Wednesday, 27 August 2014
Fair Work Amendment Bill 2014; Second Reading
Furthermore, employers also have rights, including a right to go about their business without unnecessary disruption or unfairly imposed costs. Right of entry under the current act is not fair to employers because it places unfair demands and unfair financial imposts on them. These are in the form of an obligation on employers to pay the cost of transport for union officials to remote work sites as well as the cost of their accommodation. This has created an employer funded, union-boss joy-ride scheme. There is much evidence that this abuse, and abuse it is, in the spirit, in the act and even in the word. When the CFMEU national president Joe McDonald ignored a request to leave an iron ore site in Western Australia because he did not have a right-of-entry permit, he replied, 'I haven't had one for seven years and that hasn't [expletive] stopped me.' Consider also the costs of transport and accommodation required for the excessive and disruptive right-of-entry visits to the Pluto project and the BHP Billiton plant. These are costs imposed on all businesses where unions demand right of entry. This hardly constitutes fairness.
Labor implemented the current right of entry after its election win in 2007. This, however, is utterly inconsistent with undertakings made by the then deputy opposition leader Julia Gillard, when she promised on multiple occasions prior to the 2007 election that there would be no changes to the union right-of-entry laws existing at the time. This is another broken promise. It is not fair and it is destructive of the common good of all. A weakened economy harms workers, families and communities. It harms the weakest and the most vulnerable. This is not consistent with coalition values. I trust the members opposite will recall the promises made by their former deputy leader, later leader and Prime Minister, and will remain true to their values of supporting the weakest and the most vulnerable.
The current Fair Work Act is not fair because unions currently have power of veto over greenfields agreements. Removing the obligation for them to negotiate in good faith and without delay, the union power of veto over greenfields agreements has allowed unions to refuse to reach any agreement until their demands for what can only be described as impractical, unrealistic and unsustainable wages and conditions are accepted. The current act does not ensure that vital new mining or construction projects are not unduly delayed and that investment is not threatened by protracted greenfields agreement negotiations. This is not fair to businesses, to investors and to shareholders. It is not fair to job seekers, who will not be given opportunities for employment if greenfields projects are delayed or stopped.
When looking at the union power of veto over greenfields agreements, the former Labor government's Fair Work review noted, in somewhat understated language, that these practices potentially threaten future investment in major projects in Australia. They have already delayed major resource projects worth billions of dollars. This is bad for jobs and bad for the economy, and it is bad for our sovereign risk reputation. It is bad for the unemployed, for job seekers, for their families and for their communities. By not supporting the coalition's amendments, which are based on the recommendations of Labor's own review panel and, as already noted, on Labor's promises, Labor will demonstrate an appalling inconsistency in its supposed support for those it claims most to represent. This bill will remove this union veto power over greenfields agreements and will lead to training and employment opportunities, fair and sustainable wages and conditions for employees, certainty to businesses and investors, and a stronger and more prosperous Australia.
The current Fair Work Act requires that an employee be better off overall under an individual flexibility arrangement, or IFA. The government's proposed amendments to IFAs do not affect this requirement. In fact, this bill again responds to outstanding recommendations of the former Labor government's Fair Work Review Panel. These were practical and sensible recommendations. Let me repeat: this bill responds to outstanding recommendations of the former Labor government's Fair Work Review Panel. These were practical and sensible recommendations.
These recommendations, when implemented via this government's bill, will make Australian workers better off overall, as the arrangements they reach will be based on their own needs as they, the workers themselves, have assessed them. The workers will have initiative and self-responsibility returned to them by this government, and employers and businesses will reap the benefits of a more satisfied employee. To not implement these recommendations is not fair to Australian workers. To not implement these recommendations is the antithesis of Labor's stated values. To not implement these recommendations is to not support amendments that will improve individual and common good.
Under the current Fair Work Act, there is a 'strike first, talk later' loophole, whereby employees are allowed to strike before bargaining has even commenced. This is an unbalanced and inharmonious approach to enterprise bargaining. Strikes engaged in under such circumstances, where there has been no good-faith bargaining beforehand, are not fair. They are not fair to the business owners, investors and shareholders. As production or services are halted, the very viability of the business may be threatened, and owners and investors may lose their investment and their livelihoods. They are not fair to suppliers to the business and others in the production and distribution chain, as they also lose business and income, and the viability of their own businesses can be threatened. They are not fair to consumers of services or products, as they are deprived of these resources. And they are not fair to the workers involved, both inside and outside the affected business, as they lose income and may even lose their jobs.
Allow me to read the following quotation:
… industrial disputes are serious. They hurt workers, they hurt businesses, they can hurt families and communities, and they certainly hurt the economy.
