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Thursday, 1 November 2012
Page: 12971

Mr MORRISON (Cook) (13:09): I rise to speak on the Migration Amendment (Reform of Employer Sanctions) Bill 2012 and indicate that the coalition will not be supporting this bill. The coalition will not support, on principle, a bill that seeks to impose unreasonable regulatory burden on Australian employers, the vast majority of whom are honest and law-abiding.

For five years Labor have mummified employers, tying them up with their never-ending rolls of red tape. Labor have strangled productivity and stifled ingenuity of business—micro, small and large. Since 2008 more than 18,000 additional regulations have been created by the Rudd-Gillard governments. Labor made a promise when they were elected that they would introduce a one-in one-out scheme—the first broken promise, and sadly not the last. In 2008 Labor added 5,284 regulations and repealed just 33; in 2009 Labor added 7,329 regulations and repealed just 21; in 2010 Labor added 3,386 regulations and repealed just four; and in 2011, for the 2,797 regulations added by Labor, they repealed 28. In the space of just four years that amounts to more than 18,700 regulations in with just 86 taken out. Forget one-for-one: this government's legacy is 218 regulations for every single one that they have taken out. They are a government who have turned Australian businesses into compliance officers for the federal government as part of their regulation binge over the last four to five years.

It is a tough time to be running a business, as I know the shadow minister for small business sitting at the table, the member for Dunkley, understands better than anyone in this place. Retailers are struggling. Confidence is low. People are having to find room in their budgets to pay for increased electricity bills courtesy of this government's carbon tax—the carbon tax which was never going to be introduced under a government this Prime Minister said she would lead. Resources and mining companies are facing critical decisions about future investments in the pipeline, having now been subject to a tax on mining that drove a wedge into sovereign risk investment in their sector and yet has failed to raise a dollar for the government in revenue. The mining tax has proved to be the flightless bird of taxation, and it has not gotten lift off. The only thing it has lifted off has been an increase in sovereign risk for those seeking to operate in the mining sector. Doing business is tough enough as it is, let alone doing business under Labor, and having to run the gauntlet of an overexpanding maze of red tape does not make that any easier. Labor's approach to regulation is not making people jump through a few well-placed hoops; they are sending business men and women on a steeplechase of regulation that seems to have no end.

Of course the exploitation of foreign workers is a serious issue—there can be no argument there. An immigration program must be robust and fair. The coalition has always maintained that compliance is critical to ensuring the integrity of our migration streams and to protect Australian jobs and industries. If the government want to understand why Australians have lost confidence in Australia's immigration program, they need look no further—not through increased regulation on business on foreign workers; they should be looking at their failure on our borders. And today I note that more people have arrived by boat in 2012 than turned up under the entire period of the Howard government—extraordinary failure. No wonder people have lost confidence in this government's ability to manage a migration program.

But the debate today is not about the need for compliance. Today this government is asking for more red tape to hang on business. This debate is about Labor's habit of slapping employers with ever-expanding tomes of regulation in place of finding real solutions or providing real governance through better risk management strategies and through better use of the powers they already have rather than seeking to ease their consciences for their own failures by just slapping more regulations and more laws through this parliament.

Labor's insatiable appetite for more regulation on business should not be dressed up as getting tough on immigration. A crackdown on illegal workers should not come at the expense of, in Minister Bowen's very own words, 'the vast majority of Australian employers who do the right thing and are reputable and law-abiding businesses'. A risk management response should differentiate and deliberately target those who intentionally set out to exploit others rather than overloading all employers with an expensive and excessively regulatory burden. The coalition will not support heavy-handed regulation across the board, and that is why we will not support this bill.

