Law Institute of Victoria - Workplace Relations Conference

  • Assistant Minister for Employment

I am pleased to have this opportunity to speak with you on behalf of Minister Abetz. Not only to tell you about the new Government’s employment and workplace relations plans but also to meet many of you.

On behalf of the Coalition Government, thank you—to you, the members of the Law Institute of Victoria—for the important work you do in helping to shape and develop effective legislation with respect to employment.

Can I also publicly thank the Law Institute of Victoria for providing its submission to the Coalition Government outlining its key recommendations in the area of workplace relations following the federal election in September.

In the coming months Minister Abetz will respond on behalf of the Government to the Law Institute of Victoria’s recommendations but first I would like to give you an overview of the Coalition’s approach to workplace relations.

We want to return the industrial relations pendulum to the sensible centre and reduce impediments to employment growth so that we can build a more prosperous Australia.

We must create employment opportunities.

We must protect individuals and workers.

And we must create an environment where those who can work, do work.

It’s a balancing act. But I firmly believe in the physical, mental, social and economic benefits that come from working. So many of the social problems that we experience today have as their root cause the dislocation from society that comes from unemployment.  Significant resources in our legal system are consumed dealing with these issues. 

The Coalition Government wants to put in place the policy settings to ensure workplaces can be the best they can be.

We want to get these settings right so that our workplaces are functional and productive.

The Coalition’s plans for employment, productivity and the workplace will benefit all.

It’s been a little over six weeks since we came into office—and we have come to Government at a time of subdued economic activity.

The September 2013 labour force results show that, against the backdrop of weak global economic conditions, the Australian labour market remains soft, with seasonally adjusted employment increasing by only 9100 in September.

While the seasonally adjusted unemployment rate declined from 5.8 per cent in August to 5.6 per cent in September, the participation rate also fell—at just under 65 per cent it’s Australia’s lowest level since October 2006.
Whilst I welcome a lower headline figure, had the participation rate not fallen to below 65%, the unemployment rate would have been greater.  That is the reality we have confronted. 

But while unemployment remains soft there are encouraging signs elsewhere.

The ANZ Banking Group’s job advertisement series showed a rise of 0.2 per cent in September and the NAB Monthly Business Survey indicated business confidence was also up with the index rising to its highest level since March 2010.

Clearly, these are challenging economic times.

We do not underestimate the huge social and economic task of growing employment opportunities in Australia and will continue to work methodically and diligently to create an environment for strong employment growth.

We are providing stable government which is beginning to instil confidence in the business sector to invest in the workforce.

And we are providing greater incentives to help more unemployed Australians back into work.

  • We’re cutting the company tax rate to 28.5 per cent from 1 July 2015—this will encourage investment in Australian businesses and help create jobs.
  • We’re abolishing the carbon tax.
  • Our Job Commitment Bonus payment of up to $6500 will encourage long-term unemployed young Australians to find and keep a job.
  • The Seniors Employment Incentive payment of up to $3250 encourages employers to take on mature-age job seekers aged 50 and over.
  • And we’re providing financial assistance of up to $6000 for long-term unemployed job seekers if they move to a regional area to take up a job, or up to $3000 if they move to a metropolitan area. For job seekers with dependents, there is an additional $3000 payment. 

The Coalition has an important agenda to deliver that supports jobs and productivity for the benefit of the Australian people and the national economy.

We are moving purposefully, calmly and methodically to deliver on our election promises.

We want to reduce impediments to employment growth to help achieve our commitment of generating a million new jobs over the next five years and two million jobs over the next decade.

In 2012, out of 51 countries the Economist Intelligence Unit rated Australia’s productivity growth as 50th- only Botswana performed more dismally.  So there is clearly a challenge ahead of us. 

We have a plan to boost productivity—to make Australia more competitive in the global economy and lift our standard of living.

In a competitive world, standing still is not an option. That’s why we must immediately take the decisions necessary to boost productivity growth and encourage world’s best practice to modernise and transform Australia’s businesses and industries for the 21st century.

Everything in our Better Productivity Plan is designed to make Australia more productive and our economy more competitive.

The Plan will deliver higher productivity growth by:

  • encouraging more people into the workforce to be productive contributors in the nation’s life and help make Australia a more successful country—two of the ways we will do this is through a Paid Parental Leave Scheme and better structured incentives for employers to hire people over 50 years of age;
  • cutting government red and green tape so businesses can become more productive and devote their energies towards business and jobs growth;
  • improving competition rules so competitive forces drive productivity growth; and
  • re-balancing workplace relations to reduce union militancy in workplaces and encourage higher pay for better work.

Our policy to improve the Fair Work laws will help make Australian workplaces even better. It will do this by providing a stable, fair and prosperous future for all.

Workplaces are important to our economy and society. Higher living standards, better pay and more jobs all depend on having fair, productive, and effective workplaces.

While there are many positive aspects to the Fair Work laws, there are also some problems with them. Some of these we will address immediately.

No doubt all of you have heard about the recent re-emergence of unlawfulness in the building and construction industry and the misuse of union members’ money in some unions like the Health Services Union.

