FAIR WORK ACT

Adjourned debate on motion of Hon. R.D. Lawson:

That the regulations under the Fair Work Act 1994, concerning clothing outworkers, made on 18 October 2007 and laid on the table of this council on 23 October 2007, be disallowed.

(Continued from 30 April 2008. Page 2518)

The Hon. M. PARNELL (21:20): The Greens oppose this motion, because we support the regulations. This motion seeks to disallow regulations that support the outworker code of practice. The Greens strongly support that code of practice, and we therefore strongly oppose any disallowance of the regulations that give effect to that code. A large number of people have written to me since the Liberals put this item on the Notice Paper, and they are universally in opposition to the disallowance motion with one very curious exception, which I will explore a little later on, and that is the position of Business SA.

The Hon. A. Bressington interjecting:

The Hon. M. PARNELL: The Hon. Ann Bressington laughs; I think she knows what I am talking about. We have seen their logo on the brochure promoting the new outworker code of conduct, and we have had other correspondence from them where they appear not to be entirely supportive of it; but I will get to that shortly.

One of the pieces of correspondence that I received was from the Working Women's Centre in Adelaide. I will refer briefly to its submission, but I will also make the point that many members might have received communication from the Working Women's Centre seeking their support, because that centre is now under risk of defunding from the federal government. I have written to the federal government telling it that this is an important service that we need to keep going, and I urge other honourable members to do so also.

One of the points made in the Working Women's Centre submission addresses the complaint, I guess, of the Liberal Party that the burden will be too onerous on retailers. The Working Women's Centre points out that retailers are not legally responsible for the wages and conditions of outworkers, which are regulated by an award. However, the retailers do hold decisive power and influence in the clothing industry. They are a key part of the trail from cloth to made garment.

State and federal awards have proven to be insufficient in tracking the manufacturer of clothing through the supply chain thereby being able to protect workers and prevent exploitation in the Australian garment industry. The Working Women's Centre points out that we need more, and this code of conduct is part of that additional regulatory task.

Another piece of correspondence that I received was from the Textile Clothing and Footwear Union of Australia, whose website provides information about the outworker code of practice. It states:

People who work at home, away from the employer’s premises, are known as outworkers or homeworkers. Being isolated and with very little bargaining power, homeworkers are in an extremely vulnerable position. The vast majority of homeworkers are women from non-English speaking backgrounds.

I think that is an important point to note, that we are dealing with people who need our protection, because they do not have the same access to resources that the rest of us have to be able to insist on and protect our rights. The Textile Clothing and Footwear Union document goes on to state:

It is not uncommon to find homeworkers receiving $3 an hour and sometimes less. Due to poor working conditions and inferior machinery, homeworkers are three times as likely to have work-related injuries, both acute and chronic, than their counterparts who work in factories.

A little later on we will talk about their counterparts who work in factories and who suffer injury, but for now that is a fairly staggering statistic: they are three times as likely to be injured in their homes. The document continues:

Homeworkers face irregular work and an insecure income and [they] very rarely receive industrial entitlements such as paid annual leave, superannuation or sick leave.

I have also received correspondence from a number of individuals urging me to disagree with the motion to disallow these regulations. I will not read through all of those but, as well as the groups I have mentioned, there is also the FairWear Campaign, a group which has been instrumental in lobbying for the code of conduct and which now finds itself lobbying to make sure it is not undermined by having supportive regulations disallowed.

I also had another piece of correspondence—an important and influential one, as far as I am concerned—from the Office of the Employee Ombudsman. He actually came to see me some while ago to discuss this, and it was pointed out that an outwork group was set up which had representatives from all the stakeholder organisations involved and which unanimously supported implementation of the code. Some of those organisations included SafeWork SA, WorkCover, the Working Women's Centre (as I have mentioned), the FairWear Campaign, the Dale Street Women's Health Centre (a centre that is very likely to come across injured or underpaid workers), Business SA, SA Unions, the Retailers Association (that is also behind this), and the Migrant Women's Lobby Group.

