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House of Assembly - Fifty-Third Parliament, Second Session (53-2)
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Labour Hire Licensing Bill

Second Reading

Adjourned debate on second reading.

(Continued from 10 August 2017.)

Ms CHAPMAN (Bragg—Deputy Leader of the Opposition) (16:47): I rise to speak on the Labour Hire Licensing Bill 2017. The bill was introduced by the Attorney-General on 8 August this year to provide for licensing and regulation of persons who provide labour hire services. Essentially, this requires a person who provides labour hire services to be licensed, with a fit and proper person test, and provides penalties, deregistration options, suspension and the like in the event of noncompliance with the act or standards set.

It is proposed, on the information provided, that the Consumer and Business Services division, under the responsibility of the Attorney, will be responsible for the administration of this scheme. Subsequent to the May 2015 ABC Four Corners program, in which there were very severe allegations of exploitation and underpayment of migrant workers, the government claimed that there needed to be reform in this area. In particular, concern was expressed about the alleged abuse of migrant workers on farms and in the food processing industry.

The Premier announced a parliamentary inquiry by the Economic and Finance Committee to look into the labour hire industry, including underpayment of wages, harassment and mistreatment. This report was published on 18 October 2016. I thank the members of the house who made a contribution to that committee report. Meanwhile, national and state ministers were meeting and resolved that they would establish a task force to deal with compliance and enforcement and a second task force to deal with phoenixing. The federal parliament has also passed a national vulnerable workers bill to increase penalties in this area.

Whilst there has been consideration of a national scheme for licensing, most importantly to provide some consistency, that has not occurred. Some rather scathing comment has been made by the Attorney in his second reading in respect of that, but I commend the federal government for progressing legislation to greater protect vulnerable workers in this space and to ensure that there are other groups to monitor and enforce the standards and law in respect of the protection of workers in these industries. The commonwealth approach has generally been to prosecute people who break the law, and that is something, on balance, we consider needs to be done.

It is interesting to note the consultations I had on this matter and the advice I received from a number of stakeholders. I was advised at a very late briefing that apparently no growers were actually prosecuted arising out of those rather startling allegations that were made in the 2015 Four Corners report. Nevertheless, it does not mean that one should not be alert to potential breaches in this area and the vulnerability, mainly due to language, poverty and, of course, the need to be in a host country in order to undertake work, so many workers are potentially vulnerable and this needs to be supervised and looked into.

I have asked the government to provide details of the 442 labour hire services that currently operate in South Australia, and to date I have not received any response in respect of the request on this bill. I have also sought particulars of prosecutions in the Fair Work Commission; that has not been forthcoming. I have also sought particulars of SafeWork SA cases involving prosecutions that cover vulnerable 457 visa holders and other labour hire workers in South Australia. Again, none of that information has been provided. It is fair to say, though, that potential problems can be most common in the following areas: agriculture, horticulture, meatworks, cleaning, construction, food packing and processing.

It soon became clear, in considering other jurisdictions around Australia, that the Labor governments had got together and decided they were all going to introduce labour hire regulation. I note that Premier Palaszczuk in Queensland passed legislation on 7 September 2017. It was not quite as draconian as this bill. For example, even she did not expect to get through her parliament—and did not even ask to put through—the right of entry of inspectors without a warrant. Under this bill, they are to have greater powers than the police. Even Premier Palaszczuk did not ask for that.

Nevertheless, I have now viewed their bill and the Hansard equivalent of the contributions in that debate, and it seems pretty clear that this has been a request by the union base of the Labor Party to advance this as best they can around the country through the sympathetic Labor administration, and that is exactly what is happening. Victoria is currently drafting similar legislation with the intent to progress the same. There was a provisional briefing, as I have indicated, by the government (in particular, SafeWork SA personnel). There were no attendances at the briefing by Consumer and Business Services staff, who are apparently going to be operating this.

Nevertheless, I appreciate the attendance of SafeWork SA personnel. The briefing indicated that there is a claim that ReturnToWorkSA and RevenueSA support the bill—I suspect the latter, primarily, because of the attempts to deal with the phoenixing aspect in the bill. Stakeholders were quite varied in this field as to their support or otherwise. I think it is fair to say that, consistent with the general national push, many of the stakeholders who are either involved in the industry or inadvertently caught up in the bill, or the potential application of the bill, had no strong objection to having some kind of registration system.

However, when it came to dealing with matters such as the inclusion of criminal sanctions, including imprisonment, the powers of the inspectors under the bill to enter a property without a warrant; matters including the discretion that would be given to the Consumer and Business Affairs commissioner in the approval of licences and the imposition of conditions, including taking into account the reputation of an applicant for registration, the breadth of the application proposed by the bill by definition to include parties such as trainees and group training organisations, the latter of which were quick to point out that they have a very robust series of obligations in respect of standards that they have to comply with already in their industry, both state and federal, they certainly did not want to have the obligation of further regulatory positions.