… employees will not be able to strike … unless there has been genuine good faith bargaining.
These words were spoken by Kevin Rudd in 2007. This government's proposed amendments will keep this promise made by Labor in 2007. Our amendments will ensure that protected industrial action can only be taken if bargaining for a proposed agreement has commenced.
I have outlined how the status quo with the Fair Work Act is unfair, how it is contrary to Labor's previous promises and undertakings and claimed Labor values, how it is harmful to the employment opportunities and livelihoods of so many Australians, and how its inequities harm the economy and adversely reach into and leave their mark in every Australian home. The consequences of a failure to change this act via this government's proposed amendments will be dark and dismal for the economy and, as a consequence, for Australia and every Australian.
However, there is hope, and that hope lies with this government. The amendments put forward by this government will ensure that unions can no longer frustrate enterprise bargaining through unrealistic and unsustainable claims, and unconscionable delays. The amendments will improve workplace productivity and flexibility by enhancing the scope for employees to make individual flexibility arrangements that meet their own genuine and expressed needs. They will deal with excessive right-of-entry visits demanded by combative and uncompromising union officials. They will close the 'strike first, talk later' loophole in good-faith bargaining that is so destructive of harmony, productivity and prosperity for all.
Labor have made the promises. We will hold them to their promises. This government will deliver on these promises.
Let us go back in history here. We have heard a lot this sitting week about how much stead the Labor Party puts in what is said before an election and what happens after an election. The year: 2007. The place: Australia. The speaker: Kevin Rudd. 'I am an economic conservative. We will maintain tight fiscal policy and commit to budget surpluses over the forward estimates.' 'This reckless spending must stop.' 'I am Howard lite.' 'We will maintain Australia's border integrity.' 'We will not change the right of entry provisions as they currently stand.' Honestly, the only thing he got a little bit right was the third one—the 'Howard lite' comment. He was so light he floated on helium and had the funny voice to go with it. Like a schooner glass full of froth, he had no substance.
The GFC hit Australia and Labor responded by pump-priming the economy with cash. Along the way, they rolled back the right-of-entry provisions for their union mates. So, while we had the advantage of cash in the bank and the best set of books any government in the Western world had to face such a challenge, Labor's actions slowed productivity on purpose by allowing the union movement almost unfettered access to work sites. I will always remember Marius Kloppers's words soon after Olympic Dam was put back on the shelf. He said at the time: 'Australia used to be a low-cost high-productivity place to do business. Today, Australia is a high-cost low-productivity place to do business.'
In my electorate, the issue is confidence. My people want to get and keep a good paying job. That is what all Australians want. That is what we are trying to fix here. Not all the problems we have at present can be laid at the feet of the union movement or the right of entry provisions. But, when we are seeing our manufacturing jobs move overseas, productivity must be addressed.
I think it was the Higgins review in 1908 or 1909 which made the decision for Australians that we would be a high-wage nation, regardless of the profitability of the employer. I have always been fine with us being a high-wage country if you are very productive and you have low input costs. If you remove, however, two of those, you have a recipe for unemployment. The current national rate is about 6.4 per cent and that should worry everyone in this place. In my electorate, it is worse than that, and particularly for those people who do not have much experience and for those who have loads of experience. The young and the old always cop it first when things start to go wrong, and this has been the same throughout history.
What we must do is work as hard as we can to instil the confidence to employ and hire. Being a government living within its means is a great start, but it is only a start. The major changes we hope to provide, from my perspective, are as follows. The coalition policy commitment will ensure that the Fair Work laws will provide a safety net for workers while helping business grow. This will help deliver that confidence to industry. That in turn will create new jobs and deliver real wage growth.
Changing the right of entry laws will allow employers to run a business without disruption while balancing the rights of employees at the same time. Please remember that 87 per cent of the workforce are not union members. The changes we are implementing will assist to stop union workplace harassment. Labor's own Fair Work Review Panel, when Labor were in power, noted that the Pluto LNG project received over 200 right of entry visits in just three months. BHP Billiton's Worsley Alumina plant received 180 visits in a single year. What do they have in common? They are remote places of work.
Our policy changes will mean that employers in remote area worksites do not have to pay for transport and accommodation for union officials to visit worksites. We have all heard the stories of unions taking advantage of this loophole, taking 'helicopter joy-rides', and an unnecessarily high number of visits to remote worksites, as previously stated.
A recent case featuring CFMEU National President Joe McDonald has underlined the urgent need for these reforms. In the most recent case, where Mr McDonald and the CFMEU were fined $193,600, he ignored constant requests to leave a site owned by Citic Pacific's Sino Iron Ore in Western Australia. When asked to leave the site because he didn't have a right-of-entry permit, Mr McDonald said:
I haven't had one for seven years, and that hasn't … stopped me.