From my point of view the most fascinating position is, as I mentioned earlier, that of Business SA. I think all members were sent a copy of the brochure headed 'New clothing outworker code of practice'. On the front page of that brochure are the logos of a number of organisations: the South Australian government and SafeWork SA, the Working Women's Centre, the Textile Clothing and Footwear Union, the Australian Retailers Association, SA Unions, the Office of the Employee Ombudsman, and Business SA. The logo of Business SA is on the front of the brochure, and the words inside say, 'This brochure is a joint initiative between SafeWork SA…and Business SA' (I will not read all the names again, because they are the same ones). They are listed as supportive. The back of the brochure has the Business SA address, phone number, and website.

I find it most curious that in his speech of 13 February the Hon. Robert Lawson referred to a letter from Peter Vaughan, the chief executive of Business SA, saying:

...on 7 February this year Business SA wrote to the chief industrial relations adviser at SafeWork SA, saying that it did not agree with the outworker code of practice or its immediate implementation.

I do not understand what is going on here. On one hand it is part of a coalition that includes practically everyone involved in this industry, but behind the scenes it is writing to the government saying it does not like the code of conduct. I wrote to Business SA asking for a clarification, and I am still uncertain.

I wrote to Peter Vaughan in March, and I will refer briefly to some of his reply. On 18 April this year Business SA wrote to me saying:

Business SA does not condone or support the exploitation of outworkers.

That is good, I am glad they do not condone exploitation. It would be a hard case to argue the opposite. It continued:

There must be safeguards in place to ensure that exploitation does not occur in South Australia.

I agree with that as well. It continues:

However, Business SA is also opposed to the introduction of inappropriate legislation, including regulations that impose unnecessary and excessive administrative requirements on South Australian business.

It goes on to talk about reducing red tape. So, I do not understand where they are coming from. They conclude their letter by stating:

Business SA believes it will be inappropriate to proceed with the proposed regulation.

So, it is a most curious response.

The Hon. Robert Lawson, in moving this motion, said that the regulations are too broad and they impose unreasonable, indeed, quite draconian burdens on small business. In other words, more red tape, more regulations, more form filling, for, importantly, no demonstrable good reason. I say that surely the fact that clothing outworkers are some of the lowest paid workers in Australia and that they work under a raft of unique characteristics which make them prone to abuse and exploitation—that includes their cultural and language barriers and isolation from conventional industrial frameworks—are all demonstrable reasons for the provision of protective legislation.

These outworkers, as I have said, are primarily migrant women who work in their homes or in premises not usually regarded as commercial premises. The honourable member dwelt on the lack of research on the extent of outworker employment in South Australia, but I do not see that as relevant to this debate. We know that they are amongst the most vulnerable workers in our society. We know that they fall outside the protection of legislation as a result of their lack of bargaining power and their isolation. It seems to me that this is an ethical issue that we are debating. If manufacturers make their production chains transparent then exploitation can be more easily identified and addressed.

The requirements of the South Australian code of practice are no more onerous than the current award provisions and contains the benefit that it provides a means of tracking the often complex manufacturing supply chain and thus ensuring that outworkers' conditions and wages are meeting relevant award provisions and that these workers have access to the occupational, health, safety and welfare protections to which they are legally entitled.

So, rather than creating more onerous red tape for small business, the provisions of the code of practice actually serve to create a niche marketing opportunity for ethical and local clothing manufacture. Ethical consumers concerned over the exploitation of workers are a growing segment of the retail market, and this code of practice encourages the transparency that allows consumers to make ethical decisions regarding the place and means of manufacture of clothing.

We have just finished debating ethical superannuation and the fact that people are looking to incorporate their values, as diverse as they might be, into a range of decisions they make. We have been talking about the decision as to where to invest your superannuation funds, but now, under this system here, we are talking about where people spend their money. People do want to buy products that are made ethically.

