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Thursday, 15 May 2014
Page: 3877

Mr LAURIE FERGUSON (Werriwa) (12:12): In his contribution, the member for Eden-Monaro, as well as outlining a bit of history, claimed credit to the Liberal Party for Australia's industrial relations system insofar as Sir George Reid, Liberal Prime Minister of this country, was instrumental in that period.

Having been a previous member for Reid, I hazard to guess that I know slightly more about his history and nature than the member for Eden-Monaro. In fact, I have great confidence that if Reid were around in this period of history he would not be supporting these measures. We have had a very fundamental change in the power relativities in this country over the last few decades. If, for the sake of argument, the opposition were correct—in their analogy of a hugely powerful trade union movement, massive wage increases throughout the economy and high levels of unionisation—there might, intellectually, be some defence for these changes.

The member for Eden-Monaro talked about a rebalance. He said that things had gone too far under the previous government. In fact, the previous government in no way fundamentally reclaimed large areas of industrial relations change that had been engineered by the previous Howard government. They made some gestures to move in the other direction, but there has been a fundamental shift of power in this country occasioned by casualisation, the smaller average unit of employment, the import of overseas labour, deskilling, and contraction of manufacturing industry. All these realities are what is occurring in Australian industrial relations.

So there is no real picture as presented by the government. It is a very different industrial climate in this country. The reality, perhaps, was driven home yesterday by the decision in the Fair Work Commission to strip 25 per cent off weekend penalties for people in the catering industry. It was spoken of as being 'labour cost relief' and they held out the hopeful dream that it may 'consider the reopening of some venues'. This came after complaints that passengers on luxury liners in Sydney could not get breakfast when they got off the boat.

It was also preceded by comments by the New South Wales Business Chamber:

… spiralling upwards at a rate that makes opening on weekends simply unaffordable for many small businesses.

That was a contention of the chamber, and they said:

The lure of penalty rates is meaningless for staff …

Well, I doubt that in actual fact. I think it is fairly fundamental, with the low wages in that structure. You just have to look at the actual payments out there. Many of those people need those penalty rates very much. It is probably what attracts a few of them to the industry.

This was occasioned by a Herald Sun editorial under the headline 'War declared on penalty rates' back on 5 February. Mike Smith, ANZ Bank chief executive noted:

Within political parties we see diminishing numbers of reform minded individuals and even more worrying, we have seen the emergence of political parties and politicians whose views no longer describe the reality we face.

John Hart, of course, who is a very big operator in the restaurant and catering sector, was out there yesterday and very much supporting this decision. He had said earlier that it was disgraceful that people got $27 an hour on weekends. I want to stress: that is what they get on weekends. That is not what they get for most of the week. And that should be borne in mind in light of what we think about people's wage rates.

At that time the Australian Industry Group put on the agenda, through its chief, Innes Willox, the long-term aims of business in this country. He said that they want to control workers' annual leave taking, they want to cash out annual leave—which people are allowed to accumulate; quite frankly, I think people should take their annual leave as early as possible, that is why we have it—and they want to change time off in lieu and part-time operations.

Of course John Hart, who is so vocal in this sector, recently gained some notoriety, not only as a failed preselection candidate for the Liberal Party for Parramatta a few years ago but as the driving force behind the operation of the member for North Sydney, the North Sydney Forum. This, of course, is where keen business sector partygoers are encouraged to pay as much as $22,000 to be at the table with the Treasurer. Some people were giving as low as $3,000.

So that is very much the reality of industrial relations in this country. That stripping of people's conditions yesterday is what is occurring, and what I have said of the words of the Australian Industry Group is what the agenda is in this country. It is not an era of trade union rampant power in this country. It is not only what we are seeing in this legislation but it is also in relation to the question of immigration that we are seeing the government's real agenda. In the bid to get rid of this 'ever-present' red tape, we saw the recent decision with regard to 457 skilled migrant entry to this country. In 2013 Labor closed what I think is a loophole that should be destroyed, described by an article in The Age:

Before the loophole was closed in 2013 by the Labor government, companies in the mining, construction or IT industries were hiring hundreds more workers than they had applied for. In one example, an employer was granted approval for 100 visas over three years yet in 18 months had brought in 800 workers on 457 visas.

Before the cap was introduced in 2013, the number of 457 visas was rising quickly. In the financial year 2009-10 there were 68,000 granted. By 2012-13 it was 126,000, and that is why the previous government—belatedly, as far as I am concerned—did something about making sure that there were restrictions on this.

AWU assistant national secretary Scott McDine is quoted in the article:

These secretive changes come on the back of the government's announced review which has been stacked to deliver a predetermined outcome that will hurt Australian workers.

Basically, this gets rid of the requirement that there be advertising, and it liberalises it so that you can have far more visas.

