Monday, 11 September 2023
Fair Work Legislation Amendment (Closing Loopholes) Bill 2023; Second Reading
The new offence will carry with it penalties of $18 million for bodies corporate and 25 years for individuals. Other penalties will significantly increase to reflect the seriousness of the safety breaches. Recklessly exposing an individual to serious injury or death, a category 1 offence, will now carry a penalty of $15 million for bodies corporate, up from $3 million. Individuals face a $3 million fine, up from $600,000—and a $1.5 million fine for any other person. All other penalties in the WHS Act will increase by 39.03 per cent and will be indexed to CPI. A safe working environment is a right, and these increased penalties reflect the seriousness of violating that right.
Other measures in this bill that will improve and strengthen worker safety both inside and outside of the workplace include extending the functions of the Asbestos Safety and Eradication Agency to address silica related diseases, improving access to workplaces by workplace delegates for safety and compliance issues and making it unlawful to discriminate against any employee who is or was subject to family or domestic violence. Another significant measure in this bill is the criminalisation of wage theft. No longer can employers intentionally steal from the pay packets of their workers without serious consequences. Intentional underpayment will become a criminal offence with a maximum of 10 years imprisonment and a maximum fine of either three times the amount underpaid or $1,565,000 for an individual or $7,825,000 for a body corporate, whichever is greater. This government is serious about protecting the wages of Australians, and these significant penalties reflect that. Wage theft is theft, and it's time to treat it as such.
Unfortunately, there's not enough time to mention every measure contained in this bill that will improve the rights of workers. This includes measures that will protect workers from sham contracts, streamline workers compensation claims for first responders who sustain PTSD, improve worker access to enterprise agreements and strengthen the powers of the Fair Work Commission. The bill is the culmination of more than a year of consultation from across the Australian economy and is a continuation of our commitment as a government to protecting and strengthening the rights of workers. That was the Albanese Labor government's election commitment, and it's what good Labor governments do. I'm honoured to speak on this bill, and I commend the bill to the House.
It's a sad day to have to rise and oppose this radical legislation the government is proposing in relation to industrial relations. We see a government for the first time, I think in many decades, deliberately attempting to undermine the industrial relations framework, the compact between employer and employee in Australia, by falsely naming this bill the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 when, in the consultation the government has been speaking about for the last year, every industry and business sector in country without exception said to the government that these are not loopholes. This is a falsely named bill. This is a bill that is empowering unions only, and it's deliberately designed to do so.
When we look through the schedules of this bill and the explanatory memorandum of 500 pages, we learn even more about what the minister and the government are proposing, and it is perhaps the single greatest anti-productivity industrial relations bill in our nation's history. It is the word that cannot be mentioned by the Labor Party, productivity, and while they talk about pushing up wages, wages have to come with productivity or they are simply cost increases for consumers. That's what we're seeing in our economy, and that's what we see with this legislation before us.
There will be an increase in the cost of labour without even a thought about the anti-productivity measures that are contained within this bill. I'm only going to go through a few of them because I only have 15 minutes. The rush from this government to bring in this legislation without consultation and without proper consideration is another sign from the minister that he is not serious about enhancing productivity and lifting wages and increasing the prosperity of our economy. When you think about the economic climate that we're in, with the inflation crisis that the government speaks of every day, how is it timely to increase the cost of labour across the board, reduce productivity substantially from its already low base and have a complete breakdown in the regulatory framework between employer and employee in many critical sectors of the economy?
I'm going to go through just some of the things that this bill proposes to do. The trick, of course, with the minister—I'd ask any Australian to watch carefully what the minister does—is to see his demeanour and his attitude in this House. The minister has been exceptionally angry at the dispatch box for months, screaming. Who's he screaming at? There's nobody in here to scream at. He's talking about how 10-year criminal penalties will come in for everything and employers have got to be on notice. He's screaming about loopholes that are just not loopholes. He's not listening to any single person. Where is his anger coming from? We're talking about businesses that employ people. We're talking about the industrial relations framework of our country, and it's unseemly for a minister to be screaming at the dispatch box every single day, overcome by anger. But there is a source of that anger.
The source of that anger is the union movement, which has been frustrated for many decades now that it is not the dominant part of our labour compact in Australia. It is a diminishing market in the private sector. The strongest part of the union movement is in the public sector. They resent the fact that we have more employment in our economy than ever before that is not unionised. They resent the fact that people don't choose to join a union anymore. This minister and this bill are anti the future of our workforce and workplace in the sectors that have been innovative and creative.
The only sector that has broken off the shackles of a pretty difficult industrial relations system in Australia is the gig economy. Why would a minister for employment be so anti the gig economy? Why would a minister for employment describe the gig economy as a cancer when he was in opposition? The answer is because it can't be unionised and because it's a new form of work which is competing with the current employment system. It's a good form of work. Let's be overwhelmingly clear that the gig economy has provided the opportunity for more people to access more work on their terms than ever before because people can work when they want. They can work for the rate they want. They can choose to come in and come out of the workforce without having to comply with difficult and not suitable arrangements, and they do that by choice.
It's led to a revolution in employment in Australia. It means that, through the pandemic when the government had to shut down society for emergency reasons, we were able to survive because we had this gig economy, whereas, in the past, it would have been a very difficult endeavour. Workers are choosing to work in the gig economy as a second job because our cost of living is so high and because getting a house is priced out of people's reach. People need to access new and different forms of labour. They're not looking for a long-term work contract. They're not looking for conditions with holidays and all those other benefits. The minister is so keen on making one type of employment the only type of employment you're allowed to have, and, if it doesn't suit his needs, it's a loophole; if it doesn't suit his union mates and his union mates' requirements of union membership, then it's somehow illegal.
The gig economy is providing younger people and people from different backgrounds and poorer backgrounds with opportunities to work in ways they want to work, when they want to work, and to innovate in terms of their own employment. The trick here is that the minister is so anti such an innovation in our workforce and the fact that it is providing millions of people with the hours they want, when they want them and at the rates they want and that they're doing very well out of it. He acts like this is the Middle Ages or it's indentured labour. Nothing could be further from the truth. He knows the truth is that people are choosing to do this work because it's for their benefit and because they get the rate of pay that they're seeking and they get to work when they want to work. He understands that, but he acts like the gig economy is somehow engaging in slave labour. Nothing could be further from the truth, and yet he stands at that dispatch box screaming at this House as if people are doing the wrong thing with an innovation in the employment market.
There is a real sense here that the Labor Party is actually being the conservative party. They want to take our industrial relations framework back to the 19th and 18th centuries. They want to have the contest between capital and labour that Karl Marx spoke about. That's the kind of thing they want to have, when actually we're looking to the future now. We have new emerging forms of employment, labour and industrial relations that need new frameworks—frameworks that recognise productivity, frameworks that take the opportunity of these new innovations and don't try to shut them down or feel threatened by them because of power based erosion in the union movement but actually recognise that new generations want new and different ways of working and that they should be available for people in new and different contracts. That's the truth of what the Labor Party's objection to the gig economy is. That's the truth, and don't let this government tell any young person in this country that they want you to have rights or to have a minimum standard. That is the moral blackmail in the rhetoric that is the foil behind them being threatened by the fact they cannot unionise these new forms of employment and they cannot gain power from them.
That's the truth behind this bill. It is a poor truth, and it is something that the government should be ashamed to put their name to because gig platforms mean people can create their own businesses faster, can do their own types of work faster and can provide their own benefits and set their own terms and conditions. They're doing it without the need for the Minister for Employment and Workplace Relations to be involved. They don't need the government to be involved in this part. We have a huge industrial relations framework in this country that provides all the minimum protections. We are one of the most regulated industrial markets in the world. We are the highest wage jurisdiction in the world, and yet the government says they want to artificially put up the prices. That's the reason in this legislation when we see the attached costs at $9 billion in the government's own costings. I don't believe that's correct, and industry is telling us that these costs are conservative because they don't model the changes to independent contractors and other forms of work that the government is proposing in the bill. About the $9 billion in extra wages, the minister has said, 'Well, look, that's only a tiny fraction of the wages in the whole economy.'
