Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Thursday, 17 September 2015
Page: 7093


Senator WILLIAMS (New South Wales) (10:49): I rise to speak on the Fair Work Amendment (Penalty Rates Exemption for Small Businesses) Bill 2015. Madam Acting Deputy President O'Neill, I give notice to the whips that I probably will not take my full 20 minutes in this presentation. I know it is 11 o'clock and you will be looking for a break, so I will relieve you of your chores there.

I will start off by saying that setting the minimum wage and penalty rates remains the province of the Fair Work Commission. The Fair Work Commission is currently undertaking a review of penalty rates in some modern awards as part of the first four-yearly review. Hearings have commenced this month in the commission about this matter and are scheduled to continue until December 2015. A decision will follow then.

I have some problems with penalty rates. Let me explain. I have listened to John Laws for decades in the shearing shed and on the farm et cetera. John Laws has a saying that 80 per cent of something is better than 100 per cent of nothing. This is the situation that we are facing now. I know that prior to changes that were made, thank goodness, to conditions for juniors, businesses had to employ a school student—say, someone who was 14 years old—for a minimum of three hours. It was crazy. They would get out of school and start work at four o'clock and the shop would close at 5.30. It is 1½ hours work for a 14-year-old. All of my three children had jobs when they were 14.

You do not pay three hours to a school student for 1½ hours work. So what would happen? I know businesses that would say: 'We'll pay you so much per hour. Work 1½ hours, and every two days there are your three hours.' They were actually breaking the rules. I know businesses who have said: 'Come and work for me for 1½ hours and I will pay you so much cash. We will not put it through the books.' They were cheating the system. I know businesses who have simply refused to employ schoolchildren on that basis. This is what happens. That three-hour minimum pay has now been changed, thank goodness, to give the young ones an opportunity to work—to learn a work ethic, go to work, earn some money and learn how to manage money as well. Thankfully that has been changed. It is a great scheme.

I know for a fact that businesses that open on Sunday, for example—it might be a coffee shop—do not pay the award, because they simply cannot afford to. They might pay $30 an hour cash. They cheat the system. It is wrong. They say, 'If we have to pay the full award, we cannot make a profit.' So what do they do then? They do not open of a Sunday; they say, 'There's no point in opening on a Sunday.' As Senator Leyonhjelm said, these small businesses are not charities. What is the point of opening your doors and bringing your staff in and losing money? People who run businesses are well aware that that is not very good business.

Go out to a country pub on Easter Monday—a little pub in a country town—and have a look at who is working behind the bar: the proprietor and his wife. They do not employ casual labour on Easter Monday because of the cost. It is amazing that—and I brought this to the attention of Ged Kearney from the ACTU; that was a few years ago now—$47 an hour is the casual rate on a public holiday for someone 21 years and over; add workers compensation plus superannuation and you are looking at $55 an hour.

Take the IGA store out in a small country town; say it opens Easter Monday—a public holiday. They do not have enough customers to cover the wages of their casual workers at $55 an hour. The profit margin on sales is not there. So what do they do? In some cases they cheat the system and pay cash, or they simply do not open their doors.

I have been a firm believer all my life, especially in public life, in fairness. Life is about fairness. I believe in a fair day's work for a fair day's pay—or, to put it the other way, a fair day's pay for a fair day's work. We are seeing a situation where small businesses will not open because they cannot make a profit for the day, especially on Sundays and public holidays, or they will cheat the system, or, as I said, just simply close their doors.

A recent report of new research suggests that nearly 40,000 extra Sunday jobs and public holiday jobs would be created if the penalty rates in the restaurant industry were reduced on those days. In its submission to the Fair Work Commission's review of modern awards, Restaurant & Catering Australia argues that the original reasons for higher penalty rates on Sundays and public holidays are becoming less relevant and that the current requirements are undermining the ability to open businesses to meet consumer needs, reducing shifts and hours and making it difficult for businesses to make profits. So there is research saying that almost 40,000 extra Sunday and public holiday jobs would be created. That would be a good thing.

I realise that people should be paid some sort of bonus for the inconvenience of working on a Sunday which, traditionally, is a day of rest; some bonus is fine. But, as I said, as to a small business being able to afford $55 an hour for a casual worker 21 years and over on a public holiday: to me, that is far too expensive. That is a huge cost of business, and, as I said, businesses either do not open or they may choose to cheat the system and pay cash—which does occur; I know that occurs.

Small business needs to be given some sort of boost—to be able to look towards a level playing field—because small business does it tough. Many, many businesses start each year and many, many businesses fail, especially new businesses.

That is why I am a big supporter of an amendment adding an effects test to section 46 of the Competition and Consumer Act. I have been involved in business, and I have seen what farmers go through when they supply big business—I have seen the bullying. Senator Sterle and I did a joint press release just a couple of weeks ago—a Labor senator and a Nationals senator on the same ticket—about big business wanting to pay their truckies in 90 day and 100 day payments. That is an absolute disgrace. Senator Sterle and I have written, in the one letter, to the chair of the road transport remuneration tribunal asking them for a ruling that all transport contractors be paid in 30 days. I say that because the truckies have to pay their workers in seven days and pay their accounts in 30 days, especially their fuel—and your truck is not going to operate very well without fuel in it! So that is unfair; the big end of town is bullying.

I will give you an example. You might get a contract for a big company and you go and lease three new prime movers—three new Kenworths, say—with B-double trailers, and A and B trailers. You would have payments to make each month. So say it is a good contract and all is going well, and then two years later you go to renew your contract and they say, 'Yes, we will pay the same rate—minus 10 per cent, or we are going to pay you in 90 days.' That is unfair. That is why we need this section 46 effects test, to give small business a go.

The reason I am passionate about this matter is that we live in a free enterprise economy. What does that mean? It means that you can seek wealth in any way you wish, so long as it is legal. That is a great thing we have in our country. You can leave school, or go and get a tertiary education if you wish, or go out and get a trade and start your own trade business—your own plumbing business, your own building business, your own carpentry business, your own bricklaying business or whatever. It is a great thing that people can choose the way they make their living. But it is not very good when you start up a small business and, because of the forces against you, you are squashed out of business. And I have seen it all my life. If you start a business and you are successful and you are a threat to the big businesses and they cannot get rid of you, what do they do? They buy you out. You see it all the time.

So I hope the Fair Work Commission takes into consideration the submissions and thinks about the small business costs, because, if they do not, as Senator Leyonhjelm has said, the small businesses will not open on Sundays or public holidays. They will say, 'What's the point of going and opening our coffee shop, or our restaurant, and losing $500? We might as well stay at home and not lose the money.'

As I said, if you go to a pub on a Sunday or public holiday, have a look at who is running the bar and have a look at who is in the kitchen doing the cooking. It is usually the publican—it might be a male publican and his wife, or vice versa; a lady may be the licensee and run the pub—and their partner doing the work, so they do not want to employ someone. The point is then: the jobs are not there. People are not getting a job. People are not getting paid. People are not working. That is the worst scenario you can have.

So I think there is a lot of sense in what Senator Leyonhjelm was putting forward. I do hope that the Fair Work Commission takes this in as it does its review, up to December, and considers keeping businesses afloat—keeping the doors open—and, most importantly, keeping people employed.