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Tuesday, 30 October 2012
Page: 12525

Mr BRIGGS (Mayo) (13:23): I follow the member for Wakefield, who I acknowledge has many years of experience in these issues, being a former union representative and delegate with the SDA in South Australia. I understand it has been a difficult day for the SDA in South Australia today within the Australian Labor Party.

Mr Champion: We won on the floor!

Mr BRIGGS: You won on the floor. It was an empiric victory that Don had to have, and then prove later that he could happily stand aside and hand it over to Penny.

But I digress. Regarding the bill the member for Wakefield has spoken on—the Fair Entitlements Guarantee Bill 2012—I support the member for Farrer in saying that we will be moving a second reading amendment, which I will refer to later. There were many points on which I agree with the member for Wakefield, particularly relating to the actions some companies take towards the end, when they are clearly heading in the direction of not being able to survive. I think that has been shameful at times in our history.

I refer to a good example in late 2006 where a certain components company based in Sydney, with some South Australian ownership, treated their workers in a terrible way—which I think even today, interestingly, would still be a difficult issue for any government to deal with if an employer took such an attitude towards a certain company. I remember that a certain Sydney talkback host jumped on that issue and made great hay with it. But, truth be told, when an employer wants to act in that manner, it can treat people terribly. I think that is a very good point that the member makes. Equally, there are times when employers and directors make bad decisions or deliberately make decisions which seek to unfairly treat their workers. That is why we need protections in law in this country: to ensure that people are not unfairly treated. We do need a safety net, and we have always supported—I have always supported—the need for a strong safety net of entitlements for people in the workplace.

But what the member for Wakefield did not refer to, of course, is that there are times when organised labour and workers' representatives also make mistakes and also push too far in making companies pay for entitlements which are clearly beyond the capacity of certain companies to pay for into the future. They are unsustainable, and that equally leads to the unfortunate circumstances where companies cannot continue to operate and therefore go out of business. You have to wonder sometimes whether cutting your own throat is a good idea, and that certainly has been the case with many companies.

Equally, right now, today, as we speak, there are companies—including one big company that operates in the northern suburbs of Adelaide, in the member for Wakefield's electorate—who have agreed to arrangements which are very generous. When those companies are the beneficiaries of significant taxpayer support in the first place, you have to wonder whether these companies and these workers—

Mr Champion: Come down to the factory.

Mr BRIGGS: Of course the union tells its workers that this is a terrific idea, but at the end of the day, if it makes it harder for these companies to survive in a difficult time—when the dollar is undoubtedly putting pressure on manufacturing and when heavy manufacturing in Australia is suffering—and if heavy manufacturing plants agree to over-the-top, over-the-tote wages and send around letters claiming that the wages and conditions are not over the top and not over the tote odds, you do have to wonder if they are operating in their best interests. Of course, what that will lead to from time to time is companies going out of business.

What happened when the Howard government was in power—it was in 1999, I believe, when the first iteration of the GEERS scheme was put in place—was that the state Labor governments in particular and, in truth, federal Labor had failed to put in place protections for redundancy payments and certain entitlements over their years in power. This was reasonably non-controversial at the time of introduction, in the sense that there were some companies that went out of business leaving employees without their entitlements, and the Howard government moved to address that. But it became much more stressful and difficult and much more relevant on 12 September 2001, when Ansett went out of business. This is another example where, through both management decisions and overly generous employment conditions, the company could not survive. With changes occurring in the aviation industry, what happened was that the build-up of that pressure put that company under such stress that thousands of Australians lost their jobs, and many still campaign today for what they believe are their rightful entitlements, which they have not received from administrators and the like. The Howard government moved very quickly. Of course, at that time there were other international events which had people concerned about what was going on, and the Howard government reassured people, moved quickly and created the GEERS scheme, which they then built on immediately post the Ansett crisis and which assisted those workers at a time of great need.

The establishment of that scheme basically ensured that workers, in the circumstances in which they met the criteria, could be guaranteed redundancy payments that met relevant community standards. What that sought to do is, where organised labour, company directors, CEOs or owners of businesses made bad or inappropriate decisions and overly inflated certain entitlements, particularly in relation to redundancy, the taxpayer, while ensuring a safety net, was not going to be put on the hook for amounts that are far above community expectations. The member for Wakefield referred to certain high end employers whose shareholders agree to their packages of employment. They do not get picked up by the taxpayer in the event that the companies go broke, and nor should they be. I also note that he did not refer to certain other companies when he referred to high end employers.