This is at a time when we're in a cost-of-living crisis. This is at a time when we have zero productivity growth, although productivity has been the major challenge in our economy for decades. We are not getting any productivity growth, so any increase in the wages bill, especially the $9 billion—and it is a very conservative figure, in anybody's language—is going to pass on costs directly to the consumer. Every good and every service will be more expensive. The cost of living will be more expensive. The inflation crisis will be added to in a very high-cost jurisdiction like Australia. We have very high costs, and we have very high standards. The government is pursuing our increased wage agenda artificially with no conversation about productivity. You couldn't think of a worse thing to do at a worse time for the country's economy and for our future productivity and employment requirements.
Then you factor in the changes to other things that they describe as loopholes, like the casual arrangement that they have been going on about for a long time, first in opposition and now in government. They're threatened by the casual workforce. They have been trying to claim for years that the casualisation rate has increased, but the fact came out before the election, which was very inconvenient for the minister and this Labor Party, that the rate of casualise has maintained a stability. Over 30 years we have had about the same rate of casualisation in the economy, so they dropped that argument. To be fair to them, they're not mentioning it in this debate, but they are still fighting a war against the use of casuals. Why has the use of casuals in the economy come up in recent times? It is because every other avenue through the fair work system of employers and employees working things out has been narrowed down into less and less flexible structures, which means people have to use more casuals.
Casuals are a good thing for the people who take them on. They want to be casuals. That's the truth, and the minister has to acknowledge that. He says, 'I know most people won't take up these things, so there is no problem.' But why change it if it isn't a big problem? Why at six months should you factor in 11 factors—four sections and seven subsections in this legislation—for something that isn't a big problem for most of the workforce? People are going to benefit. They want to be casuals because they want higher rates of pay. The minister knows this, but he acts as if it is a major loophole. He knows it isn't a major loophole. He knows that a fraction of the problem here doesn't warrant the solution he has provided. Again, the agenda is very different.
Reducing the flexibility in our industrial relations systems by the use of casuals in so many sectors right now is going to do one thing—it is going to increase costs for business, which is going to increase costs for all consumers, which is going to have zero productivity benefits with only cost increases. And that's the theme that industry is pointing to across the board—big business organisations, small business organisations. The idea that small business is exempt from this is not accurate. The minister and the government might say it is, but of course small business is going to be impacted by many of the things here and many of the antiproductivity measures that are contained within this bill. Everybody uniformly has come to a view that this bill is going to be retrograde for business, retrograde for productivity, retrograde for the cost of living—and yet the government wanted to ram this through very quickly. Thankfully the Senate has agreed to delay this, and no agreement has yet been reached on the bill.
But I would say to the public: this is one of those issues where a government are using a set of fake arguments as a veneer for the true agenda of what they're trying to do in this bill. You have to look through some of the false claims they're making, such as that this is about safety. This bill is not about safety. Let's be very clear about that. Safety, of course, is an issue. Safety has to be addressed in many pieces of legislation. But the point of this bill, and the reason it's in front of us, has got nothing to do with safety. It is not going to achieve any safety improvements of any substantial benefit. That can be done through OH&S and other workplace relations matters, and it has been, over many, many years, and we have onerous regimes at federal and state level, as everyone in business knows. This is not a safety issue. The moral claims about why we're doing this bill are actually false.
The truth of this bill is that unions are under threat by modern workplaces, and they're unable to gain the cachet they need in the workplaces, and therefore the government, in a whole range of sectors, are going to smash through what they describe as loopholes but which are actually just the way the system has evolved—which is in most cases to the employee's benefit—and they're going to do that on behalf of the union movement. Some people might say that wouldn't matter. He says it's only a $9 billion cost, but actually the truth is that the cost could be two or three times that. It could be much higher when you factor in the changes to independent contractors. The government didn't even model the cost of the changes in many of the parts of this bill that they have put forward. That's why we have to have a close scrutiny of every single measure. They hadn't even modelled these costs, because they just don't care about independent contractors, even though the impact on independent contractors will be substantial under this bill.
Is the real cost going to be two times $9 billion or three times $9 billion? We simply don't know. But everybody agrees that $9 billion is not even a starting figure for the cost to business, without even a single excuse or skerrick of a reason that we're going to improve productivity. The government simply haven't even tried to make that argument, to be fair to them. They're not claiming any productivity improvements out of this bill. They know there are going to be none, and in fact there will be retrograde movement in productivity, which will therefore obviously make it more difficult and costly to employ people across the board.
It is an impossibly complex bill in front of us, and there is no time today to go through all of the different complexities and measures. The House has been given very little time to do so, and I've had very little time with it myself. This is only scratching the surface of the complexity that this bill represents. I support industry in what they're doing to expose the government's agenda, the real agenda that is hidden within this legislation. The minister, instead of shouting at this House, needs to come forward and talk with some reason about what he is up to and how this bill works, because everything that he points to as a loophole is not a loophole. The gig economy is not a loophole; casuals are not a loophole; independent contractors are not a loophole. None of these things are loopholes, and yet all of the measures in this bill tackle significant parts of the structure of our industrial relations framework, with immense cost and very little benefit—no benefit for employers, but no benefit for employees either.
It's a very sad day, because we haven't got the time today to go through all of the different things, but hopefully now, with the Australian people, the industry sectors will apply a lot of scrutiny to the provisions of this bill, because there is so much buried here in this legislation that the government is trying to get away with with this complex and unnecessary legislation. We would urge the government to simply drop this legislation. I just think that now is exactly the wrong time in the economic cycle to be artificially increasing wages through extreme measures against business, with no productivity gains. You couldn't get a worse time, for cost of living and inflation, to do this to the economy.
The Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 deals with a range of critically important issues. As the title suggests, it closes a range of loopholes. I want to dwell on loopholes for a moment, because loopholes arise in a wide range of contexts. They can arise when actions are taken by certain parties to get around legislation or regulation, or, alternatively, they can arise when a piece of legislation that was well-designed gets overtaken by events, when the nature of society or the nature of the economy changes. We see this all the time—for example, in relation to taxation, where we constantly refresh taxation bills in order to deal with both of the phenomena that I just described.
Now, those opposite never have a problem with that, but, when it comes to industrial relations, when it comes to workers' rights, then anything to do with closing loopholes or anything to do with adding to workers' fundamental rights will lead to the end of civilisation and the end of the economy! And of course it's all nonsense, as we've seen so many times before.
This bill deals with many important issues. It deals with casual employees' rights. Now, nobody on this side is suggesting that the existence of casual employees is a bad thing at all—of course not. What we are saying is that a loophole exists where people who work on a casual basis do so on a permanent basis in a way that is not actually reflective of the nature of their work and where that, often, denies them rights that are absolutely fundamental. It denies them protections and security. It denies them the ability to get a mortgage, for example. So that's the kind of loophole that we are trying to deal with, not with casual work per se.
We look at labour force agreements, not because labour force agreements per se are a bad thing—of course not. They can be very important for dealing with surge workforce requirements. They can be very important for dealing with specialist skills. But where they are used to undercut basic conditions, then there are loopholes that need to be dealt with.
We will look at the gig economy. We will look at wage theft. And I will deal with those in more detail.
