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Wednesday, 17 June 2009
Page: 6341


Mr KEENAN (4:16 PM) —What are we to make of this government that talks about jobs as its highest priority then goes about doing everything in a policy sense to destroy people’s employment prospects? This is a government that are now so out of control with spin that they seem to believe that if they just talk about jobs then suddenly these jobs will materialise. It is like their approach to debt: if you do not mention it, it does not exist. It is like the Prime Minister’s approach to factions: if he does not say the factions have any influence, if he pretends they do not exist, then people will just tend to believe him. This government is now out of control with spin.

This time last year in the House everybody on the government side would have been talking about inflation. Of course, we have come to see what that policy means for the Australian community. Now, if they talk about anything, they will talk about its effect on employment. To every government policy they attach the number of jobs it will create, without providing one shred of evidence. We see it today with the Ruddbank proposal. I have heard different figures today in the House—between 75,000 and 150,000 jobs were apparently going to be protected, supported or created by the Ruddbank proposal—without anyone providing one shred of evidence.

But it is much worse than that, because, particularly in the industrial relations area, we see a government that goes about destroying the job prospects of Australians. We have seen them re-regulate the labour market—the biggest re-regulation of the labour market in Australia’s history and the first time that a major economic reform had actually been undone in this country. It was done, despite repeated calls from the opposition not to do so. It was done without any thought for the effect that it would have on people’s employment prospects. We had this major reform done without anybody knowing what it was going to do to people’s prospects of finding a job.

I want to talk about two policy areas today where the government has gone about destroying people’s job prospects. The first is award modernisation and the second is the abolition of the Australian Building and Construction Commission. Members will recall that the award modernisation process was done to simplify what is a very complicated awards structure in Australia. That itself is a very laudable aim and it is an aim that is supported by the opposition. Indeed, we promised to do it when we were in government and, if we had been successful at the election, of course we would have followed through with that.

What happened, though, was that the Deputy Prime Minister made a reference to the Australian Industrial Relations Commission to simplify the award structure in Australia and in it she said that the commission needed to go about this task without increasing the cost to employers or decreasing the take-home pay of employees. Clearly that was impossible for the commission to adhere to. It is a zero-sum game. If you take from one to give to the other then clearly you are going to disadvantage either the employer or the employee. So the commission is faced with this impossible task. It needs to go around the country—and of course we have different award structures in different states and different industries—and basically find the gold standard, wherever it exists in Australia, and apply that as the new national award. There is ample evidence that, if this policy is followed through, if the government does not change tack, they will directly destroy the jobs of tens of thousands of Australians.

As we debated the transitional bill in the other place today, the opposition gave the government a chance to change course, to save the jobs that they are going to destroy through their award modernisation, by moving sensible amendments that would have alleviated the concerns of small and large business in Australia and given the people who are going to lose their jobs under this process a fighting chance. Extraordinarily, all of our amendments were voted down by the government.

I would like to go through these amendments. This is very important because it shows the pig-headedness of this government. When faced with irrefutable evidence that what they were doing was going to damage the nation and damage people’s employment prospects, they refused to change course and refused to accept the sensible amendments that we put up. Those amendments would have provided Australian business with the ability to seek the assistance of the commission if their labour costs were going to go up due to the application of a new modern award and they could show Fair Work Australia that that was going to damage the interests of their business.

We were going to require the Australian Industrial Relations Commission, who is undertaking the award modernisation process, to allow a default five-year period over which state based differences could be phased out. This is something that the minister often refers to—she says, ‘We’ll phase in these changes over five years.’ But she has left that up to the discretion of the commission; she has no power to actually control that. So we moved amendments that would make the five-year transitional period the starting point to give business some certainty when dealing with these cost increases. But, astonishingly, that was voted down.

We also moved some other sensible amendments that would have limited industrial disputation in our workplaces, particularly in relation to union demarcation disputes, which are surely some of the most pointless industrial disputes that we find within our system.

So what we find is that the coalition moves what are very sensible amendments to try and stop the worst aspects of the government’s new policy, and what we get from this government is stonewalling and opposition for the sake of opposition.

There is ample evidence that this policy will directly destroy jobs. Clearly, if you increase the cost base for business, that is going to result in increased unemployment. It is not a very difficult concept to understand. Indeed, there is a great quote from former Labor Treasurer Frank Crean: ‘One man’s wage increase is another man’s job.’ That is something this minister does not understand, and it is something this government does not understand.

I want to go through some real-life examples from people at the coalface about what this award modernisation is actually going to do when it comes into effect. The Australian Retailers Association has said:

Smaller retailers will not cope with the collective pressure of increased labour and compliance costs in the modern retail award …

They go on to say that 82 per cent of smaller retailers say they will restructure their workforce while 65 per cent of them say they will shed staff. Costings by the Australian Retailers Association indicate that the average wage bill for a retailer will go up by $28½ thousand. They said that the financial impact of the new so-called modern retail award will hit the bottom line of the retail industry ‘like a Mack truck driving through their shop window’.

