15 November 2013

Address to the Australian Mines and Metals Association Conference, Museum of Old and New Art, Hobart.

Introduction

A SPECIAL welcome to interstate visitors – you can see firsthand here in Tasmania what the double whammy of Green/Labor Governments can do to an economy. Yet, here in these premises, you can see what private enterprise can achieve without government handouts.

It’s a pleasure to be with you. Can I thank Steve Knott and the Australian Mines and Metals Association for their support of a more productive and efficient workplace relations system.

As the national employer group for Australia’s resource industry, AREEA, like the Government, knows the importance of the resource sector to our economy.

In the weeks that the Coalition Government has put up the “open for business” sign, we’ve been delivering stable government that designed to instil confidence in the business sector to invest in the workforce.

Overview and key principles of our workplace relations agenda

The Coalition wants a stable, fair and prosperous future for all Australians, and we see workplaces as vital to achieving that goal.

The prosperity of tomorrow is in large part determined by what’s happening in our workplaces today.

This is why we’re improving the Fair Work laws and restoring the balance back to the sensible centre.

We believe that those laws should provide a strong and enforceable safety net for workers while also helping businesses to expand, create new jobs and deliver higher sustainable real-wage growth.

The Government’s policy to improve the Fair Work laws is based on common sense and a desire to find practical solutions to practical problems.

Just some of the measures we’re pursuing include:

• re-establishing the Australian Building and Construction Commission;
• providing better protection for members of Registered Organisations;
• making sure that union right-of entry provisions are sensible and fair; and
• giving underpaid workers a better deal.

We’ll also be tasking the Productivity Commission to carry out a thorough examination of the Fair Work laws.

Draft terms of reference for the Productivity Commission inquiry into the Fair Work Act are currently being finalised and will be released by March 2014.

The Government will carefully consider the recommendations and findings of the Productivity Commission.

We will consider the recommendations and determine which, if any, changes we will take to an election before they are implemented.

Subdued labour market

The Coalition has come into government at a time of subdued economic activity with a projected surge in unemployment.

Figures released last week by the ABS reflect the underlying softness of the Australian labour market, (with seasonally adjusted employment increasing only modestly by 1100).

The seasonally adjusted unemployment rate increased to 5.7 per cent in October, (after dipping to 5.6 per cent in September. Reflecting the recent weakness in the Australian labour market), and the participation rate (stood at 64.8 per cent in October—and) is now at its lowest rate since October 2006.

Particularly concerning is the downturn in jobs for people aged 15–24, with the unemployment rate rising from 11.7 per cent to 13 per cent in the past five months.

And here in Tasmania, (while there has been a slight drop in the jobless rate in the last month), we still have the highest unemployment rate in the country, at 7.9 per cent.

You’ll all be aware that last week mining machinery manufacturer Caterpillar announced that 200 jobs would be shifted from Tasmania to Thailand. That news could not have come at a worse time given the north-west has already been hit hard by plant closures and manufacturing lay-offs.

A strategy for employment growth

Because labour market conditions are clearly soft, it is more imperative than ever that the Coalition Government’s economic strategy is delivered to achieve stronger jobs growth right across the country.

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

The most important way that we can ensure job creation is by getting rid of bad policy like Labor’s job destroying Carbon Tax. We are committed to do exactly that, with a strong mandate but Labor has inexplicably decided to ignore the views of the Australian people, who are desperate for jobs and economic revival. And that is especially the case here in Tasmania.

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

Boosting productivity

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 simply not an option. That’s why we must take the decisive action to boost productivity growth and encourage world’s best practice to modernise and transform Australia’s businesses and industries for the 21st century – and for that matter – hence our Commission of Audit.

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

And let me digress briefly to the point – we want a strong economy not as an end in itself but because it is only a strong economy that can deliver the infrastructure, welfare, health and education that Australians rightly expect.

The Plan will deliver higher productivity growth by:

• reducing the company tax rate to 28.5%
• encouraging more people into the workforce to be productive contributors in the nation’s life and help make Australia a more successful country—one of the ways we will do this is through a Paid Parental Leave Scheme
• cutting government red and green tape so businesses can become more productive and devote their energies to business and jobs growth – not by $1 billion but by $1 billion per annum.
• 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.

Policies to assist the resources sector

AREEA members are significant employers and wealth generators for our nation. Therefore, our efforts to improve current regulatory and tax arrangements to encourage and promote more productive and competitive workplaces will assist workers, enterprises and the nation alike.

We support a vibrant and competitive energy and resources sector that employs thousands of Australians and creates the wealth to fund our schools, hospitals and roads.

And we’re getting on with the job of helping to protect jobs and investment by removing the unnecessary and damaging taxes weighing the sector down.

The process to abolishing the carbon and mining taxes is underway.

We will cut unnecessary red tape costs on all Australian businesses, including those in the resources and energy sectors, by at least $1 billion per year.

The Government will create a stronger economy that generates two million new jobs over the next decade.

The Coalition will introduce an Exploration Development Incentive which will allow investors to deduct the expense of mining exploration against their taxable income.

