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Monday, 26 November 2012
Page: 9639


Senator ABETZ (TasmaniaLeader of the Opposition in the Senate) (10:01): The Fair Entitlements Guarantee Bill 2012 seeks to enshrine in legislation that which the coalition put forward as the General Employee Entitlements and Redundancy Scheme. This was an initiative of the Howard government. It was an initiative which gave expression to the coalition approach to matters workplace relations—namely, practical solutions for practical problems. What we had, courtesy of the Keating recession that we had to have, was a number of businesses that went broke and did not have appropriate reserves to pay out hard-earned employee entitlements.

We as a coalition at the time believed and we still believe that employees who go through the trauma of losing their employment because of the failure of the business for which they work should not have the double whammy visited upon them by having their entitlements taken away from them as well. That is why the coalition under Mr Howard and, might I say, under Mr Abbott, as the minister for workplace relations at the time, introduced the General Employee Entitlements and Redundancy Scheme. It was a good scheme. It remains a good scheme and it is a scheme that provides protection for Australian workers who have earned and accrued entitlements. As a community, I believe it is appropriate to fund those entitlements in circumstances where people lose their jobs as a result of business failure.

As is the wont with the government, because it was a Howard government initiative, because it is a Howard government success story, what do you have to do? You have to change its name. You have got to obliterate anything that might link it to the Howard era. As a result, you have got to change the name so that, at the next election, Labor will be able to go to the Australian people and say, 'We introduced the Fair Entitlements Guarantee Bill 2012.' Yes, they will be able to say that, but the more discerning punter will know that this is mainly a name change to try to obliterate any of the history which of course is embedded in the coalition's concern for justice for employees who lose their appointment as a result of business failure.

Having said that, there are aspects of this bill which we support and that we can understand, but one thing that we are concerned about—and I will be seeking to move an amendment during the committee stage—is the benefits that are to accrue under this legislation.

The benefits that are being legislated here are, in the view of the coalition, somewhat overgenerous inasmuch as they go beyond the Fair Work Australia standards and they go beyond the Australian Industrial Relations Commission standard in relation to matters redundancy. If the parliament legislates this standard then of course it will make it so much easier for those advocating for more generous redundancy schemes to assert that, if the parliament says that this is a good regime in relation to redundancy, because the parliament has so legislated, it should be part of the relevant modern award or the relevant enterprise bargaining agreement.

It is always, I suppose, the role of the conservatives in politics to sound the warning bell. We regrettably have examples around the world of countries that thought and believed that they could legislate wonderful schemes—for redundancy, retirement et cetera—and when you have a look at those countries today you see them as the PIGS, the Portugals, the Irelands, the Greeces and the Spains. They are the countries where weak leadership of years before were willing to hand out benefits that were unsustainable. And, yes, they made heroes of themselves in the day that they handed out the benefits, but they were the architects, ultimately, of the collapse of these economies by promising too much and by giving too much in circumstances where it was clearly unsustainable. So what I would say to the Senate chamber is: be careful what you ultimately wish for because, by providing overgenerous benefits today, you may well be providing the architecture for more business collapses and ultimately economic collapse in the years to come. It will not be tomorrow. It will not be next year. But it will be some years down the track.

Make no mistake: if this becomes the standard, employers—who are the job creators in this economy—will see the cost of employment increasing even further. They will see that a redundancy scheme that is so generous will be something that their business will have to pay for—something that their business will have to set aside money for. What will those businesses do, especially those in the small manufacturing sectors? They will be looking elsewhere for their manufacturing. We talk about the Asian century. I think we know what is happening to manufacturing in this country. It is going to Asia and it is going elsewhere. It is not actually burgeoning within Australia as we speak.

So I simply ask the government: why would you seek to put forward a further impediment? And make no mistake: this standard, if we legislate it, will trickle through the system and will become the accepted standard, and that accepted standard will mitigate against future employment in Australia. It will mitigate against future employment in Australia because it will mitigate against the future viability of these businesses. That is the harsh reality. That is the reality with this legislation.

In your heart of hearts, would you love this to be possible for everybody? Would you love it to be that we could double the redundancy payments? Of course, we would all like to do it, but the question is: is it actually responsible and is it actually doable? One needs to step back and say, 'We as legislators have a responsibility. Do we want to become popular and claim that we are handing out all these goodies, or do we want to be responsible and say that there are consequences of handing out too many lollies too often?' That is basically the question that has informed the coalition's decision to seek to amend this legislation and, in the absence of the amendment getting through, to oppose this bill.

The history of taxpayer funded redundancy entitlements arose as a result of the Ansett collapse, and most people will recall the unfortunate circumstances surrounding that. The chief executive of the Australian Industry Group and others have warned people about this bill. They are concerned as to the consequences of it, and there is no doubt, in the words of Mr Innes Willox, that the bill quite deliberately has the potential to 'fuel union claims for employers to agree to similar redundancy benefits in enterprise agreements.' That is what we see in this bill and, whilst it may be well intentioned, we know that the good intention of providing these extra benefits will potentially lead to fewer employment opportunities.

