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Thursday, 24 June 2004
Page: 31647

Mr BARRESI (12:15 PM) —The small business sector looks to governments of all persuasions, state and Commonwealth, for support and protection. Why does it do that? It is very simple: we all recognise that small business is the engine room of our economy. It employs 3.3 million Australians. A sector of that size with so many people working for it needs protection and security from government, rather than being simply dismissed. We know where the ALP stands on small business—we know from two simple facts. First, at the last ALP national conference in January—I am sure that the member for Hunter was there and voted in support—various motions were passed to empower the ALP to adopt draconian measures against the business community. One such measure was to allow union officials the right of entry into small businesses at any time. That includes home based business and it applies regardless of whether union members are employed there. Union officials will have access to your business records. That is just one example of how the ALP does not understand small business and what it is about.

The second reason that the ALP does not understand why this bill needs to be supported is the make-up of the ALP. Yesterday, during the debate on the MPI, I mentioned that union membership in this country has now dropped to 17 per cent in the private sector, yet 74 per cent of the ALP caucus is made up of former union officials. Why is that important in the context of the Workplace Relations Amendment (Protecting Small Business Employment) Bill 2004? It is important because members opposite have no empathy with or understanding of what it means to set up a small business and then have policies such as those passed at the national ALP conference or decisions like that made by the Australian Industrial Relations Commission. When those policy decisions are made they have a dramatic, negative effect on small business.

If members on the other side could only understand what it is like to go to a bank or to face your spouse and say: `I'm going to leave the job that I have had for five or 10 years and set up a small business'—whatever it may be, whether it be a corner milk bar, a hairdressing salon, a consultancy company, a service station, a takeaway stall—`This is something that I want to do. I want to run my own business. I want to do something which is mine, which will employ people and which will grow.' There is then the realisation that you have to put up your house as security for a bank loan. You have to weather the anxiety every month as the statements come in. You look at your bank statements and the amount of money going out versus the amount of money coming in. That is what small business means. Members on the other side will never get it—they will never understand. Maybe one or two have had partial exposure to it but the 74 per cent of the ALP caucus who are former union representatives have no understanding of the pressure on small business, the pressure on the families or the pressure on mum and dad to put on a brave face as their children go to school and they have to feed them.

Mr BARRESI —I said that there may be some exceptions, member for Hunter. I look forward to your supporting this bill. The coalition government is proud to stand by small business and to support it against policies and decisions which will make it even harder for small business to survive.

There are three main effects of the bill. They impose changes which will enhance our position as the only party that is concerned about small businesses in Australia. Small businesses enable local people to engage in activities in their local community. Strong communities rely on strong local business networks. I am very fortunate and proud that in my electorate of Deakin many local businesses are dedicated to our community, and they are well represented by five or six chambers of commerce and traders associations. Next week I will bring together representatives of each of those groups to discuss issues of concern such as barriers to and constraints on their businesses. No doubt I will do something which the ALP will not do: inform them of the effect that voting for an ALP federal government will have on their small businesses. I will deal with some of those effects later if time permits.

The member for Greenway said: `The law is the law. The Australian Industrial Relations Commission has brought down a judgment that we have to abide by. We don't like it and we are trying to overturn it.' The member for Greenway I know is in his last few months in this House. He has been a good contributor to this parliament. He would understand that this parliament makes the laws. It is our job when a court in any of the various jurisdictions makes an interpretation or a decision which goes against the intention of what was meant to take place—in this case with the Australian Industrial Relations Commission overturning a decision it made 20 years ago—to use our power to change the law. We make the law. Until then, we abide by it.

That is in stark contrast, may I say, to some members of the union movement, who often have a total reckless disregard for decisions of the Australian Industrial Relations Commission if they go against them. There are countless examples of the union movement standing up and saying, `This is wrong. The Industrial Relations Commission got it wrong. We're going to fight it. We're going to take our people out to the street. We're going to boycott and still go out on strike.' The government is saying, `We don't like what took place with that decision by the Industrial Relations Commission. Obviously the law will be abided by until such time as the law can be changed.' That is exactly what we are doing here today. I look forward to the member for Hunter, as a self-proclaimed champion of at least one small business in his electorate, supporting this bill.