I can recall traipsing around Adelaide with a 15 year old daughter looking for the particular style of running shoe that was known not to be produced in a sweatshop. I cannot remember the exact name of it, but it is branded as such. You pay a bit of a premium for it—

The Hon. Sandra Kanck: Go to Oxfam.

The Hon. M. PARNELL: The Hon. Sandra Kanck says I should go to Oxfam: I think that is where we went in the end and we managed to get them. The point is that I think there is a marketing edge that can come from not engaging in exploitation and I think that that is something that is a counter to the argument that we are just creating more red tape: we are actually creating market opportunities instead.

The Hon. Robert Lawson stated that if we want to protect outworkers then we should do it by 'the usual method'. I guess he means legislate to make the employers meet their obligations and if the employers do not, then prosecute them. The honourable member argues that SafeWork SA is failing in its duty to find and prosecute these employers. That is why I say we need this mandatory code of practice, because the rogue employers are currently falling through the cracks.

The Hon. Robert Lawson says that no wholesaler ever reveals his supplier to retailers for fear of being cut out of the chain. I can accept that, but the details under this code of practice are not to be revealed to the industry at large, only to SafeWork SA and the union. I believe that this is an obligation that aids in transparency and that there are obvious benefits for workers who will no longer be invisible and unprotected by legislation that provides for their rights.

The 'usual methods' that the Hon. Robert Lawson talks about currently allow unscrupulous employers to evade their obligations by hiding them in complex supply and production chains. Why should it matter whether the figure is 300,000 or 25,000 outworkers across Australia? The very existence of a sector of the workforce that is commonly being paid far below the award and being denied superannuation, sick pay or leave demonstrates the need for legislative protection regardless of the size of this group.

The Hon. Robert Lawson's argument, I think, is fairly basic: increase the paperwork and industry will look overseas for a similar product. I do not accept that. I think that it ignores the growing market sector that prefers to choose locally-made products and ethical manufacture. Surely the decision to look overseas would involve far more factors than merely the amount of paperwork required. This is very much a secondary argument to the primary argument which is in relation to rights, and the rights of these people to proper treatment.

The code actively eliminates any competitive advantage that unscrupulous employers previously enjoyed and places all employers on an equal footing, competing on an equal playing-field. I think that is reason enough to support the regulations. The Greens will not, therefore, support the motion for disallowance.

The Hon. B.V. FINNIGAN (21:42): I rise in opposition to the disallowance motion. My colleague the Hon. Russell Wortley has already spoken, I think, on the government's position. I would like to place on the record some comments and responses to the contributions of the Hon. Robert Lawson in his moving this motion.

The Hon. Mr Lawson said that the proposed code will commence on 1 March this year unless disallowed, and that it is proposed that there be an amnesty for a further six months after commencement. This is incorrect, as the six-month amnesty period will actually conclude rather than commence on 1 March. During this amnesty period, SafeWork SA and members of the outwork group have conducted an education and awareness campaign which included targeted mailouts, posting information on the SafeWork SA website, conducting presentations in workshops, shopping centres displays and the distribution of explanatory leaflets at relevant community events. The Hon. Mr Lawson said that the code required retailers to provide details of their business to the union on a quarterly basis. This is incorrect, as retailers have the option of reporting the required details every six months.

Further, these details in the form of schedule 1 of the code are to be provided to SafeWork SA and the TCF union. No retailer needs to be covered by the provisions of the mandatory code; they can simply opt out by joining up to the national voluntary code at no cost. The Hon. Mr Lawson also said that on 7 February this year, Business SA wrote to SafeWork SA stating that it did not agree to the code or its immediate implementation.

The letter referred to was the submission provided by Business SA to SafeWork SA as part of the public consultation process. The submission is in fact dated 7 February 2007. I believe that is where the confusion arises to which the Hon. Mr Parnell referred. Business SA attended at least four clothing outworker group meetings subsequent to the date of that letter in 2007. Business SA has explicitly sponsored an explanatory brochure which the Hon. Mr Parnell referred to.