What the member for Wakefield failed to mention is that what the government is doing here is trying to increase by stealth, in effect, the acceptable community standard for redundancy payments. From my years in industrial relations—about 15—four weeks per year has never been the community standard. It has always been capped. In fact, 16 weeks is at the high end or the generous level of the cap. By putting forward a bill in which you are changing the arrangements of the GEERS program in the first place and in which you are extending by stealth what the acceptable community standard the government is trying to establish a new benchmark and put pressure on Australian businesses to meet that.

The argument that will flow from unions in negotiations will be, 'If it's good enough for the government and if the government can guarantee this amount, so should you, Mr Employer.' This will flow down the employment food chain from big businesses, which will have to meet these new standards—and I am sure that in some circumstances they already have arrangements that are not dissimilar—all the way down to the smallest businesses, which cannot carry these new entitlements.

In the next 12 months, we will unfortunately see people lose their jobs. There is structural change going on in the company. We hear that constantly from the government and that point is right. We will also see very quickly a lot of smaller businesses signing up to agreements so that they do not have disputation in their workplace. There is now Fair Work legislation that makes it impossible for them to stand up to union bullying. They will agree to these arrangements. They will have to make changes to their businesses and they will be stuck with redundancy payments that they cannot possibly pay. What you will have is this perverse effect where more companies will be forced out the back door, to use a famous saying of a former Prime Minister in this place. That will be the outcome of this move by the government to uncap this entitlement. It will be unaffordable for many businesses. Pressure will be put on them through industrial negotiations to sign up.

We know, because business leader after business leader have told us, that these industrial negotiations are now skewed very much to organised labour rather than to the interests of employees, of businesses and of our economy. That is why we object and that is why we are moving, as the member for Farrar outlined, a reasonable amendment to improve this bill. That amendment will cap that amount at 16 weeks of pay. We believe that that is the acceptable community standard. People in the community would agree with that. But equally the taxpayer has to pick up these tabs. As the member for Wakefield said and as I remarked at the beginning of this contribution, there are many circumstances in which businesses go insolvent.

Some of them, many of them, are when company directors and businesses have made the wrong decisions about their business, undoubtedly. Equally I agree with the member for Wakefield that sometimes businesses handle those circumstances horrifically and do not treat their workers properly and that there should be some protection in the system for people, their families and their livelihoods. I think that is a perfectly reasonable position. That was the position that the Howard government adopted in 2001, and then built upon in the years following.

But what this bill does is unfairly put the taxpayer on the hook for entitlements which are far beyond community expectation. That is where we object and that is why we are moving to assist the government in improving this piece of legislation. While the Howard government were the authors, the designers and the people behind this move, and while the coalition support very much the strengthening of these provisions with the conditions that we have talked about, ensuring that there are conditions on how this money is accessed and that the normal insolvency provisions are followed, people should not expect that the government will pick up unreasonable entitlements.

Mr Deputy Speaker Symon, you know industrial relations well. You have been involved in industrial relations for many years and you know how this works. When there is a new entitlement in the system it flows through, like water flows down a drainpipe, because that is exactly how unions seek to get higher conditions in employment agreements. They start at the top, with the bigger guys who can usually afford it—not always, but most usually—and usually with the public sector. They move on to bigger employers and then it trickles down, right through to smaller businesses that often cannot pay the same generous entitlements that bigger companies do. If they do not meet those challenges, if they do not meet those set standards—and, of course, this is one of the great faults of the old tripartite system—they end up being put on the hook for conditions they cannot meet, even though employees have an expectation that they will meet them because the employer has signed an agreement with them under the pressure of organised labour.

We support the direction of this bill, and we have said that very clearly. But we do not support the uncapping of this entitlement. We say put a reasonable limit on it—a number of weeks' pay to a maximum of 16 weeks. I cannot see how anyone, particularly with experience in this field, could object to that—anyone who wants to protect the taxpayer from unreasonable amounts signed up by companies, sometimes under pressure, sometimes with agreements that are far outside community expectations and sometimes where people have acted inappropriately. Whatever the circumstances of the business going down, the taxpayer should not be required to pick up that fault at this level.

Unfortunately, the bill is badly thought through, and that is why we are trying to assist the government to fix it. We hope that the government will adopt this amendment, which is reasonable, to ensure that a good idea put in place by the Howard government is strengthened even further so that Australian families can have surety that their entitlements, in the event that their company goes broke, will still be there.