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Wednesday, 25 March 1998
Page: 1223

Senator COOK (10:18 AM) —Senator Harradine has just described this bill as unfair, unreasonable and unjust, and he is correct. I start my contribution to the debate on the Workplace Relations Amendment Bill 1997 [No. 2] by quoting a significant figure in Australian politics. This person, in a speech to the South Australian Chamber of Commerce and Industry on 25 October 1995, said:

I'm not going to leave employees exposed to unfair dismissal by capricious employers.

The same figure, in a speech to a community breakfast in Perth on 11 July 1995, said:

We're not going to replace (Labor's unfair dismissal laws) with a law that gives ruthless employers carte blanche.

In a speech on 18 July 1995, the same figure said:

Let me make a hard and fast commitment that when we win government we will ensure that Australia has a balanced unfair dismissal provision which is fair to both employers and employees. We won't tolerate unreasonable dismissals.

Who is this figure? This figure is the Prime Minister. Why is this bill before us, given those commitments on the public record by the leader of the government? Because the Prime Minister is weak and the Prime Minister is lacking in leadership and authority.

This bill is a stunt. The Prime Minister is allowing a stunt to override commitments he made to the electorate before the election and commitments he made after he became Prime Minister. Why do we have that? It was not a core promise. We remember that, whenever the Prime Minister is in trouble, he defines his way out of trouble. He defines whether it was a non-core promise or a core promise. He did not tell the electors before the election that there are such things as core and non-core. But, since the election, to suit his own needs, he has defined things as core and non-core. The poor fool voters did not recognise that, when he made those commitments that he is now expected to honour, they were not core promises and he never intended to do so. This is not only gutless, this is not only a lack of moral authority; this is, of course, dishonest.

I want to go to the three major reasons this bill is before us. At one level, it is proposed that it will make it easier to sack people and that, because it does, it will therefore somehow improve employment. If it is easier to sack people, apparently more jobs can be created. The government are campaigning around Australia saying, `Look how many jobs we've created.' If they make it easier to sack people and then rotate the unemployed through those jobs, they do not create an extra number of new jobs. They report the number of new starts that were achieved in the economy and say, `Look how many new jobs we've created,' as if they have done something to improve unemployment. Have they? Of course they have not. They have just revolved the unemployed through some jobs, taking advantage of being able to peremptorily dismiss people without them having a reasonable recourse to appeal and a reasonable recourse to their circumstances being fairly reviewed.

What else has the government done? Very importantly, they have changed the bargaining relationship between a worker and an employer. Remember that Mr Howard, before the last election, also promised that there would be no reduction in working standards. He made a solemn promise on that.

By enacting this legislation, the government makes it impossible for a person in a small business negotiating a wage with their employer in a one-on-one situation to win because, if that employer does not like the claim, he can dismiss the individual and there is no effective recourse to an independent appeal. Is that fair bargaining?

How does a junior worker get on in those circumstances? What about a migrant woman? What about an ordinary Australian male? How do they get on in those circumstances when they are asked to choose between accepting the offer that they have to take or losing their job, and they have a family to support? How do they get on in those circumstances? Is this what we now call job creation? Is this what we now call dealing with unemployment?

The first proposition that this will make it easier to sack people and, therefore, will improve employment is a false proposition and an arid claim. Indeed, my colleagues who have spoken in this debate who have pointed to the government argument that there will be 50,000 new jobs created because of this provision have demonstrated amply that there is no basis in statistics, there is no basis in objective collection of facts, to justify that. The 50,000 new jobs that will allegedly be created is an assertion. It is not underpinned by any statistical work whatsoever. It is a claim, yet it is bandied around as a fact when, in fact, there is no support for it at all. So let us just deal with that first proposition.

The second false claim here is that it will help small business. The government must have a very low opinion of many employers in small business. I happen to know a lot of small business people who are proud to be good employers. I do not make the automatic assumption that everyone in business wants to exploit their employees. We do not hear about the examples of good employers; we hear about the examples of bad ones. But there are many people in Australia—and I want to go to this in some detail in a moment—who are proud to have good employees, impose trust in them, make sure they are properly trained, encourage observance of occupational health and safety standards and pay them a decent wage and are repaid by loyalty, productivity and the growth of their own enterprises. They know that the best asset their company has is the people who work for it.

