Bills

Labour Hire Licensing Repeal Bill

Second Reading

Debate resumed.

The Hon. S.K. KNOLL (Schubert—Minister for Transport, Infrastructure and Local Government, Minister for Planning) (17:22): I rise to wholeheartedly support the bill, especially as a member who sat through the labour hire inquiry. To say that this was an inquiry by the Economic and Finance Committee with a predetermined outcome in mind is an absolute understatement. What we saw was the fact that there was an agenda in mind, a union-driven agenda, by the Labor members of that committee to manufacture an outcome that would recommend what they ultimately put to parliament.

What was interesting, especially in the member for Hurtle Vale's contribution, was a lot of rhetoric but very little fact. There were no examples that she was able to give of issues that this labour hire licensing scheme would actually resolve. The reason she could not find those examples was that neither did the committee that did the inquiry. As somebody who sat there and read and listened to all the evidence that was put to the committee, I can say that there was not any example that was provided where a labour hire licensing scheme would have actually solved any of the issues that exist—none.

Also what is interesting is that this issue has also been taken up at a federal level. The federal Senate committee also concurred that a labour hire licensing scheme would only do damage to the ability for businesses to create jobs and work for people. What I found very interesting in my time on that committee, through the inquiry and subsequent report, was we received evidence from a whole host of current government agencies that have the jurisdiction and the enforcement capability to be able to deal with the issues that arise in the labour hire industry—not just in the labour hire industry but also in some of these temporary employment firms more generally.

In every instance where illegal activity was being undertaken, axiomatically those things were already illegal. Whether that be phoenixing by companies, whether that be sham contracting, whether that be underpayment by employees, every single one of those instances was an example of already illegal behaviour.

What we heard time and time again was that the issue was not identifying the problem. The issue is getting enforcement. We heard about ReturnToWorkSA, which does a phenomenal job at enforcing the existing law. Staff go into some of these suspect businesses and ask for records. Through their own data analytics, they are able to understand whether there is the potential, for instance, of underpayment of workers. Where they see there are dodgy businesses, they use their enforcement mechanisms, primarily, for instance, asking for premiums up-front, so that a dodgy business that is here today and may not be here tomorrow actually has to pay their WorkCover premiums up-front, as opposed to finding ways to get out of it over time.

They are also able to use their data to show where margins being earned by these businesses are over and above what they should be and provide evidence of that to other agencies. RevenueSA is another government agency that, for instance, collects payroll tax, and should and does have enforcement mechanisms to be able to deal with this. There is also the federal Australian Taxation Office, the Australian Securities and Investments Commission and the department of immigration, especially in relation to migrant workers who are not Australian citizens. A lot of them are potentially on migrant visas.

In the end, there were around eight different agencies, task forces or bodies that had jurisdictions to delve into illegal behaviour. Again, the only evidence we had was that somewhere north of 95 per cent of labour hire firms do the right thing. There are existing enforcement mechanisms to deal with illegal behaviour. We heard time and time again that there are calls, especially federally, for increased resources to seek out, stop and enforce the punitive measures that are already in place to deal with this illegal behaviour.

However, that is not what the committee recommended. The committee recommended more regulation. That was the predetermined outcome of the committee. That is what it delivered. That was what I and members on my side of the chamber as members of the Liberal Party, were happy to sign a minority report into. The labour hire licensing scheme that the Labor Party put to the parliament in no way dealt with the issues that exist in the community. It is not a problem that can be solved by regulation: it is a problem that needs to be solved by better enforcement.

What is perverse about this is the evidence we heard that introducing a labour hire licensing scheme in South Australia would actually hurt employment in South Australia. To impose state-based regulation that puts state-based labour hire firms at a disadvantage to interstate firms is likely to see those firms move to jurisdictions that do not have this burdensome regulation. The absolute kicker for me is that the evidence we heard said that the vast majority of firms are doing the right thing. Do you know who gets punished by this act? The people who are doing the right thing.