That is the key difference between the coalition and this government. Time and again this government fails to understand, let alone address, the challenges facing the Australian economy. Time and again, Australian taxpayers, Australian employers and Australian small businesses pay the price for Labor's wilful mismanagement. They pay for it in the taxes that this government seeks to impose upon them. They saw it most recently in MYEFO. They see it in the levies the government imposes on them in terms of self-managed super. They see it every single day in the time robbed from them to run their businesses, time they could have used to come up with the innovative products and ideas to determine and secure new markets which would grow their businesses and create jobs. That is what this over-regulation does—it robs them of their revenue in robbing them of their time.

Time is precious to anyone running a business, particularly a small business. Time spent filling out paperwork for this federal government, which has an unending appetite for it, could be better spent by these businesses doing what they do best, doing what they love and doing what they want to do—the reason they put their houses and their financial futures on the line. They do not run businesses to keep this government happy with paperwork; they do it to create a better future for themselves, their families, their communities and our economy. It is businesses that create jobs. It is not governments—although, with more regulation, they have to employ people to receive the bits of paper from businesses and endlessly collate them. At the end of the day, this paperwork offers very little in terms of making a difference to the economy.

A risk management response should differentiate and deliberately target those who set out to exploit others. Time and again, the Australian taxpayer will have to pay this bill. Businesses should not be made to do the government's work for them or be squeezed to make up the difference in terms of the $120 billion budget black hole that Labor have because their accounting went wrong. Frankly, the government do not understand the underlying challenges for the Australian economy. They just don't get it.

All Labor has done is make it harder for businesses and employers to keep their doors open. We are facing a significant productivity challenge in this country that the government has shown itself incapable of responding to. This was an issue it made much of prior to 2007 but has delivered nothing on in its time in government. In the past five years, under this government, our productivity performance has plummeted. Multifactor productivity dropped 4.2 per cent over the five years from July 2007, driven largely by a fall in capital productivity. This has a direct correlation with regulatory burdens, which chew up time and money.

A recent McKinsey study showed that, of the $200 billion increase in national income between 2005 and 2011, some 90 per cent was due to the improvement in the terms of trade and capital investment. There was an 11 per cent decline in our productivity that actually took away, stole, from our national income. The balance of the 20 per cent make-up to achieve that increase in national income was delivered by increases in the size of the workforce, particularly through a growth in the Migration Program and through an increase in workforce participation. So this government has not delivered on the productivity improvements that it said it would prior to 2007. That should come as no surprise. I am at a loss to understand what they have delivered on since that time.

Australians go into business because they believe they have something to offer. They have a vision and an idea. They go to work to do a job, not to do paperwork. According to the Productivity Commission, real GDP growth has averaged 3½ per cent over the last 35 years, with labour productivity accounting for 1.7 per cent or more than half of this growth; population accounting for 1.4 per cent; and participation, for just 0.4 per cent.

The key is to focus on reforms that are achievable and practical. One key aspect of reform highlighted by both the coalition and the Productivity Commission to improve our productivity is to remove unnecessary regulation. The Productivity Commission estimates that a 20 per cent cut in compliance costs can add 0.8 per cent to GDP growth. In dollar terms, they estimate the value gained by cutting red tape could be as much as $12 billion a year.

Over-regulation is killing business innovation across the board. It is crowding out the most important activity a business can undertake—developing the new products, services and markets that will fuel future growth and employment, and looking after its customers. We should be reducing business compliance costs and stripping back unnecessary regulation, not adding more.

The coalition will allow businesses to be businesses again if we are elected at the next election, rather than continuing to be compliance officers like this regulation-hungry government. Businesses and employers understand the cost of unnecessary complexity and regulation, including in our migration programs, and especially in the critical areas of skills, labour and business migration. Sadly, the government does not—nor will it listen to the concerns of those who experience this firsthand. Australian entrepreneurs and companies have told the Coalition Deregulation Taskforce that the cost of doing business in Australia is now anywhere between 20 and 40 per cent higher than it is for doing business with our major international competitors. For that reason, many businesses, especially in the manufacturing sector, have moved their operations offshore, to countries that are more competitive. According to the Business Council of Australia, when compared with the United States, resource projects are about 40 per cent more expensive to run in Australia, Australian airports are 90 per cent more costly to build and Australian hospitals cost 62 per cent more. The government's answer to everything is to hit the panic button and invent extra regulations to try and compensate for their own incompetence.

