Michael Hatton (Blaxland, Australian Labor Party) Share this | Hansard source

I have here the Civil Aviation Legislation Amendment (Mutual Recognition with New Zealand and Other Matters) Bill 2003, but we are not discussing that, because that got the flick. It did not get through the previous parliament. Although it was initiated, it was discussed, there were two inquiries into it and there were some different provisions, the key different provision here is that there could be changes to the regime in terms of the interaction of the safety regimes between Australia and New Zealand on the basis not of legislation—which is what we are dealing with now—but of regulation.

It took two inquiries, and it took the Labor Party and the other parties in the Senate pinging the government, but the government blithely said: ‘Don’t worry about it; you’ll all be safe. There’s some difference, but we’re not actually going to do all the analysis that we need here. It is unnecessary. You should not worry about it.’ They did make one change in the Civil Aviation Legislation Amendment (Mutual Recognition with New Zealand) Bill 2005. They said, ‘We won’t do it by regulation now; we’ll do it by legislation and there is a protection in that.’

The two inquiries in the Senate helped to determine Labor’s position. We did not just come to this position from an a priori approach. Who did we listen to? We listened to flight attendants and pilots in Australia. Some of their concerns do not really have any foundation. The mutual recognition proposed in this bill covers a broad range of areas. In the two Senate inquiries Labor came to the point of view that we would, as we did last parliament and as we are doing here, be in opposition to this bill. The fundamental fact is that the government has not taken the necessary steps to ensure not only that safety standards will be met but also that there is a complete confluence so that mutual recognition is not a mutual recognition of differences, such as in the differential approach in the number of staff to seats—one to 36 versus one to 50.

The member for Wakefield pointed out that can be a sliding scale. I wonder whether his in practice example of one to 25 applies to JetConnect, Qantas’s operation in New Zealand; to Jetstar, Qantas’s operation here; to Jetstar Asia; and to their competitors, such as Tiger Airways in Singapore. I wonder if it applies to award conditions, because that is another part of this and was a concern expressed by pilots and flight attendants. If you look at the comparability of how they are dealt with between Australia and New Zealand, you see that the Australian people are on an award at this moment in time and they have the protections of that award. But under the Workplace Relations Act we know that, as that award comes up for renewal, the foot will be pressed to the floor to change that to either a contractual basis or under Australian workplace agreements. That would then put these employees on exactly the same footing as the people in New Zealand, who are on single contracts.

Their concern is not just a question of safety; it is a question of the industrial relations implications of this approach. If you look at the history of what has happened with Qantas, its staffing and its approach to the future of the airline industry in Australia and its place in it, what you get is a concentration on cutting costs, paring back and arguing that it needs protection by the government within Australia, domestic protection of the Pacific route and other areas where it argues things are tilted and weighted against it. Over a number of years now I have been to briefings with Geoff Dixon when it was a question of Qantas versus Ansett; there were differences between the two and Qantas was having a difficult time. We know that in the end Ansett was managed by a number of people from New Zealand and Ansett bit the dust. Since that happened, the fundamental structures in Australia’s domestic airline industry have changed, despite the introduction of Virgin Blue. If you look at where it has gone, you see that we have people on awards with certain conditions including certain existing safety provisions and manning capacities in Qantas aircraft in Australia.

It is not the same with Qantas aircraft in New Zealand. There is a different standard. If those aircraft are registered in New Zealand, as are Qantas’s JetConnect aircraft, they operate under New Zealand circumstances. Part of the concern here is the impact of the acceptance of this regime and the fact that there is an enticement for people if they want to cut their costs or change the way in which they deal with it to register in New Zealand rather than registering in Australia. The majority report of the government last time they looked at this—when they blithely said: ‘Don’t worry about it, everything will be okay. All of that will be fixed up later’—proposed a review 12 months down the track. If you go to page 8 of the explanatory memorandum, on the implementation of this bill, you get the guts of what the fundamental problem is here. It is tucked away in the explanatory memorandum—that is, ‘a further agreement will need to allow practical implementation of the aims of the bill.’