The Motor Trade Association was obviously unhappy about the inclusion of all apprentices and the extra burden of that. Between the major stakeholders—including the South Australian Wine Industry Association; the Motor Trade Association; the Master Builders Association; Group Training Australia, which, as I say, deals with group training organisations; the Law Society of South Australia; the A1 Group, which represents a number of consultants; Business SA put in a comprehensive submission; and AUSVEG, who, of course, represent growers in the horticultural field—a lot of work had gone into these submissions and I thank all who took the time to provide us with briefings of their approach to this matter.

It is fair to say that, in considering this bill and how the opposition might treat it and how, in particular, I might recommend we deal with this bill, I did attempt to look at whether there was a capacity to amend a number of what may have been these inadvertent extensions of applications proposed in this bill and try to render it to an acceptable registrational licensing process that the stakeholders would then work with to accept. It seemed pretty clear that that job was going to be massive. We certainly made the effort to look at a number of the amendments. We probably would have been here for the rest of the week debating each of them. So, on balance, our party felt that there was far too much to try to remedy in this process.

The government clearly had not listened to what I think have been meritorious arguments to make significant amendment to this bill. They have decided to completely ignore those submissions and press ahead with what I would say is quite draconian legislation that clearly the government had no intention of actually remedying.

In fact, of all the bills we are dealing with just today and of all the amendments that have been proposed, I do not think there is one amendment even being foreshadowed by the government. Having asked parliamentary counsel to consider this, I have determined that in the circumstances there is little we can do to try to rescue what might be a good direction in this regard and we will oppose the bill.

Mr PEDERICK (Hammond) (17:00): I rise to speak to the labour hire bill 2017 and note that it was introduced by the Attorney-General on 10 August 2017. What the bill is seeking to do is to provide for the licensing and regulation of persons who provide labour hire services. Essentially, this requires a person to be licensed who provides labour hire services, with a fit and proper person test, and provide penalties for deregistration in the event of noncompliance with the act or standards set. It is proposed in the bill that Consumer and Business Services will be responsible for the administration of the scheme.

It is noted that there was a program in May 2015 on the ABC's Four Corners that reported alleged exploitation and underpayment of migrant workers. It targeted alleged abuse of migrant workers on farms and in the food processing industry. It was noted that the Premier had announced a parliamentary inquiry by the Economic and Finance Committee to look into the labour hire industry, including the underpayment of wages, harassment and mistreatment. This report was published on 18 October 2016. It recommended a national licensing scheme in this field.

Meanwhile, discussion at the national and state ministers' level has been to (a) establish a task force to deal with compliance and enforcement and a second task force to deal with what is called 'phoenixing', when basically one hire business folds up and another one rises from the ashes, and (b) pass a national vulnerable workers' bill to increase penalties.

As a background to this bill, SafeWork SA was to provide for the investigation and prosecution of work health and safety issues in the workplace, but not misconduct in respect of the exploitation of workers. It is noted that the government's answer is to establish a licensing scheme, as they do with most industries, providing a means to control an industry and build the empire of Consumer and Business Services. The commonwealth approach has been to prosecute people who break the law.

We have called for detail of the 442 labour hire services apparently operating in South Australia, particulars of prosecutions in the Fair Work Commission and particulars of SafeWork SA cases and prosecutions that cover the vulnerable 457 visa and other labour hire workers in South Australia. Anecdotally, the areas of industry include agriculture, horticulture, meatworkers, cleaners, construction and food packaging and processing.

It is noted that, in regard to other jurisdictions, the commonwealth has no national scheme at this stage. Queensland passed similar legislation on 7 September 2017, and this was promoted by Premier Palaszczuk in the same vein—as protecting vulnerable workers. It is noted that the Queensland Liberal National Party opposed the bill in its entirety. In Victoria, the Labor government is currently drafting similar legislation.

It is noted that the shadow attorney-general had a briefing, and it was claimed that ReturnToWorkSA and RevenueSA support that bill amendments are being considered. I have had a brief look at the South Australian Wine Industry Association submission, and members here would be particularly interested in that it recommends a suite of amendments to a number of areas, including the considerable breadth of the bill, the broadness of definitions, the determination of who is a fit and proper person and right of entry provisions, among other things.

Certainly in the electorate of Hammond, with a lot of primary production and a lot of value-add primary production, there is a lot of agriculture and horticulture. We have the Thomas Foods meatworks, we have Big River Pork and there is a lot of production in regard to Ingham's chickens, which is increasing its production in our area at Yumali, past Coomandook, where I live. They are putting in 24 layer sheds and the first of those sheds is operating. The way the chicken industry is going, they could soon be building another 24 sheds down there.

There is a massive expansion of the chicken industry in the region between Monarto and Yumali. These sheds are about $1 million each to put up, and it is not just these layer sheds that have gone in; there are grower sheds to grow the chickens. You can see the trucks coming up and down the road, day and night, through to the Ingham's factory in Adelaide. As I mentioned, we have Big River Pork and Thomas Foods International, which has for a long time been reliant on 457 Visa workers.

