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House of Assembly - Fifty-First Parliament, Third Session (51-3)
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FAIR WORK (COMMONWEALTH POWERS) BILL

Second Reading

Adjourned debate on second reading.

(Continued from 9 September 2009. Page 3773.)

The Hon. I.F. EVANS (Davenport) (11:46): I indicate that I am the lead speaker on this matter for the opposition. The Fair Work (Commonwealth Powers) Bill 2009 is the first of two bills the government has introduced with the principle of transferring the remainder of the private sector industrial relations system to the commonwealth. The house will recall that the former Howard government used its constitutional powers to take over what are known as constitutional corporations and put them into the federal industrial relations system. That is, in essence, for want of an easy description, Pty Limited companies.

It means that about 70 per cent of the South Australian private sector is under the current commonwealth system and that 30 per cent remains under the state system. There is some debate about whether it is 70 per cent or 80 per cent under the national scheme and 20 or 30 per cent, but we will use the figures of 70 per cent and 30 per cent for the sake of the argument. What the state government is proposing with the two bills (and this is the more substantive of the two bills) is to transfer the remaining 20 or 30 per cent of the private sector through to the commonwealth so that all the private sector, in essence, is under the national industrial relations system.

It does not apply that commitment to the state public sector, which will largely remain in the state system, and local government will also remain in the state system. This is an in-principle decision to be made by the parliament. Does the South Australian parliament want to set future industrial relations policy settings for the remaining 20 or 30 per cent of the private sector, or are we happy to forfeit that power through to the commonwealth?

The opposition is not going to support these bills. We went to the 2006 election, even when the Howard government was in power, saying that we would support the retention of a state industrial relations system. So, unlike the government, we do not come to the table with a philosophical position that says, 'Now that we have a friend in Canberra, we want the state to have an industrial relations system and, when we have an enemy in Canberra, we have a different position.'

Our position has been consistent now for well over three years; that is, regardless of the colour of the commonwealth, we believe that there is some benefit in the states (including South Australia) maintaining their industrial relations systems. The opposition believes this for the following reason: we think that there is good sense in states being able to set some of their business climate, if you like, and setting legislation so that they can create a competitive business environment to attract and maintain investments into the states.

The parliament should be aware of the long-term goals of the Labor Party and the union movement Australia wide. What the Labor Party seeks to do, in my view, is transfer the private sector through to the commonwealth to have a national industrial relations scheme. The minister has already been subject to public comment about the harmonisation and nationalisation of occupational health and safety laws, and there is now a draft bill out nationally for public comment. The ACTU has already put a submission to the commonwealth government about a national workers compensation scheme.

As a parliament, we should look 10 years down the track and ask ourselves: if that agenda is achieved, what legislation will the state government have left at its disposal to make an attractive business investment climate in South Australia? It will have tax measures, as does every other state, but it will not, to any large degree, have industrial relations, occupational health and safety or, indeed, workers compensation.

The state Liberal Party believes that there is some benefit in having states competing against each other. We believe that a competitive federalism in actual fact is good for Australia, because it creates competition between states and it makes states continually review their industrial relations, OH&S and other legislation to make sure they remain competitive nationally. Once you transfer it all to the commonwealth, the parliament will essentially take its eye off the ball long term—not initially, but in the long term because, essentially, that would be a matter virtually controlled by others not in this place. We do not see that that is in the long-term best interests of small states, particularly smaller states like South Australia.

During my brief time as the minister for industry and trade, we used to love travelling to the Eastern States and plundering their businesses by saying that we had the best industrial relations system in Australia; the lowest level of industrial disputes in Australia; more flexible industrial relations laws; a lower cost of living; lower business costs—come to South Australia and invest. Once you go to the national system, that argument is gone, because it is the same everywhere. So, South Australia loses the capacity to paint itself, in industrial relations terms, as a competitive environment, because it is the same everywhere.

The other issue is that, if we want evidence of that, we can go to the debate we had in this chamber and in the upper house more recently, when this government brought in what was the worst industrial relations bill in the state's history under former minister Wright—the Fair Work Bill. It went to the upper house, and we demolished it there, and I think the government is pleased that we demolished it. There were lots of ambit claims in that bill. The government was pleased we demolished it in the upper house, but how did we have the capacity to demolish it? We had the capacity to demolish it because we flew around the country and spoke to business organisations in Western Australia, Queensland, New South Wales and Victoria and looked at the provisions that this government wanted to bring in that already existed in those states.

I remember the unfair contracts legislation that existed in Queensland, for instance. It was an atrocious piece of legislation that this government adopted as part of its Fair Work Bill. We demolished it in the upper house, because we could go to the other states and look at what was happening. Once we transfer all of the private sector to the federal scheme, essentially there is one scheme across the board and, ultimately, there is no trial and error, as such, in between states, so you are stuck. If you get it wrong, it is totally wrong. For those reasons the state opposition will not be supporting the bill. We think to have one industrial relations system right across the nation will actually harm South Australia's interests in the long term.

