Craig Emerson (Rankin, Australian Labor Party) Share this | Hansard source

At the outset, I would like to note that there is a grand total of three government speakers and 23 opposition speakers on these very important bills, the Independent Contractors Bill 2006 and the Workplace Relations Legislation Amendment (Independent Contractors) Bill 2006. That tells us that these bills are motivated purely by political considerations, by an attempt to deunionise important sections of the Australian workforce. If this legislation were truly seen to be in the interests of the working people of Australia and the interests of the industries it affects, more than three government speakers would have had the drive and enthusiasm to make such statements in this chamber. But they have not, because they know that this legislation is nothing more than a political exercise—an exercise in ideology.

Labor supports genuine independent contractors—that is, those workers who freely choose to be contractors. Labor, at the same time, supports the right of genuine contractors to be represented by a union. Here, as on so many occasions, Labor diverges strongly from the position of the coalition government, because this government does not respect the right of working people in this country to be represented by a union. This government knows that, if it can deunionise the Australian workforce, it can achieve its ultimate goal of destroying the Australian Labor Party. It knows of the strong bonds between the ALP and the union movement. It knows that the true target in so much of this legislation is in fact the ALP, because the Australian Labor Party was born of the union movement and, very proudly, represents the interests of working Australians and represents the right of working Australians to be represented by a union.

The truth of the matter is that many employees are either enticed or coerced into entering into sham contractor arrangements. They can be employees on Friday and then turn up to work on Monday as contractors, when, in truth, the relationship between the employer and the employee has changed not in substance but only in appearance.

Let me deal with the enticing of employees into becoming sham contractors. That is done primarily through the income tax system because contractors, as distinct from employees, can claim extra tax deductions and be in a more beneficial tax position overall. They can, for example, put themselves in a position of being able to claim as an expense travel to and from work. They can put themselves in a position of being able to claim home office expenses and, indeed, more readily, of being able to split income between themselves and their partners.

The government recognised the revenue leakage associated with sham contractor arrangements in its consideration of the Ralph Review of Business Taxation. As a consequence of that Ralph review, recommendations were made to introduce into the parliament legislation dealing with the alienation of personal services income. That is a fancy set of words to describe legislation that would crack down on contractor arrangements that were shams designed purely to minimise tax.

As a result of the Ralph report, the Treasurer picked up the recommendations and, in a letter to the then shadow Treasurer that was negotiated across the table—I know that because I was also at the table at the time—he indicated that he was prepared to sign a letter to say that he would move decisively against sham contractor arrangements through legislation dealing with the alienation of personal services income. As on so many other occasions, the Treasurer failed to keep his word. His word was recorded in a letter signed by him. He showed no shame after being rolled in the cabinet by the Prime Minister and the Minister for Employment and Workplace Relations, who had one objective and one objective only—to continue the deunionisation of the workforces engaged in building and construction, in transport and in other occupations in our country. So the Prime Minister and the minister for workplace relations indicated that they were more than prepared to use taxpayers’ funds to achieve their goal of deunionising the workforce in those industries. In the process, they rolled the Treasurer, who came back into the parliament with a very ineffective piece of legislation called the alienation of personal services income. It was watered down very substantially from that which had been foreshadowed in the government’s response to the Ralph review.

It is worth reviewing what has happened in terms of the enforcement of that legislation, which passed through this parliament several years ago. Documents obtained under freedom of information legislation reveal that the tax office has never reviewed the operation of that legislation. It appears that the tax office has not audited anyone—or virtually anyone—who has been able to claim expenses under what could be sham contractor arrangements. More than 99 per cent of independent contractors have self-assessed, so there is no real picture of the ongoing revenue losses associated with sham contractor arrangements, but they could run into billions of dollars—such is the zeal and determination of the Prime Minister to deunionise the transport industry and the building and construction industry. The alienation of personal services income legislation is sham legislation to deal with sham contractor arrangements.

I have dealt with the matter of enticing working people into converting to sham contractor arrangements; I now turn to employers coercing employees into becoming sham contractors, and that indeed does happen. It includes sacking workers and telling them to come back to work as independent contractors if they want a job.

Under these arrangements, employees who become sham contractors are obliged to provide for their own superannuation so that the employer no longer has that responsibility, employees who become sham contractors are obliged to provide for their own insurance, and employees who become sham contractors are obliged to provide for their own workers compensation if they have an accident at work. This legislation generally removes the right of unions to represent employees who are forced into sham contractor arrangements. A lawyer can represent such people, an association can represent such people, but a registered employee organisation cannot represent such people—that is, a union cannot represent such people.

There is an exemption: the Transport Workers Union representing owner-drivers in New South Wales and Victoria. That exemption is a result of the hard work and determination of the Transport Workers Union to secure an exemption from this legislation. That came about not out of the good grace of this government—not because this government thought it was a good idea—but because this government was very apprehensive about what the Transport Workers Union might be able to achieve if it took another course of action to persuade the government to make these exemptions.