The National Red Tape Survey released this month by the Australian Chamber of Commerce and Industry found almost three-quarters of the 870 businesses surveyed are spending more time on regulation than they were two years ago. It found that 44 per cent of businesses are having to spend between one and five hours a week complying with government regulations—filling out forms, applying for permits, and reporting business activity at a local, state or federal level. It found that one in three businesses is spending more than five hours a week on regulation. That is five hours locked up in the office, off the shop or factory floor each week, which works out to be around 30 working days each year—30 days taken up just with paperwork and compliance. And I am sure that for many it is a lot worse than that. Eleven per cent of those surveyed spent more than 20 hours a week on regulation. That is more than half the working week every week.

Not surprisingly, it is costing more, too, with 73 per cent of businesses reporting that their overall cost of compliance had gone up in the last two years; 42 per cent of businesses estimating that they had spent more than $10,000 on compliance with regulation; 80 businesses spending between $50,000 and $100,000; and an astounding 60 businesses spending in excess of $100,000. Around 60 per cent of businesses said that red tape had a moderate to major impact on their businesses, while 54 per cent flagged that the effort taken to comply with the regulations had prevented them from making changes to expand or grow their businesses.

The productivity revolution—I know that the government apply the word 'revolution' to anything that falls out of their heads—that needs to take place has to operate and occur within businesses. It is about how they manage themselves and how they operate themselves.

Mr Stephen Jones: Mr Deputy Speaker Adams, I rise on a point of order. This is a magnificent job application for the leadership of the opposition, but none of it is relevant to the legislation before the House.

The DEPUTY SPEAKER ( Hon. DGH Adams ): The honourable member will resume his seat.

Mr MORRISON: I note the point made by the member for Throsby. He clearly does not understand that increased regulation, which is the subject of this bill, is what is at issue. I do not know what talking points he is going to be speaking from when he next speaks; maybe he has got them mixed up again! He happens to get mixed up on many issues most of the time, but if he wants to listen a little more than he speaks he might understand a few things about the impact of regulation on business, which I am sure that he as a former union official may have had some exposure to—if he spoke to employers rather than trying to extort them.

The Migration Amendment (Reform of Employer Sanctions) Bill 2012 before us today will only add further strain and will further stain this government's record when it comes to economic management. As thanks for having law-abiding businesses, honest employers will now have to cop a ridiculous regulatory burden to verify that their employees are, in fact, legal. The government have taken an unrealistic approach to managing risk within our immigration program and have failed to implement systems to help businesses manage that risk effectively. Because the government could not be bothered, they are going to contract this out and put the burden on business. This legislation is a case in point.

This is a government that does not understand business, big or small, and this is a government that cannot be trusted not to move the goalposts midway through an agreement or investment. There is mounting evidence that this government and this minister, held captive by the unions, are actively destroying Australia's skilled migration program, particularly in the area of temporary migration and, in that process, they are destroying Australian businesses.

Labor has undermined the confidence of foreign investors by changing the rules of engagement without warning. The government's botched handling of skilled migration has been on display for the last six months—hopefully it will come to a resolution this week—through the enterprise migration agreements farce, which continues to this day. Six months ago, the minister went to the National Press Club and announced this grand new arrangement for the Roy Hill mine project in Western Australia. But announcements by this government mean very little. They think that once you have announced something—whether it is the Asian century or the National Disability Insurance Scheme—the job has been done. It does not matter what they announce; people want to see the program delivered. Having announced an enterprise migration agreement back in May for skilled migration, particularly temporary skilled migration, opportunities to ensure the viability of a project of that significance—which is bigger in today's dollars than the Snowy Mountains project—instead of following through and being able to confirm it in a matter of days or weeks, we saw the Prime Minister and the Minister for Employment and Workplace Relations dingo on that announcement on the same day, after their meetings with unions.