Those who are existing outside the law will continue to exist outside the law, and this labour hire licensing scheme does not change that. For those who do exist inside the law, all they have is more punishing regulation. There is not a piece of legislation that the former government did not think was a good idea. What this is really about is the fact that they do not like the labour hire industry in the first place. It is much harder for their union mates to get their claws into those workers, and that is really what the labour hire licensing scheme was about.

It was all about members of the Australian Manufacturing Workers Union and others of that type finding it difficult to find and expand a membership base. They wanted a labour hire licensing scheme that would make labour hire more difficult and encourage and push businesses to move to other forms of employment.

There are many seasonal businesses out there that are crying out for workers, especially in regional communities. It is interesting that when we went up to the member for Chaffey's electorate in the Riverland they talked about screaming out for workers. In fact, the competition for labour there is such that businesses want to hold on to good workers. There is a strong market incentive for firms to look after their workers. Again, that is not what this inquiry was about and that is not what this labour hire licensing scheme is about.

Through that report, the Labor Party were not able to find instances of where their predetermined scheme was going to help. Subsequently, since this has come into place, there is still no evidence that it has done anything to actually help this situation. I have had representations from many in my electorate. Again, for those who do not understand, in the Barossa Valley our biggest employment industry is the wine industry. Grapes grow on vines and grapes grow only once a year, so it is only once a year that you need to prune after the harvest has finished and you are in that winter period, but it is also only once a year that you need to pick the grapes.

The Hon. T.J. Whetstone: Don't forget bunch thinning.

The Hon. S.K. KNOLL: Well, there is bunch thinning and various other things, but my point still stands: you pick the grapes only once. There is a significant ramp up and ramp down of work within vineyards at various points during the year, and the best way to facilitate that is through labour hire so that people can come and work across regions. We heard evidence of the fact that there are people who try to chase the seasons to be able to get work and balance out that work in different places.

What is really frustrating here is that we had a government that was more than happy to champion the wine industry as one of our export leaders and as a manufactured food industry that was able to compete on the world stage. On the one hand, the member for Mawson, as the minister, was happy to put his arm around whatever winemaker was heading overseas to try to bask in some reflected glory (except, of course, when he wanted to try some Argentinian malbec on the taxpayers' dime) but, on the other hand, they wanted to punish that same industry. It was absolutely incongruous.

On the one hand, they want them to go out, sell more, be efficient and effective, produce a great product and sell South Australia to the world. They want our wine industries—from down south in the Coonawarra through to the Barossa, Adelaide Hills, Limestone Coast, Langhorne Creek, Riverland, Clare Valley and all the way up, even into the beautiful wine region over in Port Lincoln—to develop and grow our state and our state's reputation. On the other hand, they want to punish that industry by giving them burdensome regulation.

The Hon. A. Koutsantonis: Burdensome? Pay wages—that's burdensome, is it?

The Hon. S.K. KNOLL: The fundamental misunderstanding of the way business operates by those opposite never ceases to amaze me. What I do not understand is how filling out a form enforces the law. How does filling out more paperwork enforce the law? It does not. What you need are agencies with enforcement capability to seek out illegal behaviour. It is not like those who are undertaking illegal behaviour offer that illegal behaviour up. A form that says, 'Tick this box if you have ever underpaid your workers,' does not work that way. Enforcement was what was needed, but that was not what was put on the table. It was regulation that was put on the table.

It was an absolutely disgusting misuse of what the Economic and Finance Committee should be looking at. It was a process that was stitched up from the beginning. We tried to inject some honesty or some balance into the debate, but essentially it was a witch-hunt to try to find some sort of excuse for why we needed to have a piece of regulation on our statute book that would encourage their union mates and give their union mates a leg up.

I am sorry, but that is not what this side of the house is about. We are about deregulating business in our economy so that, instead of filling out forms, they are out there selling goods and services to South Australians, Australians and the world and creating new jobs. Rather than punishing those who do—

The Hon. A. Koutsantonis interjecting:

The DEPUTY SPEAKER: Order! The member for West Torrens is called to order. The minister is entitled to be heard in silence. Minister, continue.

