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Tuesday, 27 November 2012
Page: 9893


Senator McKENZIE (Victoria) (17:24): Before I make my contribution on the Fair Work Amendment Bill 2012, I want to make a couple of comments about Senator Wright's contribution and the amendments that she will move on better work-life balance. This is not a radical move. We are not running sheltered workshops here. The UK is illustrative of the impact of this type of legislation on small businesses. When we talk about wanting better work-life balance for our workers, I have to say that as a daughter of a small business owner—and Mr Deputy President, I know that you were involved in small business as was Senator Scullion, who is in the chamber—work-life balance for workers is fantastic, but what about the work-life balance for those who actually produce and drive our economy—the small- to medium-sized enterprises in our communities? I can actually attest to the fact that their work-life balance is not particularly healthy. Yet they are out working, not always bringing in the big bucks but enjoying the independence that being a small business owner brings.

I rise to speak today on the Fair Work Amendment Bill 2012, and I say from the outset how disappointing it is that the Labor government is rushing through legislation—in this case, legislation that will affect every employer, every employee and every independent contractor—without allowing the Senate Standing Committee on Education, Employment and Workplace Relations adequate time to hold a thorough inquiry to investigate the detail of the bill. I am concerned that we are required to consider this bill in the Senate prior to the Parliamentary Joint Committee on Human Rights completing its report and before the responsible minister responds to the concerns of the Senate Standing Committee for the Scrutiny of Bills regarding inappropriate delegation of power and possible undue trespass on personal rights and liberties. This government should stop shirking scrutiny and permit the Senate and its senators to fulfil their duties.

The bill seeks to make several amendments as part of the government's first tranche of changes to the Fair Work Act, based selectively on reports from the Fair Work Act Review Panel and the Productivity Commission inquiry into default superannuation funds in modern awards. Many listening, including those in the chamber, will recall that the terms of reference for the Fair Work Act review were widely criticised for their limited scope, the omission of productivity, the impact of union militancy and the monetary impact of red tape. Indeed, we discovered that the Department of Finance and Deregulation and its Office of Best Practice Regulation shared the concerns of the coalition and the business sector. It was therefore no surprise to learn that the minister's political advisers had drafted the terms of reference to achieve Labor's political goals. They are probably the same advisers who draft the media releases that drive so much of this government's policy conversation with the Australian people.

The bill's provisions include amending unfair dismissal provisions to align time frames at 21 days and an attempt to improve the integrity of application and hearing process. They include changes to the structure and operation of Fair Work Australia, including renaming it to the Fair Work Commission. There is also a provision to create two additional vice-presidential appointments. The desire of this government to simply rename, rebadge, things, as if we will not notice a change or the cost involved in doing so each and every time, seems to be its modus operandi at the moment, when we consider some of the bills that we discussed last week. The provisions also introduce a process for determining the most appropriate default super fund, clarify who can vote and participate in protected industrial action and who can rightfully act as a bargaining representative, as well as amendments to enterprise agreements, particularly for individuals.

A number of submitters to our inquiry—I sit on the Senate Standing Committee on Education, Employment and Workplace Relations—expressed disappointment about the government's failure to address critical flaws with the existing legislation in the first tranche of changes. The Australian Chamber of Commerce and Industry said:

Unfortunately, the report and its recommendations, as well as the first tranche response, will do little to address the problems identified by Australian employers …

Apparently, Senator Wright, it is not a two-way street. The ACCI went on to say:

This includes the majority of SME business owners, many of whom have mortgaged the family home while trying to create valuable employment opportunities and build wealth for all Australians.

By simply ignoring the problems will not make them go away.

Priority matters raised by submitters to our inquiry included the costly requirements to respond to trade union applications prior to bargaining being agreed; ensuring capacity to make greenfield arrangements without exorbitant wage and condition outcomes or unnecessary project delays; and ensuring protected industrial action can be taken only as a last resort. Multiple submitters opposed moves to prohibit single-employee enterprise agreements on the basis that it would disadvantage small business operators. A number of amendments were proposed, including limiting the provision to proprietary limited companies and excluding partnerships and sole traders or simply improving the 'better off' test for allowing enterprise agreements, regardless of the number of staff.

The Victorian Employers' Chamber of Commerce and Industry were one of the many peak bodies standing up for small businesses, saying they were:

… invariably award dependent, without in-house workplace relations expertise, and are most vulnerable to the inequities and uncertainties of the legislation of the day.

They went on to say:

… many VECCI members have described the policy outcomes of the Fair Work reforms as detrimental to the capacity of business to do business productively, flexibly and efficiently, and have not provided an appropriately modern regulatory framework for modern workplaces and business structures. More specifically, while the Federal Government promised that the Act would not increase costs, the cost of doing business has increased as a consequence of the Act—along with the administrative and practical on-costs of regulatory uncertainty, coupled with uneven and two or three track economic conditions many industries face.

One of the 'systemic defects' identified in the Master Builders Australia submission was bargaining provisions. They stated:

… many of the pattern agreements which are being rolled out across the country on a "sign up or else" basis, by the CFMEU in particular, contain provisions which adversely affect the efficient operation of building sites. Greater balance in the bargaining laws is a pressing reform.

In my home state of Victoria, the CFMEU were condemned for approving illegal industrial action at Grocon sites earlier this year. It was illegal, it was disruptive and it was violent. Workers took out full-page ads in the state daily newspapers declaring they did not support their union's actions. Tens of thousands of dollars in members' fees were forked out for legal costs and a further $10.5 million is possibly payable to cover Grocon's losses due to union bosses choosing to act outside the law.

