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Tuesday, 10 March 2009
Page: 1130

Senator CASH (9:35 PM) —I rise to speak on the Fair Work Bill 2008. The principal objective of the Fair Work Bill, according to the Labor Party, is said to be to create a national workplace relations system that is fair to working people, flexible for business and promotes productivity and economic growth. The bill would appear to be based on the premise that there are working people or employees commonly known as ‘people who have jobs’. This is wherein the problem lies. There is a fundamental flaw with this premise because the Labor Party assumes as a matter of fact that the substance of the bill in its current form will not affect the ability or the capacity of employers to maintain jobs at least at present employment levels and, as a consequence, there will be no change to the job prospects of an employee. Nothing could be further from the truth or reality. The Labor Party has failed yet again to contemplate the consequences for employers and employees that will inevitably flow from the adverse aspects of the bill. To be brutally frank, there will be no working people, there will be no employees, there will be no employee rights and there certainly will not be any employee entitlements that need to be protected if a person is not given the opportunity to work, if they do not have a job as a consequence of the probable impact of certain parts of this legislation.

Mr Rudd and Labor seem to have forgotten that it is employers who create jobs. Governments do not create jobs; what they do, however, is provide an economic environment that is conducive to job creation. Alternatively, as with the bill before us, they can create an industrial environment that will inevitably result in job losses. The coalition, on the other hand, is committed to one of the most important objectives of economic management: ensuring that every Australian who genuinely wants to work has the opportunity to work and to fulfil a worthwhile role by supporting themselves and their family. We in the Liberal Party believe that it is a fundamental role of government to assist in creating an economic and industrial environment that both is conducive to creating jobs and, indeed, stimulates the capacity of the private sector to create jobs for those who want to work.

If you look at comments made by senior members of the Labor Party, you would think that they too are committed to ensuring that Australians are given the opportunity to work. However, one thing that we do know about the Labor government is that they are skilled in the art of rhetoric—telling the people of Australia one thing and then, when it comes to delivering, doing something entirely different. Look at what the Deputy Prime Minister has said in relation to jobs. In an article in the Chronicle on 31 December 2008 she is quoted as saying:

The loss of any job is a huge problem for the individuals involved and what we do as the government, is be out there investing in jobs, protecting jobs, and helping people who lose their jobs in one part of the economy to get into the parts of the economy that are still growing.

This was reiterated by the Deputy Prime Minister in an interview on ABC radio on 16 January 2009. And who can forget the impassioned plea by the Prime Minister urging business leaders to do whatever they can to prevent job losses?

Based on those statements, one might be entitled to believe that the proposed Fair Work Bill would actually be consistent with its stated objective. However, as with much of the legislation put forward by the Rudd government, the devil is in the detail and the spin and rhetoric often shroud the real intentions of the Labor Party. On closer examination, many provisions of this legislation in their current form will fail to give business—the creator of jobs—the industrial conditions and confidence that it needs in order to provide jobs and opportunities for the people of Australia. It would appear that yet again the statements by the Prime Minister and the Deputy Prime Minister are no more than rhetoric aimed at lulling the people of Australia into a false sense of security so that the Labor Party can get on with its real intention, and that is to protect its union mates, who the Australian Electoral Commission’s records show are Labor’s greatest financial supporters. I note that on page 6 of the government report into the Fair Work Bill it states:

In current economic conditions the government believes it is all the more important to deliver certainty and stability regarding workplace relations laws.

The only certainty and stability that will be delivered to business if this bill passes in its current form and the government fails to take into consideration the amendments proposed by the coalition is that Australians are going to be denied the fundamental right to a job. The evidence is clear.