We will also repeal the previous government's amendments, made in 2013, that expanded union right of entry even further by allowing for uninvited 'lunch room invasions'. Those amendments give unions the right to insist on addressing workers in their lunch rooms, even when the workers have not requested their presence and are not union members. This practice is just unfair and predatory. It is a shame that employees' rights to be fairly represented have turned into what looks like a case of union bullying and harassment in the workplace.
It is at the stage where the unions are now causing a slowdown on productivity across so many sectors in our economy. Again, we are facing international challenges for our jobs. Being productive must be the core element of all employment. Our changes will encourage business productivity and help to deliver our government's promise to create one million new jobs over the next five years. This will drive prosperity in a strong economy to provide more job security and ensure sustainable wage increases. Surely that is what a government must do. A government must set the stage for employers to employ and for employees to prosper through hard work.
Another important change to the legislation is the 'strike first, talk later' loophole. This poor piece of legislation allows unions and workers to strike before negotiations have even started. Labor refused to address this while they were in government, again pandering to the needs and wants of the union movement. Labor failed Australian business and they failed their members by not fighting to keep jobs here through being productive and proud of the work they were doing. Our changes will ensure protections are in place to avoid strike action unless negotiations have commenced.
One of the things that have always bugged the living daylights out of me is the greenfield agreements struck before any work can commence between aggressive unions and submissive employers. This bill will remove the veto power given to unions. Agreements can be delivered in good faith and in a reasonable time frame. Surely that is good for Australia. Employers will have the option of taking a proposed greenfield agreement to the Fair Work Commission after three months of negotiations if the agreement has not been reached. The former government's Fair Work review noted these practices 'potentially threaten future investment and major prospects in Australia'. Currently, billions of dollars' worth of new projects have been put on hold because of these provisions. I simply cannot understand a system where someone who wants to spend billions of dollars building something has to go cap in hand and negotiate with an organisation which has absolutely no skin in the game.
This bill sends a loud and clear message to the rest of the world that Australia is open for business. Is all of this just coalition rhetoric? I think not. Former Labor minister Martin Ferguson—a man who everyone in this place should respect—commented back in February this year that he backed these changes to Fair Work. Mr Ferguson said that 23 years of continual growth was threatened and that he was pleased that some of the modest changes were being introduced. I quote from The Ageon 27 February 2014, where he said:
High labour costs and low productivity are an unsustainable mix … therefore elements of Fair Work must be looked at.
Just to recap: in 2007, the Labor Party promised on multiple occasions that there would be no changes to the union right-of-entry laws. In a press conference on 28 August 2007, the deputy opposition leader, Julia Gillard, said:
We will make sure that current right of entry provisions stay. We understand that entering on the premises of an employer needs to happen in an orderly way. We will keep the right of entry provisions.
Under the current Fair Work provisions, unions have been able to gain entry to workplaces even if they are not a party to the award or agreement that applies to that business and where they have no members. Surely that is just wrong. Labor's changes gave unions privileged entry rights to any workplace as long they have 'potential members'. This is the case even where enterprise agreements are made with other unions and directly with employees. We are not trying to stop them having access. We just wanted to make it fair. There will be no requirement for an employee who has requested a union presence to even be identified. There will be measures to ensure that employees can remain anonymous if they wish. If a union is asked by an employer for proof of an invitation to the workplace and the employee wishes to remain anonymous a union will be able to apply to the Fair Work Commission for an invitation certificate. The Fair Work Commission must issue the certificate if it is satisfied that an employee who the union is entitled to represent has invited a union representative to his or her workplace for the purpose of holding discussions.
The amendment will provide that the Fair Work Commission will be required to take into account the combined impacts of visits by all unions to the workplace. This will ensure that employers have recourse in the event that combined impacts of visits by a number of unions is resulting in excessive disruptions.
These changes are about balance. This bill is about fairness, and it is all about ensuring that employers can go about their business without undue and unnecessary disruption, while retaining the capacity for employees to have representation in the workplace. We want the workplace to be a productive workplace.
I have worked in banking, debt collection, auctioneering, finance and real estate. All I ever wanted was to do my job, be proud of what I did, and get paid a fair wage for it. With that in mind, I support the individual flexibility agreements or IFAs. They were introduced by Labor with the intention of enabling workers and their employers to mutually agree on conditions that suit their needs. IFAs will be an important option to enable employees to manage their child care or other caring arrangements, or to spend time with their families or on other commitments. I am proud to be the member for Herbert in an Abbott government. We are a coalition looking to expand our workplaces and get jobs created by business.