I take this opportunity to highlight a court judgment on a matter even closer to home, in my patron seat of Bendigo. The High Court delivered a landmark ruling in the Barclay v Bendigo TAFE case on adverse action in September, showing that union officials will not be immune from disciplinary action if they fail to perform in their job or breach employment conditions. Disappointingly but hardly surprisingly, Labor intervened in the matter on the side of—think about it; wait for it—the AEU official, arguing that it was the intention of the Fair Work Act to make union bosses untouchable even if they did the wrong thing. In a statement released on the judgment, Justice Heydon said the intervention of the workplace relations minister had increased the costs awarded against the union by around 15 per cent. He said

… the Minister's stance before and during the oral hearing was not that of an intervener, but that of a partisan.

It is a damning assertion.

There are numerous examples of union officials failing to act in the best interests of their members, breaching financial management rules and using members' money for personal advantage that have hit the headlines this year—most noticeably the HSU scandal. The cost of the HSU investigation to Fair Work Australia is in excess of $1.8 million, not including the cost of its court action against the formerly Labor member for Dobell, following findings that he had used HSU funds to pay for escort services and other improper purposes. The coalition is firm in its view that this must stop. That is why we are currently seeking to amend related Fair Work acts to increase penalties to five years prison and/or up to $220,000 for those in breach, to improve protection for the members of these organisations.

Undeniably, Fair Work Australia's reputation took a hit during the protracted HSU investigation. The review panel recommended a name change that included the word 'commission' and removed the tarnished brand 'Fair Work'. It is a little surprising—but only a little, given that this is probably thematic every time I stand up to deliver a speech. It does not matter whether it is the Murray-Darling Basin Plan, Senator Back, or Indigenous affairs, Senator Scullion, or education policy or Senator Cash's work in equal opportunity for women last week. We changed the name. Let's see if we get a different outcome. We doubt it. So I am only a little surprised that the Prime Minister intervened and that subsequently, in a clear contradiction of the recommendation, the legislation seeks to change Fair Work Australia's name to the 'Fair Work Commission'. The coalition believes the review-recommended name of 'Australian Workplace Relations Commission' is more appropriate and will move an amendment to that effect. While there is apparently no monetary implication for this bill, I would be most interested to learn what the rebranding exercise will cost taxpayers.

Further on monetary implications, this bill includes provision to introduce two new vice-president appointments. The coalition shares the deep reservations expressed by many submitters to the EEWR inquiry, who noted that this was not recommended by the review panel—but don't let that get in the way of a piece of government legislation. It stinks of 'jobs for the boys' and is perhaps the minister's primary reason for suddenly pushing this legislation through parliament. I anticipate a couple of union mates are about to get a nice Christmas present. While cost implications have not been declared in the explanatory memorandum, the Deputy Secretary of DEEWR told our committee during the inquiry that there would be costs in the vicinity of $1.5 million per annum for these positions. The coalition strongly opposes the creation of the two additional vice-president positions and has moved amendments to that effect.

In the limited time remaining, I will touch briefly on amendments impacting superannuation. Minister Shorten took forever and a day to ask the Productivity Commission to conduct a much-needed inquiry into this matter and then cherry-picked its recommendations that essentially maintain the status quo. So, instead of introducing legislation that would ensure genuine competition and improve transparency, we have a bill that seeks to impose yet another layer of government intervention in the default fund market. Given that the MySuper bill has gone through the Senate this week, the coalition believes all MySuper products should be eligible to be selected under the award and proposes that the bill be amended to that effect.

The Liberal-National coalition is disappointed by government's failure to address the concerns of Australian employers and employees regarding its industrial relations laws. The coalition senators' dissenting report to the Education, Employment and Workplace Relations Legislation Committee's inquiry report into the Fair Work Amendment Bill, tabled yesterday, recommends several amendments to the bill at hand. The Leader of the Opposition in the Senate, Senator Abetz, will be moving those amendments to address the many flaws identified in the bill and I give them my full support.

For regional Australia, the whole concept of small to medium enterprises and their crucial underpinning of our local economies cannot be underestimated. I am not just talking about farmers or greengrocers. According to the ABS, if we divide our nation into the urban areas and those not in a capital city, we have 700,000 small businesses right across this nation that are outside of our capital cities. They employ 4.3 million people and their turnover is $200 billion a year. Some of them, like my own family business, are employing a father and some very recalcitrant children—Senator Back, I tell you, we had better take this one to Fair Work Australia, sorry, the commission—at two dollars a day. I think that was probably in 1978, but even if we extrapolate from that it is probably still under award.

Senator Back: Very generous!

Senator McKENZIE: It taught me a lot about the value of hard work, listening to your father and getting on and saving, because clearly, at that rate, I was not going to get to my target goal purchase—which I think back then was a pair of rollerskates—anytime soon.

Our small businesses out there in regional Australia provide 75 per cent of our employment. So these big-stick approaches do not work in companies where people are working alongside each other to ensure that the small business grows and develops. The employer wants his boss to succeed, wants the business to grow, wants to work hard so that he can not only maintain his job but his boss's business can contribute to the local footy club or the local surf lifesaving club. The employer and the employee have to fight fires together. They have to play footy on, hopefully, the same team because otherwise it could lead to some issues on a Monday morning, depending on what the game was.

Essentially, though, the way small business operates outside of capital cities is with a more collaborative approach. Small to medium enterprises underpin our local economies in the regions. We encourage the Greens and Labor to support our amendments to the bill so that we can make it the best piece of legislation going forward for industrial relations.