Jane Prentice (Ryan, Liberal Party) Share this | Hansard source

I rise to speak on the Australian Jobs Bill 2013. Today's bill is yet another example of this Labor government's interventionist approach to industry policy. It says it is part of its plan to support and create jobs, but realistically the primary consequences of this bill are to install further bureaucratic oversight of private operators within our economy. This bill contains too many impractical and unreasonable measures; it is symptomatic of the government's command-and-control approach to industry and we should therefore oppose the bill.

The passage of today's bill would result in changes to the Australian Industry Participation system. The AIP system was introduced by the Howard government in 2001. Its core purpose is to give Australian firms increased opportunity to secure work on major local projects. Currently, companies seeking customs duty concessions under the Enhanced Project By-law Scheme and entities tendering for Commonwealth government procurements worth $20 million or more need to produce Australian Industry Participation plans. Through these plans, companies show how they will provide local firms with optimal opportunities to tender for and perform some of the work on their project. The system has generally worked very effectively, and has been accompanied by a number of complementary changes at state level. As its architect, the coalition is a supporter of the system and we would therefore support sensible refinements to the system if they are likely to enhance its operation.

The government claims its aim is to make changes to the system which will potentially increase the number of Australian suppliers for major local projects. The bill and the accompanying material show little regard for the historical evolution of the AIP system or for the progress that had already been made over many years of increasing local industry participation on major projects. Further, there is little evidence that this bill is based on a rigorous cost-benefit analysis.

As the Business Council of Australia noted in its submission to the exposure draft for this bill:

The Bill does not pass the test of good legislation—the problem is poorly defined, the costs and risks of the Bill are understated and the costs and benefits of sensible, alternative policy options have not been properly assessed.

This is not rational policy. The changes have not arisen in response to an identified need in industry. It is merely an attempt to justify the Labor government's Industry and Innovation Statement of 17 February 2013, where they proposed a number of changes that will supposedly 'strengthen the capacity of Australian firms to win more work on major projects'.

It is all very well for this Labor government to pay lip service to supporting Australian jobs. However, we must look at the detail of this bill. Some of the changes include: the establishment of a new Australian Industry Participation Authority to supposedly 'raise the profile of these activities, coordinate opportunities arising from AIP Plans (AIPPs) and help business gain access to opportunities'; the requirement of AIPPs to be generated for all projects with a capital expenditure of $500 million or more; the revision of EPBS for projects worth $2 billion or more by requiring 'Australian Industry Opportunity Officers' to be embedded in the procurement teams of individual companies. These proposals amount to a new bureaucracy, more red tape and more bureaucrats. They claim that in some way it is a measure to improve Australian industry rather than admit it is just one more way they can increase the intrusion of government into industry.

I also remain concerned about the lack of clarity in the legislation around the proposed 'trigger date' at which the production of an AIPP in the conception and/or planning phases of a project becomes mandatory. Further, there will likely be a substantial rise in the number of AIPPs that need to be produced. There will also, no doubt, be an increase in reporting and compliance requirements as a result of any lowering of the capital expenditure threshold. These revisions are heavy-handed, misguided, and will collectively compromise the operation of the Australian Industry Participation system.

It is the coalition's view that a number of the changes in this bill will weaken rather than improve the system and are an anathema to the operation of a vibrant private sector and a successful modern economy. Against this background, it is unsurprising that almost all of the submissions provided to the Senate Economics Legislation Committee raised multiple and significant concerns about the content of the exposure draft. Stakeholders within industry have already expressed their opposition to the changes in the Australian Jobs Bill 2013. Xstrata Coal, in its submission on the exposure draft, said the bill:

... only adds to the regulatory red-tape and cost of projects which are becoming increasingly marginal as a result of Australia's high cost structure, regulatory burden, tax regime and currency exchange rate.

The Business Council of Australia went further, stating that it:

... establishes a worrying new precedent for government intervention ... This will add to Australia's reputation as a costly and unpredictable place to invest in major capital projects. The introduction of a new regulator to oversee project procurement risks creating an antagonistic instead of a cooperative and constructive relationship with business.

The Australian Petroleum Production and Exploration Association in its submission to the Senate Standing Committee on Economics, said:

Overall, APPEA does not believe that a case has been made to justify the imposition of a complex and potentially time consuming regulatory process.

They noted that this bill will:

… increase complexity, uncertainty and the cost of compliance.

I absolutely agree with these sentiments.

Finally, the government has stated that these changes will be accompanied by spending of $98.2 million over the next five years. This expenditure is supposedly being offset by cuts which total over $1 billion to the research and development tax incentives, which does not appear to have been appropriately modelled and publicly clarified or justified.

However, there can be a role for government as a facilitator to support Australian industry and jobs. For example, the Export Market Development Grants have been very successful in assisting our small and medium-sized exporters engage in international markets to export Australian products and to grow the Australian economy. These grants are not about having government bureaucrats embedded in export companies telling them what or to whom they can export. However, instead of supporting this successful industry policy, this Labor government recently cut $25 million dollars for no rational reason except to cover up their $192 billion in accumulated government debt.

This bill is a complete anathema to the idea of free enterprise. It is not about supporting industry or supporting the Australian economy; it is about expanding the power of government and creating yet another new layer of bureaucracy. Embedding public servants in companies, no matter how big or small, belongs in the works of an Orwellian novel, not in the pages of Commonwealth legislation. I therefore oppose this bill.

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