We have consulted with the business community, and we understand the business community, particularly those who represent large employers who trade across states. We accept the argument that a national system for those big employers who trade across states could be of some benefit. That is why we adopted the policy in 2006 to give individual businesses choices, whether they go to the federal or state scheme. Given a choice, the large employers, like BHP, Santos and Woolworths, etc., which go across a number of states, would ultimately choose to be in one national system. I can understand that argument for those big employers.

However, let's look at the impact of what I call the small business, for instance, the Blackwood shoe shop, which might operate or compete only in the Blackwood district and not across states. Why is it so important to the government to force that business into a national scheme that brings with it increased costs and obligations on the employer?

Mr Speaker, I will give you the example of my sister's business. My family comes from a retail, building and plumbing background, and that is well known to the house. My sister's business involves a number of retail paint shops, which do not trade outside of South Australia. The extra cost to that particular business of going into the federal scheme will be $30,000 a year to do nothing more than they have done for the last 10 years, that is, sell paint. Why is that? It is because they have been forced into a federal scheme, and now the federal government is going through an award harmonisation process, and through the award harmonisation process the cost structures are different.

The house needs to be very clear about what we are doing with this bill. What we are doing is forfeiting our rights, in essence and in all practical senses, to the commonwealth, and small businesses, not the big businesses so much—and, according to WorkCover, 80 per cent of South Australian businesses employ fewer than 20; so, we are essentially a small business state—will feel the impact of this long term; their costs will increase long term.

If you want any better evidence of this speak to any businesses involved in the award harmonisation process being undertaken at the moment. There have been media comments that newsagents face a 10 per cent rise, pharmacies something like a 12 per cent rise, and the restaurant and cafe sector are so bad that they simply tried to exempt them out of the process. The horticulture sector has had complaints. There is the aged care sector, where costs are going up significantly because of their involvement in the national system.

Where we are heading long term is to a position where the state is going to have less day-to-day control, and I will come to the level of control in a minute. The bigger businesses, I think, would choose to be in the national system, and they have the resources, the revenue and the human resources to deal with all the complexities of that. It is the small end of town, the small business, that will be hurt by this long term. Yet, there is no better evidence than what is happening with the OHS laws and award harmonisation.

Occupational health and safety laws? The government knows this; it has not responded to it. We have raised this before. The housing industry says that, through the occupational health and safety provisions that are being proposed, the cost of a new single-storey house in South Australia will go up $12,000 extra just because of occupational health and safety laws—nothing else—just so that we can be in a national system—nothing else—and for a two-storey house $21,000 extra just so that we can be in a national system.

There comes a point where political philosophy has to be put aside for the practical reality of the impact on the ground. For the small businesses in this state, that 20 to 30 per cent that are not in the national scheme, the opposition says that there is more benefit to the state and more benefit to small business to retain the state system and let those businesses decide themselves whether they want to go into the federal scheme and suffer the benefits or 'dis-benefits' of going into the federal scheme or stay within the state scheme.

We have had this position now for three and a bit years. I repeat to the house: even when the Howard government was in power, we went to the 2006 election and said that we would retain a state system. Even though we had friends in Canberra, we did not ever forfeit this state's right to set an industrial relations agenda—and we went to the election with that policy in 2006. Of course, in 2006, the state government did not say that it was going to forfeit the industrial relations system to the commonwealth. It has come to this conclusion only since it has had a friend in Canberra, Mr Rudd. It has come to the conclusion that this is what it would do only since the Rudd government has been elected. The opposition is of the view that it will be voting against both these measures.

I want to run through some of the issues raised in the minister's second reading explanation. It mentions that, even though the government had introduced the bill and was committed to it, a number of issues needed to be resolved between all the other governments through the intergovernmental agreement. I understand that the intergovernmental agreement has now been signed—and the minister confirms this with a nod. The opposition is yet to see a copy of the intergovernmental agreement. Eventually, I guess, maybe when the legislation is finally dealt with in the upper house, the government might produce it, but the—

The Hon. P. Caica interjecting:

The Hon. I.F. EVANS: The minister said that is a bit unfair. I will tell the minister what is unfair. I thank his staff for forwarding me the information, but to email me, at 10 past 6 last night, amendments to the bill which the minister knows we have no chance to discuss at a portfolio meeting or a party room meeting, given that it is only 12 hours before the debate, is unfair. Further, the minister will say what a good bloke he is because he will present to the house details of the intergovernmental agreement. Why not email me last night all the other information you expect me to debate in the next 10 minutes through to the third reading stage? Why not send through the intergovernmental agreement then, so that we could see what is in it? Anyway, it was interesting that the government committed to this matter, regardless of the detail of the intergovernmental agreement.

In the second reading explanation, the government says that it consulted widely with industry groups. Industry groups will tell you that, yes, they were consulted, but they were not able to consult their members. It was a closed shop and they were only able to consult their members once the government had introduced the bill and finalised a position. That is not consultation. The government has talked to the senior people in the various industry associations, but only on the basis that they dare not talk to their members.

The government brings in a bill, saying, 'We have consulted with the industry associations and they support us generally.' Really? The industry associations never had the chance to go back to their membership as part of the consultation process until after the government introduced the bill and had reached its position. If that is what the government calls consultation, well good luck to it. It is not the style of consultation that this opposition would run or, indeed, that the former government ran, to my knowledge.