But I want to start with some of the issues that have been raised by those opposite—indeed, that were raised by the speaker most immediately past, and that is the scare campaign. It's the later stage of a multistage scare campaign.
Let's go back to the election, where those opposite said that a $1-an-hour increase for those on the lowest wages, those most vulnerable in the economy, would see the sky fall in. Of course, since that time, we've seen the opposite. We've seen record jobs growth. So those opposite used ridiculous hyperbole and rhetoric during the election campaign. The electorate, fortunately, didn't buy it. And it hasn't led to any of the consequences that they said it would.
Let's go to the secure jobs, better pay legislation. We were told it would be the end of the economy, the end of employment. Of course, when it comes to the level of strikes, when it comes to wages—when it comes to all of the things that they said would be problematic—the reverse has ended up being true.
Now we hear this rhetoric about productivity: 'We need more flexibility to get productivity going.' Those opposite use 'flexibility' as a euphemism for insecurity, for the race to the bottom. The reality couldn't be further from the truth. The way to boost productivity in a sophisticated economy is not to worsen people's conditions; it's not to make them more insecure. The evidence is clear, and it is the reverse. When people feel more secure, they invest more in highly specialised skills. When people feel more secure, they are more likely to invest in the particular skills of a particular employer. We see, in high-productivity, high-wage economies, that there is a clear link between people who are paid more and are more secure and their willingness to invest in greater skills that are specific to a particular firm or a particular sector. There is considerable evidence in some contexts that, particularly for some people on very low incomes, increasing their remuneration can lead to a greater attachment to and a greater willingness to exert effort for the firm that is paying them greater wages and providing them with more security. So there is absolutely abundant evidence in many contexts, particularly for people who are starting off in a position of very poor and very insecure conditions, that an improvement in their conditions can actually lead to behaviours, in terms of their effort and their investment in specialised skills, that actually lead to greater productivity. That's at the individual level.
Let's look at the societal level. Let's look at the highest productivity economies—economies like those of Scandinavia and Germany, where we don't see people forced into a race to the bottom; we see the opposite. In the highest productivity economies—Scandinavia and Germany being two very good cases in point—we see people with high job security. Indeed, in Germany—the manufacturing powerhouse and the high-wage manufacturing economy of the OECD—we see, in fact, a whole bunch of governance arrangements where unions have positions on management boards. So what those opposite say will lead to productivity, in fact, is not the case. It's a highly simplified, highly caricatured version of a first-year economics textbook which suggests that we need to reduce wages and increase insecurity in order to boost company profits and reduce costs, but it doesn't fly in the real world of complicated, sophisticated industries where we need to empower workers and give workers incentives to invest in human capital—to invest in themselves—for the long run.
Then, of course, there are the broader benefits of the kinds of security we're talking about here. We don't want to create a whole class of people who are, through a contrivance, characterised as insecure workers, when it's not necessary for their work arrangements, so that they can't get a mortgage and can't take part in absolutely core social arrangements. Those opposite so often claim to be the party of home ownership, but—when we try to change arrangements that are fake contrivances, are unnecessary and force people to be characterised as insecure workers or casual workers when, in substance, they are long term, permanent part-time or full-time workers—those opposite are denying many people participation in many of these core social arrangements. When looking at productivity in a more holistic sense, again, those opposite take this route towards a race to the bottom and insecurity—a path which doesn't lead to the kinds of outcomes that they're claiming.
So let's start with casual employees, an absolutely critical part of this bill. Nobody is saying that casual workers shouldn't exist. There are many, many people who like the casual arrangements that they are offered, but we find that there is this set of people on permanent casual arrangements, whether they be in part-time arrangements or full-time arrangements, who have been put into a situation where they are called casual, but what they are experiencing are not the kinds of circumstances that casual arrangements were originally set up to provide. These people lose job security and peace of mind. Indeed, in 2021, the AMA called for the minimising of financial barriers for insecure workers. Insecure work is associated with a range of negative health outcomes, including mental ill-health, chronic disease and workplace injuries. Eight hundred and fifty thousand workers could be beneficially impacted by the pathways that are being offered by this bill, where, if you're on long-term arrangements that, in substance, are really ongoing, and you choose to translate that into ongoing employment, that is going to provide substantial benefits, in terms of your job security and your peace of mind, but also, as I mentioned earlier, your capacity in a broader sense to engage with a raft of social arrangements, such as getting a mortgage, which many people are currently excluded from, for no good reason.
Let's look at labour force agreements. Again, labour force agreements are often worthwhile. They can be a way in which firms can deal with the need for a surge in workforce numbers. They can be a way in which workforces can be supplemented by specialist arrangements. But labour force agreements, in some instances, can be used as a way of undercutting an enterprise agreement. Now, the arrangements that we're talking about in this bill will only apply in situations where there is an enterprise agreement. This bill will ensure that labour force agreements are not used for the predominant purpose of undercutting wages and conditions. That was never the intention of labour force agreements, and it is a highly inappropriate use of that structure.
Let me get on to the gig economy. I have spoken in favour of many aspects of the gig economy since my inaugural speech. I believe that there are many productivity-enhancing aspects of the gig economy, whether we look at the transport sector and point-to-point rides or meal delivery. But, despite the fact that the gig economy can in some instances lead to higher standards of service and greater efficiency in the utilisation of assets, such as cars in the case of Uber, there are concerning aspects of this sector.
For example, there is often a lack of transparency around remuneration. There have been many studies in the US showing that there are many workers on gig platforms are being paid less than the minimum wage, but that is unclear. We had the almost farcical situation in the last parliament where minister after minister was asked point blank, 'Can you guarantee that there aren't swathes of workers earning less the minimum wage,' and the response was 'it's complicated'. That level of lack of transparency is not appropriate. There are also, of course, a number of workplace safety issues arising in a number of contexts.
The minister has made it clear that we accept the technology, we accept the method of engagement, but we do need to strengthen the regulatory arrangements because the number of people on gig platforms is rising. As I said, there are many aspects of the gig economy which are beneficial both to workers and to the broader economy, but we need stronger and better arrangements.
At the moment, if you go to the Fair Work Commission and they ask, 'Are you an employee?' and you say no, you fall off the regulatory cliff. What this bill is doing and what this government is saying is we need a ramp, not a cliff. We need an intermediate set of arrangements that allow us to keep the best aspects of the gig economy to protect workers in an appropriate way.
So what does it look like? Firstly, the bill proposes an arrangement where there's a gateway with a number of questions. If you're on a digital platform, does your work have employee-like characteristics? That would be a test that would be considered across a number of criteria. Do you have low bargaining power? Do you have low levels of control over the work that you do? Are you being paid low wages, in the sense that they are less than you would be paid if you were an employee? In considering all of these criteria, the Fair Work Commission can come to a decision as to whether or not a subset of protections should be offered to somebody working on gig platform. It might be that, having made a determination, some workers—not everyone working on gig platforms—might be offered, for example, minimum rates of pay, but in a way that reflects the nature of the work on the gig platform. It may not be hourly, for example; it may be based on smaller time increments. Another right that gig workers might be able to receive is not to be unfairly deactivated from the platform. Again, that's entirely reasonable and would reflect a mechanism by which you could keep the fundamental structure of the platform while providing workers on that platform with a reasonable subset of rights.
These changes create a situation for those workers where they go from effectively having no guaranteed rights to having a subset of guaranteed rights that are appropriate for the context. We need to move away from the contrivance that any worker on the gig platform is an independent contractor or small business. It's a contrivance which has led to a situation where too many people don't get any protection at all, and there are possibly well over half a million people that could benefit from these kinds of protections.