If you downgrade and humiliate those people, you will get a downgraded, low outcome result. The bottom line is your profit will fall. If you encourage, train, protect the health and safety and pay a decent wage, you will get committed employees, proud of their work, satisfied in their job, who contribute to the growth of that company. There are many employers in this nation who know that and do not want this legislation where the lowest common denominator prevails. They know that, if this is carried, they are in the hands of the narrow-minded, exploitative employers.

For example, you have a good employer on the block and a bad employer on the block competing with each other. One wants to pay decent wages, respect their workers and encourage higher productivity and one wants to exploit them. If this law comes into being, the second employer wins. Because, therefore, wages fall and the cost of his goods fall, the first employer has to follow suit and reduce his work force as well. You have a race to the bottom.

Is that the country we want for Australia? Is that what a modern society is about? Are they the high living standards that we always talk about, that we aim to achieve—that is, where fear and exploitation rule the workplace, not a fair go, not decency, not an aspiration for higher skills, better quality output and a committed work force? I do not hold the view that the government holds that exploitation should rule. I hold the view that many employers hold that we should have a committed work force. This legislation does not do that.

The third thing about this legislation which has been said by all of my colleagues in this debate, and rightly, is that this is an outrageous political stunt. It is an outrageous political stunt because this is an attempt to procure a double dissolution, or, as I heard a breathless journalist say the other day, a double disillusion. One could be disillusioned by this government, but they are after a double dissolution.

So they put an outrageous piece of legislation to the Senate knowing that Senator Harradine, who holds one of the key votes in this chamber—a balance of power vote—is committed to not supporting it. They want his vote on Wik. They know that he cannot in all conscience, in coming to terms with what he understands as decency in the workplace, vote for this. They know he describes it, as he did a minute ago, as unfair, unreasonable and unjust. They know that. So they confront the Senate in order to artificially contrive a constitutional trigger so they can have an early election.

Senator Faulkner —A race election.

Senator COOK —And a race election, as Senator Faulkner points out, quite rightly. So this is a stunt. This is a contrivance. This is a manipulation of the democratic process in order to achieve that.

I want to say a few words on behalf of the good employers in Australia on what they aspire to, together with the good workers of this nation, and what they want to see. What does small business really want? Small business really wants as its first priority a stronger economy with stronger growth rates. If the economy is strong and growing, unemployment is falling, there are more wage earners than there are unemployed. People have the purchasing power to buy the goods and services produced by small business. There is greater opportunity with growth. That is what they want to see.

What is the performance of this government? The national accounts for the March quarter came out just three weeks ago. The markets were anticipating a growth rate for the Australian economy of four per cent for the year or four plus. Many of them looked on the bright side and thought it should be four plus. I punted in the privacy of my own office that it would be around four per cent.

What did the national accounts show? They showed that the growth rate for the year was 3.6 per cent. They surprised the markets. The exchange rate fell on those figures and the stock exchange went down on those figures because they expected something higher. In other words, this government not only underperformed in terms of growth in the economy on its own estimates, but it surprised the market with how poorly it did as well. The true picture is an economy which came out of a recession—it was not a technical recession, but a low growth period imposed by cuts by the government in the 1996-97 budget which reduced domestic demand—and grew and people thought, `Here is the stronger recovery.' Now that it has wilted, now that it has died in the traces, what we are seeing is much lower growth, and the impact of the Asian currency meltdown has not yet hit the Australian economy either.

Today we have reports that the Australian economy's growth will be cut by one per cent because of the low demand in Asia for our goods and services. If that is one per cent off the 3.6 per cent, we will have a 2.6 per cent growth rate in the Australian economy. If that is what they are talking about, it will mean higher unemployment, a contracting demand, bankruptcies for small business and many more people out of work. Small business wants a growth economy. They do not want to see that economic performance.

What else does small business want? I will tell you one of the things they do not want. They do not want a GST. Small business does not want to have to be turned into a tax collector for this government. Small business does not want to have to levy a 15 per cent—or whatever the figure is—goods and services tax on every transaction they make.

