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Tuesday, 27 November 2012
Page: 9901

Senator SINODINOS (New South Wales) (18:00): I am surprised that I have to follow Senator Back and that we do not have too many speakers from the other side. Despite three-quarters of Labor senators being ex-union bosses, not one of them aside from the minister, I understand, can bring themselves to speak on the Fair Work Amendment Bill 2012.

This bill will have a significant impact on every employer, employee and independent contractor in this country, and now the labour movement is allowing the legislation to go through without a murmur, at least from the representatives of the movement in this chamber. Not one of them wants to come in here and defend the provisions that we are debating here today. Not one of them wants to come in here and debate workplace relations out in the open. They prefer to do those deals in those smoke-filled rooms, move the amendments at the national conference and then put them up and hope that no-one will oppose them or have anything to say about them.

Well, we will debate them. We will talk about them. The reason we do so is that, as I said before, the Fair Work Act is a very important act, one of the most important acts before us in this chamber. The opposition are disappointed that this act was not the subject of a full-blooded independent review. A number of my colleagues have discussed that in some detail. I will not go over the same ground, except to ask: what has the government got to lose from a full-blooded review? If we are confident of the impact of this act on the wellbeing of this country and on various parameters of that wellbeing, what did the government have to lose from having a full-blooded review, an independent review? While three eminent persons were given the job of undertaking this review, they were members of the club. They were insiders. In many ways they were being asked to review their own handiwork, or handiwork that they strongly supported or for which they had an ideological disposition. It is fine to have an ideological disposition, but the fact of the matter is that we have an obligation as a parliament to look more impartially and objectively at the impact of legislation on the economic condition of our country, the social condition of our country, and all of those desiderata that are important in considering public policy.

Unfortunately, on this occasion we had an insider review. It was only through freedom of information legislation that we were able to glean that there had been a debate within the Public Service about the terms of reference for the review and the fact that the Public Service in the tradition of giving frank and fearless advice said that there should be fairly broad terms of reference so that the review could look at all those issues around productivity and flexibility which are so important when you discuss industrial relations. One of the members of that review, Professor John Edwards—former economic adviser to Paul Keating, former journalist, and I think now a member of the Reserve Bank board—has argued on many occasions that there is not much of a linkage between the industrial relations system and productivity. This is not right, there is a major linkage. But it was surprising that he, as an eminent economist, would make that sort of point. The reason I mention it here is that this was precisely the reason he was chosen to do this review, because of the disposition he brought to the review. So we ended up with hamstrung, politically determined terms of reference which largely guided, I think, the committee or the panel to the recommendations that they made.

There will be some areas in which we will support certain of the recommendations, because we think that they will advance certain issues that we have identified in our consultations with business, both large and small. But on the whole we are disappointed by the way that this review has gone forward. We should not be surprised that that was the method of carriage, because this has been a government which is owned lock, stock and barrel by the trade union movement. They bought this government with their 'Your rights at work' campaign in the run-up to the 2007 election.

It is true that the dragon of Work Choices did rouse some of the slumbering members of the union movement from the last part of the Howard years. That is true. But while Labor in parliament, particularly in that other place, argued about case studies of employees being allegedly exploited by employers, the real motive behind the trade union movement and its opposition to Work Choices came from the fact that they saw it somehow as an existential threat to them.

It was not an existential threat to them. In a competitive marketplace you earn the right to represent others. They were afraid of competition, they were afraid of contestability, therefore they put all their resources behind electing a government that would not only remove Work Choices but also turn the clock back on industrial relations even to pre the Keating era. It was the Keating government that, after the 1993 election, made the first major moves in the direction of enterprise bargaining. It was the Keating government that moved on enterprise bargaining even though they twinned it with some backward steps on unfair dismissals, which I will discuss later. But the point is that the bargain that was struck between the Parliamentary Labor Party and the trade union movement was to put in place this legislation which turned the clock back on industrial relations and undid some of the good work of not only the Keating period but also the Howard period, particularly in relation to things like Australian workplace agreements which added another layer of flexibility to the labour market.

That is the context in which all of this occurred. In fact in 2007, Julia Gillard came up with an extremely pro-union draft industrial relations policy that Kevin Rudd had to water down because of employer resistance in the run-up to the 2007 election. He became so worried about losing business support that he watered the policy down.

