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Monday, 23 May 2011
Page: 4275

Ms O'DWYER (Higgins) (21:00): I rise in this grievance debate tonight to speak about the continued dishonesty and deception of this Labor government. In recent times there has been a lot of attention on the Prime Minister's explicit promise that she would not introduce a carbon tax if elected—yet, after the election, she broke faith with the Australian people and broke her promise. This promise went the way of Grocery Watch, Fuelwatch, the citizens assembly, no means testing of private health insurance rebates—and on and on it goes.

Tonight I would like to talk about the Prime Minister—or the Deputy Prime Minister, as she then was—and her promise before the 2007 election that no Australian worker would be worse off as a result of her industrial relations laws and that her reforms would not have a negative impact on productivity or on our nation's economy. She also promised that she would have a 'tough cop on the beat' in the construction industry, yet we know that she has legislation pending which she will introduce to repeal the powers of the Australian Building and Construction Commission once the Greens seize control of the Senate in the second half of this year.

A critical task for this government is to increase productivity. The Treasurer's budget, which he delivered only a week ago, was anaemic. He talked about a few work trials but did not do anything long-term to plan for the future and to entrench reform that would lead to productivity enhancements. Julia Gillard made a comment in 2007 where she said: 'The best thing about Labor's industrial relations plan is that it will be good for productivity.' She said that in November 2007—and, in fact, continued to repeat it in the two years following. But, this is not the view of the head of the Productivity Commission, Gary Banks, who delivered a speech in December last year about what we need to do as a nation to increase Australia's productivity. He said:

If we are to secure Australia's productive potential into the future, the regulation of labour markets cannot remain a no-go area for evidence based policy.

He further said:

It is vital to ensure that regulations intended to promote fairness in Australia's workplaces do not detract unduly from their productivity. Getting the balance right requires careful ex ante assessment and ex post review.

What do you think are the chances of this government making a careful examination of its industrial relations laws? Despite workplace relations being central to how we improve productivity, this government has not even considered them. Instead, it measures its success by how much is has spent. If the government is doing something about productivity then why is the RBA concerned about capacity constraints and the new inflationary pressures that threaten the economy? The RBA said in the latest statement on monetary policy:

In 2012 underlying inflation is expected to be around 3% and, on the stated assumptions, to increase to around 3¼ % by the end of 2013. This reflects a combination of factors, including a gradual further strengthening in labour costs as capacity utilisation and the labour market tighten and the waning of the disinflationary effect of the recent appreciation. It is likely that inflation rates for a range of non-tradeable items, including utilities, particularly electricity and rents, will contribute significantly to overall inflation.

So we have an underlying inflation problem that is pushing up beyond the RBA's target of two to three per cent. We have capacity constraints adding further stress to the economy. Under these conditions a flexible workplace is essential to ensuring that costs do not get out of control with business forced to pass them on to consumers. Labor unhelpfully likes to characterise two different classes of people: workers and consumers. They forget that everyone works and everyone consumes. Rising costs and rising prices affect everyone. Industrial relations reform is the key to stopping the wage price spiral from taking hold in the economy, and ultimately it is to the benefit of everyone, not just trade unions who benefit directly from monopolies on labour.

But if the Labor Party is not prepared to take my word on the fact that we have an issue in industrial relations reform then perhaps they will take the word of Heather Ridout. She has made a number of comments in relation to this just recently, saying that there needs to be a proper examination and a proper review. Heather Ridout has said that it would be unfortunate to have the 'strike first, negotiate later' decision become entrenched under Fair Work Australia and that it is quite necessary for this to be examined into the future—and examine it we must.

Trade unions are beginning to assert themselves in a way that has not have been seen for a long time. Indeed, they have already claimed a prime minister. The increase in union privilege under Labor's new industrial relations laws makes little sense when you consider the long-running decline in union membership in Australia. Trade union membership is apparently at 19 per cent of the work force, and 14 per cent in the private sector.

Paul Howes, though, the well-known Secretary of the Australian Workers Union, which has been responsible for at least one job loss, claimed that his membership had increased 30 per cent from 2007 to 2010. But when asked to justify these figures by a national newspaper in recent times he was unfortunately not able to do it. This leads us to question how accurate these figures in fact are. It also leads us to question why it is that these claims are being made, and in fact who these unions are actually representing if they are not representing the widescale workforce that they claim to be representing. The simple answer is that these unions recognise that the only way that they can gain a foothold politically is by appearing relevant—and if they have to fudge the numbers to do that, they will. The unions rely very heavily on the Australian Labor Party to implement their policy program, and the Prime Minister has been a very willing participant in doing just that.

I want to make a couple of comments in my remaining time about the importance of having a strong cop on the beat in the construction sector. The Australian Building and Construction Commission, as many people would realise, was born out of the royal commission 10 years ago which was brought about to investigate the lawlessness, thuggery, intimidation and corruption that existed as part of the culture on construction sites. This was a culture that saw itself as above the law and flagrantly breached the law without any thought of consequence—a culture that has significantly increased the cost of building. The benefits of a strong watchdog for the construction industry as well as the wider community are clear—to get rid of, and stamp out, this lawlessness that exists within the construction industry.

I think it is best to look at the research that has been undertaken to see what impact the Australian Building and Construction Commission has had in delivering some widespread benefits in its role as a strong cop on the beat. Research undertaken by KPMG Econtech shows that the ABCC has seen a 10 per cent rise in industry productivity, an annual economic welfare gain of $5.5 billion per year, a drop in the CPI of 1.2 per cent, an increase in GDP of 1.5 per cent and a significant reduction in days lost through industrial action. Yet this Labor government plans to undo these economic and workplace improvements by shifting power away from the independent umpire back to the unions—to neuter the ABCC with their legislation. This government is not interested in maintaining law and order on worksites and improving the economic welfare of the nation. They are more interested in ensuring their political support from unions, who, it seems, can remove a Prime Minister and install another and now change the law.

It remains to be seen exactly how far this government will go with these changes. When the Greens take power in the Senate in the second half of this year we know that they would like to go a lot further. The Prime Minister should resist this call most vehemently, but if her track record is anything to go by we know she will not. (Time expired)