Australian families rely on. They will not restore the faith of the Australian people, lost by a government who did not even see fit to consult them on their industrial relations laws at the last election. Work Choices is at the heart of why people no longer trust John Howard and Peter Costello. Prior to the last election, Work Choices was never mentioned. The government—

Mr Hardgrave —Mr Deputy Speaker, I take a point of order. It is absolutely important that the standing orders relating to the proper identification of members in this place are upheld. The member for Lilley has not done that.

The DEPUTY SPEAKER (Mr Wilkie)—Order! The member for Moreton will resume his seat. The member for Lilley has the call and is reminded to refer to honourable members by their title or seat.

Mr SWAN —Mr Deputy Speaker, they don’t like it because they know that Work Choices is at the heart of why people no longer trust the Prime Minister, John Howard, and the Treasurer, Peter Costello. Prior to the 2004 election, Work Choices was never mentioned. The government did not seek a mandate for Work Choices or anything that resembled it. The member for Moreton did not take this to the people in Moreton at the last election. When, thanks to Queensland, John Howard won an unexpected Senate majority, he went on national television, put his hand on his heart and declared before the people that he would not abuse or misuse the mandate that he had been unexpectedly given. But he has been abusing that mandate ever since then. Nowhere is that more evident than it is in Work Choices—and the Australian people know it.

The Australian people have good reason not to trust a pre-election Prime Minister and a pre-election Treasurer. They have more form than a Melbourne Cup race book. The Australian people also know that if the Prime Minister is re-elected we will not only see a return to Work Choices as we have known it; the Prime Minister will go further. If the Prime Minister is re-elected we will see harsher industrial relations laws in this country. Why do we know that? Because his key supporters have said precisely that. He believes in these laws. His key supporters believe in them and that is why they will make them harsher if they are re-elected. Senator Minchin told the HR Nicholls Society, when he did not know that a journalist was in the room, that Work Choices was only the first instalment in the government’s IR plans. The Treasurer has not ruled out harsher laws either. We have the finance minister and the Treasurer all on the record leaving open the possibility of making these laws harsher after the next election.

What is now clear from the bill that is before the House today is that the government now know they have gone too far with their extreme laws, which rip away penalty rates and other conditions. They know they are out of step with the Australian community, so what they are trying to do is to beat a temporary retreat, to pretend that somehow they have wound back these laws. They are not fooling anyone with this attempt at an extreme makeover and a political retreat. Why is it that they have instructed the Workplace Infoline to drop the name ‘Work Choices’ from its language? Why is it that they are spending millions of dollars of taxpayers’ money on political advertising just a few months out from the election? It is to save their political hide, but I think the Australian people have seen through this mob.

This bill is about clever politics. It is not about good policy; it is about creating a perception. It is not about restoring sound process. It will take a lot more than a multimillion-dollar taxpayer funded advertising campaign to restore balance to Australia’s industrial relations system. The bill says there is a new test which is somehow supposed to strengthen the security of Australian families and working Australians. But there are holes so big in this test that you could drive a truck through them. They have not put a safety net in place or, if they have, it has gigantic holes in it. It is a small step forward, but the fundamental unfairness of this legislation remains. Its elements are ill defined and it does not protect basic conditions Australian families rely on. Of course it comes with a bureaucratic army: two new institutions—the Office of the Workplace Ombudsman and the Workplace Authority—and a compliance framework, we have learnt, which will involve recruiting 600 inspectors to make the system work.

If fairness has been restored, why is there a need for 600 inspectors? If they have gone all the way to restore these conditions, why do they need 600 inspectors? Is it not the case that the laws are still unfair? That is why 600 inspectors are required. Instead of policing bad laws, what about putting in place fair laws in the first place? I will tell you why. Because they are not committed to fair laws. They are committed to an extreme makeover just before the election. They will come back after the election and go down the same road again, and double it, because that is the record of the Howard government.

Compared with the system the government introduced last year, these changes may improve the situation for some people, and that is a good thing. I am not convinced it will, but I cannot see how it will make them worse. So for this reason we do not want to prolong the uncertainty caused by these changes. We will not seek to delay the passage of this bill through the parliament, but we have very serious concerns, as the Deputy Leader of the Opposition has already noted. We are concerned that these changes do nothing to protect important award conditions, such as redundancy, rostering protections, long service leave and so on. There is a lack of detail about the meaning of terms like ‘fair compensation’, ‘exceptional circumstances’ or ‘compensation of significant value’. There is disturbingly little scope for scrutiny of the decisions made by the Workplace Authority under these changes.