Finally, there's wage theft—extremely important. It's almost so obvious that it doesn't need that much explanation. Of course, if an employee steals from their employer, then they are criminally liable. At the moment, the reverse is not true. Now, there are going to be instances where money isn't paid to a worker by accident or through some kind of error. But if it goes beyond that, if it goes beyond an error to the point where there was intention and it was theft, then there should be consequences for employers just as there are for employees.
So this bill is a reasonable balance. This bill closes loopholes that shouldn't be there. In contradiction to what those opposite are saying, it is not going to damage productivity. Productivity isn't a simple matter of reducing costs to employees. That is not what we see in the high-productivity economies of the world. This bill will actually help us move down the productivity journey, but in a way that provides reasonable protection for workers, subject to allowing casual workers, labour force agreements and the gig economy to continue, but in an appropriate way.
The measures in the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 will cost every Australian in one way or another, and it is, in spite of what we've heard, radical change. As we heard the CEO of the Minerals Council of Australia, Tania Constable, say at the Minerals Council dinner:
"Let's not sugarcoat it. These industrial relations changes are some of the most extreme interventionist workplace changes that have ever been proposed in Australia."
As I said, the measures will cost all Australians in one form or another. Already it has been estimated that it will cost Australians at least $9 billion. That's $9 billion, and that's just the first rough calculation. It is extraordinary that the government are quite happy that that's exactly what these laws will do. They've admitted it.
Australians are paying increased costs for everyday goods and services that they rely on currently, and we know that the government is intent on making those same Australians pay at least another $9 billion or more. At a time when the cost-of-living, the cost of doing business, energy costs, inflation and staff and housing shortages are such critical issues for Australians, there is no doubt this extra $9 billion—at least, and I think that's the tip of the iceberg—will have detrimental impacts with potential disruptions in the labour market itself, particularly in resource intense states like Western Australia. We have no doubt that there will be major impacts.
We know the minister can make further changes with a stroke of his pen in at least 32 instances throughout this bill. It concerns me greatly that it will be a legal nightmare for small business owners and employers generally. It is a very incredibly complex bill. You try being that small business trying to make your way through these 800-odd pages and asking, 'How does this affect me and my workplace and my business?' It is complex. It is incredibly complex. It significantly increases red tape, and it is costly in spite of what those opposite think.
It is a direct attack on tradies and other independent contractors on labour hire, the WA resources and mining sector, the gig economy, casual employment as well as casual employees—for instance in the IT area—and the specialists who may have to take a 20 per cent cut in their income as a result of this bill. It's actually an attack on their choices and their employment options that they choose, that are right for them and work for them in that business or sector.
It's the same with casual employment. It inevitably means fewer opportunities, particularly in small to medium businesses, for our young people and for those in rural and regional Australia who rely on these particular jobs. For smaller businesses in particular it means fewer opportunities for older people, who we are trying to get to come back into work and continue to work on terms that suit them as well. It's a two-way street. It certainly will not help employees who specifically want to work and do casual work and get that 25 per cent casual rate. In so many instances in my electorate, I see the impact of the great relationships between employers and employees. It's a mutually beneficial relationship built around what suits both. It's not just a one-way street. It suits both of those parties. Well, there are going to be fewer of those jobs available.
This bill will give unprecedented right of entry to the unions to go into businesses, and particularly some of our smaller businesses. These businesses won't have rights when, without notice, the union can arrive on their doorstep. These businesses will have no choice but to do as they're told, and unfortunately I see this as a strategy that embeds conflict in our workplaces where we've currently got employees and employers working together to get done what needs doing and people being remunerated for the work that they do. I meet so many employers who work so closely with their employees and are incredibly grateful that those people work with them, because they cannot achieve for that business without their really good employees, and to have that approach that separates the two is appalling.
I understand that this could also affect the disability sector in regional and rural areas. Again, we're trying desperately to provide the best possible outcomes and support for people in our areas, and we've already got our regional and rural pharmacies really struggling from cuts to their incomes. Now, given that some of these people are the small businesses who employ over 15 people—it's not really clear whether this legislation is just for small businesses under 15 employees or what; it's hard to tell from what's in this—those same businesses who actually employ over 15 people could well now have a union delegate walking into their pharmacies. Many of these small businesses employ so many local people, in flexible arrangements which are designed to suit both.
I'm really concerned about the impact this will have on our wonderful small businesses—the courageous people who mortgage their homes just to have a go, the ones who offer other Australians jobs. That's what they do, and this bill treats them almost as if they were the enemy instead of being the people who employ other Australians. They're already so badly affected by the higher and higher costs of doing business, whether it's energy, input costs, inflation, business interest rates or higher insurance premiums, just for a start. These are the same businesses that can't afford a dedicated HR person to go through all of these laws and say, 'What do we have to do as a small business?' Those people don't even know what's hit them yet. I am really concerned for them.
If a small-business employer can't afford to retain all or some of their workers because of measures in this bill, workers will lose their jobs. There isn't a never-ending bucket in these small businesses. Some work on very fine profit margins. I know a number of businesspeople and small-business people who work and pay their employees instead of themselves, so I shake my head at anything that adds to the problems for those businesses. It is really tough in many small businesses right now. They do not need this other layer of complexity and concern right at this moment. As I said, it is not clear at all who in small business will be impacted by what's in this bill. Who will be covered? Who won't be covered?
Dairy businesses, employing certain numbers of people who are milking cows and doing all sorts of other jobs on that farm, like rearing calves; vegetables, fruit, horticulture and viticulture small businesses; the cropping and shearing space—these are all the small businesses in rural and regional Australia that could well have the AWU at their gates with no notice, turning up at a farmhouse where the business is run out of the farmer's home. Labor members may not have set foot on a farm and may think that we all have separate offices that we run our businesses out of. No; it's our homes. So a delegate, if he or she has a suspicion—no actual evidence—can actually demand entry.
Delegates will have a virtual proxy law enforcement role where the employer, be they a farmer, a small-business owner or a major employer, doesn't have rights in this space. They can come into our homes and demand to inspect any work, any process or any object. They can interview any person. They can demand to inspect or copy any records or documents, including those on computers, and take samples of goods and substances. In the process, they can subject members of that family to interrogation. And can you imagine the amount of personal information that sits on those computers, given that they're part and parcel of how we operate? Who will have access to this, and what are the responsibilities of those people as to the information they have access to and what they actually do with it? That small-business owner or farmer has no right of refusal or legal representation at that time. I see this as a really gross, ugly invasion and trampling of individual rights in a country that is supposed to be a democracy.
There's another really serious issue here, because we, the farmers, are clearly targets. Minister Burke said so last week in question time when he actually accused us, the farmers of this country, of wage theft. He also expressed his contempt for the NFF. So, unfortunately, we need to expect that the unions will be knocking on our doors as a result of this. This is coming from a minister who, in this bill, has given himself extraordinary powers. The constant change potential, the uncertainty that that creates for business—I think he can unilaterally and independently change the regulations in at least 32 cases. That happens without parliamentary scrutiny or debate. Who knows what's going to be changed next?
The government also needs to clarify for our farmers: is it our biosecurity on our properties that we work so hard to protect—we guard it jealously, and what we do is extraordinary—which has priority? Which has priority: our biosecurity and those gates that we have with the notice that says, 'You must contact us before you come on'? Who has rights? What right has priority: that of biosecurity on our property or those who choose to turn up because they have a suspicion that something's happening on our properties? We've seen the threat of foot-and-mouth disease, so I wonder: where does biosecurity sit in relation to this bill when you're talking about farmers? I also have some serious concerns that I'll be closely watching around what happens in the transport and logistics space. I will keep a close eye on what happens here.