The Hon. Mr Lawson stated that he supports the existing outworker protections under the relevant award and the Fair Work Act and states that there is no desire not to ensure that outworkers are protected. The existing protections contained in the Clothing Industry Award and the Fair Work Act do play an important role in regulating practices in the clothing industry. However, given the complex networks and relationships within the industry, these protections are not sufficient by themselves to ensure the protection of clothing outworkers. The code fills in this void by reaching up to retailers located at the top of the supply and production chain.

Quoting directly from Business SA's submission, the Hon. Mr Lawson stated that Business SA maintains that there should have been a regulatory impact assessment (RIA) in relation to the need for and impact of the introduction of the code. A comprehensive regulatory impact assessment and accompanying business cost calculator assessment were completed in July 2007, and this was part of a cabinet submission regarding the promulgation of the code dated 18 October 2007. All members of the outwork group, including Business SA, were clearly notified that an RIA and business cost calculator assessment had been prepared as part of the cabinet process.

The general outline of the findings of the RIA and business cost calculator assessment were provided to the outwork group. Business SA's submission stated that a formal regulatory impact assessment should have included a number of things—and I will address those. It said that it should have assessed the scope of the outworker problem in South Australia and that it provided no empirical evidence regarding the scope of the problem in this state. By its nature outwork is isolated, unseen and generally non-unionised, and it is difficult to accurately assess the number of people involved in home-based garment manufacture in Australia and South Australia.

However, research commissioned in 2003 for the New South Wales government established an estimated ceiling to the number of potential pool of outworkers at 84,000. Prior to this, in 1995, the Senate's Economics References Committee looked at the question and said that the likely minimum was between 50,000 and 300,000 outworkers throughout Australia. While it is hard to gauge an accurate figure for this state, if we look at the normal pro rata's that apply there are certainly many thousands.

Business SA's submission also stated that the RIA should assess the number and size of businesses that would be covered by the code. In fact, extensive consultation and liaison was carried out between key stakeholders regarding the potential coverage of the code, including the New South Wales Office of Industrial Relations, the ARE (Australian Retailers Association), the federal Workplace Ombudsman, the Workplace Authority, the TCE Union and key community organisations. A database of manufacturing and retail clothing establishments that may be affected by the code was compiled with the assistance of WorkCover. This data was used during the public consultation period and, during this period, over 450 South Australian businesses were provided with draft copies of the code and an explanatory memorandum.

Business SA's submission refers to its own research and feedback. During outworker group meetings in 2006 and 2007, Business SA was asked to provide information regarding the members that may be affected by the code, but no such information was provided. During the public consultation period, Business SA arranged a seminar for its members regarding the code, and SafeWork's chief adviser for industrial relations was to attend the seminar. SafeWork was advised, prior to the seminar, that only two members had responded to the invitation to attend the seminar and, subsequently, one was held with approximately five members attending. That is in reference to Business SA's claim that it needed to do more research and get more feedback. Obviously, there was not much interest from its members.

Business SA also stated that the RIA would have revealed whether the code would achieve the intended outcome. A detailed assessment of the economic and social costs and benefits of four regulatory options was included in the RIA. The adoption of the current code was assessed as being of greatest net benefit. The RIA would have provided an analysis of the difference in imposition on business relating to the voluntary and regulatory codes, and a detailed assessment of these factors was provided in the RIA and the business cost calculator assessment. Again, Business SA stated that the RIA would have analysed current methods and resources available to address outworker issues.

The relevant South Australian award and federal award do not extend to retailers located at the top of the supply and production chain. The exception to this is where a retailer is a direct employer of an outworker (a situation that rarely occurs in South Australia).