The irony is that, if the Transport Workers Union quite legitimately and correctly has been able to come to arrangements in New South Wales and Victoria that protect the interests of working people while at the same time ensuring a viable industry and the government has seen fit to make those exemptions, that tells us the story—that is, that this legislation is unnecessary. Life will go on in the transport industry in New South Wales and Victoria, but the government has insisted that life will not go on in the transport industry in my home state of Queensland or in the other states of Australia. So the government did not provide those exemptions out of good grace or common sense but because it felt it had no real political alternative but to do so.

This legislation is an integral part of the government’s single-minded desire to deunionise the Australian workforce. That desire is expressed more comprehensively in its Work Choices legislation, to which I now move based on the second reading amendment. It is called Work Choices, but it provides no choice for employees. In a most Orwellian way, it withdraws those few choices that remained for employees following the legislation of 1996 and subsequent second-wave legislation. The titles of all those bills that came through this parliament were very Orwellian—the fair dismissal bill, the fair termination bill and the better bargaining bill, which removed bargaining rights from working people. I could go on, because there were 13 such bills.

In removing the choice of employees to bargain collectively and to be represented by a union in such enterprise bargaining, the government has turned its back on enterprise bargaining in Australia. Yet in 1996 and all the way through, while it was trying to get these Orwellian pieces of legislation through the parliament, the government claimed its support for enterprise bargaining. The government pretended that it was its idea. The government tried to disguise the fact that enterprise bargaining was introduced by the Labor government in 1993 as a natural evolution of the system as we moved from the highly centralised wage-fixing system inherited by the incoming Labor government in 1983 from the then coalition government, the Treasurer of which is now the Prime Minister of Australia. It was Labor that inherited a highly centralised wage-fixing system that had resulted in wage increases of around 14 per cent per annum in the last couple of years of the Fraser government. Is it any wonder that the incoming Labor government inherited double-digit inflation and double-digit unemployment?

You do not hear the word ‘stagflation’ used that much these days. This is a term that was used during the late seventies and early eighties to describe the state of the Australian economy—that is, stagnation with inflation. That was a result of the policies pursued by the Fraser government and the then Treasurer of this country, now the Prime Minister of Australia. There was one other variable that is important to the quality of life of Australians that was also well and truly into double digits. I wonder if members in this chamber can remember what that variable is: interest rates. The now Prime Minister of Australia, as the Treasurer of Australia, holds the record for the highest interest rates in at least a quarter of a century. On 8 April 1982, 90-day bank bills reached 22 per cent. That was the cost of borrowing money in those hyperinflationary days.

So, when the Prime Minister talks about high interest rates under Labor, the truth is that he holds the record. The only reason mortgage rates were not higher is that they were capped by law, which meant that people with lower incomes were absolutely excluded from owning a home. They did not have the credit rating that banks required in order to lend them the limited lending funds available.

That was the economic situation inherited by the then Labor government, which dealt with it by reducing inflation, interest rates and unemployment. It did that initially through various incarnations of the accord and then gradually moved to a less centralised system and to enterprise bargaining. In the process, Labor did seek and achieve wage moderation.

We hear from this government—daily—that real wages have increased by 16 per cent under the coalition but increased by only one per cent under Labor. What happened during that period of the Labor government? Labor inherited an industrial sector that was on its knees—that was uncompetitive and that needed some wage moderation to help it reorient itself from a highly protected, narrow domestic market to one where it could compete in the international market, on the global stage. It was therefore important that wage moderation be achieved—to boost the competitiveness of those industries that had lost all competitiveness under the previous coalition government.

The trade union movement of this country cooperated in moderating wages. Instead of condemning the trade union movement, this government should thank it for boosting the competitiveness of Australian industry and helping the previous Labor government in a reform program—cooperating in a reform program that has set Australia up for 15 years of strong economic growth and allowing real wages to increase over that time.

In exchange for moderation in money wages, the then Labor government, through the accord and through understandings developed with the trade union movement and the working people of this country, entered into arrangements that boosted the social wage. It was Labor that introduced Medicare, providing universal health care for Australians. It was Labor that ensured that child care became affordable, by greatly expanding the number of childcare places. It was Labor that introduced a decent system of family payments in this country, which ensured that those who were not in work and the working poor were able to have their incomes boosted by taxpayers in exchange for wage moderation. It was Labor that opened up our universities to people who did not ordinarily have the financial capacity to go to university. It was Labor that introduced compulsory superannuation—nine per cent—as part of the social wage, as part of that wage moderation.

Every commentator knows that Labor achieved that wage moderation through improvements in the social wage and in order to ensure that this country had an economic future. Yet this government condemns the trade union movement for its cooperation in ensuring that wage moderation occurred and that Australian industry could become competitive, and it thanks the union movement with this extreme industrial relations legislation.

The Howard government says that industrial relations was not an issue in the most recent election in Queensland. Why did Lawrence Springborg promise to protect state government employees from the Howard government’s extreme industrial relations legislation? He understood that it was unpopular. He understood that it was bad for Queensland. He understood that it was bad for Australia. That is why he moved to protect working people from this government’s vicious legislation.

That is the history of wage moderation in this country. The legislation before us here today is an indictment of the government, because now employees have no choice but to toady to employers and do what they are told. The government has employees—the working people of Australia—right where it wants them: subservient to employers. (Time expired)

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