I have expressed my angst about the fact that in the area around Murray Bridge, where there is 10 per cent unemployment, we still so desperately need and truly value these workers under these schemes because otherwise we would not get the throughput of the value-add work done in the processing sector in the region. I also note that Adelaide Mushrooms, owned by the Costa Group, is about to double in size, with an investment of $64 million and their biggest issue is whether they can get the 200 to 250 staff they require. There is plenty happening in my area.

With respect to the Wine Industry Association submission, there have been plenty of labour hire companies employed. In my electorate, the Langhorne Creek is a great wine region. Sometimes people do not give it the credit it deserves, but some great wines come out of the region, and certainly labour hire companies come in there. I must say that there was an issue a few years ago that I managed to sort out through the tax arrangements. I went to the Attorney-General in regard to that and we did get a favourable response for a local labour hire company.

The bill does seem to be a big stick to regulate the issue. We need sensible amendments to get through to make sure that we get the right regulation around labour hire. That is not saying that something should not be done, but we should do it in the right manner. We do not want these sharks in the industry, if there are any out there, doing things that are not right for those valuable workers on the land. As I said, many of these people come from overseas, and certainly in my electorate they come from all parts of Asia, Africa and Afghanistan.

All these different nationalities have made a massive contribution in my electorate. Certainly, in regard to the Chinese, many have become citizens. A wave of about 300 workers came in many years ago and they bought out the bike shop. They bought every bike in the place, I think, and they had to get more in. Then they have slowly progressed, adding more value to the local economy and progressing to getting their licences and driving cars to get to work.

They truly are valued. We have to have the right thing done. That said, we have to make sure that we get the right amendments so that we get the right legislative response, so that the work of these people is truly valued and respected and so that it is noted that they are essential, certainly in primary production and in the primary production processing area, not just in my electorate but right throughout the state.

Mr KNOLL (Schubert) (17:10): I rise to speak against the Labour Hire Licensing Bill 2017. I do so having sat through the second half of the Economic and Finance Committee's inquiry into this topic. The longer the hearings went on and the more groups we spoke to from industry associations, individuals and indeed unions, the more convinced I became that this bill, which seemed to be the predetermined outcome of the committee in the first place, would have a deleterious effect on businesses in South Australia with no positive effect on actually dealing with the issue at hand.

Throughout the committee hearings, we talked to a number of individuals about cases of where, as workers, they had been mistreated—cases where they had been underpaid or had not been given or paid their full entitlements and cases where workplace law had been breached. We heard about cases of company phoenixing and cases of essentially string and repeat offending from certain directors and individuals who essentially stayed one step ahead of the efforts, of the compliance agencies, such as they are, and were able to wreak havoc with some vulnerable groups within our community. However, in everything that was discussed, every time something was brought forward as a wrong that has been committed, every single one of those activities was already illegal.

Not once were we able to find moral wrongdoing that the community and society at large would consider needs to be an offence that was not already an offence. What we are talking about here is activity that is already illegal—not complying with workers' occ health and safety conditions, not complying with workers' pay and general conditions, not complying with upholding the standards of company directorships, phoenixing, underpayment of WorkCover premiums. Everything else we talked about and everything else we heard was already an illegal activity, so what we are dealing with here is not a failure of law.

The next step was talking to the relevant compliance agencies—some of whom were a little bit more willing than others to come forward—about what efforts they were undertaking to make sure that this illegal behaviour was brought to justice. We spoke to a whole host of agencies. We spoke to the tax office, ReturnToWorkSA and various federal departments, especially the Department of Immigration and Border Protection, about what efforts they are undertaking to make this illegal behaviour stop by bringing these people to justice.

Speaking very specifically about ReturnToWork, we had Greg McCarthy before us and it is very sad to see him go. ReturnToWork outlined to us a very effective way in which they are able to currently stop this illegal behaviour from happening. What they do essentially with these labour hire companies that seemingly rise up out of the ashes, and there are question marks over whether or not they are going to properly pay their return-to-work premiums, is ask them to pay in advance.

What they are also able to do with more sophisticated data analytics is have a look at labour hire companies, look at what they should be charging and look at the relative size of their business and make calculations about whether or not they believe that people are paying an appropriate return-to-work premium, and where they do not believe they are they go in and investigate. Where they believe that there is not compliance, or they do not believe that they can trust these companies, do you know what they do? They do not register them.

They have the ability within this one agency, of the multitude that deal with labour hire companies and compliance of their operations, to be very effective in the way that they can stop this illegal behaviour. They can do it with the current law, and all they need is the willingness to do it and the resources to do it. For ReturnToWorkSA, there is a financial incentive because, if they do their job properly, they will collect more WorkCover premiums. They are incentivised to go out there and enforce compliance.

