Jacinta Collins (Victoria, Australian Labor Party) Share this | Hansard source

I am glad that my Western Australian opposition Senate colleague has mentioned that we are going to make further amendments because we did foreshadow that that was likely after consultation through a Senate inquiry. Indeed, we felt that consultation should be meaningful. And so when the Senate inquires into a new, significant, large piece of legislation and makes good recommendations, the government picks them up. I will take the senator to some of them.

Let me deal firstly with what I would call the opposition’s right of entry charade, because that is what it is—a charade. The opposition has claimed that the right of entry scheme in the bill goes further than the commitment made at the last election. Senator Barnett just now referred to the opposition’s minority report. Let me take the Senate to the government senators’ report on this, where we clearly set out what we put in the Forward with Fairness policy and we comment on that. We point to one of the details that opposition senators have been complaining about and make the following point:

The committee majority notes that they have ignored the details of the policy reproduced below—

and indeed we do so—

which makes clear there is a right to meet with the union in non-working hours …

In their desperation, the opposition have latched onto a broad heading in our policy of Forward with Fairness. Remember, this is a broad heading in a policy released well before the election, which sets out how we would maintain rules about right of entry. The existing right of entry rules needed to be refashioned, but essentially, yes, they have been maintained. The core opposition complaint is that we are not maintaining the nuances that the opposition put in during Work Choices to try and limit the historical capacity of unions to ensure compliance with our industrial relations laws. That is what they are really objecting to. I think Australian workers will understand that, without having the capacity to pursue breaches, the capacity of unions to ensure that the law is being complied with is quite limited.

The bill is consistent with the election commitments made by the government. Under Work Choices the right of entry by unions was connected with the union being a party to an award or a collective agreement. Under the bill the right of entry will be linked to the right of a union to represent the industrial interests of an employee. This change is necessary because of the different nature of awards under the Fair Work Bill. It does not represent an increase per se in the right of entry. In particular, because award modernisation brings many awards together under a single instrument, it makes more sense for the right of entry to be linked to industrial representation.

Let us be very clear about what we are talking about here. We are looking at a regime very similar to what applied historically for many, many years prior to Work Choices, where unions had a recognised responsibility to follow through in compliance with Australia’s industrial relations laws. I asked many employer organisations about this during the Senate inquiry. I asked whether the framework as it had applied prior to Work Choices had been problematic. Was there a history of issues? Were there problems that could be identified? Fundamentally, the answer was: ‘No, but it might happen.’ I am sorry, but we need to deal with the reality here and now. We are designing a new system, a fair system, and not one structured on the paranoia and fearmongering that was the basis of Work Choices. That is not to say that we have not listened at all in relation to the right-of-entry provisions. As the Deputy Prime Minister announced yesterday, we are picking up the recommendations of the Privacy Commissioner. We did listen during the Senate inquiry and other consultation. There are going to be further amendments to ensure that people’s privacy will be protected.

Let me move on to another area where members of the opposition have sought to make much hay in recent months. This relates to the potential for union demarcation disputes in greenfield agreements. The opposition has argued that the bill will hamper new greenfield agreements and hamper infrastructure work and other projects that we are in desperate need of as we confront the global financial crisis. Under Work Choices an employer could determine the terms and conditions for employees under a greenfield agreement without consulting a single employee or employee representative. Let us just understand where the lack of balance was. Let me repeat that: under Work Choices an employer could determine—by themselves, without challenge—the terms and conditions of employment under a greenfield agreement without consulting a single employee or employee representative. That will no longer be possible under the new regulatory system, and I am proud of that fact. The government, however, has listened to concerns raised in consultation and will amend the bill such that Fair Work Australia must be satisfied that the employee representatives or union representing the majority of workers should be notified and that that is in the public interest and that the agreement be approved. It will no longer be necessary, as was previously proposed, to notify all unions.

Let me expand on the point I made just a moment ago in relation to the global financial crisis. The opposition argues that the global financial crisis should be used as an excuse to delay these reforms, in particular because they will reduce job creation. The reverse is true. The global financial crisis gives us more reason than ever to put in place the right policy settings in our workplace relations. This is particularly true in the case of the government’s workplace reforms, which will enhance the effectiveness of the government’s overall response to the economic slowdown.

First, the provision of greater workplace security for workers will enhance the impact of the stimulus package. A key determinant of the effectiveness of fiscal stimulus is the multiplier effect: the higher the marginal propensity to consume, the higher the short-run multiplier, the greater the proportion of the stimulus that will flow directly into the economy rather than being saved. All other things being equal, people will be more likely to spend an increase in income if they feel more secure in their employment. In contrast, the proportion that they save will tend to be higher, the greater the risk of an unexpected bout of unemployment. One of the key planks of the government’s workplace reforms is to provide workers with protection against arbitrary and unfair dismissal. This protection will boost the impact of the Nation Building and Jobs Plan by increasing the marginal propensity of employees to consume.

Second is the issue of job creation, and here too there is another story. The total level of net job creation in an economy is a combination of how many jobs are destroyed versus how many jobs are created. This is a concept that opposition senators do not seem to understand and, again, they are fearmongering. A higher level of job protection will tend to discourage needless downsizing. This is particularly important in a time of economic slowdown. Studies have found that companies that downsize are outperformed in the long run by companies with less workforce fluctuation. This suggests that removing unnecessary turnover could enhance productivity levels. Workforce turnover results in significant transaction costs including severance payments and then, later on, search costs. In addition, higher staff turnover can have productivity costs associated with the loss of firm-specific knowledge and experience and low worker morale. More effective regulation of arbitrary and unfair dismissals could enhance productivity levels thereby reducing the impact of the downturn. But these arguments seem to be lost on the opposition.

Some argue that greater workplace security and unfair dismissal laws in particular will reduce the level of job creation since firms will be less likely to employ workers if they are harder to dismiss. This may be true in some instances—and I stress ‘some’—although, given that hiring is largely driven by fundamental business demands, the effect of dismissal laws on hiring is overstated by many. This is an argument that has occurred many times and, since my time is limited, I will move on to dealing with what I think is a more fundamental issue for the opposition at the moment.

The opposition seem to be becoming experts at being sceptics. For a long time they have been, as we know, climate change sceptics. Recently, in opposing the government’s fiscal stimulus package and saying that we should ‘wait and see’ they showed themselves as being global financial crisis sceptics. Now we can see that they are also workplace fairness sceptics. By that I mean, when we face the issue of how we deal with managing our workplace relations, we can choose the low road or we can choose the high road. Those of us who are optimists about our future and our capacity to perform and manage in a global economy and who believe in the capacity of our workforce, our ability to develop skill and our desire to see a future for Australia, where we have a skilled workforce and a high standard of living, would choose the high road. This opposition seem to think that we should take the low road, which demonstrates to me that they are workplace fairness sceptics. They want to take a low road. This is not good for Australia’s future.

Anyone listening to this debate should understand that, even though Work Choices stripped away redundancy entitlements, the opposition still cannot see the concerns of the Australian public. Even though they stripped away countless other entitlements that the electorate knew by the pain that caused, if not to themselves, then to their friends, family or those around them, the opposition still cannot see those concerns.