There is much work to be done. I want the tender process worked on to ensure that taxpayers get real value for the work carried out, and not just inflated prices to cover things which produce no results. I want taxpayer funds expended in my seat and throughout my region to wash through our entire economy, and not just through a couple of firms lucky enough to win a government tender.
There is much work to be done here, and we had better get to it. My city of Townsville wants a bright future. We are a government which talks about developing the north, and that is a key ingredient in my city's future, but to make it happen we have to be as flexible as possible to ensure that we are able to work for a competitive price. We have to meet our markets; it is that simple.
I have said it before and I will say it again: I am always happy to have Australia as a high-wage nation. But to do that we—governments, business owners and employees—have to do everything in our power to ensure that our input costs are as low as possible and that we are as productive as possible. We can compete in the 21st century. We are open for business. In this government we just have to deliver for all Australians.
I rise to speak in this debate on this second reading amendment to the Fair Work Amendment Bill 2014. The bill makes amendments to the Fair Work Act 2009 to implement elements of the coalition's policy to improve the Fair Work laws which were announced prior to the 2013 elections.
The bill will amend the act in a number of ways which will boost productivity and encourage economic growth. The measures in the bill will provide a more balanced workplace relations system and safeguard workers' conditions. The bill will stop unions from vetoing greenfield agreements, which will help to further open up the economy and stop the unions railroading projects that create jobs and prosperity. Expensive industrial action will be addressed by ensuring that bargaining must have commenced before strike action can be taken. Improvements to individual flexibility arrangements will give workers greater scope to negotiate arrangements with their employers to meet their individual needs.
The bill will implement fairer and more effective right-of-entry laws that mean businesses can carry on without unnecessary disruption. Most importantly, the amendments in this bill will help build a more prosperous future for all Australians. It is all about prosperity and jobs growth; that is the focus of our government.
In the contribution by the member for Gorton, he claimed that the bill will be opposed by those opposite and is being opposed, because it is a continuation of this government's crusade against the employment conditions of workers across Australia. Nothing could be further from the truth. In light of the incredible U-turn we have seen from the Labor Party on so many of the amendments that they actually proposed when they were in government, it is disappointing that members opposite are now seeking to protect militant union behaviour which damages jobs and ordinary good men and women who are members of unions. I want to make one thing very clear in relation to this bill: this is not about any sort of slight on good men and women who are members of unions. I was once a member of a union, and the member that I was a member of did some very good work. But we must have a balanced economy. We must have unions that do the right thing by their workers but also do the right thing by the economy.
In my home state of Victoria and in the Geelong region—part of which I am honoured to represent as the member for Corangamite—there have been some clear issues with improper behaviour by trade union representatives which underscore why these amendments are required. Militant, unlawful behaviour by unions such as the Construction, Forestry, Mining and Energy Union, the CFMEU, is bad for business and it is bad for jobs. We have seen this time and time again across Australia, particularly in Victoria, where construction costs are, on average, 25 per cent to 30 per cent higher than anywhere else in Australia. This is damaging our economy in Victoria. This is damaging the prospects of ordinary men and women to do the best that they can do in the workplace.
In May last year the Supreme Court of Victoria found the CFMEU in contempt of court after it blockaded the Myer site in Melbourne despite an injunction preventing union members from going within 50 metres of the Grocon construction site. Militant union behaviour has also slowed progress on a very important development in Geelong. The Little Creatures brewery in Geelong, which finally opened late last year, was delayed significantly when protestors illegally blockaded the site. The Supreme Court ordered against unlawful protesting at the site by the CFMEU and the Australian Manufacturing Workers Union. Instead of holding the brewery to ransom, the unions should have been fighting for local jobs. They were stopping local jobs. They were stopping the good men and women of Geelong from working on this site. This sort of behaviour shows by unions must be held more accountable. They must operate within the law. What was so amazing was that at the time that this was happening to this wonderful new development delivering so many jobs for the people of Geelong, the Labor Party and local Labor members in the Geelong region stood by and said nothing.
Also in the region I represent Boral has endured a terrible time working on a very important project in Victoria—the multibillion dollar regional rail link. This is a project that the Commonwealth is contributing in excess of $3 billion to. It is a very important project for Geelong, for Ballarat and for Bendigo in connecting the people of those cities to Melbourne and giving greater certainty in terms of their commute into Melbourne. The CFMEU ran an orchestrated costly and illegal campaign against Boral, because Boral refused to give in to demands by the union to stop doing business with the Grocon group. Of course, this was very illegal—but, despite that, there was chaos on this site. There was chaos on the regional rail link project. Boral drivers were harassed and threatened and many of its clients were warned by union officials against doing business with Boral. This unlawful and damaging campaign cost Boral more than $10 million in lost sales and legal fees. And it is a very good reason why the royal commission into trade union conduct, currently being undertaken, is so vital and why it is so vital that the Australian Building and Construction Commissioner be re-introduced by our government—of course, another initiative that has been blocked by members opposite.
