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Thursday, 9 February 2012
Page: 589

Dr MIKE KELLY (Eden-MonaroParliamentary Secretary for Agriculture, Fisheries and Forestry) (12:55): It is a great pleasure to be able to speak on the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2011. The situation we find ourselves in is that we have a leftover issue to deal with in relation to the terrible Work Choices regime. Here we see the next step and the healing hand of Labor in dealing with the deep and damaging wound caused by that Work Choices period. It was a shameful period with a surprise package sprung on the electorate without a mandate.

It is something to reflect upon that we have heard from the coalition that they generally supported the mandate that we had to deal with the Work Choices issue, and yet they have strongly opposed this last remaining measure to deal with one of its most damaging aspects. It was an aspect that I found particularly abhorrent, as I know many members on our side did. This was a mechanism, the ABCC, that targeted a particular component of the industrial relations sector, a particular element of that component being focused purely on construction industry workers in a totally disproportionate manner. There are incidents and issues in certain locations in the sector but it is, generally speaking, a well-functioning industry that was at the time achieving productivity gains and which still is. I will come back to that point.

This measure that we are discussing today introduces a new mechanism, the building industry inspectorate, to replace the ABCC. It will get the balance right in dealing with the issues that we know emerge on the employer side of this equation as well. There have been many of those. I have witnessed many of them in my proximity to colleagues in the ACT and the loss of life experienced on building sites. It has also been my great privilege to represent many CFMEU members in my region. Prior to the redistribution, a large number of them were working in the Carter Holt Harvey and Hyne timber mills in the Tumut and Tumbarumba region and down at the South East Fibre Exports facility in Eden. And there are many construction workers who live in Queanbeyan, Bungendore and Jerrabomberra who commute across to worksites in the ACT and around my region. These are men and women enjoying the benefits of collective agreements negotiated with their employers through good partnerships, producing good productivity outcomes with that team approach to an industry, which we know is going to always offer the best potential for productivity outcomes.

This measure will even out the oversight of the industry given that we obviously have issues that still remain that people are concerned about to do with the oversight of the industry. I am personally of the belief that the day is fast approaching when there will be no need to make any distinction in relation to this sector of our economy. In particular, I have always been deeply concerned about the compulsory examination power that existed under the ABCC. With this reform there will be a sunset clause attached to that aspect, and the belief is that in three years time there will be no longer any plausible argument as to why such powers need to exist. These sorts of powers should be extremely carefully considered in any democracy. The circumstances in which you would resort to powers like this have to be exigent and very focused on limiting their duration and application. It has always deeply troubled me that these sorts of provisions have existed. I look forward to their demise and there being no longer a need to resort to them. So we will then see the last of some of the abhorrent aspects of this Howard measure, which was in fact designed to target workers, destroy their representative capacity and destroy unionism in this country. That was the overall plan.

I well remember my opponent in the 2007 campaign, the former member for Eden-Monaro, saying on radio that unions knew that if Labor was not successful in that campaign their days would be numbered, that it would be all over. This was the strategy and that was the tactic: to destroy the representative ability of workers in this country—a more reprehensible strategy could not be contemplated.

With these provisions in this legislation we will also see the ability to deal with the situation of the employers—and we have seen lots of unlawful conduct associated with the construction industry on the part of employers. We have seen underpayment of wages and sham contracting. In recent times in this region, we have seen lots of incidents of unsatisfactory practices in relation to work and safety. I commend the colleagues that I have worked with who looked after the interests of those workers in the CFMEU, who do such a wonderful job not only in representing the interests of their members and promoting a prosperous industry but also in the added support that they provide to our community and our region. They have been involved in so many activities, charitable and otherwise, that they are integral to the quality of life of our community. I salute what the CFMEU have contributed to my region and to the interests of the workers in that region.

Coming back to the context in which this legislation is being introduced and curing the legacy of the Work Choices years, we know that Mr Abbott has stated that Work Choices is dead and buried or cremated, but we have seen the reintroduction of the concept through the code word 'flexibility'. What flexibility means to the coalition is returning to those days when the worst impositions of Work Choices had a devastating effect on people. Why is that? Why do they resort to these measures? They talk about productivity in the economy. To the coalition, we know that productivity solutions always mean making the worker carry the burden of those productivity gains. The easy solution for them will always be to cut wages, cut jobs and support productivity gains in whichever way they can through the hide of the worker.

When Mr Abbott talks about signing pledges in blood, he means he is signing his pledges in workers' blood. He does not support the preservation of jobs—the hundreds of thousands of jobs that were obviously saved through the GFC, the hundreds of thousands of jobs attached to the automotive industry, or the thousands of jobs we have heard the shadow Treasurer talk about axing from the Public Service in my region alone, which would devastate our local economy, as the coalition did back in 1996 when they sent us into recession.

We should really focus on the true story of productivity. There are many fine economic commentators who have burst the balloon on the issue that industrial relations is the heart of productivity and accounts for where this country is now. It just is not true. Of course improvements can always be made to industrial relations regimes. Circumstances change, economies transition, and you always need to keep an eye on reforms that might be necessary.