This bill is the only alternative following the decision by the Australian Industrial Relations Commission that imposes redundancy pay obligations on small business. Without this legislative change, small businesses with fewer than 15 employees would fall under the jurisdiction of the commission. This would compel the businesses to comply with the ruling, which would impose greater risk and place a significant financial burden on smaller operations. While this bill also seeks to cancel the effect of the variations made by the commission to awards from the point at which the decision was made, the bill will not change the pay redundancy provisions made prior to the commission's decision.

The third mechanism of this bill is to prevent the flow-on of the commission's decision to small businesses that are constitutional corporations and that are covered by state awards. This issue has arisen because of the commission's decision that changed the exemptions for small business. The decision resulted in severance pay for businesses with fewer employees becoming mandatory. This exemption was actually established by the commission some 20 years ago.

Should this decision be allowed to stand and the impost on smaller businesses remain, significant financial monkeys will be placed on the backs of small business owners around the country. For example, the local strip shopping centre convenience store with seven employees who have been with the business for six continuous years would face a $30,000 redundancy liability. That is a $30,000 liability on top of the second mortgage that they have taken out, on top of the uncertainty of supply in some case, on top of anti-competitive practices and on top of the costs of recruitment and termination. This is an unsustainable cost and an unsustainable expectation to place on the thousands of small businesses right around this country. It needs to be redressed.

Our reforms to the workplace relations system have created a fairer, more flexible system. I am proud of the fact that the Howard government has embarked on wide ranging reforms to the industrial relations system to allow greater flexibility. That flexibility arises out of an ability to negotiate working conditions and the freedom to choose whether or not to belong to a union. We have taken steps to protect youth wages, which are under threat by many on the other side who I know at the last national conference also moved to abolish junior wage rates, which will cost 200,000 jobs, according to the Australian Retail Association.

This bill further enhances our position of opposing unnecessary restraints on small business which make it harder to employ people. The owners and operators of smaller businesses should have the confidence to employ people without the cloud of large payouts hovering over their heads. The alternative to this bill being passed would be to leave the majority of small businesses subject to redundancy payments in accordance with the commission's decision. This would hamper their capacity to grow and employ more people. It would threaten them with having to meet large payments with a relatively low turnover.

Another impact of the commission's decision would be a domino effect through the states. It is important to note that just last week UnionsWA applied to the Western Australian Industrial Relations Commission to extend similar redundancy provisions to small businesses in Western Australia. This bill is taking the only course available to prevent small businesses with fewer than 15 employees from being compelled to pay redundancies.

While this bill is seeking to remedy the ruling of the AIRC, it in no way makes agreements to include redundancy payments void. It simply removes the standardisation or the regulation of the redundancy pay provisions. In other words, redundancy payment for small businesses will be by choice rather than the norm—if a small business has the capacity and there is an agreement. I will certainly be encouraging a lot of small businesses in Victoria—as we approach the 1 January time period when many of those on state awards will be moving to federal awards—to take out Australian workplace agreements as a form of protection against any increased costs in entitlements that they may have to pay by moving to a federal award.

What has become the norm is Labor's aversion to good policy. The opposition is again siding with those opposed to this bill, and those opposed to it are essentially their union colleagues. They are opposing a bill that will alter a law that would otherwise cripple small business and possibly restrict job opportunities. The party for the worker being against jobs does not add up. I do not understand it. I wish that members on the other side who understand small business, such as the member for Hunter, would be far more influential and persuasive in their dealings with their colleagues. The member for Hunter should get up there and argue with passion the cause for small business in front of his colleagues to bring them on side on this issue. I am quite happy to help him out in that cause.

Mr Fitzgibbon —Be careful: I am speaking next.

Mr BARRESI —He is speaking against.