The Hon. A. Koutsantonis interjecting:

The DEPUTY SPEAKER: Member for West Torrens!

The Hon. S.K. KNOLL: The member for Hurtle Vale stood up and said that this is a matter of ideology, and for the Labor Party it certainly is a matter of ideology, a matter of patronage and a matter of understanding whose thumb is sitting on which forehead. However, on this side of the house we are about what is practical and what is good to grow jobs in a practical, outcome-based sense. It is why we oppose this bill, it is why we oppose this act, it is why we will work to repeal this bill and it is why we are here to actually drive jobs growth, especially—

Members interjecting:

The DEPUTY SPEAKER: Order! Minister, can you take a seat for a moment, please. The chamber has been a bit ratty this afternoon. That is the only word I can use to describe it. Standing orders have it that when a member is making a contribution he or she is entitled to be heard in silence; otherwise, you will be called out of order or warned. Minister.

The Hon. S.K. KNOLL: We will continue to stick up for deregulation of our economy. We will continue to stick up for the small businesses that are actually out there employing South Australians and will help to drive jobs growth. We will also stick up especially for those businesses in manufacturing industries and in agriculture industries in regional South Australia that are desperately crying out for an easier way to do business so that they can get on and do what they do best—that is, providing the majority of merchandise exports out of our state.

Oftentimes, the member for Dunstan, our Premier, remarks that we need to be looking after the biggest export industries in our state and helping them to grow and thrive, as that is where we are going to get significant jobs growth. What are those industries? Those industries are in agricultural food exports: sheep meat, lamb, wool, wine, seafood exports and fresh fruit exports. All these things come out of regional South Australia, and almost all these industries are punished by the Labour Hire Licensing Act.

I am very proud to stand on this side of the house with a bunch of people who are committed to growing our economy, getting outcomes rather than playing politics and actually looking after jobs in South Australia.

The Hon. S.C. MULLIGHAN (Lee) (17:37): I rise to speak on the Deputy Premier's bill to repeal the act, which was introduced last year, to provide for a labour hire licensing regime. This act, as it currently stands, has as one of its objects the protection of vulnerable workers. When it comes to looking after workers in South Australia, there could not be a more noble cause than protecting those most vulnerable workers.

If we cast our minds back, the genesis of this was not just the member for Schubert's personal experience and what evidence he had heard about what was going on in the employment sectors across the South Australian economy.

The SPEAKER: Member for Lee, are you the lead speaker?

The Hon. S.C. MULLIGHAN: Am I the lead speaker?

The SPEAKER: Yes. Reserve the right to be—

The Hon. S.C. MULLIGHAN: No, 20 minutes will do me fine. As I was saying, the genesis of this was media report after media report, all reporting firsthand on the outrageous experiences of workers across different sectors of the economy. Perhaps the most notable that members might recall—perhaps not so much on that side, given the anti-ABC stance of so many in the Liberal Party—was a Four Corners report in 2015, titled Slaving Away. It told the story of labour hire workers who in some instances were being paid $3.95 an hour, in some instances were required to work 22-hour shifts, in some instances were required to sleep on dog beds in between shifts and in some instances were required to trade sexual favours in order to gain shifts of employment.

That is what can happen when labour hire companies behave as poorly as you could possibly imagine and exploit workers. That is the experience that has been the case in South Australia and has been the case in other parts of the country. That is why governments, not just here but elsewhere, are continuing to look at licensing regimes for labour hire companies.

It is not that there is a fundamental problem with labour hire companies. I think we will all admit that they have their place to provide workers who are not employees of a specific company to that company so that they can continue to produce the goods and the services that they need to. There is no problem in concept with having a labour hire industry. It is the behaviour and the standards that can occur within that industry that are widely reported to be occurring within the industry which led to the introduction of this act.

The member for Schubert is absolutely right: this is a matter of ideology. This is a matter of bloody-minded ideology by those opposite in the Liberal Party who abhor the protection of workers, who do not believe it is their role in this place to look after the rights of workers, to make sure that they are paid the legislated minimum for their labour, that they are being afforded the legislative protections around occupational health and safety and that they are being afforded all of the rights that they have been given over many decades in this state when it comes to providing your labour for reward.