The government claims that this will be more efficient. More efficient for whom? I challenge the minister to explain to my sister how their having a $30,000 per year extra bill is more efficient—and they are doing nothing different from what they have done for the last 10 years. The award modernisation process that they are locked into as a result of being in the federal scheme delivers them that result. The government can wave its flag and say, 'Isn't this good: we have a national scheme and it is somehow more efficient for business.' Really? Go and talk to the newsagents, the little guys, the pharmacies, the horticultural sector, the retailers and all those operating the little one, two and three people businesses that are running their own show, and they will tell you that the award modernisation process, thanks to the national scheme, is a dog's breakfast.

This is what is being delivered through a national scheme, and I do not think that the government has its head around exactly what cost structure will be imposed long term on the little bloke, the small business, as a result of this scheme. The minister can correct me if I am wrong. He certainly has more industrial expertise at his disposal through his officers than I, but, if we go to a national scheme, all the awards will eventually go to national awards.

The basic rates—the minimum pay structure under all the awards—will be the same Australia wide, and that means that for those industries that just pay the award—and there are plenty of them out there; the retail sector, in particular, tends not to pay above the award—what you are imposing on the retail sector—and restaurants and cafes is another—is a national cost structure, a national penalty system that it has never had to wear before.

South Australia has always had a lower cost of living than other states. It has always been a state with a lower cost structure for its systems, but not any more. If we go to a national scheme, the wage structures will be the same. I am talking long term, not tomorrow or next week but, rather, in five or 10 years once Fair Work Australia, the industrial relations commission, goes through all the awards. We are heading to the same wage structure and minimum wages all the way through.

The minister will quite rightly say that not every industry pays the minimum award. That is quite true. In relation to the plumbing and building industries—which are nexus awards, anyway—that is quite true, but plenty of industries just pay the award. Those industries—which are mainly made up of little blokes and mum and dad businesses—will get caught.

The minister will quite rightly say that a lot of those businesses are caught now due to the Howard decision about industrial relations. That is true. I do not mind saying—again publicly—that I was the only Liberal to stand up publicly against the Howard legislation and campaign with a different view.

It has always been my view that South Australia is best placed to set the industrial relations environment, the occupational health and safety environment and the workers compensation environment it wants in this state to provide a proper system of wages, safety and compensation to its citizens, but at the same time provide for a competitive business environment compared with other states.

So what is the government's view on this? Once we have a national system of industrial relations, a national system of occupational health and safety and a national system of workers compensation, tell me exactly how South Australia will then provide a different competitive business environment. Essentially, we are left with the tools of tax and training.

We are starting to limit and restrict the impact that states can have on setting their competitive business climate long term—10, 20 or 30 years down the track. I am looking that far ahead. I am not looking at tomorrow but, rather, long term. What does the parliament think will happen long term? Let us look at it. South Australian federal representation is reducing. We have gone from 12 seats to 11 seats in the lifetime of this parliament due to population shift from the lower population states to the higher population states. Queensland has got an extra seat and South Australia has lost a seat.

More of the power in the federal parliament—and, indeed, the federal cabinet—will be Eastern States based. What we will get long term is Eastern States industrial laws, Eastern States occupational health and safety and Eastern States workers compensation. This state, for decades, under governments of every colour, has campaigned against exactly that. We have gone to Eastern States businesses and plundered them and brought them to South Australia by saying, 'You don't want to have the Eastern States industrial relations regime,' or OH&S regime or workers compensation regime. 'Come to South Australia, where it is cheaper and easier and there is a better quality of life, to do your business.' To my mind, long term, we are forfeiting that argument, and we are forfeiting it so we can say we have a national system. I am not convinced and, indeed, neither is the opposition yet convinced.

In his second reading explanation the minister gives examples of the benefits of a national system, and I will quiz him on every one of these examples. He says there will be great benefits to small business: I think I have addressed that. There will be greater benefits to young workers. How are young workers better off? Surely, that depends on the award, I would have thought; but, apparently, by going to a national system somehow younger workers are better off—not the older workers, just the younger workers.

Apparently, there are greater benefits for women in going to a national IR scheme—not for men, but just the women. Apparently, somehow, there are greater benefits for women in going to a national scheme. And you would not believe it, Madam Speaker: there are greater benefits for the disabled in going to a national scheme. There are greater benefits for regional workers—not metropolitan workers, apparently—and there are greater benefits for indigenous workers. Also, there are greater benefits for workers from culturally and linguistically diverse backgrounds. All that is in the second reading speech.

Give me a break! Does anyone honestly believe that going to a national system somehow derives benefits for simply those classes of workers mentioned in the minister's second reading explanation? I do not believe that. I think that is an all-encompassing, feel-good statement that sets out all the tick boxes, if you like, of political correctness. Either the legislation is good for all South Australians or it is not. A cynic might ask: what is in it for an able-bodied male living in the city? So, I do not believe that section of the second reading explanation.

