Sharman Stone (Murray, Liberal Party, Shadow Minister for Immigration and Citizenship) Share this | Hansard source

I too wish to speak on the Fair Work (Transitional Provisions and Consequential Amendments) Bill 2009 and the Fair Work (State Referral and Consequential and Other Amendments) Bill 2009. This is very important legislation indeed. It is all about our future in terms of who can afford to employ someone even when there is demand for their product. Who will take a second look at the newcomer to the workplace—the unskilled and untrained person, the disabled person or the young mother wanting flexibility in the workplace?

Conditions are so tough in this country that we are going to see even more unemployment than we currently have. The coalition created 2.2 million jobs. When we left government there was work for all. We, in fact, had some of the highest rates of workforce participation ever and we were proud of the fact that some very long-term unemployed found work and found new meaning in life. After all, who you are and what you are in Australia is very much identified with work if you are of working age. Unemployment is currently at 5.4 per cent, and it is going to get worse. It could peak at well over nine per cent in 2011. That will be over one million Australians without work, and that will be a tragedy.

This legislation is of critical importance. I want to focus my remarks on the horticulture industry. Others have spoken about the retail industry, other industries that require flexibility, microbusinesses with just one or two employees and the hospitality and tourism industries that have significant numbers of part-timers and casual workers. Horticulture seems to be completely beyond the mindset of the Labor government. They seem to be completely out of touch with the reality in rural Australia when it comes to making proper and adequate moves. I will describe what has happened.

In January 2009 the Australian Industrial Relations Commission released the exposure draft of the federal horticultural award 2010. This was part of Labor’s so-called modernisation of the award system. The exposure draft allowed for piecework to continue in basically the way it had done over the last 25 years. Generally the fruit industry was accepting of the proposed new horticultural award. Piecework is pivotal to the harvesting, pruning, thinning and packing work needed in the horticultural industry. Piecework has been the method of employment for most for decades, and it has had the full support of the Australian Workers Union.

On 3 April 2009, a few months later, the AIRC released the horticultural award 2010 and the industry was shocked to find that clause 15 of the award had been totally redrafted and no longer reflected the previous exposure award or any previous awards that they had seen. The redrafted clause sees the piecework loading increase from 12½ per cent to 15 per cent and has imposed a floor to piecework rates based on a minimum hourly rate, and hence has undermined the whole concept of piecework altogether.

The minimum hourly rate will have an enormous impact on the horticulture sector, the growers of our fruit and vegetables. This sector relies heavily, as I have said, on a casual workforce and it requires flexibility, weekend work and after-dark work. It must be noted that the intent of piecework is not to financially disadvantage employees. In fact, good pickers can earn well in excess of the minimum hourly casual rates. The advantage of piecework for a significant portion of the casual workforce—including the grey nomads, as they are called, or newcomers or inexperienced workers and the physically disabled individual who wishes to work in the workforce but must do so at their own rate, perhaps just initially—is that they can choose to work at their own pace. These workers in the future may not be employed due to their inability to meet minimum piecework requirements based on the required minimum casual wage. That is not fair to those workers. It does not achieve anything but to remove numbers of people from the workforce who enjoy hard physical labour and who, using the skills and capacities they have, make a contribution to their own lives and their independence, and to the nation.

Furthermore, piecework in its intent has continued to be recognised under the federal pastoral award 2010. The best example is that of shearers shearing sheep, whereby the shearer is paid piecework for the number shorn per day. The same concept should therefore be okay and should be applicable to the horticultural sector. Apparently piecework is not a total anathema to the Labor government.

So we have this extraordinary situation. The federal horticultural award 2010 also imposes further costs on growers by the changes to penalty rates and overtime restrictions. Many horticultural sectors are required to harvest during particular times of the year, often on successive days on a daily basis, day after day, seven, eight, nine, 10 days straight, due to the highly perishable nature of their products. Tomatoes do not wait, strawberries do not wait, harvest-ready summer fruits cannot wait, the weather might change, there might be rain, there might be frost and hail, and you have to pick when the fruit needs to be picked. You harvest when harvest is required, not when a penalty rate dictates or when some labour commission decides that there is a time when you work and a time when you cannot. In some industry sectors in horticulture you have to harvest on Sundays to meet domestic and overseas orders. In fact, if you want fresh fruit and vegetables in your supermarkets during the week, someone has to pick and pack that product on a Sunday.

Under this new award there is to be a 200 per cent loading on Sunday work. It is double time but with a minimum of four hours payment no matter how few hours you work. If you work two hours, sorry, you must be paid for four hours and at double rates. Can you imagine the impact this is going to have on the costs to the grower?