In the Fair Work Act our workers are deemed to be employees without restriction. Our workers can also recover unpaid wages from fashion houses, manufacturers, contractors and other suppliers in the clothing production chain. The South Australian award and Fair Work Act currently impose substantial direct financial liability upon clothing manufacturers in South Australia who supply goods to South Australian retailers. This liability is both contractual and statutory; however, these provisions do not reach up to the top of the supply and production chain.

The biggest problem in attempting to assess how many outworkers are in South Australia and the overall levels of compliance is the hidden nature of the industry and the difficulty in finding outworkers' work locations, employment relationships, their employers and appropriate employment and business records. Put simply, the current regulatory system does not reach far enough to provide inspectors with sufficient information to penetrate the complex supply chain.

Business SA also asserted that the regulatory impact assessment would have analysed whether it is appropriate for employers bound by the Clothing Trades Award who comply with the award's (what they describe as) onerous requirements also to be required to comply with even further regulatory obligations on top of award requirements. For employers involved in supply chains already complying with the relevant federal or state award, there are no additional reporting requirements under the code. If employers have artificially reduced minimum terms and conditions of employment, they will incur increased costs.

The South Australian award currently imposes substantial direct financial liability upon clothing manufacturers in South Australia who supply goods to South Australian retailers. By contrast, the code will not impose any further regulatory obligations in the form of financial liability for remuneration upon any retailers at all, or upon any manufacturers who are already complying with either the federal award or the South Australian award.

Business SA said there was a lack of clarity in the terminology used in the code; however, the terminology is consistent with that used in the equivalent New South Wales code. Business SA raised a further point regarding the practical impact of the code on businesses.

In our view, there will be no further impact regarding manufacturers whose supply chains are covered by and comply with the state or federal award. The code does create some new obligations for retailers, albeit minimal, by requiring greater compliance and record-keeping.

Business SA also asserted that the RIA would have revealed there are differences in definitions used in other state and federal legislation, but the code is entirely consistent with other state and federal instruments dealing with clothing outworkers. The RIA, according to Business SA, would have identified what is required to ensure appropriate consistency with other jurisdictional activity with respect to outworkers.

It has been made clear on numerous occasions at outworker group meetings that there is only one other mandatory code of practice in operation, that being the New South Wales Extended Responsibility Scheme. There are no other mandatory codes operating in Australia; however, the Queensland and Victorian governments have committed themselves to the introduction of mandatory codes for clothing outworkers. According to Business SA, the RIA would have ensured that the record-keeping requirements are not in conflict with the Premier's commitment to reducing red tape on South Australian businesses.

The record-keeping requirements for manufacturers are no greater than that which already exist under the award. Retailers subject to the requirements of the code have particular reporting requirements which, to a large extent, mirror what is required of manufacturers under the state award. Of course, retailers have the opportunity—and, indeed, the code creates an incentive for this to happen—to become a signatory to the voluntary code. The impact of the code on retail businesses is of a minor machinery nature and does not substantially alter existing arrangements in terms of record-keeping, and the record-keeping requirements have been fully assessed in the regulatory impact assessment and the business cost calculator analysis.

Business SA further asserts that the RIA would have researched the impact on the equivalent regulation on small business in New South Wales. Prior to the introduction of the code, there was consistent and intensive consultation between SafeWork SA and the equivalent New South Wales agency which looked at the effect and experience of small businesses in New South Wales.

Business SA states that there was a significant disturbing lack of awareness of the proposed regulation throughout the employer community. The duration of the public consultation period was approximately 13 weeks. Prior to this the outworker group (of which Business SA is a member) was fully aware of the details of the proposed draft code. Extensive consultation occurred prior to the official public consultation period and the 13-week public consultation period provided ample opportunity for business to comment on the code.

Business SA again says that there has been a significant and disturbing lack of awareness in the employer community regarding the code. In fact, there has been a comprehensive mail out by SafeWork SA to over 450 individuals and businesses that may be affected by the code. Comprehensive information has been available on the SafeWork SA website, including the draft code and the explanatory memorandum. Throughout the public consultation period there was also a provision on the SafeWork SA website for individuals and businesses to launch their submissions online.

