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Monday, 17 March 2008
Page: 1040

Senator WONG (Minister for Climate Change and Water) (9:59 PM) —I rise to make some comments in reply in this debate on the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008. At the outset, I thank senators for their contributions to the debate, particularly the senators who participated in the Senate committee inquiry process into this bill.

At the 2004 election, the Australian people did not vote for their pay and conditions to be stripped away through individual Australian workplace agreements. They did not vote to exchange the safety net for a limited number of protected award conditions that could simply be eradicated, without compensation, from a workplace agreement by the flick of a pen.

The opposition now say that they made a mistake with Work Choices. Perhaps, if they had sought at any time to tell the Australian people of their plans, the Australian people could have warned them about the mistake they were making. The member for North Sydney, the former Minister for Employment and Workplace Relations, said:

... I don’t think many ministers in cabinet were aware that you could be worse off under Work Choices, and that you could actually have certain conditions taken away without compensation ...

That is a quote from a minister commenting on cabinet deliberations, confirming that Howard government cabinet ministers were not actually aware of the impact on working families, on ordinary Australians, of the legislation they endorsed. The member for Menzies, who was the Minister for Employment and Workplace Relations at the time the Work Choices legislation was introduced, said in his speech during debate on this bill, ‘I have said before that I believe we did make a mistake in relation to Work Choices.’

At no stage has anyone in the opposition apologised for making that mistake. In fact, what we saw tonight from Senator Abetz was yet another rearguard defence of Work Choices, because he cannot help himself. He is still in this chamber defending Work Choices with every breath. The reality is that he is another one of those on the other side who want these extreme laws to stay in place and who have not accepted that these laws are not good for Australian working families.

I am not sure what is worse: a government that deliberately sought to reduce the rights and entitlements of Australian workers in the workplace or a government that did so accidentally, asleep at the wheel, blindly allowing pay and conditions to be slashed whilst ignoring that it was even occurring—the former Prime Minister insisting that it was merely a perception on the part of some people, saying, ‘We haven’t had people coming up and saying, “I’ve been affected,” but they have this general idea that others might have been.’ These are the same people—that is, the opposition who are now calling on the government to provide the economic modelling of the effects of the transition bill—who did not do any proper modelling on their own Work Choices bill; who refuse to release the limited modelling they did conduct; and who withheld key data of the effects of Work Choices from the Australian people.

Prior to last year’s election, we on this side of the chamber made our workplace relations policy crystal clear. In November last year, the Australian people voted for a fair, balanced and productive workplace relations system for the future. We made it clear that we would act immediately to prevent any new Australian workplace agreements being made. This bill delivers on that promise. We made it clear that we would allow workplaces using Australian workplace agreements as at 1 December 2007 to use individual transitional employment agreements in limited circumstances only in order to assist with the transition to the government’s new workplace relations system. This bill delivers on that promise. We made it clear that we would introduce a genuine no disadvantage test against the full safety net for all agreements. Again, this bill delivers on that promise. We made it clear that we would immediately commence the process of award modernisation, and this bill delivers on that promise.

ITEAs will only be available for a limited transitional period until the government’s new workplace relations system is fully operational from 1 January 2010. Under this government, there will be no scope for any individual statutory agreement to be made after 31 December 2009 and, under this government, there will be no need for any individual statutory agreement to be made after 31 December 2009. That is because this government will deliver on its promise to put in place a fair and flexible safety net of 10 legislated national employment standards and a further 10 minimum conditions contained in simple, modern awards for employees earning $100,000 or less. This will be a safety net that cannot be ripped away. Where an employer and employee choose to make an individual arrangement, it will be underpinned by the safety net. Where an employer and employees agree to make a collective agreement in the government’s new workplace relations system, employees must be left better off overall when compared with the safety net.

I want to turn now to an issue that had some focus in the debate today, and that is the relationship between workplace flexibility and productivity. There is no evidence that having Australian workplace agreements has made any difference to inflation, productivity or industrial harmony. What they did do was assist in stripping away Australian workers’ pay and conditions. Whilst this government is tackling the inflation challenge and the productivity challenge for this nation, the fact is that the former government simply ignored multiple Reserve Bank warnings about the inflation risks arising from skill shortages and infrastructure gaps. What they focused on was introducing a system which enabled workers’ pay and conditions to be stripped away. This is what they did instead of rising to meet the productivity challenge. Instead of meeting the productivity challenge, the former government created a workplace relations system that combined the greatest regulation this country has ever seen while reducing job security and basic protections for employees. Unsurprisingly, productivity growth did not increase with Work Choices changes. While aggregate data is of limited value in determining the impact of AWAs on productivity growth, the most recent national accounts data shows that productivity growth in the market sector was flat between March 2006 and September 2007 compared with the annual average wage growth over the past two decades of 2.3 per cent.

I listened with interest tonight to Senator Abetz claiming credit for the unemployment rate, a bit like Mr Costello in the other place. I wonder whether he will also claim credit for the flatlining of productivity that I have outlined and for the consecutive interest rate rises that we saw under the Howard government, and the last two. Will the opposition also claim credit for that? I wait for those on the other side to actually be consistent about which aspects of their economic legacy they wish to take credit for, because somehow I do not believe—

Senator Johnston —We’ll just take credit for the $20 billion cash in the kitty.