Then when they were in government the policy was implemented. It was an election commitment. A commitment was made that after two years there would be in effect a post-implementation review. That is where the review we are talking about today originated.

In the meantime, government has not only moved to put in place a more retrograde industrial relations system but also complemented it by a whole series of other measures that further entrench the role of trade unions in the workplace and the role of productivity-reducing employment practices. I am referring here to specific packages in areas like the shipping industry. The shipping reform package essentially gave concessions to shipping companies and gave important benefits to the Maritime Union of Australia. The Maritime Union of Australia promised, hand on heart, that there would be a productivity compact between the shipping companies and the MUA that would deliver major productivity gains that would offset the costs of the package we are talking about in the shipping industry. We are yet to see the colour of their money on the productivity compact, and we will be waiting awhile.

In the road transport sector we had the establishment of the transport remuneration tribunal under the guise of promoting driver safety. We all support greater driver safety, but this has become a mechanism for further regulation of wage rates in the transport sector. That tribunal works as a subset of Fair Work Australia so its genesis and outlook are very much from within that framework of Fair Work Australia.

In the building and construction industry we had the watering down of the Building and Construction Commission. It was defanged. In 2007 the now government said, hand on heart, that it would not water down the cop on the beat in the construction sector, but it has. We are seeing the impact of that in a number of industry sectors, particularly obviously construction and building. You just have to go to Victoria to see some of the disputes going on. In the centre of Melbourne there is the Grocon dispute and in Geelong as well there is a dispute. The one in Geelong I think involves the CFMEU. But my point is that the Fair Work Act is buttressed by a whole series of other actions that this government has taken to entrench trade union privilege in the Australian economy.

I turn now to superannuation, another area where the government allegedly is moving in the direction of greater contestability—in this case in relation to the default funds that workers can use for their superannuation. Again what will happen here is that advice will be provided by a panel and Fair Work Australia will make those judgements. Again it will therefore not be a genuinely open, contestable and transparent process where any eligible fund can be a default fund but it will be one which is very much controlled within the framework of Fair Work Australia.

This is where we come up against one of the greater achievements of the labour movement—that is, the way some of these organisations are staffed. In the case of Fair Work Australia we have had the debate in the context of this bill about the creation of two new senior vice-presidential roles. There has been much speculation as to the sorts of people who will occupy those roles. We have had speculation about Jeff Lawrence, a former Secretary of the ACTU, being appointed. It has been the tradition over the years to have employer and employee advocates and representatives become members of some of these quasi-judicial bodies. The speculation has been that it might be Jeff Lawrence, a former Secretary of the ACTU, or Josh Bornstein, a lawyer. Those who watched the ABC miniseries about the waterfront dispute will know that Josh Bornstein played a role in the waterfront dispute by sort of advising I think the MUA at that stage. Lately he has been tweeting advice to the Prime Minister about how to handle the AWU matter or seeking to promote her cause in that regard. He was recently quoted talking in a lecture about the lack of a link in economics between industrial relations systems and frameworks and productivity. Those are some of the potential candidates for senior vice-presidential roles on Fair Work Australia.

Any government has the right to appoint whomever it wants, but you need to have a process which gives confidence to people in the marketplace—employers and employees—that they will face a group of people who will be impartial, objective and consistent with the objects of the act in carrying out their duties. That is not what you would get here if you get these sorts of players promoted to these roles. We already know something about the sorts of players on these bodies. An overwhelming number of people appointed to Fair Work Australia have a trade union pedigree, including Bernie Riordan, a former official of the Electrical Trade Union, who was appointed in the last round. He mysteriously had civil proceedings against him settled the day before his appointment. If I recall correctly, Mr Riordan comes out of New South Wales and he not only was a trustee of his industry super fund but also was involved with a group called Chifley Financial Services, which provided services to that fund. That goes to the issue about the conflicts of interest that exist through the relationship between the trade union movement and some of the industry super funds and the fact that some of these industry people also provide services to some of these funds.

If I recall correctly, Mr Riordan at one stage was also one of the leaders of the opposition to the privatisation of electricity assets in New South Wales. At a time when you have Martin Ferguson, an ex-President of the ACTU and one of the real straight talkers in this government, calling on state governments to privatise their electricity assets in order to create a more competitive and more efficient national electricity market you have people like Bernie Riordan floating around Fair Work Australia bringing his age of the dinosaur views, if I can put it like that, into play on industrial relations. That is the nature of what we are dealing with here.