Six months later, the Roy Hill mine EMA is still not signed. There is still no deed. And this is happening when the coalition have supported the government; even when we support them, they still cannot get it right. I hope that the minister will be able to come to an agreement on the Roy Hill mine project. I hope that the government will come to that agreement this week. They have already failed to this point, through their delay, but if they fail to come to an agreement this week then they have failed absolutely.

It is against this track record of failure after comprehensive failure that the government have come into this place and sought permission from the parliament to impose upon businesses another regulatory burden. They are not asking for more money, as they were earlier in the week; they are asking for more regulation. Is it any wonder businesses do not trust this minister when he tells them that these sanctions 'should only be of concern to those employers who seek to circumvent the law'? These sanctions should be of concern to every employer whose business relies on being able to access overseas workers where Australians are not available to fill the jobs.

In their submission to the Department of Immigration and Citizenship, when the exposure draft of this bill was first released, the Australian Mines and Metals Association noted that these measures would 'impose disproportionate cost and inconvenience on resource industry employers, even though work by noncitizens has not been identified as a significant occurrence within the resource industry'. They went on to say:

Overall, it is imperative that the cost of doing business is balanced appropriately against the cost of ensuring compliance with migration laws.

These bills do not strike that balance.

The Australian Hotels Association said in their response to the exposure draft that their concerns centred around what they saw as 'significant additional obligations on all businesses and all workers as an inefficient way of addressing a relatively small-scale and isolated problem'. AiG, the Australian Industry Group, described the proposal as 'heavy-handed and unnecessary'. They said that imposing strict liability offences on employers and labour suppliers will not deter the small minority of employers or labour suppliers who already knowingly abuse the law to engage cheap labour. They said:

Rather the proposed changes will impact the unintended targets, i.e. good employers and labour suppliers. It is unfair that these persons be subject to high regulatory burdens because of the illegal practices of a very small few.

The Labor government has already imposed a significant burden on employers who hire overseas workers, including but not limited to the Migration Legislation Amendment (Worker Protection) Act 2008, which gave the Department of Immigration and Citizenship expanded powers to monitor, investigate and penalise employers for noncompliance as a sponsor. The department has existing laws to do the job that is needed to ensure compliance in relation to migration. Under that legislation, DIAC officers were given the investigative authority to conduct site visits, monitor workplaces and impose fines of up to $33,000. Furthermore, that legislation imposed a mandatory training requirement for 457 visa holders that effectively amounted to a two per cent payroll tax on those who engaged overseas workers in a temporary capacity.

This bill creates new, and broadens old, applications of criminal offences and civil penalty provisions on those who permit or refer an unlawful noncitizen to work in breach of their visa conditions.

And it extends that liability to include executive officers of corporate bodies, partners or members of management committees of unincorporated associations. The current employer sanctions regime, introduced by the Howard government in 2007, already includes criminal offences for allowing or referring an unlawful citizen to work, or to work in breach of a visa condition restricting their work. When it comes to this government, and when it comes to Labor more generally, too much regulation is never enough when it comes to imposing a regulatory burden on small and large business alike.

In a report commissioned by the government, Mr Stephen Howells concluded that the provisions are:

wholly ineffective as a deterrent against the small number of employers and labour suppliers who engage or refer non-citizens who do not have lawful permission to work or who work in breach of their visa conditions.

He went on to say:

The Employer Sanctions provisions are also ineffective as an educational tool for recalcitrant employers and labour suppliers.