We have heard about various federal operations where there are cross-agency efforts to enforce compliance. Those efforts need to go on and they need to continue, whether that is RevenueSA getting in and helping to actively ensure that businesses are paying payroll tax, whether that be the Australian Taxation Office, which I know looks at various metrics of companies of all persuasions to try and understand whether or not they are paying enough tax, or whether that is looking at retail businesses and the proportion of those retail businesses and their use of credit cards.

For instance, if there is an overuse of credit cards in the total revenue stream of the business, that is, there is cash that is potentially being filtered away, the ATO investigates. Again, there would be ways of using sophisticated analytics where the ATO could get involved and enforce compliance and review labour hire companies. It does not need a legislative change. SafeWork SA can get out there and enforce compliance and ensure that labour hire companies are correctly complying with workplace occupational health and safety regimes. They do not need a change of law to be able to do that. They are a well-resourced agency, and if there is an issue in this particular industry they can go out and they can enforce compliance.

The Fair Work Ombudsman can take up any case that is brought to them by an employee. Again, with a lot of the issues that we heard, those cases were taken up by the Fair Work Ombudsman. I admit that there are times when it is difficult to pursue these companies when they vanish, but there is already a strong compliance mechanism there. ASIC, in relation to the regulation of companies and directorships, has a compliance role in this area and again should be looking to enforce the law as it currently stands and ensure that these labour hire companies are doing the right thing.

The Department of Immigration and Border Protection, in relation to the compliance and obligations of visa permits, again has the ability and the power and should have the resources to enforce compliance in this area. There is so much regulation and so many different bodies that have the ability to make compliance happen in these areas that it is almost becoming embarrassing. The one thing seemingly missing was either the resources or the will to go after these companies.

All the things that I have just spoken about, and all these agencies that I have just spoken about, do not need this piece of legislation to do their job, and in the end that is exactly what needs to happen: we need the existing agencies, of which there are many, to do their job. This labour hire licensing bill will do nothing in and of itself to improve compliance. Increased compliance and scrutiny and regulatory focus will improve compliance, not a piece of legislation that simply increases the red tape and regulatory burden on South Australian businesses. All this bill will do is make law-abiding labour hire businesses do more paperwork. It is going to be the businesses we do not want to target through a piece of legislation like this who will end up being punished for the stupidity and shortsightedness of this bill.

This is very much modus operandi for the Labor Party. This is the Labor Party that did not see a problem that increased government could not fix. It did not see a problem that increased paperwork could not fix. It did not see a problem that more red tape could not fix. If this becomes law, we will not see improvement in this area. What we will see is the 90 to 95 per cent of labour hire companies across this state that do the right thing getting punished and what it will actually do is create a perverse incentive.

At the moment, the reason that labour hire companies try to flout the law is that there is a financial incentive for them to do so. The companies that are paying the right wages and paying all of the entitlements and the return-to-work premiums and superannuation have higher costs than the rogue operators. What you do when you increase the red-tape burden on those businesses is that you increase their costs, but for those who already exist outside the law these costs will not be borne, so what you have is a perverse incentive where a bill that is designed to stop rogue labour hire operators will actually give them a greater leg up when they are competing against the businesses that are doing the right thing.

This piece of legislation has the distinct potential to make the situation worse. Those opposite only see this as a beautiful feel-good measure to create some paperwork so that when something goes wrong they say, 'Yes, but we've got this in place. Some people filled out some paperwork. Some people are outside the law and undertake illegal conduct, but the piece of paper said it's okay.' But it is not.

The only way that this bill, if it is to become law, is going to improve workplace conditions for those who work for labour hire companies is if it is enforced. The argument needs to be put that if enforcement is the answer, then licensing is not the answer. Don't enforce labour hire licensing. Enforce the current act. Get the current compliance agencies to do their job properly. This is not just a view of the state Liberal Party. This is the view of industry associations and people who actually operate in this area.

If I look at the South Australian Wine Industry Association's submission, they say that given that some noncompliant labour hire firms are already able to fly under the radar, they are highly transient and do not necessarily have any fixed physical address, then will any register really capture those who should be captured? The answer in the Liberal Party's opinion is, no, they will not. The second reason that we should not be putting this bill into law is that this will punish South Australian businesses and not those of other states.

We had quite a discussion around the committee table about whether or not the recommendation should be more along the lines of how we need this to be a federal government solution. Essentially, what we came to is that in the absence of a federal solution, we need to run with a state-based solution. What this will do is force and encourage labour hire companies to go interstate. At a time when we can ill afford to lose business in South Australia, what we are doing is introducing a piece of legislation that will drive companies across the border.

It will drive companies across the border, which is a ridiculous proposition, but those opposite do not see that. They see a piece of paper, they see an increased paper trail and more work for boffins and public servants. They see more work for bureaucrats. That is something they always support. No wonder industry associations such as the Wine Industry Association feel the need to say, 'Hey, guys, maybe this is not the way to go. Maybe we actually need to think about the underlying causes of this and deal with the root cause of this behaviour, rather than just trying to add more paperwork to the pile to make everybody feel better.'