But I am a senator for Western Australia and, as such, it is my priority to ensure that we maintain and, hopefully, expand upon jobs in Western Australia. We in Western Australia want a fair workplace system that encourages employers and gives them the confidence to take risks and provides job opportunities to those who want to work. We do not want a system that discourages employers and has the effect of shrinking business confidence and job opportunities. Let us face it: within Western Australia the mining and petroleum industries are big business and big employers. The cold reality of the global market, if the provisions in this bill diminish employment opportunities in the mining and construction industry, is that this not only will be bad for the Western Australian economy but will have resulting flow-on effects to the Australian economy and to our balance of payments, which clearly impacts upon the value of the Australian dollar. Alarm bells are ringing in Western Australia in relation to the impact of the legislation in its current form. To quote the Western Australian Minister for Commerce:

The WA Government is concerned that the bargaining, transfer of business, unfair dismissal and right of entry provisions of the Bill will negatively affect Western Australian workplaces. It is critical in the current economic climate that workplace laws encourage flexibility, productivity and business confidence.

I have already stated that the devil is in the detail of this legislation, so let us have a look at some of those areas which, if passed in their current form, may well lead to job losses and are at odds with the Rudd government’s promise as to what the legislation will do. Right of entry—when is a promise not a promise? When it is made by the Labor Party and it relates to the increased power of unions. There is no denying that one. The federal government’s policy commitments as set out in their much publicised Forward with Fairness contained an express commitment to retain existing right of entry provisions. This commitment was unambiguous but for the fact that it was made by the Labor Party. In a speech delivered in April 2008, the Deputy Prime Minister stated:

… the current rules in relation to right of entry will remain.

This statement could not be clearer on the face of it. In fact, it is not possible to misunderstand this statement. However, as it always is with Labor, the devil is in the detail, and the details of this legislation show that this earlier unambiguous statement by the Deputy Prime Minister could not be further from the truth.

As I am from Western Australia, where the union movement has controlled state Labor governments for many years, I may well be cynical enough to say that the changes in this bill to the right of entry laws do little more than pay back the union movement for pouring millions into the Labor Party campaign machine at the last election. I might even be bold enough to say that there is nothing fair about the Fair Work Bill unless you are a union boss or a union heavy. Despite promises of a fair go for working Australians, all Labor has done in this bill is reward its union mates. But why am I so concerned? Quite simply, because I am from Western Australia and we have Joe McDonald and Kevin Reynolds. We also have the findings of the Cole Royal Commission into the Building and Construction Industry, which found widespread disregard of obligations concerning unions’ power to enter work premises and inspect employment records.

With this legislation it is back to the good old days and the standover tactics that the Cole royal commission made reference to. God help industry in Western Australia and God help the people who now have jobs but may lose them as a consequence of the Rudd government handing back unbridled power to the unions. There is no ‘public good’ policy reason for the shift in right of entry or access to include access to non-union-member records. Why does the Rudd government insist upon this type of access? We all know the answer, and that is it is designed to increase union power and will be used by the unions to ‘encourage’ nonmembers to join the union movement.

A return to the good old days is also found in the default bargaining agent provisions of the bill. The bill provides that, where an employee is a member of the union, their bargaining agent automatically becomes that particular employee’s union, unless that employee opts out and elects an alternative agent. The old opt out clause is a subtle backdoor approach to increasing union influence in workplaces, because the legislation is drafted in a way so that the onus is placed on the employee to dare opt out, which they will not, and nominate an independent bargaining agent.

The bill provides for a simpler and fairer scheme to deal with the transfer of employment rights and obligations if there is a transfer of business and a new employer takes on employees of the old employer. There is a fundamental flaw in this basic premise. The Labor Party assumes that the new employer will take on the employees from the old employer. However, there is substantial evidence from industry—from those people who are the employer part of that equation—that the proposed provisions are in fact anti employment and will create a disincentive for companies to retain and employ the existing staff of a business. The Australian Industry Group was unequivocal in their evidence to the Senate inquiry about the effect of the new provisions. It stated:

The provisions are anti employment and would create a huge incentive for companies not to employ workers of businesses they take over.

Evidence direct from a large employer in Western Australia, the Compass Group, before the Senate inquiry into the Fair Work Bill was:

The way the bill is structured, what it fundamentally will do is put businesses such as ours in the position that we will say that, unless there are very good, compelling reasons to take on existing employees from the client, frankly we will not do that. It will be less convoluted for us to simply employ fresh people and then not be burdened with the transfer of business provisions.