The minister talks about cooperative federalism: I talk about competitive federalism. I think the United States has got it right and I think Canada has got it right. They have states actively competing against each other for workers and for business. There is a competitive tension between the states. By going to a national system, we will lose some of that—a significant part—and I think I addressed that in my earlier contribution.

The minister in his second reading speech says South Australia will have a significant and ongoing say. Well, I am not convinced. Under these bills, as I understand it, there are two ways that the state government can have a direct influence on future industrial relations legislation. There are only two ways. It can give a six month notice and totally withdraw from the scheme, if I understand the bill correctly. So, the state government can basically say, 'The federal government is moving to a policy area we do not like so we are going to withdraw from the whole scheme.' The business community is not fussed about that because it says no government will ever have the guts to do that. That is essentially the business community's argument on that provision.

There is another provision that if the federal government seeks to amend some of the key principles in the bill, the government can give three months' notice and withdraw the commonwealth's power in relation to just those principles. The business community is not that happy with that provision. For instance, if the federal government moved to change the unfair dismissal provisions to a position that the then state government did not like, under this bill the state government could say, 'We are going to withdraw the commonwealth's power just in relation to unfair dismissals.' The business community would argue, 'Well, that is bizarre.'

You would have businesses under the commonwealth system for everything except unfair dismissals and under the state system for unfair dismissals, and they say that would become very complex. However, the government has thought about this long and hard and has decided that that is the model it wishes to put in place. They are the only two ways in which the state can have a say. Of course, the state parliament does not have a say.

This will all be done in the smoke-filled rooms of cabinet. It will simply be done through the cabinet process: the parliament will be ignored. We will not a have a say. We will get a ministerial statement; we might get a press release if we are lucky. However, we certainly will not have a say through legislation on that provision because, from memory, they are done on advice to the Governor, who advises the federal government on behalf of cabinet.

The mechanism that the government is using is what is known in the industrial relations field as a text-based referral. The referral is done by way of a schedule to this bill. I note that the email with a new schedule attached to it was sent through at 10 past 6 last night. There are nine pages of amendments, including a new schedule, the text to be included in the provisions of the commonwealth Fair Work Act. So, having met with the minister back in September, and the minister's having introduced it in June, at 10 past 6 last night we receive another schedule to look at.

The opposition will not be commenting on any amendments before the house. We accept the fact that it is basically a 30 to 15 vote in this house. We will have to look at the amendments in between houses. As I received them at 10 past 6 last night, I have not had a chance to consult any member of the business community about them. The minister's office says they are minor. I accept the fact that they may be minor, but I have not had a chance to go through them line by line. So, with respect to the amendments, we will not be commenting, other than to say that we will look at them between the houses.

It staggers me that, on such a major piece of legislation—giving up our industrial relations rights—after years of negotiating this, the government is still coming up with amendments the night before. I just find that interesting, I guess. One of the interesting aspects of this (and I think I have got this right; the minister can correct me) is that, if the commonwealth decides to move amendments which the state does not like to the commonwealth industrial relations laws and which then become the state industrial relations laws by default, we can move for a clawback, if you like, of the provisions.

However, the amendments the commonwealth has already moved stay in place. If the commonwealth moves amendments, for instance, to a particular provision that the state does not like, even though it is through the federal parliament, the state can then object to it and seek to withdraw, but the amendment stays in place. It is for future amendments from that point on—from the withdrawal—that the state claws back its power.

So, if the unfair dismissal provision is changed and the state does not like it, it can use its three months' notice to withdraw unfair dismissal out of the commonwealth system. However, the change that it does not like stays there and applies, and it is only future changes the state can make to suit itself, but of course it cannot make a change that is different from the federal change because the federal change, through the constitution, overrides the state change. I argue: what protection is there for the state? Not a lot. Essentially, we are forfeiting the rest of the industrial relations system to the commonwealth. That is the government's plan and, as I said, long term, I think that is a mistake.

I will be interested to question the minister in the committee stage on exactly how future amendments to the act work. I understand that through the intergovernmental agreement changes can be agreed at the ministerial council if two-thirds of the council support such changes. One assumes that South Australia could get voted out on every occasion, because we could be in the minor third, and the amendments will still go through.

I am not sure, as I have not seen the intergovernmental agreement and it is not attached to the legislation (when this legislation was introduced they were still negotiating it, so it was a movable feast, so the opposition is totally in the dark on the issue), of the legal position if the ministerial council agreed to an amendment and South Australia actively participated in the vote by voting against it. Are we then locked into not being able to use any of our retraction provisions—the six month or three month clause—to retract our position? That is not clear.

It is not clear under the intergovernmental agreement whether the two-thirds provision even applies. If it does, who gets to vote in the two-thirds: is it every state, every state and territory, every state and territory plus the commonwealth or, as per the ministerial council, every state and territory, plus the commonwealth, plus New Zealand? Does it actually get a vote? It is not clear to me; it is not before us. I am at liberty to ask the questions in that sense. The minister might like to address how that will actually work.

The federal government will be able to make technical and progressive amendments. I am not sure how a court would interpret the word 'progressive'. It is not defined in the bill but, if the South Australian parliament supports this it is saying that it is happy for a federal government to move 'progressive amendments' to our industrial relations system, I have no idea what that actually means in an industrial relations setting or exactly how a court or tribunal would interpret the words 'progressive amendment'.