The ICTRA also made a submission and said that it was not convinced of the need for a national licensing system or industry code as this would only serve to increase costs for already compliant labour hire providers and fail to prevent unscrupulous operators. Further disparate forms of regulation and more onerous licensing requirements in South Australia may deter national and international labour hire contracting firms from operating in South Australia. That is exactly the point I just made from the people who operate on a national basis, who should know and do know. But those opposite do not listen to them. All they do is find ways to create increased burden for South Australians because they can think of no other solutions.

We have had inquiries into this topic in Queensland and at a federal level. A submission made to the Queensland parliament makes this point, that we need to think about enforcing the legislation we have. Creating new legislation with no compliance regime underneath is not very valid—simple, poignant and something the government really needs to take greater heed of.

I would like to also go to the federal Senate Education and Employment References Committee inquiry into the impact of Australia's temporary work visa programs on the Australian market, where they made a similar recommendation. The Coalition senators made comments in relation to recommendation 32 of that report. It is a recommendation that talks about introducing a national labour hire licensing scheme and it states:

Coalition Senators do not agree with this recommendation as it would punish those labour hire firms which are already complying with relevant laws.

They go on to say:

While there are undoubtedly a minority of labour hire firms which are doing the wrong thing, what they are doing, in most cases, is already illegal. Coalition Senators support the prosecution of these illegal operations.

That is simple. I do not know how many industry associations need to tell the government, I do not know how many other inquiries need to tell the government, but they need to start listening because this is symptomatic of what has been wrong in South Australia for the last 15 years. It is symptomatic.

It is another piece of legislation that would make it more difficult to do business in this state, and especially more difficult to do business in South Australia vis-a-vis other states. Victoria is doing pretty well when it comes to unemployment, New South Wales is certainly doing pretty well when it comes to unemployment, and those two states would love nothing more than to take business from South Australia. This bill is a free kick that allows, pushes and encourages labour hire firms to quit this state.

When South Australians go to the polls in March next year, they need to understand that this piece of legislation is symptomatic of the fundamental differences in approach between the Labor Party and the Liberal Party. Labor is always for more red tape and more regulation. Labor is always for more bureaucratic bungling, bureaucratic paperwork and red tape in South Australia. We on this side of the house, though, understand that if we improve the cost of doing business in South Australia we increase jobs.

If we decrease the cost of doing business in South Australia, we increase jobs. It is a very simple proposition and something that is understood the world over. What we are talking about here is not revolutionary, but it is, for instance, what they have done in New Zealand, Tasmania and New South Wales. This is a tried and tested way to improve jobs growth in a state or in a country—that is, to reduce red tape and regulation. It is something that our state leader has been talking about since he took the leadership.

We will be a government that is for wholesale deregulation. We will be a government that will reduce the burden on businesses so that businesses can create the jobs that will keep our young people here in this state. We will help South Australian businesses lower their cost of doing business so that we can actually get some confidence, some optimism, some economic growth, some business investment and some future prospects that do not make 6,000 young people move interstate every year. It is a very simple proposition, and I do not know how else to explain it to members opposite. This is the problem.

When you want to know why we are in the predicament we are in and why we have been here increasingly over the past two decades, this kind of legislation is exactly the reason. We had an Economic and Finance Committee inquiry, and it seemed to me that the Labor members on that committee were looking for evidence to justify this very outcome. Everything that was discussed was designed to bring about this outcome. What is frustrating is that they were not doing it to protect the worker, otherwise we would be talking about increased compliance.

What they were trying to do was find ways to increase union involvement in these firms. This is about protecting their union mates and trying to improve membership levels for their union mates instead of looking after South Australians, because otherwise we would be talking about going after the bad guys, about actually stopping this illegal behaviour, but that is not what we talked about. It was all about: do you think that a labour hire licensing scheme would improve the situation; do you believe that we need more red tape in this area? Everything was leading to this conclusion, and, magically, somehow this bill arrives.

The Attorney-General did make some good inroads on return to work and for one brief, shining moment came to the realisation that reducing the cost of doing business by reducing return-to-work premiums and improving the efficiency of the system was the way to create jobs. It seems that that reformist zeal has puffed out in a very vague cloud of smoke and he is back to his old ways and the Labor Party's old way of regulating everything that sits or stands or moves or has a heartbeat. I will be very glad to vote no on this bill, and I look forward to the upper house doing its job of knocking off this extremely dangerous piece of legislation.

The Hon. A. PICCOLO (Light) (17:30): I would like to say a few words in support of this bill. I must have sat on a different committee from the member for Schubert because that was certainly not the evidence that I heard in the committee. When you listen to the member for Schubert, he puts a very good and strong case about why you should support this bill and all the things you have to do to achieve compliance in this industry. That is why you need something to improve that and to also improve the cost compliance, which means that by reducing cost of compliance we reduce the cost to the taxpayer.