I was interested that the member for Eden-Monaro said that this legislation was the government 'starting to do things'. We know from the elections that there was no intimation that in this legislation they would go beyond the actual inquiry in this sector. But they have done this in the legislation. He said that this was 'only the start'. He also pontificated about a correlation between industrial relations regulation and employment. On both sides of politics the evidence for this is pretty poor—it is pretty non-existent. I remember in the previous parliament people on this side of the parliament were able to bring forth statistics that indicated that levels of productivity in this country, for instance, were not in correlation or connected with a loosening up of the industrial relations system.

The member for Eden-Monaro went on to talk about the unemployment rates at this time being in some way connected with the previous government and industrial relations. We know what happened internationally at that time: there was the US housing crisis and the global financial crisis. We know that it is also related to contractions in mining demand from China and India. These are the factors that dominate with regard to employment levels. He said today that this legislation is going to lead to some massive job creation and will totally liberalise employers' willingness to hire people—he described it as 'job creating'. I was interested to note that he said that the government did want workers' conditions to 'improve over time'. So the message is: intense suffering through changes such as this and the hope that things will eventually improve.

He spoke of Labor unwinding bipartisan workplace changes. I think that clearly this is a significant change away from the middle ground. It is in the context of a decisive downgrading of the industrial relations power of the union movement. He talked about a correlation between unemployment and liberalised marketplaces in regard to labour. We see at the moment, in the United States, Obama struggling to try to lift the minimum wage from $7.25 to $10.10 by 2016. Its level now is lower than in 1978. That is the reality of deregulated labour markets, an ineffective union force and campaigns to make sure that unions cannot get membership and that people are intimidated into not joining.

If we look at unemployment levels in the United States and Australia, if I were going to be a total mutton-head on this whole issue, I would argue that there is a direct correlation between the United States' low unionisation and high unemployment in the country over a long period of time. That has not been the case. It is not connected. We know that there are intrinsic reasons in many economies as to why there are particular levels of unemployment.

The member for Eden-Monaro talked about being concerned about unemployment. I have more respect for senior economist Brian Redican, from the Macquarie Bank, a former Reserve Bank economist, about the possibilities of where unemployment is really going to come from. In an article on 17 January this year in the Australian Financial Review, he said:

Clearly the direct effect of spending cuts is less spending in the economy and there will be less employment as a result …

… The question is whether the potential benefits of that less spending, lower interest rates for example, provide a bit of an offset. While they might provide an offset, usually the benefit is further out. Whereas the spending cuts start affecting employment negatively immediately.

So the reality is that this budget is going to have a lot more impact on employment and the possible retraction of spending, with the sacking of public servants, than a liberalisation of workplace conditions.

Amongst the aspects of this bill that cause concern are the way in which these agreements can be entered into between an employee and an employer to provide a more flexible workplace. That is intelligent. Everyone supports that concept. If both sides of the industrial relations barrier decide individually that it is better to sacrifice a few penalty rates to facilitate something that affects the family—to let the bloke go and train the football team once a week or to help the woman to help at a canteen on the weekend et cetera—forgoing some kinds of conditions for that is a sensible way of operating, and there should not be interference from the trade unions in that. That is already a distinct possibility in the current operation.

But we see here that they are setting up a defence for employers who intimidate individuals to give up conditions by having them sign these agreements. It is supposedly a defence for the employee, but what it really becomes is a form of evidence for the employer later that the employee really knew what they were doing at the time. In some cases, it is going to be by coercion because it is more advantageous to the employer for the employee to agree to that. Also, we know that certain conditions in the existing measures in regard to how much that financial loss is and whether it is comparable or in some ways commensurate with what is sacrificed are being abandoned here. As well as that, there was previously a condition that there would have to be prior information to the ombudsman in relation to these changes. All of those things are scrapped. So we see, effectively, not a change that will facilitate the employee's right to give up a few conditions in return for something that is important to him but a situation where power shifts very massively to the employer so that they can get what they want.

I am also concerned about these greenfield site provisions. To me, they are essentially a recipe for getting in the unions that are more compliant, regardless of how much support they have from the workers on the site. If there is a union that is not desired by the employer, one can be certain that the deal will be reached with one that is seen as more willing to toe the line—the typical HSU that we have seen in the last few years with its national officials. That is the kind of body that is going to be called in and will be preferred over other unions that basically are not as inclined to go along with things.

I think this measure is not defensible. It is not about helping employees. It is not about trying to have a middle ground or to have a sensible compromise. In regard to these new greenfield sites, we are also going to see a method for employers to essentially negotiate with themselves. It will be a fait accompli for the employees, regardless of their intentions about which unions they want to have there. Finally, of course—under some kind of rhetoric about employee representatives flying around in luxury aircraft—the question about right of entry will involve severe restrictions. It is now very much the employer's argument as to how much they think their place is violated or interfered with by the workers' representatives' attendance that is going to predominate when people get entry.