The Fair Work Amendment Bill will address the current imbalance in union workplace access rules. These changes will balance the right of employees to be represented in the workplace if they wish to be with the right of employers to conduct their business free from unnecessary disruption. The government sees right of entry as a specific statutory privilege to which conditions ought to apply; regrettably, some union bosses do not. In 2007, the Labor Party promised that there would be no changes to the union right-of-entry laws. Back then, the previous government, despite the many mistakes that the previous government made, actually recognised that this was bad for jobs and bad for business.
As we have heard from the member for Herbert, and I will repeat it again, deputy opposition leader Julia Gillard at the time actually said: 'We will make sure the current right-of-entry provisions stay. We understand that entering on the premises of an employer needs to happen in an orderly way. We will keep the right-of-entry provisions.' Here is another broken promise by former Prime Minister Julia Gillard. Labor, instead, gave unions much easier access to workplaces under the Fair Work Act, which of course were exploited. It did not do what it said it would do. It did not take the action that it said it would take. It recognised that this sort of conduct was disruptive, bad for productivity and bad for jobs, and breaking down important relations between employers and employees. And now we see another fabulous U-turn by members opposite, who only need to know how to say 'no'. Nearly every initiative we bring into this parliament, we see members opposite saying 'no'. They are even blocking their own savings measures. This is an opposition that say 'no' whenever it has an opportunity and now we see blatant hypocrisy at work here again. Our amendments will legislate Labor's promise which was never enacted. Given that the Labor Party in opposition, with the strong support of the union movement, supported this policy back in 2007, it is absolutely ludicrous for members opposite to be taking the stand that they are now taking.
Currently, right of entry for discussion purposes can occur when the relevant union is entitled to represent the industrial interests of the employees at the workplace. This means unions can enter and hold discussions even if they have no actual members at the workplace and no-one sought their presence. This is completely illogical. The bill will amend the provisions so that the ability for unions to enter a workplace is either tied to a union's recognised representative role at the workplace or employees at the workplace have requested the union's presence. A union will only be entitled to enter a workplace for discussion purposes if they are covered by an enterprise agreement or if they have been invited by a member or an employee they are entitled to represent.
The bill will also provide a mechanism for the Fair Work Commission to deal with disputes about excessive right-of-entry visits for discussion purposes. The previous government's amendments to the Fair Work Act in this area were drafted in a way that renders them largely ineffective—only able to be used in extreme circumstances. Our amendments will remove this restriction, ensuring the commission has the power to properly deal with excessive right-of-entry visits. The bill will also repeal the previous government's amendments that expanded right-of-entry rights even further by allowing for uninvited lunch room visits and requiring employers to pay for the cost of union boss visits to remote work sites. Those amendments give unions the right to insist on addressing workers in their lunchroom, even when the workers have not requested their presence and are not union members. This is unfair to the 87 per cent of private sector workers who are not union members and for all workers who just want to enjoy their lunchbreak uninterrupted by union games and union disruption. In many cases, that is what was going on in workplaces right around Australia. This is about restoring the balance; this is about restoring fairness.
And this is about implementing the measures by those opposite that they are now sitting there bleating about, because they are not consistent in their own principles. This bill will restore the arrangements which were previously in place, where union officials must comply with a reasonable request by the employer to hold discussions in a specific room.
Our policy includes a provision to create realistic time frames for new agreements or greenfields agreements. We want to ensure that enterprise agreement projects can be negotiated quickly to ensure infrastructure projects are not unnecessarily delayed. This has been a very big issue, one that the Fair Work Act review found was an absolutely destructive problem in terms of productivity and jobs growth. It is one where the former government's Fair Work Act review found—and I will quote from the review:
… the existing provisions effectively confer on a union (or unions) with coverage of a majority of prospective workers a significant capacity to frustrate the making of an appropriate greenfields agreement at all or at least in a timely way. Unions in this position are able to withhold agreement and effectively prevent the determination of terms and conditions in advance of a project commencing. In light of the evidence we were presented about the need for certainty over the labour costs associated with major projects, we are concerned—
And, as I said, I am quoting the Fair Work Act review—
at the risk of delays in greenfields agreement making that this entails.
In fact, the review found that these practices, where unions effectively operated to stall major infrastructure projects, potentially threatened future investment in major projects in Australia. It is extraordinary, once again, in light of the finding of the former government's review—of those opposite; of your review—that they are now sitting on their hands and again making a massive U-turn on an important principle.
