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Thursday, 24 June 2004
Page: 31665


Mr BALDWIN (1:36 PM) —Over the past few weeks in this House we have heard a lot of talk about the magic pudding. The Labor Party believe in the Lindsay philosophy that there is a magic pudding, but they have an inability to determine fiction from non-fiction. The way that they talk about small business and its ability to afford anything is as though every small business has its own magic pudding: they can just rip off a bit more to pay for things and it will reappear again, like a never-ending bank account.

The reality is that the Labor Party do not understand small business and do not understand about employment, because small business and employment are linked together. Today I join my colleagues in the government in debating the Workplace Relations Amendment (Protecting Small Business Employment) Bill 2004 and expressing our support for the 1.1 million small businesses in Australia which employ over three million people. The decision of the Australian Industrial Relations Commission in March this year to remove the small business exemption for redundancy pay will cost jobs. There is no doubt that it will cost lots of jobs because, as I said, small business does not have a magic pudding to rely on. It does not have its own version of Centenary House, as an endless bucket of money that the Labor Party would have. This action by the Australian Industrial Relations Commission will make running a small business more difficult and more costly, and, in the end, it will limit their ability to provide the employment that we need in this country. The decision turns on its head a system which has served this country well for the last 20 years, and the price at the end of the day will be a direct cost to small businesses.

Like my colleagues, who know what it is like to run a small business—something that the Labor Party know nothing about or, in fact, even care about—we understand the impost that the commission's decision will have. The commission handed down a test case decision to remove the exemption of businesses with fewer than 15 employees from redundancy, so the redundancy pay scale that was determined in 1984 for larger businesses now applies to small businesses. The scale is four weeks pay after one year of service and eight weeks pay after four years of service. For example, for a small business that had to make a redundancy payment to an employee who was on the minimum wage before the commission's decision the payment would have been about $1,340 after four years of service. But, because of the commission's ruling, that business is now liable to pay around $5,000. If you have a small business, like a mum and dad small business, which is paying above the minimum wage then these costs blow out even higher. So, understandably, when the decision came out small business organisations were horrified, just like I was.

Peter Anderson from the Australian Chamber of Commerce and Industry said that the decision was `a savage hit on Australia's small business sector and their capacity to employ'. He said that small businesses would have to find an extra $190 million to cover the redundancy. That is not $190 million out of some magic pudding; that is $190 million out of the back pockets of those business people. Importantly, that is $190 million that will not be spent on jobs and opportunities, particularly for young people, as my friend and colleague the member for Dobell knows only too well. Despite all the evidence that was put before the commission, it still made this decision, which will have a devastating effect on the ability of small businesses to create jobs and to keep their businesses running.

From the Australian Industry Group, Heather Ridout, in the Financial Review, wrote:

A large number of small business people gave evidence to the AIRC in the redundancy test case.

... ... ...

Many of the businesses were operating with marginal or negative profitability and in some cases the proprietors earned less than their employees.

Many of the owners had been forced to give guarantees to the banks over their personal assets, in particular family homes, and many were very worried about the impact of redundancy pay obligations upon their ability to obtain further finance.

What is quite unbelievable is that, just before the Australian Industrial Relations Commission made their decision, the Queensland Industrial Relations Commission made their decision on a similar redundancy case, but the Queensland commission decided to keep the exemption for small business. Peter Beattie must almost be a member of the Liberal Party or The Nationals, because he supports small businesses, jobs, growth and opportunities, unlike the members opposite. The Queensland commission found that, because of the lack of financial resilience, smaller cash reserves and the potential for redundancy payouts to lead to insolvencies for small business, it would not support the removal of exemptions for small business in redundancy payments.

The very same information was before the Australian Industrial Relations Commission, and yet the decision was made to put this impost on a growing sector of our economy which creates jobs and has been a significant driver in the reduction of the unemployment rate. In my area, in the Hunter in 1994 the unemployment rate was 15.4 per cent. Today the unemployment rate in the Hunter is down to 6.7 per cent. The Howard government have introduced this legislation today because they know about the burden that the decision will place on small businesses. We are not talking about multinational companies here; we are talking about local family businesses. The thousands of small businesses with fewer than 15 employees in towns like Raymond Terrace, Dungog, Lemon Tree Passage, Nelson Bay, Shoal Bay, Tea Gardens, Hawks Nest, Bulahdelah, Karuah, Forster, Tuncurry and Gloucester—indeed, all over Australia—will be affected by the decision of the commission.

