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Monday, 26 November 2012
Page: 9661

Senator XENOPHON (South Australia) (11:35): I indicate that I have got serious concerns about the Fair Work Amendment (Transfer of Business) Bill 2012. For the record, I believe that the previous bill that Senator Bilyk has referred to in relation to entitlements for a business that has gone broke and the government stepping in to ensure the entitlements of workers is a worthy bill. I am broadly supportive of that bill but I have concerns in relation to this bill, because I think that it will have some completely unintended consequences. Secondly, I believe that the process by which this bill has been introduced is terribly flawed. Thirdly, I think we need to look at the overarching issue of productivity in this nation in terms of our workforce. I would like to refer to a recent article by emeritus professor in economics Richard Blandy, which I think is worthy of note.

Firstly, in relation to the processes of this bill, my understanding is that this bill did not come out of the Fair Work review at all. This is something that has come out of nowhere in a sense in that it has not been part of due process or appropriate process. I note that Senator Abetz, the Leader of the Opposition in the Senate, made note that the Australian Industry Group is very concerned about this in terms of a lack of consultation with one of Australia's leading industry groups that represents many thousands of employers, representing many hundreds of thousands of jobs. I do not think under any reasonable characterisation the Australian Industry Group could be described as an enemy of the government. I think they have played quite a constructive role with the Gillard and formerly Rudd governments in terms of issues of industrial policy, manufacturing and other policies in relation to broader public policy issues affecting their members. The process appears to be deeply flawed, but I think the outcome is even more flawed.

It is worth referring to an article by Gary Johns, a former ALP minister—I know that his politics seem to have shifted somewhat in recent years. In the Australian on 25 September 2012, his opinion piece bears some note. What he is suggesting is—and I will quote from Mr Johns:

Employer evidence suggests the changes to the former transmission provisions make it less, not more, likely that a purchaser would keep existing employees. This is because the changes make it difficult for a purchaser to restructure the business, including altering inefficient work practices.

The unintended consequences of the changes are that new employers are reluctant to employ any of the previous employees so as not to be bound by the previous industrial agreements. So much for looking after state public servants.

Mr Johns also makes reference to surveys the Australian Human Resources Institute has undertaken. I have looked at those surveys this morning, and the Australian Human Resources Institute has indicated that some 37 per cent of respondents claim that the transfer of business provisions had a negative or very negative impact on business. Overall, this will have the effect of doing the opposite of what it is intended to do: this will actually kill off jobs. This will make it harder for state public servants to find employment, because they will be at a relative disadvantage compared to other employees, which is not what this bill is intended to do. But, in fact, the way that this bill is structured, the way that it has been drafted and the way that it is meant to operate indicate that it will have these huge unintended consequences.

The point that Mr Johns makes, I think, is a very telling one, and I would like to ask the parliamentary secretary to comment either in the response to the second reading contributions and the summing up or, indeed, in the committee stage. I am conscious that we have a very, very heavy legislative agenda this week and that we need to deal with matters as expeditiously as possible, but this is important. Mr Johns makes the assertion that these transfer provisions were not in place when the Hawke-Keating government sold off Trans-Australia Airlines, the Commonwealth Bank, the Commonwealth Serum Laboratories and many more. The tests then in place were a balance to allow the new employer the chance to do better with the existing workforce or, failing that, to move on nonperformers, according to Mr Johns. So my question to the government is this: is the government asserting that these transfer-of-business provisions are equivalent or identical to what the Hawke-Keating government did during their time in office? I have to say that I think history has shown that the Hawke-Keating government struck a pretty good balance between improving productivity and protecting workers' rights. So is what this government is doing quite a departure from the Hawke-Keating era? It seems that it is. It seems that what is being proposed here is radically different from what the Hawke-Keating government did, which I thought struck that balance between productivity and the rights of workers in those formerly state-owned enterprises.

The final matter I want to touch on is the bigger picture of what this means for us as a nation in terms of productivity. I think it is quite disturbing, and I think it is worth referring to comments made by Emeritus Professor Richard Blandy, who is a professor in economics and someone who I have known for many years. Before he is pigeonholed by anyone as being in some way anti-Labor or against the labour movement, I say that Professor Blandy and I got to know each other quite well during the privatisation process of the Olsen Liberal government in South Australia in the late 1990s. Professor Blandy was critical of that privatisation for a number of reasons, including the impact on consumers and the way it was structured—leaving aside the issue of mandate.

It was a bit like the Gillard government saying, 'We'll never, ever have a carbon tax.' John Olsen, as Liberal Premier of South Australia, said, 'We'll never, ever privatise the state's electricity assets,' and bingo—a couple of months after getting into office he said, 'Things have changed and we've got to privatise.' Leaving that aside, Professor Blandy received enormous political heat as an academic because he was critical of the way the Liberal government in South Australia was structuring the privatisation of the electricity assets. In his predictions—along with the predictions of Frontier Economics and Danny Price, the economist who has given advice to the coalition on an emissions trading scheme—he was very critical of what the then Liberal government in South Australia was doing, and I think Professor Blandy's concerns were borne out.

What Professor Blandy has said in a very well-researched opinion piece in the Australian on 24 October of this year is:

… Australia's long-term slow rate of growth in productivity (and high rate of growth in unit labour costs) compared with other countries …

has seen us slip behind. He said:

Australian productivity growth is the third lowest among the 10 countries—

that he analysed—

just nosing Spain into second-last spot. South Korea's rate of productivity growth has been 3.5 times Australia's across the past 20 years. Finland and Sweden's rate of productivity growth has been about double Australia's, and that of the US about 70 per cent faster.

I mention Finland and Sweden because no-one could consider those to be low-growth countries that do not have strong protections for their employees. They are taking an innovative approach to industry, to manufacturing, to value-adding and to having those high-paid, highly productive, innovative jobs. So I think we need to heed the warnings of someone like Professor Blandy—someone who has raised the ire of both sides of politics in what I think is a fearless approach to analysing public policy.

So, I have very real concerns about this legislation. I think it is bad policy, the process has been flawed and, above all, what it is intended to do—and that is supposedly to protect workers—through these transfer-of-business provisions will actually have the opposite effect. My challenge to the government is to say here and now: are these transfer-of-business provisions equivalent to, identical to or substantially the same as what the Hawke-Keating government were doing in relation to their transfer-of-business provisions when they privatised a number of state-owned assets? I dare say that the government cannot credibly say that that is the case. For those reasons I have very real concerns about this legislation and I have real difficulty in supporting it.