We are taking strong action to address these issues, with the following:

1.) Re-establishing the Australian Building and Construction Commission to return the rule of law to construction sites;

2.) changing the laws applying to employer organisations and unions to align the obligations of officials with those of company directors, and 3.) establishing a Registered Organisations Commission to oversee the new system.

These changes will be introduced in the first sitting week of the new Parliament.

We will ensure that union right of entry protections are sensible and fair, balancing the need for workers to be represented if they wish with the need for workplaces to run without unnecessary disruption.

We will ensure that all workers have access to Individual Flexibility Arrangements which allow workers and their employers to vary the terms of an agreement or award to suit their individual needs, provided that the employee is better off overall—that test will not change.

We will make changes to promote harmonious, sensible and productive bargaining. Unions will not be able to take industrial action before genuine and meaningful talks have occurred, or in support of unrealistic claims. We will also require workers and management to consider productivity improvements when bargaining for an enterprise agreement.

To help us achieve the best possible workplace relations system, we will task the Productivity Commission with undertaking a thorough analysis of the Fair Work laws to identify the impact they have on our economy, productivity and jobs and how they could be improved.

This review will commence within five months.

Let me turn to more detail on our plan to re-establish the Australian Building and Construction Commission.

The Coalition will re-establish the ABCC to ensure it maintains the rule of law and improves productivity on building sites and construction projects, whether on-shore or off-shore.

For many years, the building and construction sector provided the worst examples of old fashioned industrial relations lawlessness.

The Cole Royal Commission established that building sites and construction projects were hotbeds of intimidation, lawlessness, thuggery and violence.  Projects were delayed, costs blew out and investment in our economy and infrastructure was jeopardised.

It fell to the Howard Coalition Government to step in and make the tough decisions to clean up this sector. The establishment of the ABCC in 2005 provided a genuinely strong watchdog, dissolving the 1970’s style practices that plagued this industry. It was a specialist regulator that enforced the rule of law applying to the building and construction sector.

While the ABCC existed, the performance of the building and construction sector improved dramatically. The results speak for themselves:

  • Industry productivity up by 9.4 per cent;
  • Annual economic welfare gain to the community of around $6 billion dollars per year; and
  • Significant reduction in days lost through industrial action.

Over its term in government, Labor progressively dismantled the powers of the ABCC and then finally abolished it in 2012. It did this despite the fact that with each Labor change reducing the watchdog’s powers, almost immediately the ‘bad old days’ returned. Labor oversaw wildcat stoppages, militant protests, demands that union mates be employed on projects, and an increase in disputes and did not address them effectively. For example:

  • In August 2012, the CFMEU / Myer Emporium dispute saw violence in city streets, militant protestors intimidating the community and attacks on police horses.
  • In November 2012, the Little Creatures brewery site in Geelong suffered a violent dispute where picketers were accused in court documents of making throat-cutting gestures, threats of stomping heads in, workers being told they were dead and of shoving, kicking and punching motor vehicles. On social media, a union member also threatened to boycott a local store for providing food to the workers on site.
  • In February 2013, City West Water in Werribee was subject to a dispute where protestors threatened people with ‘Columbian neckties’ and the dispute was so heated that workers had to be flown in by helicopter.

It stands as a stark reminder of what can happen if there is no tough watchdog for building sites and construction projects to properly enforce the rule of law.

The problems were made worse because at the same time as Labor reduced the watchdog’s power, it weakened the Code and Guidelines that contained special rules on government procured construction. Labor let in practices that were previously banned such as “one in all in” where if one person is offered overtime all of the other workers must also be offered overtime.

The Coalition will re-establish the ABCC. We will reverse Labor’s changes to the laws which underpinned the ABCC and replace Labor’s failed and ineffective Fair Work Building Construction. The ABCC will administer a national code and guidelines and we will work with the State Governments who have put in place their own codes to ensure consistency.

I’m pleased to report that the Government is working methodically to introduce legislation  shortly. I’m also pleased to report that the Government last week appointed Mr Nigel Hadgkiss as the Director of the current Fair Work Building and Construction Commission who will assist with the transition.

The former Commissioner, Hon. John Lloyd has been appointed as the Chairman of the Fair Work Building and Construction Advisory Board.

The Government does not underestimate the importance of ensuring that the rule of law is upheld and that workers feel safe when they go to work.

The Government understands that excessive red tape hinders competition, reduces investment, stifles innovation, lowers job opportunities and damages the overall living standards of Australians.

Excessive red tape makes it harder for employers to create jobs and improve productivity.

We will help small businesses grow and create more jobs.

We will reduce the regulatory burden for individuals, businesses and community organisations by at least $1 billion annually.

Some of our plans to reduce red tape may make life easier for you in your own workplaces.

We will require Parliament to spend two days a year removing legislation and regulations to help ease the burden on small business.

In closing I want to again acknowledge and thank the Law Society of Victoria for submitting its key workplace relations recommendations to the new Government and they will be responded to in due course.

The Government and the institute may have alternative views on some issues, but our workplace relations system is richer for your contribution.

The Coalition, like the Law Institute of Victoria, wants to get the right balance between employers and employees so that our workplaces can perform at their best.

Our policy will help make Australian workplaces even better, by improving the Fair Work laws to provide a stable, fair and prosperous future for all. [Ends]

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