The bill does a couple of things, and that is why we should support it. It will not take me 20 minutes to talk about this to the parliament in the same way that it took the member for Schubert 20 minutes to essentially support the view he held before the committee even started. The member for Schubert is well known for his antiregulation beliefs, and that is fine; he is entitled to those beliefs, but to say they stack up against the evidence before the committee is completely erroneous.

The bill reduces the cost of compliance because it puts in mechanisms for self-policing. In effect, there is a chain of responsibility, which means that all parties to a transaction have a legal liability to do the right thing. At the moment, the so-called rogue labour hire people are encouraged to do this because the client benefits as well. The bill makes it very clear that the beneficiary client also gets caught up in this new law, which is very important, and that provides some self-policing.

This bill is not too dissimilar to the franchise reform just passed by the Senate and the federal Coalition government following the 7/11 matters, where people were underpaid, etc. It is interesting that the federal Liberal and National Party government have introduced new legislation which also creates a chain of responsibility. It is very important because it makes sure that the worker, at the end of the day, is not the person who pays the cost, and that is what we have at the moment. Workers in this country pay for the noncompliance activities, the unlawful activities of these people. This bill, like the franchise law and reform bill passed by the federal parliament, provides additional protections for workers.

It is very interesting to note that the same people who oppose this bill, namely, the Liberal Party in our state, are the same people who opposed our Small Business Commissioner Bill on the same grounds—a whole range of new levels of regulation, etc. That bill has been well received and is supported by small business.

I speak in support of this bill because, at very low cost to the taxpayer, it improves the system and makes it more efficient and improves compliance. As I said, it achieves that by developing what I like to call a chain of responsibility to make sure that all players in the industry play their role.

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Justice Reform, Minister for Planning, Minister for Industrial Relations, Minister for Child Protection Reform, Minister for the Public Sector, Minister for Consumer and Business Services, Minister for the City of Adelaide) (17:34): I would like to thank everybody for their participation in the debate. I want to make a couple of brief points. First of all, can I make it very clear to everybody that this is not a matter we should be taking lightly. The member for Schubert and the member for Light both mentioned evidence before the parliamentary committee. I think they would have heard evidence from ReturnToWorkSA about the tens of millions of dollars being evaded; that is just in payments due to ReturnToWorkSA, leaving aside superannuation payments and other things. Part of the reason that is able to happen is that these people are basically flying underneath the radar, so this is a really serious matter.

The second point is that I would have been, and I put on the record now that I continue to be, happy to listen to the opposition if they have constructive amendments they wish to move to this bill. This is one of those areas where I think the parliament could do some useful work. I am open to constructive amendments to the bill and, assuming it goes through this chamber, as I am hopeful it might, I make the offer that I am here, available to talk to people about what might be done between here and the other place.

I could tell that the member for Schubert was on one of his favourite topics this evening because he became quite animated. Give him his dues: he did not do a bad job, but he was channelling Eric Abetz. Except for the intonation of voice, I could see that well-known Tasmanian Senator straight across the parliament from me. To give a simple answer to his question, 'Why do we need any regulation in this place?' I respond with this question: there are a whole bunch of people out there who reckon they are builders, but we require them to have a building licence so that when they go to somebody's home and say, 'I'm here to build you a house,' or, 'I'm here to build you a garage,' you can say, 'Where's your builder's licence?'

If they do not have their builder's licence, they are a crook. You do not pay them and you do not have to pay them. You should actually dob them in for trying to pass themselves off as somebody who is legally qualified to do building work. We do not think it is okay to support dodgy builders or bogus plumbers or electricians. We accept the fact that they should have a licence and that people should be protected by having the opportunity to see that licence and that they get some protection under the law for dealing with a licensed operator. That is our point.

What would happen under this legislation is that all the people who are doing the right thing would be licensed. Everybody who dealt with a licensed person would do so knowing that they were licensed and that they also would be protected to some degree because they are dealing with a licensed operator. It would also make the shades of grey that presently sit out there vanish, and we would have black and white. We would have those people with a licence and those people without. Let us be clear about this. The people who would not have licences under this scheme, the people who would not be able to get a licence under this scheme, are the very spivs and crooks we are trying to catch up with.

These are the spivs and crooks who do not pay their taxes, do not pay return-to-work levies, do not pay superannuation levies and do not pay people award wages or minimum wages. They are actually bludging off everybody, including bone fide, law-abiding businesses that run a labour hire business. I say to the member for Hammond that nobody is attacking labour hire per se. In fact, we are trying to support legitimate labour hire operators and defend them against these bogus spivs who are undercutting them by breaking the law. If you have bone fide, honest labour hire operators in your electorate, and I am sure that you do, you should be supporting this because this will defend those honest business operators from the unscrupulous crooks who are breaking every law in the book, undercutting their business and basically trying to put them out of business.

Here is what I would like to say briefly on this: members of the opposition, member for Hammond, please have a think about this. The people who are the good, honest labour hire operators—and I readily acknowledge that there are plenty of them—have nothing to fear from this bill. In fact, this bill in its objects is specifically there partially to protect them from crooks. I am open to amendments to this. I am not trying to run some doctrinaire ideological proposition here. I am trying to make a really sharp difference between the crooks and the honest people.

