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Thursday, 15 May 2014
Page: 3853

Dr HENDY (Eden-Monaro) (10:29): I rise to support the Fair Work Amendment Bill 2014 and reject the opposition's amendment. This bill is part of our economic reform program as promised before the election and is also part of our jobs plan. I will have more to say about jobs later in this speech.

Members will know that I am a former chief executive of the Australian Chamber of Commerce and Industry. As such, I know a bit about the subject of the bill before the House. Industrial relations has been a fraught area of debate in the Australian polity for more than 100 years now. Despite our opponents' simplistic attempts to demonise our views on industrial relations, the fact is that our approach is to actually put in place an industrial relations framework that improves wages and terms and conditions over the long term. We want to boost the incomes of employees as well as employers. Our opponents say that we hate trade unions. That is not true. Many on our side of politics have been members of unions. I am particularly proud of the fact that my great-grandfather, William Hendy, was a founding member of the Queensland Teachers' Union and was one of the first general secretaries of the union in the late 1800s. The member for Moreton, who is just leaving the chamber, may be interested to know that, given his background in the education union.

Mr Champion interjecting

Dr HENDY: The member for Wakefield is a member of the Shoppies, are you?

Mr Champion: Yes.

Dr HENDY: I have another particular family story to relate that is relevant. My late mother was a member of the Hardy family, and one of my Hardy ancestors is Harriet Hardy. That is not a name that is particularly known in the annals of history, but she was married to John Stuart Mill, one of the fathers of English liberalism. The fact that an ancestor of mine had such close links to liberalism's foundations is, of course, personally pleasing to me. However, I further note that John Stuart Mill recorded that his two greatest published works—that is, the books Principles of Political Economy and On Liberty—were joint collaborations with his wife, despite the fact that her name was not recorded as joint author. So I could potentially claim that my ancestor was one of the mothers of English liberalism.

What has all that got to do with trade unions and industrial relations? It is that JS Mill's works from the mid-1800s—specifically, from the earliest days of liberalism—justified the legitimacy of labour unions in a capitalist system. I have always agreed with that. And indeed, it was the Liberal government of Sir George Reid here in Australia that actually established Australia's unique industrial relations system. It was not a Labor government, but a Liberal government, that did that. I have always argued that the Liberal party, as the creator of that system, has been best placed to ensure that the system is appropriately balanced between employees and employers.

It is a bit like a seesaw in a children's playground: if it is weighted too much one way, it simply does not work. The former Labor government massively weighted up the seesaw in favour of the trade union leadership. We need to re-weight the system—and this is what this bill starts to do. Why is this important? The reason is jobs. Recently we saw that the latest unemployment rate is 5.8 per cent. While not the best of news, it was an improvement from the six per cent earlier in the year. Indeed, it was an improvement on the 6.25 per cent forecast by the federal Treasury during the dying days of the Labor government. This is the economic legacy we were left and are now dealing with. When John Howard left office the unemployment rate was four per cent, and very soon after the 2007 election it fell slightly further, to 3.9 per cent. That was a magnificent effort that Prime Minister Howard and his Liberal and National Party team were able to deliver after inheriting from the Keating Labor government an unemployment rate of more than eight per cent in 1996. And it is very instructive, how many years it took—that is 12 years, to get to that 3.9 per cent figure.

Unemployment is an incredibly hard social problem to deal with; it takes years of effort. And now we have to again start a repair job after Labor has sent unemployment rising. This bill helps to deal with the problem. In the period that the now Leader of the Opposition was employment minister, the number of unemployed people increased by 80,000, and over the full six years of the Labor government the jobless queues grew by 200,000. Labor still do not recognise the destructiveness of their policies. The impact on small business has been particularly devastating. In my own electorate of Eden-Monaro, small business is the lifeblood of rural communities. As the minister at the table, the member for Dunkley, well knows, across the country the last six years saw some 3,000 fewer small businesses employing people. The overall result for small business has been staggering. Under Labor, 412,000 jobs were lost in small business.

Only the coalition has a credible plan to create jobs by getting the budget in order, getting regulation down and getting productivity up. As the minister stated in the second reading speech for this bill, this bill will deliver on key aspects of our election policy and does not go any further than that. Indeed, he said that on union workplace access, individual flexibility arrangements and the removal of the ability to strike first and talk later, we are actually delivering on specific policy commitments made by the Labor party prior to the 2007 election but that Labor deliberately broke. These changes are on top of the significant reforms contained in the Fair Work Registered Organisations Amendment Bill 2013 and the Building and Construction Industry (Improving Productivity) Bill 2013.

Indeed, we have a significant reform agenda. With respect to this current bill, I want to concentrate on the issue of individual flexibility arrangements. The bill introduces amendments to provide clarity and certainty for employees around the use of IFAs. IFAs are not some diabolical invention of the Liberal party. In fact, they were introduced by Labor—by Julia Gillard, no less—when she was workplace relations minister, with the intent of enabling employees and their employers to mutually agree on conditions that suit their needs while ensuring that employees are better off overall compared with their underpinning employment instrument.