Another sector that will be under the pump will be the building and construction industry, especially, I suspect, residential construction sectors. There are thousands—I think 400,000—contracted independent tradies in that sector. At a time when we're seeing building and construction companies going into administration at a rate we've not seen before in our history, this increases the complexity and cost of construction. I'm already aware of builders in the South West who've historically delivered fixed-price contracts, and they've actually delivered them in spite of the fact that it has cost them to do so. They've had to absorb those additional inflationary costs in their own business, so they're already not making profits. We're going to find out very quickly what 'same job, same pay' actually means in this space and how that interacts with tier 1 and tier 2 type contracts and the current arrangements that exist for delivering major projects.
We've got a whole lot of different subbies working on various parts of the work at any given time, and they have to come and go because the weather changes. The job itself changes when something doesn't turn up on time or there's a shortage, as we've seen, in the logistics and supply chains. There are any number of hold-ups and changes that have to be made as a project is being built, and flexibility is the absolute key. Labour hire and subbies are necessities on these sites. I think we need to be measuring how much this bill and the measures in it will add to construction costs not just on major projects but also for new homeowners building their first, new or other home and what that will do across the board for the cost of compliance. I think there are some really significant potential impacts from this bill.
We've even seen our sporting codes expressing concerns about what it's going to do to the arrangements they have to keep their sporting codes operating. That's just another one that we keep hearing about. I think we certainly need to keep a very close eye on what the numbers are in traineeships and apprenticeships and how the measures in this bill will impact on the decisions that employers will make in this space.
Like most members in this House, I have some very good businesses in my patch. I think they have a right to be very concerned about the judgements that are being made in this bill—that these businesses are not caring and are not actually providing extraordinary opportunities for the people who work with them and for them, nor the remuneration that those people receive for the work that they do. That relationship between employer and employee is so critical, and anything that interferes with that in a detrimental way should be of concern to everybody in this place. As we see so frequently, when I talk to my employers, especially those who right now can't even get employees, they are desperate. They just need people who can come and work with them and for them. When the employers do find them and they do come and they do their best, the employers are incredibly grateful for that work. They train the employees, and they put time and effort into getting these people to where they need them to be. We need to be fostering that type of relationship in everything that happens in this House, and anything that comes between those relationships is of great concern to me.
Lucy is a 63-year-old aged care educator in my electorate who owns a lovely single-fronted terrace with a nice garden, located in Malvern. She walks her dog around the neighbourhood and lives a simple life within her means. In closer discussion she frets, though, about meeting her mortgage repayments, because she has been employed on a casual basis for the past 10 years on recurrent rolling contracts. Without regular work she is at risk of losing her home, something she came close to during the early days of the pandemic when her work dried up. At her age it is not easy to find another job. This is her reward for working her whole life and paying her taxes. If Lucy could go into permanent work she would, but that pathway has evaporated for her. As a result she dips into her super to pay her mortgage when she can't make ends meet, robbing Peter to pay Paul.
Under our workplace reforms if you are working regular and predictable hours like Lucy and you want to be permanent, you will be able to do so. It will be voluntary, initiated by the worker. No-one will be forced to convert to permanent and lose their casual loading. Employees in medium and large businesses will be able to access permanent work after six months, while those working in small businesses will after 12 months. The worker gains financial security and feels valued, while the business retains an experienced worker. Our society gains by living its values of the fair go while dialling down the vulnerability too many Australians face. This measure will benefit around 850,000 casual workers. Bills aren't casual; they are a certainty, so why shouldn't people working regular hours have the same certainty about their next pay cheque?
While Lucy is at the end of her working life, she keeps company with younger people who are part of that growing army of 2.7 million casuals and 320,000 labour hire workers across Australia. These are the truckies who move our goods around from farm to table, those who stack our shelves, the workers who keep residential aged care homes functioning, those who work in childcare centres and those who send us overseas and then bring us back again. We complain bitterly when services are not up to scratch, flights are delayed, bags are late or lost and wait times at call centres blow out, but we do not probe as to why, despite booming profits, customer service is so poor.
Australians can accept bumper profits even during tough economic periods, provided that customer service standards are not just upheld but in fact exceeded. When service delivery tanks in the face of bloated corporate profits, Australians see red. The exceptional service Australians rightfully expect is delivered not by robots but by people, and those people have not been treated fairly for some time. It is not uncommon for stewards on the same flight to have different wages or for baggage handlers to be outsourced to labour hire firms who undercut EBAs. It may explain why the customer experience is so variable in Australian airports. Every permutation of flights on time, delayed or cancelled has become the norm rather than the exception. What has emerged in Australia is that large companies have exploited the labour hire loophole to undercut EBAs they've already signed up to. Labour hire workers are brought in at lower pay to perform the same work. It makes a mockery of the EBA process.
This amendment will give the Fair Work Commission the powers to require labour hire employees be paid at least the wages of the EBA. Some exemptions will apply for small businesses. The explosion of gig workers, some of whom have died in the course of their work, like food delivery workers, is the focus of our minimum standards. Gig workers enjoy their flexibility, but they also want to work free from exploitation and in a safe environment so they can go home rather than to hospital or worse. Low pay drives shortcuts in safety, which can lead to life-limiting choices and consequences. This needs to change. I don't want to live in a society with a growing underclass of working poor; neither do my constituents. I've seen it overseas, where tips pay the bills. It does not align with our values. The mentality of the disposable worker needs to stop.
The amendment will allow the Fair Work Commission to set minimum standards for gig workers. These minimum standards may cover payment terms, deductions, insurance and cost recovery but not rostering or work health and safety, which falls under other legislation. One of my favourite elements of this bill is around criminalising wage theft. Wage theft is rampant, and those opposite were complicit in allowing it to take root like a toxic weed. They even cultivated it by taking years to acknowledge the problem and then introducing legislation only to vote down their own legislation in the Senate. They effectively switched on a green flashing light for wage theft.
Wage theft is criminalised in Victoria and Queensland because they got sick of waiting for the previous government to act. However, we need national consistency on this issue to close this loophole. Heftier penalties will apply, with jail time of up to 10 years and financial penalties calculated in the multiples. The deterrent effect of criminalising wage theft will be profound. It sends a message to employers to tighten up their processes. A class action against a Victorian health network was found in favour of 1,500 junior doctors who had been chronically underpaid their overtime between 2015 and 2021. It was the norm when I went through my early training. We just took it on the chin and took it in our hip pocket, but not this generation. If it's happening to our brightest, then it's happening to many others, and it shouldn't take court action to rectify. We will be criminalising wage theft with a stroke of our pen.
I have previously written about work health and safety in health care in the context of breaches during the early days of the pandemic. My research paper called Hearing the voices of Australian healthcare workers during the COVID-19 pandemic had testimony from Australian healthcare workers noting that a few of them actually died from exposure to COVID in the course of their work. These were nurses. Industrial manslaughter is a crime in Victoria, and it is long overdue that it become nationally consistent, again to act as a powerful lever to lift work health and safety standards. Penalties will be $18 million for a body corporate and 25 years for an individual. One hundred and sixty people died at work in 2022. That's 160 too many.
It will be unlawful to discriminate against a worker who has disclosed that they have been subject to family and domestic violence, complementing the 10 days of paid family and domestic violence leave that we have already legislated. This acknowledges that domestic violence affects people's cognition—their ability to think, to perform and to be productive. It destabilises them, but it should not result in termination of employment at a time when people need support. When workers are not happy, especially in the service industries, it follows that the customer experience will suffer. The same applies to health care. Doctors and nurses who do not feel valued or respected do not give their best. It is difficult to quantify, but the end result is the same: service delivery suffers. Aged care is no different, and, when a heavily casualised workforce moved between aged-care centres to make ends meet, infection control became the casualty, leading to aged-care outbreaks that were deadly, and these in turn spilt into the community, prolonging lockdowns.