What is more important? Is it the rights of more than 800,000 South Australians who are engaged in paid employment, or is it protecting the rights of those businesses that have enjoyed, to date, engaging exploited workers? That is the fundamental question. That is the delineation between the Liberal Party's ideology and the Labor Party's ideology. It could not be clearer. Any false arguments that the member for Schubert comes up with where he says, 'This is all about regulation. We are the party of deregulation,' is rubbish. In the most recent state budget, the Attorney-General herself is introducing a licensing regime for the property management industry. The party of regulation and red tape seems to be over there—not over here, over there.

In fact, the simplify bill before this parliament was introduced by the Labor Party to reduce red tape, not by the Liberal Party. In fact, it has now just been dusted off because, once again, they have run out of ideas and run out of legislation, so they have had to rush in some Labor-initiated bills back into the parliament. It is extraordinary.

Of course, it is not surprising to hear that sort of ill-directed comment from the member for Schubert. This is the person who of clutches the biography of Sir Thomas Playford to his chest, yet abhors state intervention in the economy. Could you have it more wrong in your own mind than the member for Schubert does when it comes to the stewardship of a state economy? So confused is he that he does not even understand the role of the South Australian government and the South Australian parliament during those Playford years.

It is remarkable that we would have member of parliament after member of parliament standing up to support the bill knowing that the rights of workers are likely to be trodden all over as a result if labour hire companies continue to engage in the practices that put employees and workers in situations where they are exploited. It should not be acceptable to anyone under any circumstances that a worker is not paid what they are meant to be paid by law.

It should not be acceptable to anyone in this place that they could be exploited when they are forced to work in an unsafe working environment. It should not be acceptable to anyone in this place that a worker could be forced into a situation where they are working up to 22 hours out of a 24-hour period. It should not be acceptable to anyone that the environment that that worker is forced to live in, in between providing their labour for reward, requires them to sleep in substandard accommodation or even on a dog bed.

It certainly should not be acceptable to anyone in this place that a worker might be forced into a situation where the only way they can feel comfortable that they are going to be guaranteed future shifts of paid employment is if they trade sexual favours for it. That is what has been going on in the labour hire industry but that is apparently not a problem for these people, and the reason why is, once again—

The Hon. D.C. VAN HOLST PELLEKAAN: Point of order—

An honourable member: You want to make a personal explanation?

The Hon. D.C. VAN HOLST PELLEKAAN: No, I ask—

An honourable member interjecting:

The SPEAKER: Order!

The Hon. D.C. VAN HOLST PELLEKAAN: I ask the member to withdraw that comment. I take personal offence at that comment.

The SPEAKER: Which comment was that?

The Hon. D.C. VAN HOLST PELLEKAAN: That members opposite, including myself, would think it was okay for a worker to be forced to trade sexual favours for employment. He said we would find that acceptable, and that is a disgraceful comment.

The SPEAKER: Yes, I ask that that last comment be withdrawn.

The Hon. S.C. MULLIGHAN: I withdraw it. It is outrageous that members opposite would think it acceptable that workers can continue to be exploited by those people who misbehave in the labour hire industry.

Licensing labour hire providers are an obvious solution to this, creating a set of standards and a set of accountabilities and some transparency about those people engaged in this industry. That is an obvious legislative response, and the legislative response that this parliament took. If there are gripes, and legitimate gripes, that need to be raised, aired and addressed by members of parliament then, again, the obvious response is to come into this place with an amendment bill—not a bill of repeal but an amendment bill.

It is funny I should raise that because I am advised that when the opposition was briefed on this bill the officers who provided that briefing admitted that there were amendments that had been drafted in order to make sure that this regime was doing exactly what was intended and nothing more. That is an appropriate response of this chamber and of the other place if there are unintended consequences of this act; it is not to try to satisfy some ideological longing by those opposite to throw away the whole regime, to leave workers in a place where they can continue being exploited by those people who are deliberately putting workers out into the community to be exploited.