Mr Fitzgibbon —I am speaking next.

Mr BARRESI —He is speaking next.

The SPEAKER —Order! Member for Hunter and member for Deakin, the last time I checked, the Speaker was not actually going to participate in the debate.

Mr BARRESI —Mr Speaker, the last time I checked, employees are generally made redundant when times are tough, when a business is finding it difficult to make ends meet. Yet the opposition would have struggling small business owners cough up for legal fees to fund a case before the Australian Industrial Relations Commission. Federal Labor would be happy for jobs to be threatened and for the growth of small business to be hampered, while it would expect the owners of those businesses to front up to the costly legal system to put a case for an exemption. I would have thought the commission would have enough on its plate already. This is just another example of shoddy ALP policy. Had the ALP done its homework, it would have realised that an exemption system will not work. There has been an exemption system in place for larger businesses for 20 years and, from what we have seen, it has not produced one exemption. One is forced to ask whether the state governments are backing this proposal by the ALP. Not one of the four state governments involved in the Australian Industrial Relations Commission test case has come on board and supported the ALP's plan for an exemption system. Therefore, it would appear that federal Labor is on its own, and I look forward to federal Labor changing its view on this matter.

In speaking to this bill, I believe it is important to look at the context within which it is set. In my electorate of Deakin, there are over 6,500 small business. When you use the national average, that equates to almost 20,000 people employed by small businesses in Deakin. To say the small business sector is important to my area is an understatement. No-one says that running a small business is easy, and those of us on this side know that it can be very difficult and stressful. At times it is all-consuming both personally and for the family. Small business owners and managers rely on the bigger picture to set their scene. A strong, growing economy is essential so that families and individuals have a greater capacity to become active in their businesses and in the engagement of their services. Today, families are in a better position to think about the things that are important in their lives, such as financial security and personal security, than they were prior to 1996.

As small business owners know, sound management of their books is vital. Our 1.2 million small businesses have been fortunate that the coalition has occupied the Treasury benches during the world's economic downturn and that we have been able to weather the global economic storm. Our economy is one of the strongest in the region, and it outshines many economies around the world. For the first time in 35 years, the unemployment rate is below six per cent and the inflation rate is below three per cent. This is good news for small business. But this is an economy and a situation that will be in jeopardy if the other side get their way in running the economy and industrial relations policy.

Yesterday, I participated in the MPI on industrial relations, and one aspect of industrial relations which is important to small business is casual and part-time employment. The member for Hasluck yesterday was decrying the fact that there is much casualisation taking place and was saying that this government should be doing more to attack casual employment and to reverse it. If you look at the ALP national platform you can see where they stand on those things that are important to small business. Labor will give casual employees the right to demand to be made permanent. This will make it much harder for small business to employ people at times when they need them. It will also greatly increase costs by making casuals eligible for redundancy payments and leave entitlements, as proposed by the Industrial Relations Commission.

Casual employment is not something that has been foisted upon people out there; it is something that employees want. They have demanded it. Half of all casuals are young people, students in their first jobs—there are women going back into the work force, mature age people who are entering the work force after perhaps being laid off from a job that they had for many years. The notion of lifetime employment, from both the employer and employee perspective, has long gone. We do not have that these days. People do look to casualisation as an alternative. So why have on your platform an attack on casual employment?

We saw an example recently where the metal trades industry award allowed people who were casual to move to be permanent. If you take the ALP's proposition, all of those who were offered that opportunity would have moved across to permanent employment. What did we find? Was it 100 per cent of those who were casual that moved to permanent employment? Was it 50 per cent? Was it 40 per cent? Was it 25 per cent? Two per cent of the casuals moved across to permanent employment. This is an indication that the ALP and their union mates have got it wrong with small business and with the work force in general. Their opposition to this bill is a further indication that the ALP have got it wrong. They need to reverse their decision, to allow small business to grow, prosper and employ people who want to be employed on terms that they have negotiated with small business operators. (Time expired)