The health and economic impact of precarious work is real. The chronic erosion of pay and conditions is contributing to inequality, which not only denies workers social mobility but presents a growing threat to societal stability. It is not about having a competitive business sector versus fair work and fair pay for people. You can have both. Indeed Germany has examples of industries where this applies. It is not a zero-sum game. For too long, workers have been seen as a problem to be managed rather than the asset that they are. There are a raft of changes in this bill, but the overall intent is clear: we seek to breathe life and put teeth into our election promise of secure work and better pay. I commend this bill to the House.
When I was a young boy and I had nasty medicine to take, my mother had an interesting ploy. She'd put the disgusting pill on a teaspoon of jam and say, 'Eat it up.' It was a bitter pill to swallow, but the jam was sweet enough that I would take the medicine. I've got to tell you that I think this industrial relations bill, the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023, is exactly that. It's a bitter pill wrapped up in a bit of sweet jam. There are a number of things in it that are difficult for anyone to argue against, but there are a whole lot of extra bitter pills that sit within it that will attack dynamism, attack decision-making and attack flexibility in the Australian workforce, and yet those attributes are what we need in Australia at the moment.
It is a fast-changing world. We have the advent of artificial intelligence and of instant communications, and we all use so many of these applications even on our phones that sit within our pocket, and businesses use them too. But along the way they are getting tied up in red tape. I can't tell you the number of business people I've known—tradies, for instance—that have worked their way up and started to employ people around them. They say, 'I've got six or eight on the workforce.' Next time I run into them, I ask, 'How's it going?' 'Oh, I got rid of them all. Just me now.' 'Why is that?' 'Because I was just working my backside off to fill up their envelopes. They were doing a good job, I was doing a good job, and the company was doing a good job, but I had no life. I was working all week and all weekend. I can earn more money and keep more of my own money by just working on my own.' What a slap in the face for entrepreneurism.
We have this bill. In total there are about 800 pages, with the points of clarity being almost 300 pages in the bill, I think. It was slapped on us at a minute's notice, virtually, in this parliament, and we are now expected to debate it. We've had a little bit longer to look at it now, and of course the longer we have it, the more we look at it and the more bitter pills we find within it. There are those skerricks of jam, like the clauses around family and domestic violence, for instance, which I would have no trouble supporting at all, except they sit within this other structure. Then there's wages theft, and I heard the previous speaker talking about wages theft. Well, wages theft is illegal already. You can't go around stealing other people's property, and in most cases, if it's done with intent, it will be a criminal offence. Somehow things will be said about the opposition, so people like me who see all the nasty things within this bill that I will be compelled to vote against. The government will say, 'Rowan Ramsey, the member for Grey, is in favour of wages theft.' Nothing could be further from the truth, but as I say, with nearly 300 pages of legislation and 500 pages of explanatory notes, no wonder it is a complex bill—it is way over complex.
If the minister really wanted to achieve change he would split them up and we could come at these issues one at a time. But instead he has thrown this great grab bag together, and I am talking about complexity. You look at a businessperson who has seven, eight, 15, even 70 people on the books, and already the Fair Work Act has 1,200 pages. It's no wonder why people sometimes get it wrong when the act is almost impossible to sort through to find out what it is you are meant to be doing. It is a while since I've employed people outside the current job that I have, but even then—and that was 16 years ago—on my farm, I was reading through pages and pages making sure that we got all the employment details right. It's just got worse and worse and worse, and that's why the movers and shakers in our society are saying, 'No more!' The Treasurer said in March that we will be 40 per cent poorer if we don't raise productivity. In a bill that has nearly 300 pages and another 500 pages of explanatory notes, given the subject that the Treasurer is keen to talk about, which is raising productivity in Australia, they can fit in everything else, but they can't fit anything in about productivity. There is not one single thing in this bill that will raise productivity in Australia. In fact, they are just making it harder for us to encourage the dynamism and the innovation that we need. If you wanted to ossify your business sector, if you wanted to ossify our economy, the best thing to do is go down to the supermarket and get yourself a trolley full of red tape. That's what we've got in this bill, a trolley full of red tape. Unsurprisingly, having been duped on tranche 1 of the industrial relations reform, businesses are arcing up, kicking back and saying: 'Enough's enough. If you want us to carry Australia'—and both sides of parliament do want that—'then you need to cut us a break.'
But of course the big ticket here, the really big, bitter pill that sits within this sticky jam, is the right of access for unions, unannounced. Bang, bang on the door, and in they come. All they have to do is suspect that the employer is doing the wrong thing, but they don't actually have to prove that suspicion to anyone. They can just go to the Fair Work Commission and say: 'We suspect that Joe Blow isn't doing the right thing.' 'Why do you suspect that?' 'Oh well, he looks a bit dodgy to me. What do you think?' Then it's bang, bang on the door, and in they come. And that door might be the door to your home. It might be any of our homes. Many businesses are run from home today. So the union jackboots are at your door, just when you're trying to get the kids off to school in the morning. Or they could be out on our farms, bringing weeds onto the farm, threatening biosecurity. We don't know. We don't have the ability to say, before they come into the house: 'Have you washed your hands? Have you washed your feet? Have you been on a farm recently?' These are outrageous interventions into our lives, into our businesses, as people go about their lawful business.
Embedded within the bill—and the government has dropped this language now—is the 'same job, same pay' tenet that of course the Minerals Council has led the charge against. The other day I was on a farm property visiting a shearing gang. I've got to tell you that shearing is one of the last industries in Australia where people actually get paid for what they do. They get paid well. A good shearer can probably knock out a thousand bucks a day quite easily. But they get paid for what they do. They work hard. They deserve it. I don't make any bones about it. But imagine, if we started paying shearers by the hour, how many sheep would get shorn.
Of course, the government has already moved in this area, with the fruit-picking industry, and put in minimum rates of pay. When I was a young man, in school, I used to pick fruit. We used to go up the Riverland, where my sister lived, and pick fruit. I was paid piecework there, by the number of apricots that I picked in the day, not for just rolling up in the morning. The fact is that, under these proposals, it's so difficult to actually reward your best workers. We want our best workers to hang around. We don't want to lose them to the mining industry. The way to keep them is to pay them a bit more than the ones that you could probably do without because they're not going quite as fast or efficiently or whatever. But this comes in the way of that.
There is another thing that seems to have crept back in here, another one of those bitter pills. Mr Deputy Speaker Goodenough, I think you would well remember the fight that we had in this place before about the Road Safety Remuneration Tribunal. I've just been to an event for truckies up in the Dorothy Tangney room. Interestingly enough, it wasn't discussed by the minister up there, and neither were any of these incursions. But the idea that the minister and Fair Work can actually view up and down the pipeline of the trucking industry is a thinly veiled attempt to get rid of the little operators—the ones that have full flexibility because they're driving the trucks with their family, their cousins or whatever, and doing a great job out there—to try and get them run over by the big businesses that will sign the deals to allow the unions in the door. Why would you want that? It all comes back this: that's what funds the Labor Party. No wonder they're in favour of this legislation. That's how they get around. They dress these bitter pills up as being good for the public. One mob it is really good for is the Labor Party.
Let's talk about gig workers. Sure, everybody should be paid properly for what they do. But one of the reasons that these platforms have workers is that they really, really, really like the flexibility that they offer. Whether they come to work that day or not might depend on other things in their life. They are free to clock on or clock off, to pick up fares or not—as an Uber driver, but that's not the only platform that gig workers use, of course. If we're going to start intervening in that, just who is damaged? You might get a better pay deal for them, but you might get a lot less work, as well. It's a trade-off.