This bill is important for jobs. This bill will provide confidence to employers and to investors. This bill is incredibly important for Australia's productivity and I commend the bill to the House.
The Fair Work Amendment Bill 2014 is an important contribution in what I see as a redirection in employer-employee relationships after six years of a union feeding frenzy that we saw sponsored and encouraged by the Rudd-Gillard government.
Of course, all of those good times for unionists do have to come to an end and, increasingly in a world of transparency and more rapid dissemination of some of their antics around the nation, there is a general shift away from the view that we need a patronising union body to be brokering arrangements between the worker and the boss constantly to an understanding that in 99 per cent of cases both employees and employers are actually there for mutual benefit. It is something that is lost on unions. Historically, while I think both sides of this chamber would recognise the very vital role that unions play, I guess we have all been involved in groups—and unions are effectively a group of people who sit down, devise a constitution and then spend inordinate amounts of time to work out how to get what they want out of the system.
There was a period in Australian history, as there was in many economies around the world, where union membership was compulsory. That meant it was compulsory that you handed over your money from your wallet to somebody else to spend as they saw fit, usually without telling you. We have moved on from that to a point where unions now engage in paralegal and sometimes, unfortunately, illegal activities, spending union members' resources on court cases—and that is the most obvious use of those resources that we see publicly—but also increasingly for their own private purposes and their own personal preferences. At that point, I think you have seen some kickback from the general public.
In the bill today, we are looking at a range of areas where union activity has done nothing to help workers—let us be honest—but everything to help the union rep and the person who has their hand in the till and access to the credit cards and the bank accounts. What we saw initially was a focus in greenfield mining sites. It was presumed to be, probably, the most effective area of union engagement, and this was the basic principle that, once you strike a deal on one mining site, you then take that deal, slap it on the table at the next mining location—regardless of the difference in conditions there—and simply start negotiation from that point and begin ratcheting up. What we were left with was senior union representatives able to negotiate, just for their mates, 20 days of annual leave a year, potentially 18 days of sick leave every year, 13 days of long service leave, and then a nine-day fortnight on top of that. Most Australians have not had 13 days of sick leave in their life.
Of course, the cloak of legitimacy that is used by this group over on the other side of the chamber is, 'Oh, we're doing it for the workers.' That is right: the workers who potentially know nothing about these antics and how the money is spent. Most Australians do not have any intimate engagement at all with unions, because the proportion who are paid-up union members is declining annually, but some of us do see union members at work. For me, it is usually around election time. It is usually someone who does not live in my community, who drives across from the other side of town in somebody else's vehicle, usually on somebody else's time, and then follows me round with a video camera and uploads it onto YouTube—all, of course, in the interests of the workers, because that is the cloak of legitimacy that these groups constantly fall back upon to legitimise their antics.
The result of that has been extraordinarily expensive power. You need look no further than the New South Wales situation, where up to 70 per cent of all of the expenditure in power is labour costs. That is right: in an area that should be almost fully automated, 70 per cent of costs are labour costs. It is just basically this ugly triumvirate that has been referred to in the press: compliant membership, militant unions and effectively public ownership allowing this whole unholy alliance to proceed. We go to Victoria and we see the Wonthaggi desalination plant, where not millions, not hundreds of millions, but billions of dollars was effectively poured down into these unhealthy agreements, into a desalination plant that ended up costing way more than it ever should have.
People often ask what happened to the boom times. Did we squander the boom times? So we have to almost forensically trace back the money flows through a period when Australia had, unchallenged, some of the best terms of trade it has had in its short history. Much of this money was simply siphoned off to union-friendly agreements struck by union-friendly Labor state governments. We need to remember that the corollary here is that ultimately the money did find its way into someone's pockets, and it most commonly found its way into an Australian's pocket, so at that level I guess there is some mitigating circumstance there. But in the end what we saw was that the money flowed to where the union strong arm could get it to flow to, not to where it was most productive.
If the money had flowed to Australian workers who were productive and ingenious, taking a progressive and forward-leaning view to making their industry more effective, then we would have seen even greater economic outcomes. But no: what we saw was simply the money being transferred to the union individual, who did as little as they could for as much money as possible. I do not deny that that is human nature, but in a system where the sand in the wheels is coming from a union working as hard as it possibly can to slow down the project, to make the project more expensive, of course you can potentially grind a great economy to a halt, or at least slow it down enormously.