How is that good for the average Australian person? It cannot be clearer. The employers have spoken. The proposed transfer of work provisions create a disincentive for someone purchasing a business. Forget protecting employee entitlements—which, allegedly, is what this amendment is meant to do. There will be no employee entitlements to protect because the employee will not have a job.

In relation to greenfield agreements, a number of concerns were raised by industry. There is clear evidence from the construction industry that the legislation in its current form will make construction and infrastructure projects more expensive and will cost jobs within the construction industry. Wilhelm Harnisch, CEO of the Master Builders Association of Australia, has warned that certain clauses in the bill have the potential to increase the level of industrial disputation and make it harder to reach agreements. The Western Australian Minister for Commerce said in evidence:

Our view is that the changes to greenfields agreements and the requirement now whereby employers will be required to notify all relevant employee organisations has the capacity to significantly … frustrate negotiations where unions have overlapping coverage of employees.

The Western Australian economy over the last decade or so has primarily been driven by investment in capacity building in the resources sector; in other words, by construction activity building capacity in the resources sector. The proposed legislation has the potential to impact and frustrate the economic development of Western Australia.

These concerns were reiterated in evidence from the WA Chamber of Commerce and Industry to the Senate inquiry into the Fair Work Bill. Perhaps the most compelling evidence in relation to greenfield agreements again came from Mr Harnisch in his evidence before the Senate inquiry. He explained the actual impact of the proposed provision on project costs:

A member has informed us of their experience with making a current union greenfields agreement. That company has informed us that making a greenfields agreement with one union rather than with the union’s rival organisation was estimated to have saved up to $80 million on one project and around $15 million to $20 million on another project. These are savings which relate to infrastructure projects and moneys that are better spent on that purpose than on escalating the cost of those projects. We cannot emphasise enough that confidentiality in making a greenfields agreement with one union is an outcome from the bill that would be a great boost to productivity when compared with the proposed scheme.

The close association of this witness with the realities of the building and construction industry make this evidence particularly compelling. Unless this particular part of the legislation is amended, there is no doubt that we will see substantial delays in the commencement of construction projects and increased construction costs. This is not good news for industry and it is certainly not good news in Australia.

One other area that I would like to raise is about the default funds for superannuation. A number of submissions were made that employers and employees require choice when determining what fund they want to place their superannuation into. Under the award modernisation process, a number of the funds that have been allocated as default funds are industry funds; they are union funds. Where is the choice when an employer has to put money into a union fund? This part of the legislation needs to be changed to provide for genuine choice of default funds.

The bad news for employers and employees in Australia is that they are the ones, as Senator Bernardi has stated this evening, who will have to bear the brunt of Labor’s flawed industrial legislation. Regrettably, while the stated purpose of this bill is actually meritorious, the detail shows us that the rhetoric of the Labor Party is not to be trusted. The Liberal Party believes that every person in a developed economy such as ours who wants to work and who is able to work should be given the opportunity to work. It is a fundamental right of a person living in Australia to be able to work. For this to occur, we believe in creating an economic and industrial environment that is conducive and, indeed, encourages job creation.

We in the Liberal Party have three main policy objectives when it comes to the people of Australia: jobs, jobs and more jobs. We know that it is small, medium and large businesses and not governments that generate the opportunity for job creation and job growth. I implore the Rudd government to seriously reconsider those aspects of the legislation—we are not asking the government to reconsider all of it—that are anti employer and anti jobs. If you do not have a job, you have no entitlements. I say to the Labor Party: ‘Don’t crucify the people of Australia in an attempt to advance your own cheap political agenda.’

Given the global economic downturn and its impact on the Australian economy as well as the rapidly increasing levels of unemployed across Australia, this is not the time to further jeopardise the jobs of hardworking men and women who are clearly battling to weather the tough economic times. Legislation that detrimentally expands the rights of unions and discourages employers from creating employment is bad policy, regardless of the prevailing economic conditions. It is bad for this country and so, in certain aspects, this bill must be amended.