Under our scheme, the Australian Taxation Office will determine a proportion of expenses that can be claimed as tax credits by investors. Our scheme will target small exploration companies by limiting eligibility to companies with no taxable income.

The Exploration Development Incentive will start for investments made from 1 July 2014. The scheme will be capped at $100 million over the forward estimates.

We will also produce a new Energy White Paper, to be publicly released within a year. This will give industry and consumers certainty and confidence in government policy.

We will deliver a one-stop-shop for environmental approvals ensuring projects can commence as soon as possible but without compromising environmental standards.

The Coalition will work constructively with industry to monitor and upgrade an appropriate maritime surveillance regime to protect Australia’s offshore oil and gas platforms.

In cooperation with relevant state governments, gas explorers and producers and gas consumers we will set in place a workable gas supply strategy for the East Coast gas market to the year 2020.

Improving the Fair Work system

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 have addressed immediately.

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

We’re taking strong action to address these issues through the restoration of the Australian Building and Construction Commission and the establishment of a Registered Organisations Commission to oversee a new system of registered organisations as I indicated at the start of my address.

The amendments to the Fair Work Act to be introduced early next year will further enhance the effectiveness of our workplace relations arrangements in a considered and prudent way.

AREEA’s reform agenda released in March 2013 refers to areas for reform in key areas such as protected industrial action, allowable matters in agreements and bargaining, greenfields agreement-making, individual flexibility arrangements, and trade union right-of-entry.

Let me turn to right of entry and greenfields agreements.

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.

The way that right of entry operates under the Fair Work Act is not balanced and is not based on common sense. When I hear of one project experiencing 200 union visits in just three months it is clear there are issues with the system that need to be addressed. The Coalition has consistently identified shortcomings with the current regime and its plans to remedy these shortcomings. The “radical and extreme” agenda we have in this area is to adopt what Labor promised in 2007, i.e. no change from the Howard Government.

We will also get rid of the changes made by the previous Government, whilst in its death throes expanded union rights even further and have been of particular concern to AREEA. I refer to changes that require employers to facilitate union access to remote sites and make lunch rooms the default meeting places for union visits. On this last point, let me be clear: we will stop the lunch-room invasion and we will stop the joy rides for union bosses to offshore sites at company expense.

We will also create realistic timeframes for greenfields agreements.

Unions should not have the power to effectively veto the commencement of new projects or extract exorbitant wages and conditions by refusing to sign up to a greenfields agreement. The current model for greenfields agreements delays construction projects is bad for jobs, bad for businesses and is bad for the Australian economy.

We will fix this problem by providing that if negotiations for a greenfields agreement have not been completed within three months then a business will be able to take their proposed agreement to the Fair Work Commission for approval. The Commission will be able to make and approve the proposed agreement, but subject to strict tests, including that it must satisfy the existing ‘Better Off Overall Test’.

Consistent with our election policy, I hope to introduce legislation on these Greenfields Agreements early next year to send a clear message that Australia is well and truly open for business.

Australian Building and Construction Commission

As AREEA in its own survey shows, there has been a significant deterioration in the culture of the building and construction industry since the abolition of the ABCC by the previous Government.

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

• industry productivity up by 9.4 per cent
• Australian consumers better off by around $7.5 billion per year, and
• fewer days lost through industrial action.

We all remember the scenes at the Myer Emporium site in Melbourne in August last year, where police horses were being punched by an unruly mob of individuals who were demonstrating in circumstances where the actual workers on the site were happy with the boss and their conditions .

And just this month the Fair Work Commission found that visits by CFMEU officials to four Lend Lease sites in Adelaide last month constituted a planned and resource-intensive series of visits involving intimidatory tactics in breach of right-of-entry requirements.

The commission also found that a CFMEU official had threatened to stop work at one of the Adelaide sites unless the contractor moved a union flag to a more prominent position.

The fact that the union would disrupt a major building project over the issue of the positioning of a union flag says it all.

That’s why, yesterday, we introduced a Bill to re-establish ABCC with strong powers and imposition of substantial fines.

I note comments by Dave Noonan of the CFMEU that the ABCC unfairly ‘discriminates’ against the building industry. I would say in response that the case against industry-specific laws would be so much stronger if the participants in that industry behaved like everyone else. Unfortunately, they don’t.

The Government has already appointed Nigel Hadgkiss PSM as the Director of the current Fair Work Building and Construction Commission who will assist with the transition to the ABCC.

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

We also promised that a re-established ABCC will administer a re-invigorated national building code that will govern industrial relations arrangements for Government-funded projects. This step will ensure that taxpayers’ dollars are used efficiently.

New appeals body

On 31 October I wrote to employers and unions, the states and other industrial stakeholders seeking their views on a proposal to create a new appeals jurisdiction covering the Fair Work Commission.

We certainly believe that this is an idea worth considering—and that is as strongly as we have put it .

Any input by the 13th of December will be considered.

Conclusion

Our agenda is not AREEA’s agenda.

Our agenda is to serve the national interest.

But it is a much welcome and happy stance that AREEA’s agenda has so much overlap with the national interest.

I wish you success for the nation’s sake.

(Ends)