The better off overall test was introduced with IFAs and we have no plans to change it. The Liberal Party's view is that IFAs ought to be an important option to enable employees to, for instance, manage their child care or other caring arrangements, to spend time with family or for other commitments. They are specific to the individual and are of benefit to them.

The amendments to IFAs in this bill are actually based on the Fair Work Act Review panel recommendations commissioned by the Rudd-Gillard-Rudd government. They also include further new safeguards to ensure that employees are better off. To be clear, the current IFA framework in the Fair Work Act will stay, with additional protections put in place.

As the minister has catalogued, this means that an employer cannot force an employee to sign an IFA or make it a condition of employment, that the employer must be better off overall than they would have been under the applicable modern award or enterprise agreement, and a worker must provide a statement to the employer saying that the IFA meets their genuine needs and that they are better off overall. The amendment will deliver on the promises made by Labor in 2007 and provide that IFAs may be made in relation to all of the matters currently prescribed in the model flexibility term, to the extent that those matters are covered in the agreement. This will ensure that workers have access to fair flexibility without a veto by union bosses.

Two further amendments recommended by the Fair Work Act Review panel will be made to provide clarity and certainty to both employers and employees. First, the unilateral termination period for IFAs made under enterprise agreements will be extended from 28 days to 13 weeks, consistent with the position of awards. The second amendment will confirm the existing position that the better off overall test for IFAs can be satisfied by exchanging monetary benefits for benefits that are not monetary. The amendment, combined with the government's new requirement for a statement in writing from the employee, will provide greater protection and certainty for all parties. These changes deserve to be passed. The Labor and the Greens have vowed to block them in the Senate. This is to deny the job-creating nature of these reforms. The Labor negativity is appalling when it is known that this opposition will cost jobs.

I want to particularly refer to Paul Howes and Martin Ferguson. Paul Howes, National Secretary of the Australian Workers Union, the AWU, has belled the cat on the opposition leader's negative strategy. As reported in The Sydney Morning Herald on 5 February this year, Mr Howes:

… criticised the industrial relations system for “dragging Australia down” and fired a broadside at “criminals” who betrayed the union movement and hijacked its agenda.

Australian Workers Union chief Paul Howes has called for a “grand compact” between business and unions to take the heat out of the industrial relations debate and admitted wages in some sectors had increased too quickly.

Mr Howes urged his comrades in the union movement to concede there had been a pattern of unsustainable wages growth in some sectors of the economy, adding “we could be pricing ourselves out of the market”.

He said "the leap-frog wage outcomes in the offshore sector, in particular, are not going to be sustainable for the long-term".

But he urged business to concede that on an economy wide basis, industrial disputes had fallen and wages growth had slowed.

   …   …   …

The union national secretary said the industrial relations see-saw in Australia, which has seen a range of legislative changes in the last decade and a half and contributed to a "perpetual instability" in the IR system.

"Some will tell you that our industrial relations system is dragging us down.

"And I won't be popular amongst my friends in the labour movement for saying this - but I agree," he said.

To be fair I think that Mr Howes might be holding a grudge with respect to the Leader of the Opposition over the knifing of Prime Minister Julia Gillard just weeks prior to the 2013 election. However, he made some sensible comments about Labor's dog-in-the-manger approach to industrial relations. Recently Martin Ferguson, the former Labor cabinet minister and, indeed most relevantly, a former president of the Australian Council of Trade Unions, had a lot to say about the bereft policies of the opposition. Martin Ferguson is a well-respected former Labor Party MP. He is not a member of the HR Nicholls Society. Again The Sydney Morning Herald reported on 28 February 2014 the following:

''High labour costs and low productivity are an unsustainable mix,'' Mr Ferguson said. ''And therefore elements of the Fair Work Act must be looked at.''

Mr Ferguson said the Coalition's plan to restore the Australian Building and Construction Commission should be seen as a step that would encourage investment in Australia.

''Rather than seeing the ABCC as a tool that allows one side to get an upper hand over the other in some never-ending ideological skirmish, it should be seen for what it was: a mechanism that holds both sides to account and which can help deliver projects on time and on budget,'' he said.

''As the son of a bricklayer, I know a thing or two about the building industry.

''But it is time that some in today's union leadership recognised that their members' long-term interests are aligned with their long-term job security.''

Labor's response was typical—to play the man. The member for Gorton simply dismissed these considered comments, saying that, 'Mr Ferguson had deserted the workers and joined the employers.' This is typical class warfare from the member for Gorton—an approach shared by the Leader of the Opposition.

I remind the House that, since the election, the Leader of the Opposition has done a deal with the trade union leadership to oppose the government's sensible reforms. In an article by Peter van Onselen in The Weekend Australian, on 9 November 2013, it was reported that during the Labor leadership campaign straight after the 2013 federal election:

In letters to union leaders he—

that is, the Leader of the Opposition—

reaffirmed his commitment to a host of policies that go further in unwinding bipartisan workplace reforms of the past two decades than the Fair Work Act did.

The Leader of the Opposition should release those letters so that the public is aware of his secret policies.

In conclusion, I strongly support this bill. It is a major economic reform bill that is a key part of our jobs plan. I reject the opposition's amendment and am saddened by the dog-in-the-manger attitude to such important reforms.