So, if you are looking for what happened in the last 10 years, look no further than the infrastructure projects in our great states and our great capital cities, in particular, that cost probably 50 per cent more than they should have, that just had way too many paid up union people wandering around the workforce on salaries between $100,000 and $250,000 and doing little more than gazing over the worksite, passing on some orders and barely getting their hands dirty. We paid enough of those people through compliant management in the major construction firms to end up with projects that could not pay for themselves with the tolls that they were collecting or whatever other source of revenue they gained. What we ended up with were road projects that should have been a great advance for our capital cities that ended up having a cost-benefit ratio of between 1.01 and 1.05. That is barely viable when you are paying such extraordinary labour costs. As I have said, there is nothing wrong with a higher wage, but not if it is going to workers who are not making any productive difference whatsoever to the project.
The only way to get a project funded initially—usually with state Labor governments—was to enter into labour friendly agreements and union friendly agreements. This complacent attitude to working with unions, because it was the easiest way to get the job done—regardless of the cost—is where not tens or hundreds of millions of dollars but potentially billions of dollars of taxpayer funds were directed. That is why we can look back after years of Labor state governments and see infrastructure that, yes, was delivered but way more expensively than it should have been and way later than it should have been and, in the end, was barely cost effective—meaning that, for instance, the tolls on major road projects barely paid the exorbitant costs that had been accrued by the project.
The previous speaker alluded to rights of entry. As a person who does not deal intimately with unions, it comes as a bit of a surprise that, if there is a safety issue on site or some form of concern, there should not be every possible public resource devoted to addressing it. But I just do not understand the penchant that unions have with getting an extra set of their armpits into workers' lunchrooms. Can you think of the last place that you would want to encounter a union rep? It is in your lunchroom, in your lunch hour—and addressing you even if you have not invited them.
Well, it gets worse—because the Rudd-Gillard era led to intrusions and incursions by union House of reps into workplace lunchrooms even if they were not a union directly related to that field of enterprise and even if they had not been invited. Twenty years from now we will look back and be amazed at how the excesses of the union movement led to such an expensive bill for building infrastructure in this country. To be able to take protected union action, even before bargaining has begun, breaks virtually every rule of Australian fairness that ordinary citizens would find incredible. But, no, what we have here are individuals who have made being in a union a lifestyle and gaining access to the funds of those members a focus.
Let's be honest: there is always one Uncle Arthur in the organisation who reads the constitution and knows it backwards and gets their hands on the membership list and then works out how to get the credit card. That is how all organisations work. The fundamental problem here is that, if it leads to power prices being hundreds of millions of dollars higher than they need to be and if it leads to average residents paying $200 a year more for power than in an equivalent situation in another state, someone has to stand up and do something. You simply cannot let that unholy alliance of public ownership, militant unions and compliant management harm low-income individuals and low-income families. And to cloak oneself with the legitimacy of saying, 'It's for the worker,' is just not going to cut it anymore.
We need a review of the right of entry. We urgently need a review of greenfield site negotiation by unions—before it kills off new starts altogether—and, of course, we need to remember that taking protected union action for union purposes rather than for the benefit of the enterprise needs to come to an end. I think everyone here in this chamber—as would most Australians—would concede that there is an important role for unions to be protecting vulnerable workers. The great problem is that we cannot get them to stick to that, can we?
I am pleased to say that we have worked very, very hard in Queensland to ensure that the royal commission is livestreamed on the internet and after a number of interventions we were finally successful in ensuring that everyday Australians can watch and listen live online to some of the testimonials that are being delivered and, of course, to listen also to the unions defending themselves for their antics. It is vitally important and I congratulate the court for making all of these proceedings available to the general public. Australians deserve to be able to hear and see exactly what Australian unions have been up to. My next focus is on making sure that all submissions that are made to this royal commission are available online. Every submission made to this royal commission into union corruption should be available to every Australian if they choose to view them. It is a very important step in exposing some of the excesses that were fermented by the Rudd-Gillard government.
I have described what is, I think, the centrepiece of union activity, and that has been skimming as much as they possibly can from projects and setting up favourable deals for themselves. No-one has any disagreement with decent wages for workers, but that is not going to be achieved by the current union arrangements. This bill changes that. It makes important changes. They are the first of many. Let nobody say that this will in any way impact workers. If you speak to workers, you find that all they want is some flexibility to negotiate. It is all they have asked for and they never got it. After six years of Labor intransigence workers can look forward to a period where they can negotiate directly with employers—adult to adult; none of this union patronisation—and set up individual agreements based on the principle of flexibility, which Australians have always held onto strongly.
There have been times where we have seen these union antics on display, particularly in Melbourne. We have a number of members here from Melbourne, where union antics were on display in the last year. We have seen in the power sector in New South Wales the tragic result of leaving power exclusively in public hands—allowing militant unions to basically negotiate whatever agreements they want. As I said at the start of this speech, that time may well becoming to an end. This bill is the first small but significant contribution in that direction—more flexibility for workers, more productive greenfield agreements and, yes, we will not see an extra set of union armpits in the lunchroom of working sites around Australia from here. Let's pass this bill and make it law.