Like I say, there are good things in the legislation. I'm not saying that we don't need to take care of all our workers. After all, as someone who has employed workers for most of their life, the last thing I want to do is lose my good workers. Generally speaking, employers will work to keep good employees and go above and beyond the minimum standard. It's not guaranteed at every level, but to think there are not laws against that already—there are minimum standards in place, through our award system, that mean there is a minimum rate of pay in Australia and it must be paid.
Not all of the groups that I'm going to name have been hostile to the government; in fact, on the first tranche, which I was a bit surprised at, they virtually worked with the government to bring in these reforms, but the Australian Chamber of Commerce and Industry, the Australian Industry Group and the Council of Small Business Organisations Australia have come out vehemently opposed to this tranche of industrial reform. That's what the government calls it—reform. I'm not sure that 'reform' is the correct word.
I can see some good in the legislation, but very, very little. I haven't even touched on all of the points that I find offensive within it. I hear giggles coming from the other side there. If anyone thinks this is a laughing matter, they should look at what funds the Australian economy. What are the businesses that the Australian economy runs on? Where does the money to fund all that government expenditure come from? It either comes from companies or it comes from the people that they pay wages to, who contribute back to the economy through their income taxes.
This is bad legislation. It has Labor Party fingerprints all over it. It's about paying off their pay masters—the people that fund their campaigns—and I'm totally opposed to it.
I rise to support the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023. The bill is about fairness. It's about protecting Australian workers from having their pay undercut. It's about closing loopholes, which will make a life-changing difference for the group of workers that will be supported through these changes. These are reasonable changes.
While we all recognise the changes we're seeing in what work can look like, everyone deserves to work in safe conditions and to earn a decent wage. That is a basic and unobjectionable fact. This legislation delivers on a commitment that our government took to the last election. In fact, we announced it as a policy 2½ years ago, and we have remained steadfast in making sure we see these reasonable and practical changes happen. We promised to get wages moving, and to do that we need to close the loopholes that are undermining the wages and conditions of workers. To that end, this bill makes a series of changes, and particularly I want to highlight three elements of the bill: criminalising wage theft, properly defining 'casual work' so casuals aren't being exploited, and making sure gig workers aren't being ripped off.
Since we've come to government, I know the minister has undertaken extensive consultation on the design of these measures. The government has consulted with business groups, unions, employers, small-business representatives, academics and civil society to make sure we are getting the balance right. While we've been doing all this work, those opposite have called this a made-up issue. Once again, they've demonstrated that they don't care—they are prepared to show disdain for workers and the conditions under which Australian workers have to operate. Regardless of what the other side does or says, our government is prepared to stand up for fair rights for workers. That is what we are doing—standing up for fair rights. We are ensuring that loopholes that undermine job security and wages are closed, because that is the fair, reasonable and right thing to do.
There's been some discussion in the community, led by some business groups, attempting to portray the changes that we're making as radical. In fact, these are not radical changes. They are sensible changes that will make a difference for workers and, through them, the families of those workers who have been short-changed by loopholes in the past. Our government is making the current laws work more effectively.
The reforms our government will introduce for gig workers with the passage of this bill will require that workers have some minimum standards, benchmarks, against existing award rates when they are working in a way that is similar to employees.
The wage theft reforms will simply strengthen the enforcement of existing rates of pay. This is a good thing. It's a move that I would think most employers out there would welcome because they don't want to be undercut by the bad apples who are doing the wrong thing.
The government's new definition of casual employment will clarify what was always intended with casual work. If you are working regular and predictable hours and you want to become permanent, that pathway is available to you. These laws will strengthen the current workplace relations system, providing certainty, fairness and a level playing field for workers and for businesses.
As I've said, the bill includes a number of measures, and I don't propose to go through them all at this stage. But I do want to highlight some of them that I know will be of particular interest to people in my community and, I think, to Australians more widely. The first focuses on criminalising wage theft, introducing a criminal offence for the intentional underpayment of employees' wages and certain entitlements, and increasing the penalties for civil underpayment breaches. This will include a new way for a court to calculate penalties with the inclusion of the value of the underpayment option in situations where that value exceeds the available maximum penalty. At the moment, if a worker steals from the till, it's a criminal offence. But, in many parts of Australia, if an employer steals for a worker's pay packet, it's not. That is not a tenable situation. I would think that anyone here or in our communities would agree that that is simply not fair. Employers who intentionally steal from their workers should face criminal penalties.
I am pleased that two state Labor governments, Queensland and my home state of Victoria, have already criminalised wage theft. They had to do that because they got sick of waiting for the previous Liberal government to act. As our government looks to making this change, we are mindful, of course, of not inadvertently watering down those wage theft laws which have already been put in place in the states. But we are doing this, we are making this national change, because Australia needs a national wage theft system to make sure we are ending the rip-offs. If passed, this particular set of changes would commence from 1 January 2025. That would allow time for affected agencies to prepare for the new regime.
On the topic of the previous government, I note that, shamefully, during their nine years in office they did nothing to stop the wage theft epidemic—nothing. It took them years to even get to the stage of acknowledging that there might be a problem with wage theft. Eventually, they brought forward some half-hearted legislation that made it pretty clear that they were not interested. And then, when that got to the Senate, they voted against their own legislation. They took their draft law, they tore it up and they threw it away. They couldn't get enough support for their plans because they didn't make sure that they weren't cutting workers' pay and conditions. This sent a clear message to those people, and I don't think there are many of them, who do do the wrong thing—people who were making wage theft a practice. It said, 'That's okay; the federal government is not going to do anything about that.' The message we are sending is clear—that it's not okay. Workers deserve to be paid, and that is an obvious thing.
We do see wage underpayment continuing to feature in Australian workplaces. Obviously, the people who lose from this are workers, and not just the individuals; it is also workers' families and other dependents. Workers are left out of pocket. As I said before, it also forces businesses that are doing the right thing—those businesses who do follow the law—to compete with businesses that are trying to get an unfair advantage.
I know that many people will have seen media reporting and coverage of cases of wage theft because it has been extensive. This parliament has considered the issue through several inquiries, including the 2022 Senate inquiry into the unlawful underpayment of employees' remuneration. This is a well-canvassed issue. What hasn't been well canvassed previously is the solution, and that's what this government and this legislation is intended to do. This is a government that is focused on supporting Australians and making sure that people are treated reasonably and fairly, that they are safe and that they are earning a decent wage.
Another reform that forms part of this bill relates to the treatment of gig economy workers, also known as employee-like workers. Our government will extend the powers of the Fair Work Commission to include gig forms of work, better protecting people in new forms of work from exploitation and dangerous working conditions. I do accept, as the government does, that the way people work has changed and is changing, that some people do want to work in a flexible way for platforms. The relationships some workers have to employers is different. None of that, however, should be an excuse for poor treatment or underpayment. So under these new laws, the Fair Work Commission will be able to make orders for minimum standards for new forms of work, such as gig work.
Let me be clear: we are not trying to turn people into employees when they don't want to be employees. I do understand that some gig workers like the flexibility from using technology, and this won't change under our laws. But we do know that there is a direct link between low rates of pay and safety that leads to situations where workers may have to take risks so that they can get more work because they're struggling to make ends meet. Just because someone is working in the gig economy, doesn't mean they should end up being paid less than they would if they'd been an employee.
To put it really starkly, in some cases what we see at the moment is 19th century conditions with 21st century technology. It's not working. It's not good for workers or for businesses, and I don't think it's good for consumers either. I don't think the people who also want to take advantage of the flexibility of this type of work through the products they're consuming want the people who are delivering those goods and services to them to be underpaid and exploited. We can all agree that the conditions of work should meet today's standards, should meet basic principles when it comes to what is fair and reasonable treatment and pay. We do not want to become a country where you have to rely on tips to make ends meet. That is not the Australian way.