What is Labor’s fundamental problem with this? It is that the practical steps with regard to the different safety regimes in both countries, and the safety and economic implications, have not been taken into account, despite the fact that we had the 2003 bill in train for two years or so, from 2001 to 2003—and it is about five years now. We have had plenty of time to undertake that comparison. Instead of that, we have a bill that the government want, one they are going to run through with. When they get to the practical implication—in another bill that we will deal with later, maybe after the 12-month review—what do we get? A new overarching intergovernmental agreement on aviation mutual recognition is under development—that is nice—which, when completed, will set out the principles, objectives and joint understandings between Australia and New Zealand in relation to the mutual recognition of aviation related safety certification. Annexed to the new agreement will be an operational agreement between the two aviation safety regulators, CASA and CAANZ, which will establish working arrangements between the two. Only those Australian and New Zealand operators covered by the air services agreement will be eligible for mutual recognition. This is a case of putting the cart before the horse. Here we have the legislation, and we have not had the investigation of what the impact will be, despite the length of time it has been available. We also do not have the full plan and preparation for the practical implementation of what is in the bill. So why is the bill before us now? We have not had the prior work; we have not had the post work. What is the agenda here in sticking to this approach?

If you go back to the Senate committee inquiry—and it was one of the benefits in the past, before the government controlled the numbers in the Senate, that a Senate inquiry could look at this independently and come up with a different point of view—and look at their concerns and what they were saying, you see that they outlined that the evidence they took indicated there was a complete difference between CAANZ, the New Zealand regulator, and CASA, in terms of their interpretation of mutual recognition. CASA say that Australian standards are still going to be maintained absolutely: ‘We will rigidly stick to those. If you primarily operate in Australia, then you will stick to all of those safety provisions.’ What do the New Zealand regulators say? ‘No, it is not going to work like that. What we are going to do is to harmonise.’ The shadow minister, Senator Kerry O’Brien, said in the Senate on 10 May:

… the committee established that Australian and New Zealand regulators have entirely contradictory views on the impact of mutual recognition. The Civil Aviation Safety Authority of New Zealand gave evidence that mutual recognition would lead to the harmonisation of safety standards; the Department of Transport and Regional Services firmly repudiated that view. This left the committee questioning, not unreasonably, the inconsistency between Australia and New Zealand on this critical issue.

This is critical and entirely central to a determination of what this is about. If you have the two safety regulators completely at odds in terms of what this means, it is obvious that the work has not properly been done previously—unless the New Zealanders are really onto something, unless this is really about harmonisation, unless this is really not just about safety but about cutting costs, cutting wages and cutting conditions and utilising this mutual recognition package to run an industrial relations agenda.

This is John Howard, the Prime Minister, writ large. This is what he has been about since 1974. This is what he is doing in the Workplace Relations Act. Day after day, when questioned about it, his response is: ‘Oh, people will get jobs. They’ll have jobs. Isn’t that terrific? They’ll have jobs.’ There will be lower wages and conditions for the majority of people—not in the booming mining areas of Western Australia, not in the parts of the economy that are ripping on, but in New South Wales, in Victoria and in other parts of the economy that do not have that engine serving them. What is in it for the majority of normal punters out in the electorate? The cutting of their provisions.

In the Prime Minister’s mind is the ‘Thailandisation’ of Australia’s workforce. Why is that the case? I know he has had that idea since 1974, but he also has had a bit of experience. This bloke has got form in terms of the problems he experienced as Australia’s federal Treasurer—in my experience, the worst—when on, I think, 10 January 2003, he reached a position where he actually achieved the trifecta: double-digit inflation, double-digit unemployment and double-digit interest rates. If you think about what the conditions were of the 1982-83 recession—the member for Bennelong’s recession; the one where he was Treasurer of Australia and responsible for those conditions—you see that that recession arose because of a wages breakout on an expectation of $29 billion worth of expansion in the minerals sector which did not happen. There was a 20 per cent to 30 per cent wage increase demanded by the ‘metallies’. These are the things that conditioned the Prime Minister.

The reason this is all material is very simple. There is an agenda here that goes beyond safety and safety standards. It is an agenda to actually change the structure of Australia’s aviation industry. We had Dick Smith, when he was put in a position of significant power in CASA, dramatically changing the safety standards for the whole of Australia for light aircraft, just pursuing his wont. But the agenda here is very clear. It is determined by the condition of the Prime Minister’s approach to this is and what drives the Workplace Relations Act. For me, it explains why this kind of bill can get up without proper reference and without the fundamental problems being looked at.