There is also the absurdly restricting Monday to Friday, 6 am to 6 pm span of hours for packing house employees. Penalty rates of 150 to 200 per cent must be paid to employees if they work outside that span of hours even if it is part of their 38-hour ordinary week. You have to pack on a weekend to meet Monday food markets, as I have said, and you work Saturdays, Sundays and in the evenings. It is not a city-centric industry where you can down tools and turn off the lights at 4.30 or 5 pm. It is different in fruit and vegetable growing.

Australian food producers cannot pass on their prices. If the costs of labour go up they cannot say to Coles and Woolworths, ‘We are going to charge you more now for the superb product we are landing on the steps of your warehouses,’ because the duopoly in Australia, as we all know, simply does not work that way. It says, ‘We will import or we will go to more generics, and you can go to the back of the queue as one of our suppliers.’

The fruit and vegetable industry is made up of small, medium and larger enterprises operating within a range of business models and markets. The environment in which these enterprises operate is highly commercial and extremely competitive. These businesses compete when they export, often against highly subsidised product, but also world-best produced product, and we have been successful and competitive. We cannot compete if the labour costs are pushed up, as is proposed in these awards.

Labour is the most critical factor in ensuring the smooth running of the field preparation, planting, maintenance, harvesting, pruning and packing. Despite advances in technology, the horticultural industry continues to be heavily reliant on manual work and such a workforce is associated with considerable costs and risks. It is one of those ironies where, as you try to produce even more consumption-ready fruit and vegetables where you want the higher price for the higher quality product, you go back to even more manual picking, sorting and packing. So it is not a case of these growers simply reaching for a machine. It is human labour and human capital that makes our fruit and vegetable markets as good and as fine in quality as they are.

From a commercial aspect there is a concentration of the domestic fresh food market within the two major retailers with serious concerns being raised about the duopoly’s increasing market power. The clear trend of these retailers is to use their market power to push costs, risks and responsibilities back down the supply chain to the grower. The grower’s profit margins continue to decrease while the profit margins of the major retailers remain at record highs.

Now we have this labour proposal from the Rudd Labor government that the costs of labour are also to spiral out of control and to be totally unrealistic in the way that labour is organised during the week and on weekends. This is not just about growers going broke and moving out of the industry. This is about our very food security for this nation. If our fruit and vegetable growers cannot make ends meet, then I must admit there are plenty of alternatives. You can buy frozen peas from China—they are not very edible but you can. You can buy fresh fruit product from a lot of our neighbouring countries and you can certainly find frozen product from all around the world in our supermarkets today.

But I argue—and I think I am joined by most Australians—that we would prefer it if this nation maintained its own food self-sufficiency. It is important for strategic, health, environmental and quality of life issues for us to maintain a capacity to grow our own food. Under these new award casual rates and conditions for horticulture we are seeing casual rates increase from two to 25 per cent. Given the vast majority of employees in the horticultural industry are casual employees, this will result in significant increases in costs for employers which cannot be passed on, which means the end of food growing and marketing for a lot of our Australian horticulturalists. That is extraordinarily bad, and I do not for a minute support what is being proposed nor do horticulture industries in Australia.

To give an example, a Queensland strawberry grower employs 700 people during peak harvest periods. Increases in the casual rates described under these new awards will alone result in an increased wage bill of $92,568 during a three-month period. The changes in classification structures will significantly increase costs. In Western Australia, for example, the change in classifications will result in an increase in casual weekly wages of between $27.36 and $148.58. We just have to wonder what was going on when this particular award was changed without proper consultation, without any detailed understanding of horticulture in Australia—or perhaps a ‘no care’ response to it. The removal of a true piece rate and its replacement with a base hourly rate supplemented by an incentive payment will devastate employment of various groups who have utilised piece rates in the past. These include grey nomads, backpackers and people who are physically challenged. I have to say the significant regulatory burdens associated with recording hourly rates of employees who were previously pieceworkers is also more red tape than most of our growers, our horticulturalists, can bear. Employers are simply not equipped to undertake this additional regulatory task.

I want to go back to the beginning and say that the Fair Work (Transitional Provisions and Consequential Amendments) Bill and the Fair Work (State Referral and Consequential and Other Amendments) Bill are not about helping this country survive into the future with its own food-producing capacity; nor are they about helping employers survive the downturns which we are now experiencing as the Rudd Labor government lurches through inappropriate responses to a global meltdown. We have a serious problem of unemployment in this country. Sadly, the horticultural industry is going to be severely disadvantaged with these rates and conditions now imposed and I ask this government to rethink what it is currently proposing.

Debate (on motion by Ms McKew) adjourned.

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