Given the nature of the industry in the electorate of Paterson, you can see how far this decision will spread. We have farmers who employ farmhands to work on their dairy or beef properties; we have tourism operators who offer all sorts of activities, from the Stockton Sand Dunes right up to the Barrington Tops and through to the waterways of Port Stephens and the Great Lakes; we have people who run accommodation services, such as motels, hotels, and bed and breakfasts; we have small business operators in every single community in my electorate who run businesses like bread shops, butcheries, newsagencies, convenience stores, local nurseries and car yards; and we have the local mechanics and even a small manufacturing business. The list goes on and on. There are thousands of small businesses in my electorate who will be devastated by this action.

In Labor-held electorates, how many businesses have fewer than 15 employees? And why is it that their local members are not supporting this legislation, which opposes any attempt to apply redundancy pay obligations to these businesses? If this legislation is not passed, the majority of small businesses covered by federal awards will eventually be subject to redundancy payments for their employees, and small businesses that are constitutional corporations and covered by state awards will also be subject to these redundancy payments.

This bill will remove the redundancy pay for small businesses with fewer than 15 employees from the jurisdiction of the commission, it will cancel the effect of any variations to awards that were made by the commission from the time of the decision until the legislation commences and it will prevent a flow-on of the commission's decision to small businesses that are constitutional corporations and covered by state awards.

What I find very hypocritical—and something that, as a former small business operator, I cannot understand—is that Labor will not support measures like this to support small businesses and, in fact, will not support these measures to create more jobs, more employment. They claim they want to help people climb the ladder of opportunity, but when it comes to putting words into practice they run for the hills. In fact, they pull out those very rungs from that ladder of opportunity. They are more than happy to let small businesses pay more and more until their businesses are not viable but, then again, from the way the Labor Party ran this country when they were in government, I can understand that they do not know how to be good economic managers.

All of this is being controlled by the union arm of the Labor Party. Members opposite comply with what the unions want, just like marionettes, even though membership of unions in this country is plummeting. Even though they know that small businesses are totally against this redundancy decision from the commission, and even though they represent small businesses in their electorates, nothing has reduced the stranglehold that the unions have on the Labor Party. The opposition are blind to the damage that they cause by not supporting measures like this and other unfair dismissal laws.

Labor have opposed almost every attempt by the coalition to increase flexibility in the labour market and to provide more jobs. As I said, in 1994 unemployment in the Hunter was 15.4 per cent; today, it is around 6.6 per cent. We have established that ladder of opportunity, and the Labor Party not only want to pull out the rungs from that ladder but want to push the ladder over. They have no idea what it is like to run a small business and to lay down the policies necessary to get small businesses to thrive. When small businesses thrive, they employ people and develop our economy—Labor have no idea.

What do Labor have to say about small business? What makes interesting reading is the ALP national platform. It is the most anti-business book that anyone could ever read. I will start by going to page 35.


Mr Sidebottom —Did you get that far, did you?


Mr BALDWIN —We got through it. I suppose you endorsed this. What would the people in your electorate say about you endorsing this? It says:

Labor will abolish Australian Workplace Agreements.

Let us move through this not riveting but sickening reading to page 37, which says:

Labor will legislate so that casual employees will be able to demand to be made permanent. This will impose further costs on small businesses to pay for sick leave, holiday pay and long service leave.

On we go. In relation to forced union bargaining, page 38 said:

Labor plans to introduce so-called good faith bargaining that will mean forcing small businesses and employees to negotiate with union bosses.

That big heavy hitter, sitting over the top yet again. On page 39, there is more reading that is rather interesting—or, for small businesses, rather frightening. It says:

Labor plans to give union bosses the power to walk into any small business at any time even when there are no union members in the workplace. Union bosses will have access to employees as well as their records—even home-based businesses.

So, if you are a plumber and you run your business from home, and your wife might be doing the books and you might employ one or two people, union bosses will have the right to walk into your house and demand to see the books and talk to your employees, with absolutely no respect for you or your business. The one that really concerns me is also on page 39 and is in relation to secondary boycotts. It says:

Labor will scrap protection for small businesses from lawful industrial action by removing the secondary boycott provisions from the Trade Practices Act.

