Digging potholes not closing loopholes

14 September, 2023

As I begin my remarks on the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 I will say to the member for Shortland, Mr Conroy, that he said the employer said, 'I don't want to give you the leave entitlement.' That's actually not true, because, when you're casual, you get paid all of your entitlements as part of your agreement, which you know very well. So please don't make remarks to the parliament that leave people in a place where they believe something that is not true.

Even under a Labor government, our own Commonwealth car drivers moved from being full-time drivers to casual drivers. Why? Because it suits them to be casual drivers. It means they can say at any time, 'I'm not available in the next two weeks. I'm off with my partner'—or 'my wife'—'to do something else.' There are people that choose to be paid as casuals.

When as an employer I had casual employees, they were paid at least a third more than my permanent employees because all the entitlements that are due to them are paid in their hourly rate. For their hourly rate, I had the federal award when I dealt with my staff, but we always paid over the federal award. Why did we pay over the federal award? Because we had good staff and we wanted to keep them. And I never wanted to be in a position where someone said, 'You underpaid me.' So the casual employees always received at least a third, if not more, more than the full-time employees.

Then the minister mentioned wage theft. Most of the wages infringements that have been found—big organisations like banks had underpaid and other organisations had underpaid—weren't by intention; it was by misreading the law of the land at the time in regard to industrial relations. It wasn't at any stage their intention. Now, there are unscrupulous employers and there are unscrupulous employees. This is the world we live in. However, for all of the employers that I remember dealing with, their most precious commodity was their employees. Not only would they pay them correctly but they would also be generous with bonuses around Christmas time.

In my industry, which was a small business, under the federal award when an employee went on holidays they got a 17½ per cent loading—to go on holidays. You get paid 17½ per cent more for your four weeks of holiday a year. I don't think that happens to you, Mr Deputy Speaker Vasta, because I know you don't get a holiday.

I'd say closing loopholes and digging potholes would be my framework for this bill. The Fair Work legislation Amendment (Closing Loopholes) Bill 2023 is a perplexing, complex and unwieldy document that will not improve the common good. I repeat that: it will not improve the common good. On the contrary, it will reduce productivity and thereby cause hardship to many small-business owners and workers in the community; and it will shift power to unions who seek to control those who are part of the gig economy, which they have no claim on today. The bill might more accurately be called the 'Fair work legislation amendment (digging potholes) bill'.

Writing in the Australian this week, Robert Gottliebsen, who I've got a lot of time for, talks about the practical effects of the bill. He writes:

The operations of every enterprise in Australia ranging from the local gardener or plumber to BHP and the Commonwealth Bank will be caught in the incredible ramifications of the 784-page industrial relations legislation including the 500 pages of explanatory memorandum.

Given the complexity and the total powers being awarded to the minister and Fair Work Australia, no enterprise whether they be big or small will have any certainty as to whether they are obeying or breaking the law.

He also said:

And if they find that, unintentionally, they have broken these incredibly complex laws, they may suffer enormous penalties. An accurate analogy can be applied to the roads. Imagine if, the road regulators quadruple penalties for speeding and then erect multiple speed restriction signs along those roads and cover each one with a hessian bag.

You drive along the road completely unaware as to whether you have broken the law, but still facing huge penalties.

They were his words.

The bill is anti productivity at a time when we need a productivity boost in this nation. In an address to the parliament yesterday, the member for Mitchell said:

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 …

I wholeheartedly agree with the member for Mitchell in his conclusion that, if this bill becomes law, there will be an increase in the cost of labour without even a thought about the anti-productivity measures that are contained within the bill.

Let's turn to the gig economy and the $9 billion cost. This bill is against those who work in the gig economy. I'll quote the member for Mitchell again—it was quite an impressive speech, I thought. He said:

… 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—

Not a bad job—

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—

That's true—

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—

That's the $9 billion—

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.

The minister should be acutely aware that we are in the midst of a cost-of-living crisis. I think there is consensus that our common good depends on productivity improving, and yet we have zero productivity growth.

What does the additional $9 billion in cost due to the bill mean for the community? What does it mean for those struggling with mortgages and high rents? It means an additional, unnecessary cost that will be passed on to consumers. Goods and services will become more expensive. Productivity will not increase; rather, it will decline. You could not think of a worse thing to do at a worse time for the Australian economy for our future productivity and employment. Not one in the electorate of Monash will thank you for this legislation. The minister has said that the bill will result in only $9 billion in costs—his own words—but the truth is that this could be twice or three times that amount. Astonishingly, the government did not even model the cost of changes in many parts of the bill. Why not do this? Perhaps the government just doesn't care about independent contractors, who are so important to our economy.

Casuals are a good thing for people who like to take them on. People want to be casual because it's a means of increasing their income. On that subject, the member for Mitchell said:

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.

Big business organisations and small business organisations are sounding a warning to the minister and the government, who claim that small business is exempt from the bill, but this is not accurate. Many of the provisions in this bill are against increasing productivity. The bill won't close loopholes. It will dig potholes on the road. It won't improve the common good.

Yesterday the member for Mitchell said:

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 …

He also said:

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.

Of course, it was another famous Marx—Groucho Marx—who said, 'Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies.' This is perhaps a good analysis of what is happening with the proponents of the closing loopholes bill. The member for Mitchell continues:

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.

In the Australian article yesterday, Robert Gottliebsen observed:

To their great credit, the independents have refused to rush the legislation through the upper house and have delegated it to a parliamentary committee which means there will be more time to expose the damage it will create.

The Senate Education and Employment Legislation Committee will conduct a public inquiry and will report on February 1 2024. I note that Paul Karp in the Guardian says Senator Pocock has already suggested some views about breaking up the bill so some parts could be passed this year.

Pocock wants to deal with several parts this year, including: banning discrimination against employees experiencing family and domestic violence; the workers' compensation change; and provisions criminalising wage theft.

While employers may not agree with every item on the list, the Australian Chamber of Commerce and Industry (Acci), AiGroup, Minerals Council and Master Builders agree in principle with splitting the bill, allowing the discrimination and workers compensation law changes to be dealt with immediately.

I end with a paraphrase of Robert Gottliebsen's article in the Australian yesterday. He says the Treasurer keeps expressing optimism about productivity and the future of the nation and continues:

But he has been completely gazumped by the Employment Minister who masks his massive legislative agenda with irrelevancies like paying a little more for pizzas.

I invite the Treasurer to take a day off and sit down with those 784 pages and try and understand what on earth it all means for someone trying to conduct an enterprise.

Maybe all ALP politicians should circulate the 784 pages among the small enterprises in their electorate so they "understand" the new rules that are to govern them.

This is 784 pages of new rules that will only offend the running of your business. We oppose this legislation for very good reason.

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