I would like to congratulate the member for his excellent address. As usual, he summed up the bill very well. I rise to close the debate on the Fair Work Amendment Bill 2014. I would obviously like to thank all the members for their contributions to this debate, particularly government members. This bill delivers on a range of commitments in our election policy, which was released well before the federal election—nothing more and nothing less. There have been a number of misconceptions about this bill during the debate, and it is important that I take this opportunity to set the record straight.
In relation to greenfields agreements, it is clear that, to assist economic growth, we need to encourage investment in new projects. Let me be clear: these are brand and projects that do not yet have any employees but need to get off the ground and running very quickly. Business will not invest when union bosses use their role in greenfields negotiations to effectively exercise a veto by demanding unsustainable wages and conditions. To address this and stimulate vital investment, the bill requires unions and employers to bargain for greenfields agreements in good faith and also provides a new optional three-month negotiation time frame for the making of these agreements.
There have been claims that these amendments exclude unions from the bargaining process. This is false. Employers will need to bargain for greenfields agreements with the union or unions that are able to represent the majority of future employees, as is currently the case under the act. If agreement cannot be reached within an optional three-month negotiation time frame, an employer will be able to take its proposed agreement to the independent umpire for their consideration against the relevant tests.
I also remind members that there are extensive measures in place to protect the interests of future employees. In addition to the existing approval requirements, including the public interest test and better-off-overall test, the amendments provide that greenfields agreements made under the new three-month negotiation process must also provide pay and conditions that are consistent with prevailing industry standards. These amendments balance the needs of business and employees and will help to create more investment, more projects and more jobs for the country.
Under the Fair Work Act union officials were given wide access to workplaces for discussions with employees. The changes to the right-of-entry provisions broke undertakings that the pre-Fair Work Act arrangements would be retained. This has led to a situation where some workplaces are experiencing an excessive number of visits, with the previous government's own Fair Work Act Review Panel citing examples of workplaces experiencing hundreds of visits per year. This bill protects the rights of workers to be represented in the workplace while balancing the right of employers to go about their business without unnecessary disruption.
Contrary to some members' claims, there will be no requirement for an employee to ask their employer or be identified to their employer if they wish the union to visit their workplace. If proof of an invitation to the workplace is required, the bill provides that a union may obtain an invitation certificate from the Fair Work Commission. This ensures that if employees wish to remain anonymous then they can. The bill does not impact on the ability for unions to enter workplaces for workplace health and safety reasons or to investigate possible breaches of industrial laws or instruments.
The bill restores balance by removing the strike-first talk-later loophole under the Fair Work Act. To be clear: it does not remove the right of employees to take protected industrial action. It does, however, require that bargaining has commenced before protected industrial action can be taken. This change was recommended by the previous government's Fair Work Act Review Panel and will help ensure that costly industrial action is not taken prematurely.
The proposed amendments relating to individual flexibility arrangements have been the subject of extensive commentary, much of which is highly misleading and does not stand up to scrutiny. Let me be absolutely clear: contrary to claims made by some members, the bill does not remove any of the existing protections when entering into an IFA under the Fair Work Act, nor does it change the existing requirement that the employee must be better off overall. The legislation will continue to require IFAs to be genuinely agreed to by the employee and employer. It will continue to require that the employee is better off overall compared to the relevant modern award or enterprise agreement.
Honourable members would not often hear me quote former Prime Minister Julia Gillard, but Ms Gillard, as the architect of the fair work laws, made it clear in a speech on 2 October 2009:
I want to make it clear, because there have been some wrong statements about this matter, IFAs are nothing like AWAs. Very far from it. Strict protections ensure that IFAs can never be used to disadvantage employees.
Every IFA must be genuinely agreed to and can only be made if the employee is better off overall than under the relevant award or agreement. And the Act provides an employee can terminate an IFA at any time.
That was true then and is still true today under this bill.
In addition, the bill will require that IFAs include a genuine-need statement recording the employee's view about how the IFA meets their genuine needs and results in them being better off overall. Existing protections to ensure an employee cannot be pressured or forced to agree to an IFA will also be retained, as will protections that prevent prospective employees being required to agree to an IFA in order to gain employment. Breaches of these arrangements can result in significant penalties including fines for the employer and compensation for the worker.
The reforms contained in this bill respond to overwhelming evidence of problems with the operation of the Fair Work Act. The measures remove some existing impediments to productivity and growth, helping to build a more stable, fair and prosperous future for Australia's workers, businesses and the economy. The amendments implement the coalition's publicly stated election policies—nothing more and nothing less—so I call on all members to support the passage of this bill and again thank all members who participated in the debate.