According to Business SA, the further concern is that the voluntary code was not made available to the proposed regulation. The explanatory memorandum which accompanied the draft code referred to the voluntary code and provided a link to it, as did the SafeWork SA website.

Business SA asserted that a privately established voluntary code exists in New South Wales that constitutes an agreement between the union and other organisations in that state. Contrary to this assertion, the voluntary code is a national voluntary code and not merely a New South Wales specific voluntary code. Signatories to this national voluntary code have for some considerable period of time included prominent retailers and manufacturers based in South Australia.

The voluntary code is operated and controlled by a committee made up of the following industry, union and community organisations: the TCF Union; the Council of Textile and Fashion Industries of Australia; the Brotherhood of St Laurence; Australian Business Ltd; Yakka; the Australian Industry Group; and Poppets Schoolwear. The committee oversees the establishment and ongoing management of the voluntary code. This includes registering and maintaining the 'no sweatshop' trademarks, logos and other ID items.

Business SA asserted that there are many businesses that sell T-shirts and memorabilia, some of which might be covered by this code. In fact, the provisions of this code only apply in respect of clothing that is manufactured in Australia. No business needs to be covered by the provisions of the code; they can opt out by joining up to the national voluntary code at no cost. Businesses also have the option of reporting the required details every six months to SafeWork SA And the TCF Union.

In the Hon. Mr Lawson's contribution on 27 February, he said, 'There is no exercise to undertake the regulatory impact statement.' In fact, SafeWork SA completed the required regulatory impact statement in the first half of 2007, and this was taken into account in the decision to proceed with the code.

The Hon. Mr Lawson also said he had spoken to Mr John Brownsea of the State Retailers Association who told him that he had members in the clothing retail industry who were entirely unaware of the code.

In my understanding, the claim that Mr Brownsea was unaware of the formulation of the code does not match the history of the matter. He was invited to join the consultation process on separate occasions by Mr Bourke and Mr Hulme of SafeWork SA, but declined on the basis that he had no membership in the clothing industry.

Members interjecting:

The ACTING PRESIDENT (Hon. J.S.L. Dawkins): Order! The Hon. Mr Finnigan has the floor.

The Hon. B.V. FINNIGAN: Thank you, Mr Acting President. I was responding to what the Hon. Mr Lawson said in relation to Mr Brownsea of the State Retailers Association. The Hon. Mr Lawson also said:

You might say, 'Well, what's all the fuss about? They ought to sign up to the New South Wales homeworkers code, and they will not have to bother about this one.'

The claim that the voluntary homeworkers code is a strictly New South Wales homeworkers code is untrue. The voluntary homeworkers code is a national code with long-standing South Australian participation; most notably, the active participation of the most high-profile textile clothing and footwear manufacturer and retailer in the state of South Australia, RM Williams, which has been a signatory to the national code—

Members interjecting:

The ACTING PRESIDENT: Order! The Hon. Mr Finnigan does not need any help from either side of the chamber.

The Hon. B.V. FINNIGAN: Finally, the Hon. Mr Lawson said:

There are serious inconsistencies between this homeworkers code, which is called the 'voluntary code', and what is called the 'mandatory code' that is being imposed. The most significant one is that the mandatory code applies only to goods manufactured in Australia...The voluntary code applies to all goods, whether manufactured in Australia or outside of Australia.

The final statement by the Hon. Mr Lawson is not correct. The Homeworkers Code of Practice only applies in respect to goods manufactured within Australia, consistent with the definition of 'supplier' in Part One: Retailers at clause 1—Definitions.

It has taken a little while to go through that, but I think it is important to respond in detail to the assertions made in the submission by Business SA, which the Hon. Mr Lawson took the time to read into Hansard.