What this amounts to, because union membership has dropped so low in this country, is that the bullyboys of the Labor Party and the union are going to team up to demand that people join a unionised work force. I thought life was all about freedom—freedom of association, freedom to join. But the Labor Party want to take that freedom away. They want a unionised work force. Why would they want a unionised work force? They want a unionised work force to bump up their money. They want to bump up their money because they know that there is no way that the lease on Centenary House will ever be renewed. It is the dearest rental property in the world. They have been milking the Australian taxpayer, pocketing over six grand a day, which has been going into their coffers. These people need to find an alternative source of revenue. I am sure people in the gallery would agree that there is no place for union demands and bullying in society. Page 39 also says:

Labor will force employers to pay the long service leave to workers who have accrued that entitlement in previous jobs under different employers.

We have discussed that before in this area. Long service leave is a reward for long service with one employer. But the Labor Party and the unions are not content with that and want to be able to transfer that across different employers. Again, this is a direct attack on small businesses.

The Labor Party want to take superannuation contributions paid by small businesses from nine per cent to 15 per cent. This is not out of the employee's pocket but out of the employer's pocket. If people want to contribute to their own superannuation—and we encourage that—that is good. But why should there be another penalty placed on small business people—the people who employ people? Labor members have never been in business and they have never had their own dollars or their own home on the line, so they have no understanding of what it is like to be in business. The opposition could say, `Maybe we're not going to do that,' but the reality is that their ideas on this have all been enunciated and detailed in their ALP policy documents.

When it comes to tax on business, the Labor Party will introduce a new federal payroll tax. They will impose a federal payroll tax—the first payroll tax since 1971. They will put a fund in place to tax small businesses. In fact, Craig Emerson—the spokesman for workplace relations and the Public Service—on 2 April said, `Labor will impose the first federal payroll tax since 1971 with a 0.1 per cent levy on payrolls to fund a national insurance scheme for worker entitlements.' There is already a state payroll tax—a tax against jobs—and the Labor Party, being determined to drive up unemployment, would introduce a new tax on jobs. Supported by three of his colleagues, Bob McMullan—


The DEPUTY SPEAKER (Hon. I.R. Causley)—The member for Paterson will refer to members by their seat.


Mr BALDWIN —the member for Fraser, the Labor shadow minister for finance and small business—said, on ninemsn news on 9 March, that the federal opposition admitted that taxes would be increased under Labor. Later that day, on Channel 9's Today show, he said that nobody can say they will not raise taxes over a three-year term. On 8 March on Lateline, in relation to taxes, the member for Sydney said, `I don't think anyone likes to hear that there are new taxes coming up, but we've got a big social program and someone has to pay for it in some way.' So they are saying they are quite happy to put up taxes to pay for the social program. But, as you increase taxes, particularly on small businesses, who is affected?


Mr Ticehurst —You put them out of work.


Mr BALDWIN —You put them out of work. The people affected are those that are employed and unfortunately those that are unemployed, because, if we see a dwindling of the job market under the Labor Party, it will mean fewer opportunities for employment. This government has tried hard—and perhaps it could have done a little more—but Labor has rejected over 40 bills to change industrial relations in this country. If those changes had gone ahead, how much lower would unemployment in Australia be than it is today? I think the unemployment figures today are the lowest they have been in around 30 years. But how much lower could they be? Labor's target is to get unemployment back up again and make sure that people are back on the dole, because that is the way Labor likes it. Labor loves people to be unemployed, and that is why it presided over the highest unemployment this country has ever seen.



Mr BALDWIN —The member for Braddon is extremely proud of that. We heard earlier today in this chamber how he supports all of this ALP platform, the platform that will drive people out of jobs because it will drive small businesses broke. The reality is that Labor's backward policies will wind back jobs in this country; they will undermine job security and damage investor confidence. This country cannot afford to have a Labor government, a government that would never support small business or support the creation of jobs. As I said, the very people they purport to represent—the workers and the unemployed—are the people they desert by attacking this bill and not supporting it. They seem to think that small business in this country has a magic pudding—each and every one of them. They seem to think they can keep putting these cost imposts on the small business sector—indeed, any business sector—believing they all have the money to pay for it. Businesses do not have magic bank accounts. Money has to come from somewhere, and it comes from the earnings of the business. If you put that many costs and imposts on a small business then it cannot afford to carry on that business viably.

I urge Labor members in this place to think seriously about this bill and about the small businesses in their electorate and the employment opportunities that can come from having industrial relations reforms. You are doing the right thing by the people when you get them jobs. It is the Labor Party that oppose job creation. It is the Labor Party that oppose industrial relations reform. They should be condemned for that. I commend this bill to the House.

Debate (on motion by Mr Ross Cameron) adjourned.