What I am trying to have as an outcome is this: if you are an honest person in labour hire, that is fine, I have no argument with you. Nobody else has an argument with you. We are happy to support you, but we do not want you being picked off by unscrupulous crooks who are breaking all the laws and undercutting you because they are not doing what you are doing, which is paying their taxes and paying their employees proper wages. That is it.

If there are any amendments that the opposition can suggest to this that are consistent with what I just said and address some of the problems the opposition may have with this, I am open to listening to you. I am not saying, 'Take this or that's it.' I want to make it really clear. I am happy to listen to you. Once the bill leaves this place, it will be a few weeks between here and somewhere else. If the opposition has some positive, constructive suggestions that are consistent with the objective that I have just put, I am all ears, I am happy to listen. Who knows? We might be able to work it out.

What is disappointing is the attitude of, 'Well, we find some of this a bit hard. You know what? We are not even going to try and engage with this. Were are just going to vote no.' I think that is a bit average, really. For Mr Bevan, if he is still listening, this is the sort of thing that you do not pick up all the time. It is when we are trying really hard to engage with the opposition and we are asking them to come and work with us on this, and they just say, 'No, too hard. We do not want to have anything to do with it. We're just going to say no.' I want to give them a chance to think about that again.

During the time the bill is between this place and the other place, the opposition has a couple of party room meetings. I know lots of exciting things happen in there. Have another think about it. I am interested in hearing if you have positive, constructive suggestions. Just come and talk to me. We may yet be able to do a great thing for the honest labour hire employers and employees in South Australia.

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Justice Reform, Minister for Planning, Minister for Industrial Relations, Minister for Child Protection Reform, Minister for the Public Sector, Minister for Consumer and Business Services, Minister for the City of Adelaide) (17:42): I move:

That this bill be now read a second time.

The house divided on the second reading:

Ayes 20

Noes 14

Majority 6

AYES
Bedford, F.E. Bignell, L.W.K. Brock, G.G.
Caica, P. Close, S.E. Cook, N.F.
Gee, J.P. Hamilton-Smith, M.L.J. Hildyard, K.A.
Hughes, E.J. Kenyon, T.R. (teller) Koutsantonis, A.
Odenwalder, L.K. Piccolo, A. Picton, C.J.
Rankine, J.M. Rau, J.R. Snelling, J.J.
Vlahos, L.A. Wortley, D.
NOES
Chapman, V.A. Duluk, S. Gardner, J.A.W.
Knoll, S.K. Marshall, S.S. Pederick, A.S.
Pengilly, M.R. Redmond, I.M. Tarzia, V.A.
Treloar, P.A. (teller) van Holst Pellekaan, D.C. Whetstone, T.J.
Williams, M.R. Wingard, C.
PAIRS
Bettison, Z.L. Pisoni, D.G. Digance, A.F.C.
Griffiths, S.P. Key, S.W. Sanderson, R.
Mullighan, S.C. Goldsworthy, R.M. Weatherill, J.W.
Speirs, D.

Second reading thus carried.


Third Reading

The Hon. J.R. RAU (Enfield—Deputy Premier, Attorney-General, Minister for Justice Reform, Minister for Planning, Minister for Industrial Relations, Minister for Child Protection Reform, Minister for the Public Sector, Minister for Consumer and Business Services, Minister for the City of Adelaide) (17:49): I move:

That this bill be now read a third time.

The SPEAKER: Yes, that is what, conventionally, attorneys-general do in that situation.

Mr Knoll: We just voted on the third reading.

The SPEAKER: No, we voted on the second reading.

Mr GARDNER: Sorry, in that case I will speak on the third reading, given that the opposition was under the impression that it had been read a second time and then the motion was put that it be read a third time. We voted against it. We called a division and so we thought we had voted on it. However, we are happy to now vote against the second reading and we will vote against the third reading again.

The SPEAKER: Could I—

The Hon. J.R. Rau interjecting:

The SPEAKER: The Deputy Premier will be quiet. I call him to order. We have read the bill a second time. Would the opposition like a committee consideration of the clauses?

The Hon. J.R. Rau: There is nothing to consider.

The SPEAKER: No.

Mr Gardner: That is what he said last time.

The SPEAKER: The Deputy Premier is warned. There may well be nothing to consider, but it is not for him to interject about it. The motion before the house is the motion of the Deputy Premier that the bill be now read a third time and the member for Morialta wishes to speak on that.

Mr GARDNER: I did speak on it, sir, just then.

The SPEAKER: It was so swift that I missed it.

Mr GARDNER: You commented on it. You commented on my comments, sir.

The SPEAKER: Will the deputy leader now speak on the third reading?

Ms CHAPMAN: I will, sir, yes.

The SPEAKER: Splendid.

