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Economics Legislation Committee
03/06/2015
Estimates
TREASURY PORTFOLIO
Productivity Commission

Productivity Commission

[15:33]

CHAIR: I call the Productivity Commission. I flag with senators present that it has been indicated that the Productivity Commission will not be required for much today and that we are looking to finish any time between now and four o'clock. As the officers of the Productivity Commission come in, I guess they are pretty happy to be hearing me saying that. Mr Harris, welcome back. It is great to have you here—and officers of the Productivity Commission. Before I make a couple of comments, do you have anything you would like to say?

Mr Harris : I have no opening statement, as ever.

CHAIR: As ever. In February we spoke about various things, and I think since February there has been quite a bit of work coming your way. Could you give me some idea of what the quantum is and how much pressure you are under right now.

Mr Harris : I do not think we are under pressure right now.

CHAIR: Okay, that answers my next question, because you have lost some staff, and I was about to say—

Mr Harris : We have lost a few staff, but not what I would call a significant number; and it is certainly not likely to affect our performance.

In terms of the work we currently have underway, the workplace relations inquiry is very active for us right now. In the last quarter, we have completed a couple of pieces of interesting research work. There is a particular piece of work which I am quite proud of on public housing. It was launched as our second flagship research project, so we put effectively the same amount of resourcing into it as we might put into a full-scale inquiry.

This piece of work on public housing was intended to demonstrate the value that might come from accessing administrative data holdings across a range of Commonwealth and state departments who are interested in the public housing issue. The great value in it—besides its effectiveness, I think, in demonstrating the value of accessing that data and, frankly, the effort you have to go to currently to access it—was also that it did actually come to a conclusion.

This is an area in which public policy has worked on a presumption for a long time that there might be substantial value in encouraging public housing tenants into private rental roles as an effective way of encouraging increased employment. The value in this piece of research is that, because we managed to access 2.5 million data entries through access to the Department of Human Services in Canberra and analysis from the Department of Employment on the employment prospects of people involved in public housing, we were pretty much able to demonstrate that that contention, which has been around for a long time—that it may be of value to encourage public housing tenants to move into private housing as a means of improving their employment prospects—was not accurate. And that is a very substantial conclusion.

As I said, we undertook it primarily as a piece of research to prove the value of administrative data and these administrative data holdings, but we were not necessarily confident that we would actually get a result. But we did get a result. We published it, and I think the Commonwealth and a number of states—not all, but a number of them—have taken quite a lot of advantage of that piece of research. We have gone and done briefings for them, and it may have quite a substantial influence on public housing policy going forward. We do not know that yet, and obviously it is now in the hands of agencies and ministers to decide whether that is the case.

That is where we have been at for the last few months.

CHAIR: We had a housing affordability and public housing has been the subject of a number of inquiries in this place. Indeed another inquiry is mooted, I think, or it may have got up in the joint parliamentary committee. I will go to you, Senator Ketter.

Senator KETTER: Thank you. Mr Harris, my main area of interest is the workplace relations inquiry. Could give us an opening statement as to where that is up to at the moment?

Mr Harris : We are currently in the phase where we go through analysis of all of the literature that has been written on workplace relations issues, both in Australia and that which we can access from overseas. Consideration of submissions given to us in the first round is underway—that is, the round that precedes us publishing a draft report towards the end of July or in August, around that period. I cannot remember precisely the number of submissions—

Mr Lattimore : 249.

Mr Harris : Plus, on top of that, we had a particular access point in this inquiry for what I might call snapshots—individual comments from individuals, not so much formal submissions but just comments. We have received some hundreds of comments also through that particular mechanism.

Senator KETTER: That is in addition to the 249?

Mr Harris : Yes. As a consequence of all of that information, we are now drafting chapters for the draft report. We are substantially through the first iteration of that, and we are getting into the second iteration of it. I think the thing is shaping up about as well as it could. It is a 10-month inquiry and, for something as large as this, that is a pretty tight time frame. It was tight for submitters as well, I might note. There was a bit of contention. When we put out our issues paper towards the end of January, we gave people a date in mid-March to come back with submissions. Quite a few people have given us submissions post mid-March—in other words, after the closing date. We are taking those into account, as we said we would, because we knew it was a tight time frame. Obviously, it is a pressure on us because we are trying to draft chapters at the same time as information is coming in in real time. But we are doing pretty well. The team is holding up, even though it is under pretty substantial pressure. Obviously, we have people involved doing weekend work and things like that to try and meet deadlines. We are on track, and I think we will probably get a pretty interesting draft for the end of July, early August.

Senator KETTER: You mentioned that you have a team at work on this. How many staff do you have on that team?

Mr Lattimore : Eight.

Mr Harris : There is some modelling resourcing going into it in addition to that.

Senator KETTER: With your 249 submissions, have you done any analysis on how many from employers, how many from individuals?

Mr Lattimore : I can fill you in on that, Senator: 46 from employers, 62 from employer associations, 30 from HR and legal practitioners, 29 from employee associations, 28 from individual employees and a variety of others.

Senator KETTER: It is probably too early to say this, but, in terms of the tenor of the submissions, are you able to make any general comments about that?

Mr Lattimore : We have got an idea of the issues. Bargaining and agreements was probably the top matter raised by parties. Employment protection, which was mainly unfair dismissal—not so much the general protections—was 91. Wages and conditions, often the minimum wage issue, as I mentioned, and awards were pretty critical. Penalty rates was very common from parts of the industry, and then there were a variety of other issues. I can go through them but they are the principal ones.

Senator KETTER: Would I be able to obtain a copy of that document you are referring to there?

Mr Lattimore : That would be fine.

Senator KETTER: And also the breakdown on the composition of the submissions.

Mr Lattimore : Certainly.