The fact that they will not do this to my mind raises further questions. Who were those companies, in particular, who were raised in that Four Corners report? Who were those companies that were alleged to be engaged in this sort of behaviour? Let us take the retail sector: Coles, Woolworths, Aldi and Costco. Why do they ring a bell? That is right, they are the parties that so strongly desire shop trading hours reform. The pieces are starting to fit together, are they not?

The party of selective big business, those opposite, have their eyes out purely for the interests of those large businesses, not for South Australian workers. That is the clear delineation on ideology: you choose between a handful of large businesses that have the strength, money and power to make their voices heard—repeatedly heard and, apparently, listened to by those opposite—or you take the side of the more than 800,000 South Australians who provide their labour for reward. I know who I back: it is the more than 800,000 South Australians. It is not the handful of big businesses that want further deregulation in their favour.

Maybe the minister for agriculture is right. Maybe those people who have petitioned him about the impact of this law have legitimate grievances. Maybe the way in which they run their businesses, maybe the way in which they harvest their fruit or process it or package it or provide it for market means that maybe there are consequences on them which are unintended in the application of the act. That, of course, should lead to the minister—either directly or via the Deputy Premier—coming in here with some amendments to make sure we can still protect vulnerable workers, prevent the exploitation of workers in the South Australian economy—

The Hon. S.K. Knoll interjecting:

The Hon. S.C. MULLIGHAN: You have had your chance, and you were unconvincing. The right thing to do would be to come in here with some amendments—

Members interjecting:

The SPEAKER: Order!

The Hon. S.C. MULLIGHAN: —and try to deal with those unintended consequences, but unfortunately we see this Liberal government keep returning to type. It would not be the first time that we have seen these ideological frolics against the rights of workers. Of course, we had the Minister for Industry and Skills, on the rare occasion he was allowed to speak in this place, come in and try to move legislation to rewrite some of the industry and skills board.

The Hon. D.G. PISONI: Point of order: I believe the member is reflecting on a vote of the house.

The Hon. S.C. MULLIGHAN: I am not reflecting on the vote of the house at all. How was I reflecting on the vote of the house?

The SPEAKER: I will listen carefully. I did not hear it, but please continue.

The Hon. S.C. MULLIGHAN: He came in here with amendments to the act, which would have entitled him to pick and choose who he could appoint to the Training and Skills Commission. We know how controversial that was.

The Hon. S.K. KNOLL: Point of order: the member is referring to a bill that is currently before this place.

The Hon. S.C. MULLIGHAN: That is also incorrect. It is in the other place. Are there any other tedious, tenuous points of order to try to disrupt me?

The SPEAKER: Member for Lee, just be seated for one moment. It is not before this house at the moment. Please continue. I will listen carefully. Thank you.

The Hon. S.C. MULLIGHAN: Maybe there is a 'three strikes and you are out' policy over there, who knows? The reason he wanted to change that act, as we were told in the second reading speech, was to give the minister the prerogative over who was appointed to that board. Of course, we have seen that prerogative exercised, and exercised not so well, haven't we, minister?

Members interjecting:

The Hon. S.C. MULLIGHAN: No, I should not say any more. Legally, I do not think I am able to. I should not say any more. That is another reflection of the ideological approach against workers by this government. It would almost be understandable if they were shooting the lights out in economic performance, if they were shooting the lights out in employment growth, and if they were shooting the lights out with the number of jobs being created across all of these sectors that they claim are so important to them.

The Hon. A. Koutsantonis: Zero jobs growth.

The Hon. S.C. MULLIGHAN: Zero jobs growth this financial year. What a shocking performance!

Members interjecting:

The SPEAKER: Order!

The Hon. S.C. MULLIGHAN: The great delivery from this government—

Members interjecting:

The SPEAKER: Leader and the Minister for Transport, order!

The Hon. S.C. MULLIGHAN: Let's move to erode—

Members interjecting:

The SPEAKER: Order! The member for Lee has the call.