Ms CHAPMAN (Bragg—Deputy Leader of the Opposition) (17:51): May I just add a few matters that I would like the government to consider. The proposal, as we understand it from the government briefing, is that Consumer and Business Services be responsible for the administration of this scheme. As I indicated during the debate on this matter, SafeWork SA attended the briefing on this and I inquired as to whether they ought to be the body that supervises this if it ever becomes law, which had come to us from some stakeholders. They indicated that they obviously had not been nominated, although they currently had jurisdiction in respect of the prosecution of occupational health and safety matters and that obviously would ultimately be a matter for the government.

When I spoke to the stakeholders, in particular the South Australian Wine Industry Association representatives, they confirmed that SafeWork SA already deal with the licensing of recruitment businesses pursuant to the Employment Agents Registration Act 1993, which is a licensing process similar to what is proposed here, namely, the fit and proper person test. They attend to the registration licensing arrangements for the recruitment businesses, as I have indicated, particularly as SafeWork SA already has a role in respect of business operations. Obviously, it is currently confined to occupational health and safety.

I am comforted by the fact that SafeWork SA finally has a new head of its division after the previous chief executive left SafeWork SA sometime late last year. I am advised through some of the recent briefings—in fact, I think it was Mr Watson who confirmed to me—that SafeWork SA now has a chief executive. Martyn Campbell is the new chief executive officer effective from—I cannot even read my own writing—the last couple of months. He has been appointed now, so all that sounds good.

On the other hand, I note with interest the SafeWork SA ministerial statement made by the Attorney today in his role as Minister for Industrial Relations. Having told the parliament today that the DPP had conducted a review in respect of the failing prosecutions since 2010 apparently, as directed by the Premier if the media reports are right, it seems that since SafeWork SA has been in the hands of the Attorney-General as Minister for Industrial Relations rather than the Premier's office, it has gone from bad to worse.

Not only have we had the shocking situation of there being an increase in cases that have been aborted for some unknown, and now secret reason, because we are not allowed to see the DPP's report but also the alarming increase in the number of workplace deaths. We did not have any comprehensible answer on that from the Attorney or the Premier today. So, although it has been put as a recommendation to us that SafeWork SA, as an agency, should assume the responsibility of the operation of this bill if it comes into law, obviously it will not be with our blessing for the reasons that have already been presented.

However, I make the point that if SafeWork SA were to take on this role we would want to be satisfied that, as an agency, it is functional and it is going to be effective and it is doing its job properly and that, under its apparent new stewardship, things are going to improve. However, if we have the same level of secrecy from the government in respect of the operations of that entity then we are clearly going to have some problems.

That is not to say that Consumer and Business Services has not been without its critics. Again, the Attorney-General is responsible for that agency—and it does not augur well for the management of some of the things that he is responsible for—but this is yet another agency which has been criticised for failing to respond to consumer complaints and which does not have a good reputation in the general community for being of assistance to consumers in areas that they are already responsible for.

I just say to the government that proposing the Commissioner for Consumer and Business Services attends to the enforcement and administration of this new responsibility, if it passes, I think has significant problems already. However, the proposed SafeWork SA option is not without problems as well and would need to have a significant improvement. If this legislation ever sees the light of day through the legislative process here in the parliament, then I am happy to discuss it further with the government because it is a matter of concern to industry that they have an agency that is actually functioning at a reasonable standard and will attend to the enforcement in a fair and equitable manner.

The other thing I will conclude on in respect of this—and I had not disclosed this during the course of the second reading but I will now—is to say that I do represent, in the electorate of Bragg, a significant number of horticultural and viticultural businesses that rely on labour hire companies to provide labour and workforce particularly during seasonal pickings and processing. I had not referred to it earlier but certainly a number of individual entities have confirmed to me that they are not averse to there being some regulation over the labour hire companies that they deal with.

However, it is fair to say that those I spoke to were very happy with the service of the labour hire companies that they use for the purposes of providing seasonal workers and had not had any direct complaint. But, again, they all seem to be full bottle on some stories about people who they felt were not good operators and who ought to be prosecuted or at least investigated, and that the existing agencies were everything from lazy to derelict in their duties in making sure that bad labour hire companies were not being investigated.

Another matter I will mention is that in the Queensland legislation one of the things that was recommended, instead of having very substantial fines plus the criminal sanctions of imprisonment for breaches—obviously, the National party in Queensland was objecting to this bill in any event—one helpful contribution, I thought, was to suggest that in there being a monetary fine regime, whether it is $50,000 or whatever for the first offence, there be very substantial increases in the monetary fines on second, third or subsequent offences—that is, into the hundreds of thousands of dollars. Perhaps that is something that needs to be considered, but certainly there is no justification for the imprisonment terms and, for all of those reasons, again, we confirm that we oppose this bill.

Sitting suspended from 18:00 to 19:30.

Mr TRELOAR: Madam Deputy Speaker, I draw your attention to the state of the house.

A quorum having been formed:

Bill read a third time and passed.

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