Where we are now has been greatly emphasised by a number of very credible commentators such as Alan Kohler, Ross Gittins and George Megalogenis, people you would pay attention to on economic matters—not, I am afraid, Larry, Curly and Moe, the member for Goldstein, the member for North Sydney and the Leader of the Opposition. Their credibility has been absolutely blown out of the water in recent times. Not only have we seen the farcical 'pass the parcel' situation of the budget reply at the previous budget; also we saw their credibility blown out of the water in the 2010 campaign with the Howarth so-called 'audit' that was not an audit and disciplinary action had to be taken in relation to that. That was a farce, because they were not able to test the assumptions that underpinned the estimates. If you can test the assumptions then the figure, if you pardon the expression, is bollocks. We have seen their credibility blown out of the water. Since then we have seen the estimates in relation to Nauru done on the back of a coaster by a catering company. I am not sure what we are going to see next. Perhaps they will subcontract their next budget reply to McDonald's.

If we look at what Alan Kohler, for example, has written in relation to productivity—and we are talking about multifactor productivity, the relationship between capital and labour which is the only really important and relevant factor to look at—we have seen that the productivity figures at the moment, taking into account all the sectors, have been skewed in relation to the impact of investment and issues in the mining sector. Certainly, there has been a decline in mining productivity and the reason for that are the high levels of investment in the mining and utilities industries that have not yet come on-stream. That has also been affected by the GDP growth, which has been slower during the GFC.

The massive investment in the mining industry that we have seen is important because the injection of capital relating to productivity outputs of labour has been extremely skewed by this massive investment. It is the mining and quarrying sector that is skewing the overall productivity picture in this country. If you look at manufacturing, construction, hospitality and real estate, they all improved their growth in productivity between the 1990s and the 2000s. This is the true picture.

When we talk about productivity, what we mean is facilitating it through investment in infrastructure, investment in skills and particularly through promotion of innovation. These are the key areas. We want to see wages maintained. We cannot engage in a race to the bottom with China and India on labour costs. That is just not possible and is not desirable for our country. We know that there are huge possibilities open to us in innovation. This government have been investing not only in innovation but also in addressing those long-neglected infrastructure and skills issues that the previous Howard government let slide during those Rip Van Winkle years. We know that, more broadly, growth in non-mining productivity has picked up and not slowed. Clearly, the impact of industrial relations reform has just not been what some of the commentators in the coalition have claimed. Another key factor underpinning the government's approach has been research by the University of New South Wales, Australian National University, Macquarie University and the Copenhagen Business School, which examined 77 businesses in the services sector with more than 5,600 employees. They found that the best performers are better at innovation. They generate more new ideas and are better at capturing and assessing their employees' ideas. In consequence, they make more improvements to services and production processes, management structures and marketing methods. But some 'treat them mean to keep them keen' managers will be surprised that high-performing outfits do better when it comes to employee emotions. They have higher levels of job satisfaction, employee commitment and willingness to exert extra effort, and they have lower levels of anxiety, fear, depression and feelings of inadequacy. One of the bottom line consequences of this is low rates of staff turnover. As Ross Gittins points out in his analysis of that study, these are the keys to where smart employers need to go. Certainly those employers that encourage innovation and are open to criticism see it as a learning opportunity. They foster involvement and cooperation among staff and provide opportunities for them to engage and contribute to the long-term progression and development of their enterprise.

These management practices are what smart employers are doing. Through the clean energy future package we have seen this government open up a whole new field of potential, not only through the Carbon Farming Initiative—which has provided great opportunities for our agricultural sector in innovation and employment opportunities—but also through the Clean Energy Finance Corporation, with the $10 billion that will be able to get behind loan guarantees and so on and will encourage the venture capital for a new economy that is in great demand the world over.

This is the real secret to the economic improvements in this country and these are the challenges ahead of us that we must face. This comes back to our philosophy of not treating workers as widgets in the way the coalition does. We do not believe that workers are simply commodities that cannot be dealt with as human beings. We will find a way to achieve our productivity gains without penalising the workers. We also intend to make sure that we keep the jobs—prosperous and satisfying jobs—growing in this economy through the investments we are making in infrastructure, in the clean energy package and also, most importantly, in the rollout of the National Broadband Network. It is absolutely beyond belief that someone like the Leader of the Nationals and the coalition are doing the regions of this country a disfavour. This is the great potential piece of infrastructure that will open up worlds of possibilities to regions like mine, where we will see things like the timber precinct in Bombala growing through the investment of $200 million by Dongwha-Tasco, who will not reach or develop the full potential of that project without the NBN underpinning it. This is what they have clearly indicated to us.

Beyond that, there are lots of innovative, new, non-polluting industries that will be associated with the NBN, because basically you can hang off that infrastructure in any location you choose in many industries without having to be tied to metro environments. For a region like mine and regions all over this country, the NBN will be a key factor in achieving the goals that we set for ourselves. That is what the government is all about: a rewarding, secure, prosperous future for our people.