Those two statements are inherently contradictory. Based upon those assessments, it is difficult to see how this legislation will exert any more of an impact upon the very small group of offenders who knowingly flout existing laws in the face of existing penalties—but I bet you it will keep the unions happy. I suspect there will be a few cheers from the union movement in the lead-up to an election as this bill parades itself around the union boards and as they decide the level of donations that they will be applying to the Labor Party as they go into the next election. It will not be keeping business happy, but it will keep their union funders happy, that is for sure.

The number of breaches is acknowledged to be few; there have been even fewer convictions. So Labor's answer to cracking down on a very small minority is to force a greater regulatory burden on the majority of businesses who already do the right thing. Howells' report estimates that around 100,000 people might be working illegally in the country at any one time. These figures are speculative. But, in any case, even if we were to accept them, the nation's total workforce is over 11 million. We are talking about less than 0.9 per cent of the workforce.

Applying these new penalties and provisions to current as well as future employees will create a significant headache and impose an enormous regulatory burden on employers. The statutory defence provisions of this new bill would require any employer establish when any work is performed, they were shown a valid Australian passport, a valid birth certificate, a valid certificate of permanent residency or a valid visa permitting work. The combined effect of these recommendations would mean that any employer could be taking a risk if they do not check a passport, birth certificate or visa status of a person who presents themselves for work. The administrative impact of this measure alone is excessive. Furthermore, the processes involved in seeking that documentation are not only lengthy; they are inherently discriminatory. Employees will be required to share information about their age and place of birth, which could lead to discrimination against people who may be legitimate Australian citizens because of their racial identity or background.

The Australian Chamber of Commerce and Industry have flagged grave concerns about the draft legislation with the Australian Human Rights Commission and informed the government that if the bill were to be passed in its current form then they would be seeking exemptions under the federal and state discrimination acts to protect their ability to make requests for the evidence required under the Migration Act.

The existing regulatory regime and costs of compliance that the government has systematically built around the employment of foreign nationals is already onerous and the proposed changes will significantly increase the regulatory burden and increase the compliance cost on employers.

The explanatory memorandum alone is 105 pages long. More importantly, there has not been a compelling case put forward by the government to change these laws.

Frankly, Australians do not have confidence in this government to run and administer policy. The episodes of failure are many to back up their lack of confidence. In sharp contrast, the coalition has proven economic credentials and a sterling record. The coalition has a six-point plan to improve productivity. We will strengthen the economy by lowering taxes and slashing red tape through more efficient government and more productive businesses, delivering more jobs, higher wages and better services for Australians. We have a proven policy and record of restoring order and integrity to Australia's immigration program and, importantly, in reinstating public confidence in both the humanitarian and refugee program and skilled migration stream. Remember it was a coalition government that increased the percentage of our permanent intake from less than 30 per cent under Paul Keating to almost 70 per cent when we left office in 2007. That is our record of which we are duly proud. We were able to do that while doubling the permanent immigration intake and halving the level of concerns Australians had about immigration levels being too high. That is evidence of the confidence of the Australian people in an immigration program being run well. That confidence is no longer in existence today.

Those businesses which currently employ illegal workers are already breaking the law. They are obviously not dissuaded by the sanctions or fines already in place, so what is the point of creating more regulations for them to continue to flout? Drowning legitimate businesses under mountains of unnecessary paperwork is not going to help the department weed out dishonest operators. The coalition has always believed that immigration is a nation-building initiative. We maintain it will play a key role in the urgent productivity challenges Australia now faces. And the way to introduce integrity into both processes is not through heavy-handed regulation but by better management under existing law. In immigration we can boost productivity by reducing the level of compliance and regulation that is strangling business. The coalition would do this through a genuine commitment to proper risk management and systems and policies to support such an approach. The coalition has the proven policy and the resolve to back it up. We mean what we say and we deliver on our word. We stick to our principles, which is why we refuse to support this bill today. It has been brought into this place, once again, to seek more regulation on top of the more taxes Labor continues to ask from the Australian community and to further increase the regulatory burden Labor is seeking to impose on employers. It is simply unreasonable and does not have our support.