The Australian economy, if you look at it, is about a 73 per cent service economy. About 78 per cent of the Australian work force are employed in the services sector. There is no tax on services, so what the government are going to do is introduce a 15 per cent tax on services. That is not there now and they say that, by making it easier to sack people in small business, somehow we will get employment growth.

What about a 15 per cent tax on goods and services? That will take money out of the pockets of small businesses. That will be an increase in taxes. They do not want it, but the government are going to introduce it and they have announced confidently that this is so-called tax reform. Well, I urge the government to go back to their dictionaries and look at the meaning of `reform'. `Reform' means positive change. A 15 per cent goods and services tax or a goods and services tax at whatever level is not positive change; it is regressive.

What else do small business want? They want protection from harsh and unconscionable conduct. They want to make sure that the big end of town cannot manipulate the contracts with the small and more vulnerable businesses to diminish their rights and exploit them. That is what they want. Has this government introduced legislation to meet that need? No, it has not. Will it? It says it will, but does it go far enough? No, it does not either.

The greatest growth area for litigation in Australia at the moment is that litigation that goes on between franchisors and franchisees. Most of the franchisees are small businesses. It is a classic case. Someone holds the central franchise and asks people to bid for it. They strike terms in a contract, then the franchisee can go out and trade under that franchise name. The fastest growth area in the Australian economy, particularly for small business, is from the blossoming of franchisees everywhere. People owe their future to the company store but they find that, whenever there is trouble, under the terms of their contracts, often that trouble is exacted on to them at the bottom of the pile—not on head office, but on the franchisees. That results in litigation, and it is the fastest growing area of commercial court work in Australia and it is growing uncontrolled. It is a big cost, a big surcharge, to impose the high price legal costs on small businesses that way and it ought to be sorted out.

Senator O'Chee interjecting

Senator COOK —Kim Beazley has tried to sort it out. He has introduced a private member's bill and we have introduced one here. The government has not moved. Small business is in pain over this and the government's bleating is an indication of its embarrassment on the issue as well.

What else does small business want? Let me tell you. Small business wants a restoration of the incentives for growth that applied under the Labor government and which were cut in the 1996 budget by this government. They want to see—and particularly now with the Asian currency meltdown—a restoration of export market development grant assistance for small business. Because the Asian economic crisis is destroying their markets, they need to be back in Asia to help protect and renegotiate their contracts. They need to be in third markets to develop opportunities for themselves.

What is the government's response? The government's response in 1996-97 was to cut those incentives so they could not do it. With the present crisis when they need to do it, has the government's response been to restore those incentives to help them achieve it? No. There has been some playing around with the definitions and there has been some alteration of the red tape but, effectively, there has been no real improvement for small business. That is what they want. They do not want this particular law.

I want to conclude in the few minutes available to me with another thing that I think small business wants as well. They want to know how to succeed. Most small business people I know want to become medium sized business people as quickly as possible and many of them want to become big business people. They want to be able to grow. This government cut the Australian Manufacturing Council, which for small manufacturers was a major source of guidance and advice on what you have to do to become a more effective company. I recall one of the surveys—the leaders and laggers survey—by the Australian Manufacturing Council. It took a snapshot of what a leader, a successful small business, looks like and what were the ingredients that had added to its success for Australia, and it took a snapshot of what a lagger, an unsuccessful small business, looks like and what were the ingredients of its failure.

This survey is very instructive. The ingredients of success were good industrial relations, high investment and trading, protection for occupational health and safety, and harmonious workplace relations. They have a committed work force. None of those were problems. There problems were getting into new markets, finding opportunities for their goods. The ingredients of the laggers were bad industrial relations, no commitment to training, high staff turnover, and blame shifting—`everyone else is at fault, not me'.

In short, leaders, successful companies, are outward looking and have formed their work force into a team, not into confrontation but into cooperation. Laggers are those who want this legislation and they are the failures. This legislation speaks to those companies that want to blame others because they do not succeed. They want to blame their workers because they could not lead an effective workplace team to grow their profits. This legislation should fail with them.