The key is given in terms of harmonisation. Next week—I think on Monday—we will be dealing with the Independent Contractors Bill. The Independent Contractors Bill will actually have a provision where people currently on awards in New South Wales and Victoria will have a 12-month period of grace. They will keep the conditions they have at the moment, but then there will be a national review. For people on contracts in other states that do not have award provisions, guess what is going to happen. Harmonisation is going to happen. The government will move to where it wants to go: to have one nationally harmonised approach. That is fundamentally what we are going to get here.

This is approach is not about closer economic relations; this is about utilising a situation where you have got a confluence between the New Zealand and the Australian systems—not to make sure that the thing really works to the advantage of everyone but to run an industrial relations agenda. When the unions, flight attendants and pilots gave evidence about other parts of the legislation where they are affected—not just on the safety stuff, even though they primarily concentrated on that—they properly said that they were fundamentally concerned about the impact of this on them and on their industry. They said it would be understandable that the New Zealand conditions could be used as a wedge.

That is not without background when you consider what has happened with Qantas. The member for Wakefield told us at some length that Qantas had a better ratio in terms of staff, that Qantas would up their number of staff in order to please their clients and that sort of stuff. Anyone flying on Qantas—as every member and senator here has done since Ansett plummeted into oblivion—knows of Qantas’s tremendous reputation. The regard that I and others had for Qantas plummeted because they did not deliver to the customers in the way that they had before Ansett plummeted and they took advantage of that situation to dramatically cut their costs.

There was also an associated safety problem. It was an amazingly stupid approach to take, but there are plenty of precedents—name every state government across Australia; name this federal government. Are people interested in maintenance issues? Are they interested in investing in keeping things running properly? The answer will be found if you look at Qantas’s broader operations and Qantas’s safety concerns. They decided to save a lot of dough and they moved their engineering facilities—or the bulk of them—to new facilities in Brisbane and in Melbourne. They moved a hell of a lot to Melbourne. It just so happened that, in the provision of that service, not one of the people going through and checking all the parts and doing all the work on them was safety certified.

So what happened? They had to send all the work, after they had completed it in this new facility, back to Sydney for the Sydney engineers to have a look at. If those Sydney engineers had not been concerned about the fact that they could be up on manslaughter charges if there was a failing within an individual part, they could have simply signed off on that—as people could sign off on this bill—and said: ‘The AOC is involved here. New Zealand’s a little bit different to us; Australia is slightly different, but we’ll just tick it, say it’s okay and just believe that everything will work out right.’

The people in the maintenance facilities in Sydney did not do that because their careers, their reputations and the lives of passengers were at risk. The result of that was pretty simple: a hell of a lot more money was spent on maintenance, and the cost savings that Qantas expected to make were not made. I know this because my nephew has spent close to 20 years as a Qantas maintenance engineer and he is now out working in the mines because, throughout Qantas, with those moves to Melbourne and to Sydney, they would not give him a redundancy package because he was too good an employee. But he and the others could see the writing on the wall.

The stupidity of this approach to put safety at risk because you are trying to make economic savings! In the broader picture, if you look at the transition from Qantas and the kind of service they had through to Jetstar, Jetstar Asia and JetConnect, what is driving it at the bottom is to make the savings, bring their costs down but still demand that, as a government, we support them as much as we can. That is part of what is driving this as well. The dynamics of the Australian industry are changing and I predict they will change in the future. It will be the ‘Jetstarisation’ of Qantas’s operations in Australia.

The stupidity of not reinvesting in yourselves is probably outlined by the fact that Singapore Airlines, which Qantas has held out of the Pacific route, is now looking at doing its maintenance work on its A380 aircraft—guess where? In Australia. Why? The airport is not big enough and they cannot get enough sand out of Malaysia. It is harder to extend it, but they know there is quality engineering. So Qantas has been trying to reshuffle stuff over to New Zealand and to Singapore, where they have in fact got Jetstar Asia registered in Singapore. The question is, as David Jull pointed out to the committee yesterday: what kind of airline is it? Is it a Singaporean airline or an Australian one? While they have stripped away our capacity to deal with our situation, the Singaporeans are saying that more can be done. The Singaporeans know that our safety standards are good. But, in terms of this mutual recognition thing, if the government had been utterly determined to do this in the proper way, they would have had all of the investigation before and that impractical implementation would have been organised and done now—not at the end of a 12-month review, not at the finish of the thing. But the explanation for this, I think, resides not just within the parameters of this bill but within the industrial relations agenda of the government. (Time expired)

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