In short, there is nothing in these amendments that diminishes our resolve to repeal Work Choices and replace it with a system that delivers an appropriate balance between the flexibility needed by a business and the security needed by employees and their families. A sensible and modern industrial relations system takes a middle path that balances flexibility needed by business with security needed by employees and their families and this bill does not achieve that. It certainly goes nowhere near that middle path—the middle path put forward by the Labor Party in this parliament.

If we are to build prosperity into the future beyond the mining boom, current policies need to be directed to lifting productivity and harnessing the talents and abilities of all of our people. The government can dress its industrial relations laws up in all the taxpayer funded spin and propaganda it likes, but this will not alter the fact that the government’s Work Choices industrial relations laws will do nothing—I repeat: nothing—to boost productivity, which has gone backwards in relative terms, on this government’s watch. This government’s failure to invest in the drivers of productivity, despite the rivers of gold flowing from the mining boom, is one of the most significant policy failures in its 11 long years at the helm. The government has been led by a narrow ideological agenda and it has been increasingly forced to rely on desperate arguments to justify the benefits of Work Choices. The first desperate economic argument that it puts is that Work Choices has been responsible for our recent jobs growth. This is one of the great cons of the Howard era.

Despite the strongest world economy in more than three decades and a once-in-a-generation mining boom, the Prime Minister would have us believe that Work Choices is responsible for 326,000 jobs created over the 13 months since March last year. This is a whopper. As porkies go, it is a whopper. This is just another economic myth of the Prime Minister designed to detract attention from the fact that the government has no plan to build prosperity beyond the mining boom.

Mr Hardgrave —Mr Deputy Speaker, I rise on a point of order. The other day the Speaker ruled that the terminology ‘porkies’ in connection with comments made by the Prime Minister was unparliamentary. I ask that the member for Lilley withdraw that comment.

The DEPUTY SPEAKER —The member for Moreton should know that I was not in the chamber at that time. I am not aware of that. I will discuss it with the Clerk. In the meantime the member for Lilley has the call.

Mr SWAN —This is just another economic myth of the Prime Minister designed to detract attention from the fact that the government has no plan to build prosperity beyond the mining boom. In a candid interview with the Financial Review on 18 December last year the Treasurer admitted that the government’s workplace laws ‘don’t create jobs; the economy does’, and he is right. The Australian economy is being swept along by the strongest global economic growth in more than 30 years and China’s appetite for our commodities and resources has helped take our terms of trade to their highest level in more than 50 years. So it is not surprising that it is in the mining states of Western Australia and Queensland and in the Northern Territory that employment is being driven. Those two states and the Territory are driving about half of all employment growth, despite the fact that they make up less than one-third of the labour force. While the mining states have seen the greatest benefit from the mining boom, other states have also benefited. As the Reserve Bank noted in its Statement on monetary policy released this month, the increase in Australia’s terms of trade and:

... the associated increase in national income has benefited all states through such channels as higher dividend payments to shareholders, increased demand by the resource-rich states for goods and services from the other states, and higher government revenues.

Labour market economist Professor Bob Gregory has also argued that the major source of jobs growth is not Work Choices but the strong growth in the economy which, in his view:

... is mainly driven by China, both through cheaper import prices and stronger export demand.

That is a view supported by Treasury secretary Ken Henry, who argued in his March departmental speech to staff:

Much of our recent macroeconomic and fiscal success is based on past reforms, assisted by the terms of trade.

If you ever wanted to see a slap in the face for the Treasurer, that is certainly it—a complete repudiation of the rubbish line he has been running in this House about the impact of Work Choices. Yet the Prime Minister continues to pass off the benefits of the mining boom as benefits from his industrial relations laws, as does the Treasurer. The reality is that much of our current employment growth has been generated directly or indirectly by the mining boom. The government is never far back when it comes to claiming credit for things really associated with the mining boom.

Earlier this month the Treasurer sought to claim that the massive tax windfalls generated by the mining boom were a product of his good economic management. The Treasurer attempted to mount the argument that the benefits of the biggest terms of trade boom this country has seen in half a century were somehow quarantined to company tax paid directly by the mining sector. That is complete economic nonsense and flies in the face of the view expressed by the OECD, his own department and many respected economists. As the OECD noted in its Economic Outlook report of last week:

... those countries that are major commodity producers (particularly Norway, Canada and Australia) have benefited from a tax windfall resulting from high commodity prices.

Another slap in the face for the Treasurer. In making these claims, the Treasurer ignores the boost to income tax collections from stronger employment and wage growth, not just in the mining sector itself, but also in other businesses serving it, like construction. He ignores higher capital gains tax from higher dividends paid to shareholders of mining companies, but also other companies that they do business with. He ignores jobs created in the finance sector, which provides the capital for infrastructure projects, and in the booming residential housing sector and so on. These sorts of claims are a reflection of a government that has been all too content to squander the benefits of the mining boom on things like $1.8 billion of political advertising over its 11 years, rather than investing the profits of the boom in future prosperity.