The reason I have explained the amendments—the six and three month clawback and the intergovernmental agreement—is that the minister says in his second reading explanation that South Australia can directly influence the new industrial relations system by this proposal to transfer the balance of our private sector through to the commonwealth. I say to the parliament: how so? Whichever way you look at it, if you vote for this you are voting for less influence, because today as we speak about 30 per cent of the private sector in South Australia is under the state industrial relations system and the parliament—the individuals here—can vote to change that industrial relations system.

The minister says that, under the new national system, by transferring it all federally, South Australia can directly influence it. I say: rubbish! We can directly influence it now, because we control it. If we forfeit it to Canberra, can we really directly influence it? I do not think so. We will be like a spectator at the football. We will barrack a bit from the sidelines and occasionally the ball will be kicked to us when someone kicks a goal but, as for having active participation and a real influence over it, I am sorry; I do not accept the argument that the South Australian parliament will have a real influence over it.

Oh, yeah, the cabinet of the day will be consulted! The opposition of the day, if it is lucky, might get something out of FOI, although cabinet documents are not FOI'd. How will the opposition or the other minor parties be involved? The answer is that they will not be involved. This proposal is to lock away the industrial system in Canberra and then give cabinet a consultative role long term. That is not the future of South Australia that I support. I support the South Australian parliament having a direct say. It might be a bit old-fashioned, but I think that the South Australian parliament should stand up for small business. I do not think we should forfeit our rights to the commonwealth, and that is what this particular bill will do.

The second reading explanation says that transitional arrangements are still being finalised; so the opposition is in the position of not knowing what they are. The government may wish to explain to us what the transitional provisions are. The other issue in relation to the intergovernmental agreement is that I want to know whether the decisions are binding and legally enforceable or are they simply a matter of honour? In other words, if the intergovernmental agreement (through the ministerial council) decides a position, is it simply a matter of honour that the state government then must implement that or is it legally binding, that is, legally enforceable? I have had mixed reports about which answer applies.

The government says that to have a national industrial scheme is a really good thing for business. It went through and named virtually every group saying that it would be of great benefit to them. Small business, young workers, women, the disabled, regional workers, indigenous workers and those from culturally and linguistically diverse backgrounds will all benefit out of having a national industrial relations scheme. What the government is not doing—and Business SA argues this—is transferring the public sector up to the national scheme.

It is that good for the private sector that the government's public sector wants nothing to do with it; and the reason I suspect the government wants nothing to do with it is because it wants to control the industrial relations setting and the wage structure for its own workforce—that is why. It is all right for the government to do that, but all you little business people out there can tootle off to the federal system. You can wear the award modernisation process, you can wear a national OH&S scheme that will put up your costs and you can wear a national WorkCover scheme within the next five to 10 years (because that is the philosophy that is being driven), and if that puts up your costs, bad luck; and that is the stark difference.

The public sector is being treated totally different to the private sector in this piece of legislation. Local government will also come back under the state scheme. Apparently, it is that good for the private sector that local government does not want to be involved in the national scheme, either. If there are all these benefits of efficiency, why would Business SA ask why they would not be applied to the public sector? It is an interesting question that the minister might like to address.

A number of government business enterprises will be excluded from the national system, and they include: the Adelaide Convention Centre, the Motor Accident Commission, the Land Management Corporation, SA Lotteries, the Forestry Corporation, the Superannuation Funds Management Corporation, the West Beach Trust, WorkCover Corporation, HomeStart Finance and the Adelaide Entertainment Centre. They will be excluded from the national system. The following business enterprises will not be excluded. I assume that means that they will be included, but the email says 'not excluded', so I will use that language. The business enterprises that will not be excluded from the national system are TransAdelaide and SA Water.

I am wondering whether the government has done any work—and the minister can answer this during his response to the second reading contributions—about competitive neutrality, because the Land Management Corporation will be under the state system, which has a different wage and award structure, etc. The people they compete against in the development industry will be under the national system. The South Australian Forestry Corporation, of course, will be under the state system, while privately owned forests will be under the national system. So, I am wondering whether any thought has been given to the competitive neutrality issues there. I would also be interested to know on what basis organisations' enterprises were in or out of the national system.

I will not speak about the second bill, even though the measures are related; I will leave that until it comes on. The minister has, I think, nine pages of amendments to his own bill, so we will need a committee stage.

In conclusion, I go back to the broad principle and that is: long term, what does South Australia's parliament see its role as being in terms of setting the industrial relations, OH&S and workers comp environment? My view is that the state parliament should have a proactive role, and I do not think that we should be forfeiting, as we are in these bills, those rights (at least the industrial relations rights, at this stage) to the commonwealth.

The opposition has the same stance as it had in 2006, that is, we support the maintenance of a state industrial relations system for those 30 per cent of businesses that find themselves still in the state system.