There has been debate in the context of this bill about the name of Fair Work Australia and the fact that 'fair work' will be retained. The reason 'fair work' will be retained is, as I understand it, that the Prime Minister herself intervened, because obviously she wants to create that link with the policy she took to the 2007 election. What that tells you is that they are unreconstructed, that there is no appetite for taking reform forward. I have said it before and I will say it again: the trade union movement of 2012 is not a patch on some of the trade union leaders of the eighties and the nineties who were prepared to be in the vanguard of economic reform in the national interest. Yes, they got benefits for their members out of it but the point is they did something that was also in the national interest. They were able to balance the two in a way that was beneficial for all of us.

There has been discussion in recent days in another place about matters to do with the Australian Workers Union. All I will say on that point is that that discussion has highlighted a culture in parts of the union movement of standing over businesses in order to get contributions, accountability for which—as we have seen in certain parts of the AWU in the 1990s—was not what it should be. This culture of standing over companies and getting money—money which was not used for the purposes for which it was allegedly raised—raises important questions about the governance of the trade union movement. I think a future coalition government should take a very good look at the structure and governance of the trade union movement. It should be subject to a no-advantage test, as is the way I would put it; in other words, to create a level playing field between unions and other bodies that want to represent workers. What we want to create is a situation where it is a competitive marketplace in representing workers and where workers have all sorts of options, because it has got to be a system which is driven by the interests of the worker, the customer, and not driven by the interests of a union hierarchy—because today the government is driven by the interests of a union hierarchy and so is the labour movement. So we need that culture to change and you can only change it through competition and contestability.

I now want to turn to unfair dismissal. Here the government is making some adjustments in relation to the rules around unfair dismissal which we welcome in the context of dealing with potentially vexatious claims. Let me make this point in the context of my work with the Coalition Deregulation Taskforce, a very good task force of which Senator Bushby was deputy chairman and did an excellent job around the country. One of the areas on which we got a lot of feedback was unfair dismissal and that the concept, principle or phenomenon of going away money had returned, that it was much easier for an employer just not to have to worry about dealing with the matter through the fair work system and that an employer would in fact be getting advice from Fair Work Australia that the best thing would be 'just to settle this and move the person on'. Now that just creates an extra tax, a tax borne by employees, because if it becomes harder to fire there is less of an incentive to hire. Particularly when it comes to small business, we need to be doing everything we can to reduce the burden of regulation, compliance and paperwork on small business. So their having to shell out $5,000, $10,000, $15,000, $20,000 or whatever it is simply to settle with an employee because they cannot be bothered to go through the process, given the time that is required to deal with it in a more rigorous and thorough way, is a condemnation of the system as it stands. So for us any support for reform in that direction is welcome and we will of course support that.

We believe that the fair work review should have gone further. It should have looked not only at the matters discussed here today but also particularly at what is happening in the building and construction industry. There should be more focus on this. Martin Ferguson, the Minister for Resources and Energy, made it very clear recently that he was concerned about the upsurge in costs associated with infrastructure investment and building and the impact that would have on our competitiveness in the mining and resources industries. He called an end to the price boom in the mining and energy market. What he was talking about was that now was the time for the hard yakka of extracting the volumes and that to extract the volumes required being competitive. It does not mean cutting people's wages but it means restraining our costs and boosting our productivity, and these are all issues that the government has tended to sweep under the carpet. These are all issues for which the government has tended to in effect say, 'Well, look, if costs are high in Australia it's because we've got a high exchange rate and that explains most of it.' Well, it does not explain most of it. The high exchange rate is a factor but the fact of the matter is any respectable international survey will show you that over the last five years our cost structure has gone up considerably. We are one of the highest cost locations in the world, both in a consumer sense and an industry cost sense, and it is getting worse.

The challenge we face in the years ahead, as the terms of trade settle given all the rest of it, is that the hard yakka to create jobs and to create higher real incomes and living standards will come from improving our productivity and improving our competitiveness. This bill in its current form does nothing to address any of those issues. It is window dressing of the type that we have come to expect from this government. There will be no change on this front until we have an honest discussion about the parameters around industrial relations policy and we have a government which is willing to enforce the law and make everybody, including the trade union movement, subject to the law.