In conclusion, I thank honourable members who made a contribution to this motion, particularly those members of the crossbenches who indicated that they will also oppose this disallowance motion, as will government members. I congratulate all those who were involved in putting together the outworker code of practice in the outworker group and those at—

The Hon. A. Bressington interjecting:

The ACTING PRESIDENT: Order! The Hon. Ann Bressington is out of order.

The Hon. B.V. FINNIGAN: I extend my thanks to those at SafeWork SA, particularly Mr Stephen Brennan, the Employee Ombudsman, Michelle Gilbert from his office, Andy, Elizabeth and anyone else there who has made a contribution.

Members interjecting:

The Hon. B.V. FINNIGAN: I am glad that members opposite are so excited to be voting on this disallowance motion, and I urge all honourable members to join me in opposing it.

Members interjecting:

The ACTING PRESIDENT: Order! I call the Hon. Robert Lawson to conclude the debate.

The Hon. R.D. LAWSON (22:01): I thank those honourable members who contributed to the debate on this motion. I regret that a couple of the addresses given this evening miss the essential point of our opposition to this particular regulation.

The Hon. R.P. Wortley: Poor old outworkers.

The Hon. R.D. LAWSON: The Hon. Russell Wortley says, 'Poor old outworkers,' and we do not have any problem with that statement. We believe, however, that the government should be enforcing the laws that already exist in relation to outworkers. It should not be attacking retailers. I ought remind the council, for those who are still undecided in relation to this motion, that the Fair Work Act contains provisions that protect outworkers.

As he rushed through the paper that was obviously written for him by somebody else, the Hon. Bernie Finnigan failed to put sufficient emphasis upon those provisions. Section 5 of the Fair Work Act specifically deals with outworkers and defines them. It states that all the provisions of the Fair Work Act apply to outworkers if a provision of an award relates to them.

The South Australian clothing industry award specifically contains provisions dealing with outworkers, and schedule 4 contains all the sorts of provisions you would expect to find in an appropriate industrial instrument relating to outworkers. The award is binding on the union and the industry of the occupations of persons described (namely, outworkers), whether as employers or employees and whether as members of a union or not.

So, there is award coverage for outworkers. They are protected by the industrial award. If the union is so keen to get better provisions, it can apply to change the provisions of that award. I assure members of the council who may not be familiar with these provisions that schedule 4 of the clothing industry award provides appropriate protections.

In part 3A of the act, commencing at section 99A, there are other provisions dealing with outworkers. It is interesting to note that those provisions specifically provide that a person whose sole business in connection with the clothing industry is the sale of clothing (clothing by retail) will not be taken to be a responsible contractor for the purposes of this legislation.

So, there is a specific provision in the Fair Work Act that, although there are provisions for the protection of outworkers, and conditions are imposed upon responsible contractors (the employers of outworkers), a person whose sole business is in connection with the sale of clothing by retail is not covered. The unions, with the assistance of the government, have sought not to amend that provision and impose obligations on the retail industry, which clearly are intended to be exempt. They have come along by the backdoor and made a code of practice. It is only a notional code of practice because it says, 'This is mandatory. There are heavy penalties if you do not abide by it. However, if you sign up to something else in New South Wales, you can avoid everything.'

More importantly—and I do not believe sufficient evidence was given either in the speech of the Hon. Bernie Finnigan or the Hon. Mark Parnell especially—the New South Wales voluntary code to which you subscribe says that, if you buy goods only made outside Australia, you do not have to do anything. What greater incentive is there to people to buy overseas-made goods than that? That is to say, 'You don't have to fill in these forms, whether quarterly or every six months. You do no have to disclose information to a union about your business. You do not have to seek to go behind your wholesaler and identify from whom the wholesaler is dealing. You do not have to do any of those things: all you have to do is buy overseas gear.' How can that help the Australian footwear and clothing industry?