Mr RAU (Enfield) (12:31): I listened with great interest to the contribution by the member for Davenport. As a person who has worked professionally in and around industrial law for many years now, I saw considerable force and merit in what he had to say. It would not surprise members of this parliament to know—or any who have been unlucky enough to listen to me speak before—that I am profoundly sceptical about the value of transferring authority from the state to the commonwealth just for the sake of doing so. I am profoundly sceptical about ministerial councils making decisions and then bringing them back here and directing us to do various things.

As I said, most, if not all, of what the member for Davenport said, I believe, is largely correct. However, there is a large number of things that he did not say. To understand a picture properly one needs to say these other things as well. The conclusion that one draws after having heard what the member has very carefully and skilfully explained to the chamber might be a different conclusion to the one drawn after hearing the other facts which are highly relevant to this matter.

The history of this matter goes back a very long way. The member for Davenport is quite right: historically, South Australia's competitive advantage within the commonwealth has been a lower cost structure, with lower wages and things like the Housing Trust, for example. Back in Tom Playford's time, these were all part of the social infrastructure and the cost structure built into the South Australian economy which made things like Whyalla, the car industry and various other things possible in South Australia. That is absolutely true.

It is also true that, going back 30, 40, 50 years, state award rates in South Australia were considerably lower than federal award rates or equivalent state award rates in some other states. Further, it is true, and important to understand, that prior to Federation Charles Kingston, who was premier of this state and a very important contributor at a state and national level, was largely responsible for putting together the system of conciliation and arbitration. That system was enshrined in the Commonwealth Conciliation and Arbitration Act 1904.

For the next 100 years, a boundary existed between what the commonwealth could do and what the states were able to do. That boundary, which was demarked by the High Court, eventually came to be reasonably clearly understood, although the path to understanding it took about 100 years, but milestones along the way enabled the commonwealth and the states to have two coexisting systems.

The federal system applied only to federally-registered organisations and people who were logged under federal awards. That tended, by the late 1990s, to be largely big business—the metal industry, motor vehicles, construction and so forth. The state system looked after everybody else in terms of their pay, conditions and so forth, whether they were a corporation, a partnership, a sole trader or whatever they were, and the state system also looked after unfair dismissals for these people.

We could go on a trip down memory lane here with Ted Gnatenko's case and all the arguments about whether the federal system excluded the operation of 15(1)(d) or whatever it was back then, but I do not want to bore everyone here stupid because most people are not as interested in that as I might be. The point is that the state system had a lot of work to do. It had a lot of work to do in terms of the relationship between employer and employee on an individual level, and it had a lot of work to do in terms of the relationship between groups of employers and groups of employees or an employer and a group of employees.

It was a very active, busy, vibrant place and it did good work, and this state has a proud record of putting very sensible people on the State Industrial Commission some of whom have been from the employer background and some from the employee background. With very few exceptions that it would be in extremely poor taste for me to entertain now, they have been excellent. I know that the member for Davenport has had the opportunity of presiding, in effect, over the system or looking at the system as a minister. He has been an employer.

The Hon. I.F. Evans interjecting:

Mr RAU: Sorry, you were minister for police, not industrial relations—quite right. Never mind. He has seen the system from a number of angles, anyway, and I am sure he has business encounters with the system. The point that I want to make is this, and it is the point that the member for Davenport alluded to and I give him credit for this: it was something that he did not want to happen and he was right. It should not have happened.

However, let us not forget that the conservative party in this country was the party that usually ran the flag of the 'Canberra octopus' up the flagpole any time anybody wanted to do anything constructive. I remember Peter Reith opposing every referendum proposal that was put up during the period of the Hawke-Keating governments on the basis, irrespective of what they were, that they were an example of the Canberra octopus.

The idea that Federal Court judges should have to retire at 70 and not when they died was apparently an example of the Canberra octopus. I personally actually disagree with that one. I think quite a lot of them are good at 75, but anyway, who am I to worry about these things? The point is that Mr Reith saw in that a threat and, for as long as I can remember, the clarion call of the Liberal and National parties at a state level has been exactly what the member for Davenport says and I agree with him.

I am what you might call an anomaly over here in terms of my views on these things. That is what I would call myself: others might call me something else. However, I will say this: the member for Davenport is now an anomaly in his own party because it is not the Labor Party that tore up a hundred years of industrial relations and stomped it into the dirt. It is not the Labor Party that made redundant overnight the conciliation and arbitration provisions of the federal constitution which have been the guiding rails for industrial relations in this country for over 100 years.

It is not the Labor Party that did that. It is the mob of hypocrites who have gone around saying, 'The Canberra octopus! We're for states rights. The commonwealth should butt out. Let the states do what they want to do. We're not on about big government. We're not on about big taxation. We're not about poking our nose into other people's business. We want everything decentralised. We want local communities making their own decisions. We want people in the workplace to make their own decisions, we want everyone to be happy having their own little endless confabs about things and making their own decisions; but we will tear up the constitutional arrangements, tear up 100 years of judicial interpretation of the conciliation and arbitration power, tear up the federal legislation dealing with conciliation and arbitration, and we will use a completely different model'—namely, the corporations power—'as the vehicle for getting ourselves inside places we were never constitutionally intended to be.'