Senator KETTER: Thank you. You have said that, rather than July, it could well be early August before the draft report comes out.

Mr Harris : Right now, we have not locked down on that, but it will be either the last day or two of July, or the first couple of days—and there is a weekend, I think, in there—of August. It will be in that, say, four or five days.

Senator KETTER: Once the draft report comes out, will there be public hearings coming up?

Mr Harris : There will be public hearings, and they will be in September.

Senator KETTER: They are on the website?

Mr Harris : I think we did somewhere suggest where they would be.

Mr Lattimore : We have not indicated where, but we do aim for pretty complete coverage so that people throughout Australia get an opportunity one way or another to have their say.

Senator KETTER: When you say 'complete coverage', would that be each capital city?

Mr Lattimore : Not necessarily. We envisioned that we would always make available the capacity for people to come in on video and things like that. We have done that in the past. We want to ensure that people get that opportunity, particularly from regional areas.

Mr Harris : We will have a couple of regional locations as well as those capital cities that we go to. Hearings are very resource intensive and, again, the time frame starts to come into it. We have to complete this report by November, and so when I say 'in September' that gives us effectively October to do drafting and then a final. I think we are allowing a two-week period, roughly, for the hearings and then we have to proceed very rapidly into final drafting.

Senator KETTER: The website says that the final report will be published in November. Are you confident about meeting that time line?

Mr Harris : If we ever have to—and I have done this once before, at least—change a date, we write to the Treasurer and say, 'We need a little bit more time.' Right now, I do not have any plan to do that.

Senator KETTER: I know the issues paper covers these topics, but will the inquiry consider changes to the safety net?

Mr Harris : We did actually go through this at the last hearings and, yes, the term 'safety net' is clearly in our issues paper. It is clearly an area where we are going to be undertaking a review. That is primarily because, as I think we also said when we put out our issues paper, it is a comprehensive review. Therefore there is not anything where you would want to say, 'Let's not undertake a review in that area', although you will see in the issues paper that we did say, 'Here are a set of areas where, either because they have been examined elsewhere recently or for some other specific reason, we're not going to go into them.' But, other than that, it is intended to be a comprehensive review of workplace relations.

Senator KETTER: It almost covers everything that impacts on employees' working life, including health and safety issues. Would you agree with that?

Mr Harris : Some submissions certainly covered health and safety issues. I guess that is a reasonable representation.

Mr Lattimore : Yes, except that we did say that we would quarantine the inquiry away from workforce health and safety issues unless they were directly related to, say, enterprise bargaining or some feature of the relationship between employers and employees. We were aware of the large amount of regulation in that area, and we were not planning to revisit that.

Senator KETTER: When you say you would 'quarantine' that—

Mr Lattimore : We will not be covering it in detail.

Senator KETTER: The report will not deal with—

Mr Lattimore : Workforce health and safety regulation around Australia.

Senator KETTER: It will not cover those issues?

Mr Lattimore : No.

Senator KETTER: The federal minimum wage is an issue you are considering?

Mr Harris : Yes.

Senator KETTER: The National Employment Standards?

Mr Harris : Yes.

Senator KETTER: The award system and flexibility?

Mr Harris : Yes.

Senator KETTER: And penalty rates?

Mr Harris : Yes.

Senator KETTER: Will the inquiry consider any issues and frameworks that were raised in the coalition's previous Work Choices policy?

Mr Harris : I think we tried to make this plain right at the start: it is not a comparative review of Work Choices versus the Fair Work Act, because that was completed in 2012. So there was actually an inquiry that went down that sort of path. But, where submissions bring up issues that are relating to Work Choices, we do consider submissions and therefore we do consider issues raised in submissions in relation to Work Choices, for example. So it is not something that we can avoid, but this inquiry is not a comparative inquiry into the strengths and weaknesses of particular legislative regimes at historical points in time. This, as I think we tried to make clear in the issues paper, is a comprehensive review of a workplace relations system for the future. So we are meant to look out and say, 'What in the nature of change in the Australian economy is likely to suggest that there should be changes in the workplace relations system so that it is fit for purpose and matches the likely trends?' We are not seers in some kind of philosophical sense, so we cannot be absolutely sure of these things, but there are trends in the economy that the workplace relations system should clearly be synchronising with. So we will take account of those things. But the intention is definitely a system for the future, rather than that at some historical point in time there was one kind of approach to an issue and subsequently there has been another kind of approach to the issue and we are going to pick and choose which of those is best. As I said, for better or for worse, the 2012 review undertook that—it was not our review but a review done by the then government. So this is about the system for the future.

Senator KETTER: I just want to come to, I suppose, the thinking of the commission which will inform the final report and just talk about my own concerns—and there are possibly many others waiting expectantly for your draft report. The concern that I have is that your report may well make recommendations which are along the lines of a diminution in the basic working conditions that people have enjoyed. Can you say anything to me and others like me to assuage our concerns in that regard?

Mr Harris : It is hard to assuage heartfelt concerns with statements across the table in a forum like this. In everything we do, we attempt to take account of not just the economic aspects of a piece of public policy but, where they are relevant, social and environmental aspects of that public policy. In the issues paper, we were as strong as we could be in saying we understand that the nature of labour relations is not a standard form of market, and that does affect everything that we are doing in the course of this inquiry. I guess what I would do, rather than provide honeyed phrases or positive words, is say that in the issues paper we set ourselves a standard that recognises that the nature of what we are dealing with here is not just a standard market. I think that will resonate when you see the draft report.

Senator KETTER: I will wait with interest.

CHAIR: Thank you for your attendance here today. That is the end of Treasury. We will reconvene with ANSTO in the Industry portfolio.

Proceedings suspended from 15:50 to 16:05