The Hon. Bernie Finnigan repeats the union's mantra that there are some 300,000 outworkers in Australia. The fact is that the Productivity Commission in an extensive review of the footwear and clothing industry identified about 25,000 outworkers in the whole of Australia. What form of gross exaggeration—

The Hon. B.V. Finnigan: If it is only 25,000, forget them, they don't need protection.

The ACTING PRESIDENT: Order! The Hon. Mr Finnigan had his go. The Hon. Mr Lawson has the floor.

The Hon. R.D. LAWSON: That is not the point. The point is that, at every corner, the proponents of this regulation exaggerate the issue grossly. There is no need to say that there is 300,000—that would make 30,000 in South Australia, which anyone in this chamber would know must be nonsense. There are 25,000 across the whole of Australia, and not the Hon. Bernie Finnigan or anyone—the brochures or the material—has shown how many of those are in South Australia. No attempt at all to ascertain—

The Hon. B.V. Finnigan: Even if it is 3,000, does that mean that this is irrelevant?

The Hon. R.D. LAWSON: No, not at all. There maybe 300, but there will not be any left if retailers in this state are told, 'Don't buy local, buy overseas goods.' The Hon. Bernie Finnigan relied upon a regulatory impact statement that Business SA says should have been made, but the government has not produced that regulatory impact statement either to Business SA or the parliament. They have not come along and said, 'This shows what the Hon. Bernie Finnigan was trying to suggest, that is, it really had very little impact at all.' It is all very well for someone who has been employed by a union to say, 'Oh, there is nothing about filling out a form, a 10-page form, providing copies of your invoices and so on every three months or every six months.'

I can tell the honourable member that anyone who has been in business in this state will know that form filling is a major imposition. Of course, their argument is, 'Well, you don't have to worry about that, you can sign up to this voluntary code and avoid all problems.' That shows what an artificial and inappropriate scheme it is. If we want to make laws to require South Australian retailers to undertake things, let us pass a law, let us have it debated in parliament and let us make a decision based upon a full understanding of the impact of the provision, not come in the backdoor and slide in this way.

I do not care whether Business SA or anyone else has agreed to have their name or logo put on it—and great play is made of the fact that the Australian Retailers Association has agreed to this. The Australian Retailers Association is so interested in South Australia that it abandoned its office here, it has no representative here and it has departed the shores of South Australia. I regret to say that it appears that Business SA is not adequately looking after the interests of the small retailer. It might be regarded as the fact that it does have many members in that particular segment.

The Hon. B.V. Finnigan interjecting:

The Hon. R.D. LAWSON: As the honourable member said, Mr John Brownsea of the State Retailers Association does cover a number—

The Hon. B.V. Finnigan interjecting:

The Hon. R.D. LAWSON: The honourable member says, quite wrongly, that Mr Brownsea acknowledges that he has no members in the clothing industry. That is not the issue here. The issue here is retailers. He does have members in the retailers. It is the retailers who are affected by this motion, not those in the clothing industry. Mr Brownsea acknowledged to me—and I can assure the council of the truth of this conversation—that he does have members who retail clothes. He is concerned about this, but he was not adequately consulted about it and he did not consult with his members. He runs a small organisation—and I do not hold that against him—but the fact is that the one representative in South Australia who does represent small retailers was not involved in the development of this proposal and does not endorse it.

The Hon. Mark Parnell said that this regulation would encourage ethical trading. Ethical trading requires the trader to have some choice about whether or not he does something. If ethical traders want to provide the union with material about their business—where they get their material—they are quite entitled to do that. One does not make someone ethical by legislating and requiring them to do something.

The Hon. Mark Parnell also said that we want to put all retailers on an equal footing. This does not put all retailers on an equal footing. It imposes an obligation on those who sell Australian goods and imposes no obligation at all on those who sell overseas made goods. This is not a matter of an equal footing for retailers; it is a matter of unequal footing. This regulation is defective and it ought not be supported by the parliament.

The council divided on the motion:

AYES (9)

NOES (12)

Majority of 3 for the noes.

Motion thus negatived.