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Thursday, 9 December 1993
Page: 4351

Senator PANIZZA (11.35 p.m.) —I would like to address Senator Kernot's Belgian option very briefly. It is a pity she did not remain in the chamber; I was here to listen to her argument. But I will talk to her chair—not you, Mr Temporary Chairman—and I think it might have the same result.

Senator Chapman —The empty chair.

Senator PANIZZA —That is right. Senator O'Chee used the Argentinian example. But it is a case of Argentina saying `Don't cry for me any longer' because Argentina's economy is turning around strongly. I do not think even Senator McMullan would deny that.

Senator Chapman —Because they have turned their policies around.

Senator PANIZZA —Of course. Senator O'Chee mentioned how some time ago we would not buy a Japanese car. In 1960 Australia made more cars than Japan—I am not talking about commercial vehicles and trucks. But look where we are now.

  Senator Kernot explained how the Belgian option worked and how people agree to take time off and are replaced by unemployed people. But she did not go on to say whether there were any costs involved. As she did not mention costs, I presume she did not think there were any.

  But, as an experienced employer, I can tell honourable senators that there is a cost. When an employee goes on four weeks leave he arranges with his employer to take his holidays at a convenient time so that that employee will not have to be replaced. But when an employee is on extended leave for 12 months or so, he has to be replaced. As Senator Kernot said, in Belgium that person has to be replaced from the pool of unemployed persons. The position would be the same in Australia because nobody would leave one job to go to another that would last for only 12 months or so.

  But there is a cost. Whether it is Belgium or Australia, unless the employer is very lucky, the replacement will have far less experience in the job. It is my experience that an employer will have to employ somebody with far less experience. If the employer believes he will have that employee for a long time, he will put a lot more time into training. Perhaps he may need another employee down the track. But if the replacement has to be put off at the end of a 12-month period, the employer has put a lot of effort into training without enjoying the productivity gains which come further down the track.

Senator O'Chee —What about the retrenchment pay or the temporary staff?

  The TEMPORARY CHAIRMAN (Senator McKiernan)—Order! Senator O'Chee, Senator Panizza does not appreciate interjections.

Senator PANIZZA —I take Senator O'Chee's point about retrenchment, but I am not going to worry about it. I am saying that, especially in the short term, the employer has a far less productive employee. At the last election we had the jobsback policy. We were slayed because it was said that employers would put off older people to put on younger people and pay them less. The Labor Party and the Democrats ran that line. But how stupid it would be for an employer to do that because he would get somebody with far less experience who could cause damage to machines and who would be a lot less productive. No employer was going to be stupid enough to put off a long-term or medium-term employee to put on someone much younger.

  As I said, I have to find the money for seven pays at the end of each fortnight. I have employed one of those people for 31 years, and some for only three or four years. But how stupid would I be to put someone on for $100 or $200 a week less? It would be utterly stupid, because the new employee is not experienced in the place or on those machines.

  I will give one small example to prove my point. This happened in a mining site. A young fellow was being trained in a pit, and he was itching to get onto a dozer. The boss probably let him go on too early. The young man was so excited to be allowed to handle that machine on that day—a big D10—that he did not notice that the ripper on the back, instead of facing down, was sticking out. What did he do? He charged off backwards. A dump truck was about 25 metres straight across from him, and the ripper went straight through the tyre—$5,000 damage before he had made one scrape. Now, that did happen.

Senator Burns —I bet he was a member of the Liberal Party.

Senator PANIZZA —That happens; I do not care where a person comes from. That example shows just how stupid the argument is to put someone off to save a little pay. Let us get back to Senator Kernot's suggestion about Belgium. If we do what she says, there is a cost involved. She did not mention there would be a cost. But I am telling her, from the examples that I have given, that it can be quite a big cost. So because of that, she has to include that as an extra burden on employers. She has to account for that cost, unless an employer is mighty lucky and an experienced person walks in, is put on that machine and does exactly the same job. A past employee might come back again. If an employer is reasonable, he will get those who come back again after trying somewhere else. An employer might be lucky, but he will not be lucky every time. If he has to put someone in the job with less experience, a cost will be involved. The minister has to admit that a cost is involved, and it has to be accounted for.