Gig workers are often engaged as independent contractors, which means under the Fair Work Act they do not receive rights and entitlements. It has been highlighted over time that some of these workers can receive less pay than they would if they were paid under the award safety net, and they have no protections if they lose their work unfairly. So these changes will give the Fair Work Commission a new power to set minimum standards for gig workers performing digital platform work. It will be for the commission to determine if they are mandatory and therefore enforceable with civil penalties or for guidance only. The commission will only be able to set minimum standards for independent contractors who are either performing work as part of the gig economy or have one or more characteristics that are employee-like, such as low bargaining power, low authority over their work or receiving remuneration at or below the rate of comparable employees. The bill will also enable registered organisations representing gig workers to make collective agreements with digital labour platforms.
Another measure that will support gig workers is that they'll have new protections from unfair deactivation if they've been working for a digital labour platform on a regular basis for six months. Under the proposed changes, eligible gig workers would be able to apply to the Fair Work Commission to seek a remedy of reinstatement if they consider their deactivation was unfair. Alongside this change, there will be a new digital labour platform deactivation code that sets out clearly the processes that platforms must follow when deactivating a worker—changes that will support workers and provide clarity for platforms. These are good changes, and they are in fact overdue. It is proposed that these changes would commence from 1 July 2024.
The third reform that forms part of this bill that I want to highlight relates to casual employment. Like the other measures I've spoken about, it's a sensible, commonsense proposal being put forward legislating a fair, objective definition to determine when an employee can be classed as casual. This would close a loophole that currently leaves people stuck as casuals even if in fact they are working permanent, regular hours. It will help to support job security and the benefits that come with that. No-one will be forced to convert from casual to permanent if they don't want to. Some people do in fact prefer to remain casual and to receive the casual loading that comes with that. But for some people there are advantages that come from being a more permanent worker, such as improved access to leave entitlements and more financial security. We know that for many people rent isn't casual. Electricity, gas and water bills aren't casual. Your council rate bill is not casual. School fees aren't casual. Yet for people who are in casual work, the nature of that work can mean they face uncertainty and pressure around meeting a number of those needs.
This measure will not see a net cost on business. Employers will pay a loading if someone is casual and they will pay leave entitlements if someone is permanent; they do not have to pay both. Again, what our government is aiming to do with these changes is to make sure we are supporting workers, we are supporting their families and we are giving them greater certainty. Again, these are reasonable measures that I know will be welcome in the community because people understand that when we treat our workers well, we all do better. That is good for our community as a whole.
So I will end my remarks where I started them: on the issue of fairness. Fairness is a value that Australians care about deeply. It's one of those things we hold up. We are the country of the fair go. Australia is a fair country. It's part of the fabric of what we consider makes up our country. Well, fairness has to extend to how we treat workers in this country. We do know that for too long loopholes in workplaces have meant that some workers have been let down. They have not been treated fairly. Their wages have been undermined, as have their conditions. They have been forced to work in unsafe conditions. Every worker deserves to work in good and safe conditions. Every worker deserves to earn a decent wage. By making the current laws work more effectively, we can support the segment of workers who have been worse off by casual work, by work in the gig economy and by wage theft. That's why parliament needs to support this bill—because it will make a real difference to these workers' lives and because it will mean that our country lives up to that value of fairness that we like to hold up and extends that fairness across our community to all workers. I commend the bill to the House.
I rise to speak on the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023. The Flynn electorate is a large blue-collar electorate consisting of diverse industries such as the mining and resources sector, the agricultural sector, heavy industry and the many small businesses that support these major industries. This proposed bill is incredibly complex and it is an attack on the hardworking family businesses in my electorate. It provides too much uncertainty. It adds additional costs to businesses, especially small businesses. It makes Australians pay more in a cost-of-living crisis. It does nothing to increase productivity. It does nothing to enhance competition. Most worryingly, it risks the jobs of a lot of casual employees. The Albanese Labor government's so-called 'closing loopholes' bill will make life tougher for small businesses by increasing costs, complexity and red tape, and it will likely lead to job losses.
The changes will cost employers up to $9 billion in extra wages over the next decade, according to the government's own estimates. Detailed Department of Employment and Workplace Relations costings tabled recently show the changes would cost employers up to $510 million annually, assuming just 66,446 labour hire employees would be covered by the new Fair Work Commission orders. The department also estimated the cost of minimum pay standards for digital platform workers would be $4 billion over the next decade. The department said small businesses would likely be able to pass on extra costs through higher prices for consumers or third-party businesses.
The Minerals Council claims the $5 billion labour hire estimate is much lower than what actual costs would be for businesses because the economic impact fails to take into account hundreds of thousands of service contractors and workers in related entity businesses captured by this legislation. According to the Queensland Resources Council, in the 2021-22 year, the total economic contribution of the mining and resources sector in my electorate of Flynn produced $17.7 billion of gross regional product. This supports over 50,000 local jobs and produces $9 billion in royalties, which help fund education, roads, health and law and order. We have Australia's largest coal reserves, and 12 operating mines are in the central highlands alone. Mining is the largest employer in the central highlands with a direct workforce exceeding 6,000 people.
According to Master Builders Australia, the Flynn electorate has almost 4,000 small building and construction businesses, the largest number of any electorate across Australia. What will this legislation mean for the people employed in these jobs? Will there be job losses? The Labor government has not explained what will happen. It has no answers. The reality is the changes proposed by this bill are far from 'very modest', as Minister for Employment and Workplace Relations describes them. This is a radical re-ordering of Australian workplace law, and every business organisation in the country has pleaded with the government not to go ahead with it. Minister Burke does not care that the job creators of Australia are telling him that it will be harder to keep people in jobs. This sort of complexity and the costs associated with it will be impossible for small businesses to deal with. This will only add to Australia's cost-of-living crisis.
The government has failed to demonstrate how these new laws will make it easier for businesses to employ people, increase productivity, create higher-skilled workforces or raise the standard of living. The Minister for Employment and Workplace Relations has admitted that the new laws will increase costs for consumers for everyday services that they have come to rely on, right in the middle of a cost-of-living crisis. We want all Australians to have safe, higher-wage, sustainable jobs and to be rewarded for their hard work and experience. But the employment minister admitted in his speech at the National Press Club that this bill will add complexity to an already unduly complex system and consumer prices will go up. Our workplace relations system is far too complex. Even his 'closing loopholes' tagline is completely disingenuous. It is about reversing decades of history in which Australia has moved away from centralised wage-fixing pay and conditions that are based on productivity and reward for effort. It is about eroding the choice and flexibility of individuals who want to work in their own time on their own terms. It's about putting significant constraints on businesses and employers wanting to expand, construct new projects and infrastructure or simply manage their operations in a way that suits them best. Millions of Australians are already suffering the crippling cost-of-living crisis, and this is of the government's making.
We are not going to support reforms which will weaken our economy, continue a bad situation and make it worse for Australians and small businesses. Industrial relations reform is without a doubt one of the most important of all economic reforms required to make Australia a more productive and competitive place. The focus of any industrial relations reforms should be to make us more productive and create more jobs. The link with productivity is the key. The more productive we are, the more Australians can be sustainably compensated. Enterprise bargaining should be the cornerstone of our workplace relations system if we are to grow pay packets, improve job security and bolster the flexibility that our employees demand and boost productivity. Australia needs a modern workplace relations system that delivers a safety net for workers, recognises the shared interests of managers and workers in an enterprise success and gives all enterprises the agility they need to compete and succeed. Time is going to cut me off, so I will finish my contribution here and declare that I oppose this bill. It is with grave fear that I say that I think that this legislation will be far, far too complicated for small and medium-sized businesses in my electorate of Flynn.