Senator WONG —Unless, Senator, you are going to be different, I think we will continue to see the opposition ducking its head when it comes to inflation, productivity and interest rate increases.

I have listened to opposition claims that the absence of new statutory agreements from 2010 onwards will reduce labour market flexibility. This is clearly not the case. The focus for determining wages and conditions of employment under Labor’s system will remain at the enterprise level through collective enterprise bargaining. Bans on pattern bargaining remain. Indeed, on 19 February the Reserve Bank’s Assistant Governor said:

Over a period of 20 years or so, the labour market has become much more flexible than it used to be. I do not see that changing in any significant way. I think that we should expect to see that low unemployment can still be sustained without generating a significant lift in inflation.

The opposition is simply on its own in the scare campaign it is attempting to run when it comes to workplace relations.

The government welcomes the opposition’s statements apparently in support of the government’s genuine no disadvantage test. It is not clear to me, however, whether the opposition really supports the no disadvantage test or whether it merely does not oppose it and would be prepared to see it again eroded at some time in the future. After all, the opposition’s original plan, when it was in government, was for workplace agreements to not be tested at all. It was only after more than a year of this approach and the approach of an election that the former government was forced into considering the introduction of a test for agreements, but what they introduced was not a no disadvantage test. It could not be called a no disadvantage test because it still allowed employees to be disadvantaged under workplace agreements when compared with the award. Important award entitlements, such as long service leave, redundancy pay and rostering protections could simply vanish without employees receiving anything in return. The benchmark for Labor’s no disadvantage test will be the full range of entitlements in an earlier award, an ITEA or an earlier collective agreement, if there is one, not merely the handful of conditions that formed the benchmark of the previous government’s so-called fairness test.

The creation of modern awards was a key election commitment by the Rudd Labor government. Along with the new National Employment Standards, modern awards will form an integral part of a fair minimum safety net for employees in the new workplace relations system from 2010. This bill provides the means for the award modernisation process to commence by setting out the Australian Industrial Relations Commission’s award modernisation function and specifying requirements for modern awards. Unlike the former government’s provisions in its legislation, the provisions in this bill are actually going to be used to ensure that this important and significant reform takes place. The commission will undertake award modernisation in accordance with the terms of an award modernisation request. The explanatory memorandum to this bill contains the award modernisation request the Deputy Prime Minister proposes to make to the president of the commission upon passage of the bill. There is no secrecy here and there is no delay. Throughout the award modernisation process, the commission will publish quarterly progress reports. These will keep the public updated about how the process is developing.

Concerns were raised before the Senate inquiry into the bill about the requirement for the commission to ensure that modern awards do not contain state based differences. I would like to note that this does not prevent the commission including in awards terms and conditions that are appropriate and based on objectively ascertainable regional circumstances, based on the evidence of the parties that such a term or condition is necessary to ensure a fair minimum safety net. It is appropriate, though, that new modern awards operating in a national system should not replicate state based differences from old awards which exist merely as a matter of historical circumstance.

This bill will extend the end date for notional agreements preserving state awards, or NAPSAs, and transitionally registered associations to coincide with the commencement of modern awards. Under the current act, NAPSAs and transitionally registered associations would end on 26 March 2009—three years after the commencement of Work Choices. The former government seemed to be entirely unconcerned about the possibility of employees being left entirely without award protections from 27 March 2009. If this government had not moved to extend the operation of those instruments, the employees covered would have been entitled to the five minimum conditions under the previous government’s fair pay and conditions standard but nothing more. Such employees will be covered by a modern award from 1 January 2010 when modern awards will commence and the government’s new workplace relations system will be fully operational.

The government has set out a clear plan for workplace relations. We did so before the election. Nevertheless, we remain engaged in genuine consultation on the detail of our proposed legislation. In framing the bill, the government has sought the views of employer, union and state and territory representatives. The government’s preparedness to listen to and act on a range of views has resulted in better legislation and contrasts starkly with the way in which Work Choices was developed. The government has also listened carefully to the matters raised by stakeholders during the Senate inquiry and the very useful contributions made by senators during the inquiry hearing.

Before I conclude, I want to make some brief comments in relation to Senator Fielding’s second reading amendment. Can I note that one of the central aspects of this bill is to restore a full safety net to ensure that agreements are assessed against the totality of awards. In general, matters such as meal breaks and penalty rates are contained in the full safety net, including awards. The primary issue, therefore, covered by Senator Fielding’s amendment appears to be award-free employees. Can I say on this issue, as Senator Fielding would be aware, the National Employment Standards discussion paper invites comments on a range of issues, including how to best deal with these issues in respect of award-free employees. I would also draw the Senate’s attention to evidence by Professor Andrew Stewart which goes to the difficulty associated with setting into a national employment standard some of the issues raised by Senator Fielding—in particular, to have a single national standard for penalty rates. Given the way in which penalty rates are generally construed, that is obviously extremely difficult to define. For these reasons, the government is not intending to support Senator Fielding’s second reading amendment.

In conclusion, the blueprint for Labor’s new system was detailed before the election. It was endorsed by voters. It will be developed in an open, consultative and rigorous way and it will get the balance right between flexibility and fairness.

Debate (on motion by Senator Wong) adjourned.