The government has also argued that its industrial relations laws are necessary reforms that will lift productivity and living standards. Yet the government has not once—I repeat, not once—asked its own key economic policy agency, the Treasury, to model the benefits. Why would that be? Why would you not ask the Treasury to model the benefits? Because you would not get the answers that you wanted. That is why the Treasurer has not asked Treasury to do that modelling.

In February this year the Treasury confirmed yet again that the government had not bothered to ask for an analysis of the government’s industrial relations changes since their introduction. The reality is that there is no available economic evidence that suggests the government’s industrial laws will lift productivity growth and future living standards. What we do know is that, since Work Choices was introduced in March last year, productivity growth has pretty much stalled. In fact, the Treasury is projecting that this financial year productivity growth will be zero. That is yet another economic fact that the Treasurer has chosen to ignore. The Prime Minister has further argued that winding back his industrial relations laws—ironically the very thing he is now purporting to do—would damage the economy, weaken our capacity to compete and destroy jobs. It is a claim that is completely bereft of substance. It is not backed up by any empirical evidence. In fact, it is about as credible as his 11 denials of a taxpayer funded climate change ad campaign in the parliament over the last few days.

I know facts and straight talking are something the Prime Minister is not entirely comfortable with, but here are the facts. Labor’s industrial relations system will take a middle path. It will be underpinned by workplace level collective enterprise bargaining, where employees and employers can directly bargain over employment conditions and productivity improvements. We know that an economy operating under an industrial relations system based on workplace bargaining can generate strong productivity growth. Over the five years after Labor engineered the shift from centralised wage fixation to enterprise bargaining in the 1990s, productivity grew at the rapid pace of 3.2 per cent per year. In the five years after the Prime Minister introduced AWAs, productivity grew by an average of just 2.2 per cent a year. As I have said, since Work Choices was introduced, productivity has barely grown at all.

The government’s industrial relations laws reflect a narrow economic agenda. They are not the pathway to higher productivity. They are not the pathway to higher living standards. They do not build prosperity by undermining security. You do not create wealth by cutting wages and conditions of hardworking Australians. You create wealth by building a strong economy, by investing in the skills of your people, by boosting productivity through modern infrastructure, technology and innovation and by getting the incentives right in the system. These are all important elements of a broad and balanced middle path that will achieve higher employment, productivity and living standards.

The real risk to Australia’s future does not lie in Labor’s middle road in industrial relations; it lies in the complacency of this government over the last decade to invest in the drivers of productivity and growth. But, of course, rather than fronting up to our core economic challenge of turning around our flagging productivity growth, the Treasurer has instead been tying himself in knots with arguments about Labor’s industrial relations policy. The Treasurer has asserted that winding back Work Choices would cause sharp wage rises and fuel inflation. But one of the government’s key claims about Work Choices is that it would lead to higher wages. The Treasurer cannot claim that Work Choices causes higher wages and then complain that winding it back will cause higher wages. That is a nonsense. His central strategy seems to be that, if he shouts loudly enough, if he employs enough theatrics and bombast in the parliament, all these illogical propositions will suddenly become logical.

After last year’s failed leadership bid, the stakes are very high for the Treasurer at the moment. It is not surprising that there is no allegation too desperate, no logic too flawed, no claim too dishonest for the Treasurer to try on. He is really pushing the envelope of credibility right to the edge these days. In fact, almost daily, we see the Treasurer making a new sacrifice of his credibility on the altar of electoral advantage—for example, the Treasurer’s recent claim that Labor will reimpose a centralised wage fixation system. This is patently dishonest and he knows it. Labor will not be going back to centralised wage fixation. After all, it was the Hawke and Keating governments which moved away from nearly a century of centralised, arbitrated wage fixation in this country. It was this move by Labor which stopped the damaging wage spirals of the previous decades, the last of which was on the current Prime Minister’s watch as Treasurer in the Fraser government.

We face big challenges as a nation. There are the competitive challenges associated with the rise of China and India and of addressing climate change, to name a few. We are only going to get the Australian people—employers, employees, small business owners and public institutions—to make these changes and meet these challenges if they perceive that the rules are fair. If people think that the rules are rigged in favour of one side or the other, there will be a backlash and we will lose the support of the community for change. It is a backlash our community cannot afford if we are asking employees to play a part in meeting the challenges ahead. (Time expired)

The DEPUTY SPEAKER (Mr Wilkie)—Before I call the honourable member for Moreton, I advise the House that I have checked the record and, on 23 May, the Deputy Speaker ruled that the term ‘porkies’ was unparliamentary and required that term to be withdrawn. I understand that the member for Lilley withdrew that term at the time the point of order was raised; therefore, no further action is required.