The concern we have is that the high bar that this legislation will set is being done outside the Fair Work Act mechanism. This is despite Labor proudly continuing to announce and parrot that the Fair Work Act 'got the balance right'. If the Fair Work Act is as strong and robust as the government claims, and if it is subject to rigorous review as it claims, then why not make the adjustments within the scope of the Fair Work Act? Why do these overgenerous redundancy schemes need to be brought in via a separate piece of legislation? Why can't Fair Work Australia make these determinations, weighing up all the arguments for and against? Why is it that the government is not willing to accept the umpire's decision in relation to these matters?

Indeed, we have been told time and time again, that the National Employment Standards of the Fair Work Act 'got the balance right', 'sets a community standard' and, we are told, is a norm for acceptable community behaviour in relation to redundancy pays. We happen to agree with that. The levels, interestingly enough, put in a schedule would see that, after one year but less than two years of employment, your redundancy payout would be four weeks, and then there is a sliding scale up to at least 10 years where you would get 12 weeks. There is a reduction in redundancy pay from 16 weeks to 12 weeks for employees with at least 10 years continuous service, and this is consistent with a relatively recent—2004—redundancy case decision made by the independent umpire, the Australian Industrial Relations Commission. The coalition supports the community standard in relation to that, as set out, might I add, in the National Employment Standards of the Fair Work Act.

We do not believe that the Labor government should set a new standard, purely for political motivations, of four weeks per year for an unlimited period of time, particularly when this new standard is inconsistent with what is the agreed community standard and which the rest of the community is subject to.

This could also, might I suggest, place the government's much-vaunted but wafer-thin federal budget surplus in some jeopardy as well. As one person submitted in relation to this legislation:

The Bill would lock these very generous benefits into legislation and the insolvency of even one large company with a generous redundancy scheme could be a major hit on the Federal Budget.

I trust Labor do not need to be reminded that their federal budgetary position is in no position to take a major hit.

So why would Labor be introducing this other than for pure political motivations? This is a government that has presided over the four largest budget deficits in history and presides over the largest net debt this country has ever seen—in those circumstances, why would a government bring in a bill that could further plunder the budget and send it spiralling even further into debt?

Somebody has to be fiscally responsible, even if the government does not want to be, in this current climate. The coalition can and will make the tough but fair decisions in the national interest. Indeed, with these generous arrangements I am reminded of a former federal Labor Treasurer, Mr Frank Crean, who wisely said that one man's pay increase is another man's job. If you make employment conditions too generous, such as this bill seeks to do, it will ultimately cut into other people's jobs and the job opportunities that they otherwise may have had. You do not need to listen to somebody from the coalition side as to the unwisdom of this proposal; you can listen to a former Labor Treasurer, Mr Frank Crean, who made that very wise observation whilst he was federal Treasurer.

We have already canvassed the very difficult budgetary position that this country finds itself in. We are spending $20 million a day just to pay the interest on what is already borrowed. In those circumstances the government is bringing in a scheme which seeks to override that which the independent umpire, the Australian Industrial Relations Commission, determined after hearing arguments from all sides of the debate.

We will be moving amendments to this legislation to cap the entitlements that employees may receive in these unfortunate circumstances of job loss at 16 weeks in line with the accepted community standard, and to bring the scheme in line with the redundancy provisions of the Fair Work Act—which, Labor still says, got the balance right. Labor has to make up its mind. Did it get the balance right or did it not get the balance right? You cannot say out of one corner of your mouth that the balance is right and the national employment standards are all good, and then out of the other side of your mouth argue that you are some great reforming party making these changes.

The entitlements of workers is an issue that is vitally important to many people, especially in the current, uncertain times. People are under huge cost-of-living pressures courtesy of the carbon tax and the wasteful spending of this government. Job security is a huge issue for many Australians. In that context you can see that it is a purely political motivation of the government to try to move this type of legislation. What it actually does is undermine job security and, more importantly, future jobs within this country.

Having said that, a reasonable scheme and a proper scheme as determined by the independent umpire, the Australian Industrial Relations Commission, is the scheme that we as a coalition adopt. This is what we adopted when we set up this scheme in the first place; it was a good scheme, it was a workable scheme and it had overwhelming community support. Whilst Labor will continually tell us about the things it has done after 11 years of a coalition government, I simply remind these opposite that the coalition brought in this scheme; we were the architects of this scheme after 13 years of Labor government not doing anything in this space. So we are in fact the authors of this scheme. We were the architects of this scheme. We introduced this scheme. We implemented the scheme. And we administered it in a way that was fair and reasonable to all Australian workers.

What Labor are seeking to do with this bill is get rid of any identifiers that would mark it as a coalition initiative; change the name and make it more generous, but we know what happens with Labor generosity. We have seen it with the National Disability Insurance Scheme; we have seen it with the dental scheme; we have seen it with Gonski. The big promises are always unfunded. Then they scratch their heads and wonder why their budgets blow out from $12 billion to $20 billion to $40 billion deficits. They then wonder why the economy is not going as well as it could be and as it should be.

What this country needs is sound, stable, secure government, willing to make the right decisions, the right calls, the balanced calls. In doing so, government sometimes have to take off the populous hat and put on the responsible hat. As the coalition seeks to prepare itself for government, in the event that the Australian people give us that privilege at the next election, we want to place firmly on the record that we will be responsible as opposed to populist. (Time expired)