The Pharmacy Guild did some analysis based on three pharmacies in Western Australia who employ a total of 31 staff. In these three pharmacies employing 31 people the combined wages bill increase from the so-called modern award would be $228,700 per annum, which is a 13.8 per cent increase. They say that the proprietors of these businesses advise that they would have to sack almost four people were this to go ahead. So from 31 people employed in these three businesses, because of this new retail modern award, they will need to sack over 10 per cent of that workforce. If we were to extrapolate these figures just across Western Australia alone this would result in a loss of 680 jobs. That is in one state, in one sector—let alone all the other states and all the other sectors where this new modern award is going to wreak havoc.

There are other industries that will be adversely affected by this. The aged-care sector indicate that their costs will rise between 10 and 20 per cent. Newsagents, particularly in Queensland, say that they will face a 14 per cent increase in labour costs. One of the independent supermarkets, just outside of my electorate in Shenton Park, said that they cannot afford to pay their casual employees $40 on a Sunday and what they will do is either not open on a Sunday or get rid of staff. Hotels in Western Australia said that the new modern award will result in almost 10 per cent increases in labour costs, with the resulting massive job losses. The horticultural industry estimate that their costs will rise by 30 per cent under these new arrangements—30 per cent. And the government just shrugs its shoulders and has no response to how these businesses are supposed to alleviate these extra costs.

Finally, can I refer to the example of the fast-food industry. Everyone in this place will know that the fast-food industry employs a lot of young people, it employs a lot of single mothers, it employs people who cannot work regular hours. What they say is that, if the so-called modern retail industry award goes ahead, the additional costs facing fast-food retailers would be $625 million per annum. They translated that into what it will mean for their business. Once they extrapolated it across the whole country they said that it will cost almost 18,000 jobs. So the fast-food industry are saying that if this new modern award goes ahead they will be forced to sack 18,000 people—and, as we know, they will be some of the most vulnerable workers within our society.

The government has absolutely no answer to this. When you raise these questions with the minister she basically just shrugs her shoulders, says it is up to the commission and then talks about the transitional period, a transitional period that she cannot control. Of course, this is a pattern with this government—talking about jobs and then doing things that destroy people’s job prospects.

We have had another example of this today, with the introduction into the House of legislation abolishing the Australian Building and Construction Commission. This was a commission that was established after the Cole royal commission. It was established by the Howard government in 2005. It has been extraordinarily successful in controlling lawlessness within the building and construction industry. Anyone familiar with the industry knows that building and construction in Australia is plagued by serial lawlessness, militant unionism and the resulting violence and thuggery. For two decades prior to the Cole royal commission this was an industry with a culture that could only be described as completely and utterly crook. There were laws that were supposed to enforce law and order within that industry, but they were not working because the cop on the beat did not have the powers that it needed to do that job properly.

We have had some theatre in the lead-up to this legislation being tabled in the parliament, where the government have pretended that they are going to be tough on the militant building unions. They come in here and say, ‘No, we’re going maintain a tough cop on the beat. Sure, we’re abolishing the Australian Building and Construction Commission. Sure, that’s been incredibly successful in enforcing law and order within that industry, but we’re going to abolish it and replace it with something that is’—allegedly—’a tough cop on the beat.’ But what we find is that this ‘tough’ cop will not have the powers that it requires to do its job properly. So, despite all the theatre, despite all the sound and fury about how Julia Gillard was being tough on the union movement, this new body is not going to have the powers that it requires to actually control law and order within what is an exceptionally difficult industry.

The ABCC has been around since 2005 and its results have been measured by independent analysis done by KPMG. What that analysis said was that, because of the ABCC, within those four short years since its establishment there has been a 10 per cent increase in productivity within the building and construction industry and industrial disputation has been reduced by 92 per cent to record lows. During this time the workers have benefited. Increases in their average weekly earnings within that industry in the three years from 2004 to 2007 were 25½ per cent in real terms.

The economic gain to the community of the creation of this commission has been estimated at over $5 billion. It has improved levels of health and safety within the building industry and there has been almost a 7.5 per cent productivity gain in commercial building relative to residential building since it was established. The results for the community of this improvement within that one industry across the whole of Australia are very impressive. GDP is 1.5 per cent higher than it otherwise would be. Inflation has been lowered because of the improvements within the construction industry. And as I said before, there has been a gain of over $5 billion to the whole community.

What we find with this government is a particular pattern of behaviour. They say things but then their actions belie the sincerity of their words. The award modernisation process is going to directly destroy tens of thousands of Australian jobs and the government has no plan to alleviate the cost increases that will result from that process. Similarly, we see it with the Australian Building and Construction Commission. We have had a tough cop on the beat, it has enforced law and order and it has contained those militant unions, but now the government, protesting that it cares about people’s jobs in that industry, is going to come along and abolish it. It is going to institute a toothless tiger that will not have the power to do the job. We will see in that industry a return to the bad old days of union thuggery and lawlessness.

This is a government with which you must look at what they do rather than what they say. You cannot believe what they say about jobs. Clearly, the examples of the award modernisation process and the Australian Building and Construction Commission are proof of that. (Time expired)