That is exactly what they have done. Howard did that without putting it to an election, without telling the public what he had in mind, and he got his just desserts at the next election for doing something that was despicable. It was dishonest because it was not put to the public first, and it was despicable because he betrayed his own mob as much as anyone else, as much as the small business people for whom the member for Davenport is pleading. He replaced a two-part industrial relations system, which had a reasonably clear demarcation line, with a piece of Swiss cheese—and the tiny little holes in the cheese were what was left of the state jurisdiction. That is exactly what he did, and now members of the opposition are saying—

Mr Goldsworthy interjecting:

Mr RAU: —that they want to save these little remnants, these tiny little filaments of jurisdiction that are left. I do not know whether the member for Kavel appreciates this, but if you operate as a corporation you are already out. Sole traders and partnerships are the only ones that are not already completely and totally enmeshed in the federal system—and even then there are ways they can slip up and wind up in the system, but we will leave that aside for the moment.

If we were having this debate before John Howard did that which destroyed the history, culture, background, certainty and understanding of what industrial relations in this country has meant for 100 years, I would not only agree with most of what the member for Davenport said, I would vote with him. However, that is not—

Mr Goldsworthy interjecting:

Mr RAU: I feel quite strongly about this, it is a terrible tragedy. As the member for Davenport pointed out, it will only be in the fullness of time; it will take 10, 20 or 30 years for all these smart alecs, who thought this was a good pre-emptive strike to sneak up on the voters after an election without telling them—if they still care about anything—to work out what terrible damage they have done. By then it will be too late. But, hello, this is one of the consequences; get used to it. This is one of the consequences, and there will be a lot more.

So if members of the opposition are looking for someone to blame for this they do not need to look any further than their former exalted national leader. I used to have a lot of respect for John Howard, not because I was a supporter of his or voted for him, but in the same way that a Port Power supporter might think that Riccuitto is not a bad player. I thought that Howard at least had the courage—in particular, the way he had the guts to take that tax reform to the electorate (albeit wasting a lot of public money on terrible advertisements with chains around supermarket things)—to put on a plate what he wanted and why he wanted it, and allow the public to make a decision about it.

He won that election, and it is to his credit that he had the courage and fortitude to do that honestly. I think the people appreciated that (he won another couple of elections after that, using various other tricks he had). Nonetheless he deserves credit for that, because it took courage and integrity. What he did by sneaking up like a cat burglar on the industrial relations system—not notifying anybody that it was coming, not giving anybody an opportunity to have a debate about it before the election and not giving anybody an opportunity to vote on it at the election—meant that everyone just started rubbing their hands and waiting and waiting for the next election, when they got the opportunity to say not only, 'We do not like your system' but also, 'We do not like the sneaky way you went about putting it in.' That is why he got booted out even of his own seat.

The Hon. I.F. Evans: A bit like Stanley Bruce in 1929.

Mr RAU: Exactly; only he and Stanley Melbourne Bruce have managed that fantastic achievement. Despite all the great things Howard might or might not have done in his career, he sullied them terribly with this. Whatever detail might be argued, remember this: we are now dealing with the holes in the Swiss cheese or, if we are going to continue with the dairy analogy, it might even be the little bits of blue running through the blue vein because it is not most of the cheese. I will give you the big tip: most of the cheese is already in the federal system.

So, let's have a debate which is relevant to today and which deals with the circumstances as they exist today. Let's certainly lament the loss of the system that was; I will join in the lament on that one any day, but it is already gone. Caesar is buried; there is no point in praising him. He is buried; he is dead. Please, let's keep the debate relevant to what is actually on the table. I only regret that the member for Davenport was not a member of the federal parliament at the time—

The Hon. I.F. Evans: I tried.

Mr RAU: —I know, but that was after this—this idiocy was perpetrated and that he was not able to offer his voice of reason to some of his colleagues who obviously had a rush of blood and decided that the fact they had fluked a majority in the Senate meant that they were going to go for the Holy Grail and give the other mob a real pineapple they would not forget, and away they went. Guess what? They joined the Golden Circle club at the next election: they got a big pineapple, too.

Let's applaud the great common sense of the Australian public. They saw a rotten act, they saw a dud system, and they did not like it. But guess what? We are stuck with it now. The damage has been done—you cannot put Humpty Dumpty back together again.

The Hon. P. CAICA (Colton—Minister for Agriculture, Food and Fisheries, Minister for Industrial Relations, Minister for Forests, Minister for Regional Development) (12:48): I thank the members for Davenport and Enfield for their contribution to the debate on this historic bill. Members are certainly now aware of the importance of South Australia's participation in the national system from 1 January 2010 in the manner proposed in this bill. This bill will ensure that South Australia is in a direct position to influence the future industrial relations laws that will apply in our community and also ensure that appropriate comprehensive education, information and enforcement services will be provided for the national system in this state.

To achieve the objectives of South Australia's being part of the new industrial relations arrangements in a timely manner, it will be necessary for parliament to consider this bill expeditiously before the Christmas break. In this regard, I record the appreciation of the government to date for the cooperation of the opposition in facilitating arrangements for what I trust will be the expeditious passage of this package of legislation through the house and, hopefully, the other place.