The Hon. S.C. MULLIGHAN: —workers' representations, let's move to erode workers' protections and, while we are doing it, let's have no jobs growth across the economy. You have to ask: why are they even here, if it is not to represent that small clutch of large businesses that it seems they continue to do the bidding of? Even as we have had a federal royal commission into the banking sector handed down, they still stand by the protections they gave to the banking industry here in South Australia.

Even as they are so proud of deregulation in the financial services industry and the banking industry, nearly 50 bank branches across regional Liberal electorates have been closed, and they are still cheering for the ANZ, CBA and Westpac. They think they are doing a great job. Here they are again, when it comes to labour hire, singing off the song sheet of those businesses who have been found time and time again in the media to be exploiting workers.

The Hon. V.A. CHAPMAN: Point of order: I do not know how relevant this is to the debate, particularly as I am not aware that banks are labour hire companies for 457 visas or whatever the current equivalent is.

The SPEAKER: So it is irrelevance?

The Hon. V.A. CHAPMAN: Totally irrelevant.

The SPEAKER: I have the point of order. I believe the member for Lee is summing up.

The Hon. S.C. MULLIGHAN: I was, but I am grateful as always to hear from the Deputy Premier. There would not be five minutes in this place without it. So that is the choice: the choice between big business and more than 800,000 South Australian workers. To my mind, we can never really get to the bottom of this, given the way the Register of Members' Interests legislation is drawn; however, I do wonder to what extent we would need to consider whether anyone in this place has any interests in the companies which we are contemplating may be involved in labour hire industries. I do wonder that, Mr Speaker. How would we know?

The Hon. D.G. Pisoni: This is an outrageous allegation.

The Hon. S.C. MULLIGHAN: How would we know?

The Hon. D.G. Pisoni: That is an outrageous allegation—outrageous! That is outrageous.

The Hon. S.C. MULLIGHAN: In fact, the member for Unley calls it outrageous.

The SPEAKER: Order!

The Hon. S.C. MULLIGHAN: We would never know—

The Hon. D.G. Pisoni: That's outrageous.

The SPEAKER: Order!

The Hon. S.C. MULLIGHAN: —because he has not even completed his register of interests. Apparently, he does not receive superannuation.

The Hon. D.G. PISONI: Point of order, sir: I would like that withdrawn. That is a false statement. My register of interests is complete.

The SPEAKER: The member for Lee, the minister has taken offence and has asked that you withdraw that statement. Would you like to withdraw?

The Hon. S.C. MULLIGHAN: I am happy to furnish the house with a copy of his register of interests.

The SPEAKER: No, the minister has taken offence and I am required, under standing orders, to ask you to withdraw.

The Hon. S.C. MULLIGHAN: Okay, I withdraw—

The SPEAKER: Thank you.

The Hon. S.C. MULLIGHAN: —and I will come back to the point in another debate.

The SPEAKER: Thank you.

The Hon. D.G. Pisoni: You are not required to present that.

The Hon. S.C. MULLIGHAN: No, you are by law, actually.

The Hon. D.G. Pisoni: It was a parliamentary super fund. Read the paperwork.

The SPEAKER: The member for Lee, let's just get on with this debate and then you might want to deal with anything else after that.

The Hon. S.C. MULLIGHAN: Thank you, Mr Speaker.

The SPEAKER: Thank you. The member for Lee has withdrawn that comment.

The Hon. S.C. MULLIGHAN: That is the choice between those opposite—those steadfast defenders of deregulation who are introducing more regulations, as we have heard; those steadfast defenders of the ideology of protecting big businesses over the legal rights of South Australian workers—and those on this side who think that those 800,000-plus South Australians deserve at least a fighting chance when they are in low-paid or insecure work, or vulnerable work, or working on farms, or put in a situation where they are not being paid their legal dues. That is our view, and that is their view.

I look forward to communicating to my constituents how we all vote on this legislation because I know what is important to them. They support my view, not the view of a small clutch of large businesses who stand to benefit from this legislation being passed.

Debate adjourned on motion of Mr Pederick.

Sitting extended beyond 18:00 on motion of Hon. V.A. Chapman.