I make the point that, while some concerns have been raised by the opposition member in regard to consultation, I think that my officers have most certainly bent over backwards to make sure that the opposition was provided every opportunity to be briefed on this. I make no apology for the fact that, during our briefing with the honourable member, none of his opposition colleagues decided to attend. Notwithstanding that, we will now undertake another process by which we will attempt to brief the opposition in the interim between the passage of this bill in this house and its introduction in another place.

Since the introduction of this bill last month, there have been some further—and I say constructive—developments relating to the bill. I confirm that, on 25 September 2009, South Australia, the commonwealth and many other state and territory governments formally endorsed the multilateral, intergovernmental agreement for a national workplace relations system for the private sector. As members would recall from my earlier contribution, this bill gives legal strength to the agreements and commitments through its amendment reference provisions, which contemplate a partial termination of the amendment reference if the fundamental principles set out in the IGA are breached. I table a copy of the IGA for the assistance of the house.

Through our continuing consultation with interstate agencies, I understand that Victoria and Tasmania have introduced, or will shortly introduce, legislation to their respective parliaments that is now in line with the provisions of the South Australian referral bill. This is indeed recognition of the leadership shown by this state, which reinforces the need to pass this bill in the form as agreed by the commonwealth and the other relevant jurisdictions to accept the referral of industrial relations for the private sector provided for in this bill.

I am also advised that the commonwealth minister will introduce a bill to the commonwealth parliament in the week beginning 19 October 2009. The commonwealth bill will accept our referral in the form to be proposed to this house and make technical and other necessary changes to the Fair Work Act 2009.

As a result of further consultation between senior officials acting on behalf of South Australia, the commonwealth and other referring states, I will be seeking to make some minor technical drafting changes to the bill currently before members. Again, comment was made by the opposition speaker in this regard, and I am thankful that we were able to get them through to him at around 10 past six last night, prior to this bill being debated today. That is the way in which this side operates: we got them at the earliest possible time we could to the opposition's lead speaker on this bill.

I will be seeking to make some minor technical drafting changes to the bill currently before the house. The changes relate to schedule 1 of the commonwealth text which has been referred and some minor consequential changes, which do not change in any way the substance of the referral. I will also provide details of the necessary alterations through a government amendment to the bill to be moved in committee.

In view of the urgency associated with the passage of the bill, I do not intend to go over the points raised during the debate but to simply reiterate the importance of a national IR system for the private sector to the employers and employees in this state. I again thank members for their contribution and the opposition for what has been its cooperative approach, which it has indicated will apply to the consideration of this bill. Notwithstanding what might be said by some to be the opposition lead speaker's anomaly in regard to the position perhaps held by his colleagues and others on this side of the house, I am hopeful that is the case with respect to what will ultimately be the support of the party more so than the lead speaker in this regard.

Many issues were raised by the opposition lead speaker. As I have said, I do not intend to go through those now. We can go through those issues during the committee stage, and that will not be a problem. I guess one of the points I would make is the relationship that was drawn or concluded by the opposition lead speaker with respect to the introduction of an industrial relations system for the private sector and a national industrial relations system in this state and its relationship to national employment standards.

I think that was probably an issue where the opposition member wanted to create a cloud by introducing it, more than anything else. However, they are issues that need to be discussed and I am quite happy for them to be raised in committee. I stand by what has been this state government's position with respect to the interaction with the commonwealth, whether it be the horticultural industry, the retail industry or any other industry that sought the support of the state government with respect to what they believe will be the impacts and how to mitigate against some of those perceived impacts.

The Hon. M.J. Atkinson: Militate.

The Hon. P. CAICA: I thank the Attorney for his sage advice with respect to terminology. I would give him some advice on what clothes he should wear, if that is what he wants in return. On what is a very serious and historic bill, I would certainly appreciate the Attorney not interjecting whilst I am on my feet, and I know that he will not do that in the future.

With regard to some of the issues raised by the opposition lead speaker, I think they are out of kilter with reality and they will be addressed during the committee stage. In particular, if he does not believe that this will provide benefits to the groups that he outlined—those being young workers, women, disabled and regional workers and, indeed, those from an indigenous or culturally linguistically diverse background; the most disadvantaged people within the workforce—he lives in another world from me, because this is going to provide certainty for those people, certainty with respect to not only what system they are in but also going forward with respect to that level of disadvantage being addressed.

I know that we have philosophical differences when it comes to this matter—I accept that—but do not think that the state government has not dealt with this matter in a serious way. It is doing so and it will continue to do so on the basis that it believes that the certainty that will arise from the referral of the remainder of the private sector is nothing but a good thing for those workers and a good thing for South Australians.

With respect to the other matters raised by the opposition, we will deal with those matters during the committee stage. I will, of course, be very pleased to answer any questions on any matters that relate to this bill that the opposition has flagged during the second reading debate. Again, I thank members for their contributions and I commend the bill to the house.

Bill read a second time.

Committee Stage

In committee.

Clause 1 passed.

Progress reported; committee to sit again.


[Sitting extended beyond 13:00 on motion of Hon. M.J. Atkinson]


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