Thank you very much for the invitation to be with you all today and the opportunity to be here. I have come back from a week in Canberra just this morning. Literally straight from the airport to this event. It’s been a big week, as was acknowledged and a big week in Senate estimates for those who would like to know what we were doing until 11-11:30 at night every day, in my case, grilling the Department of Foreign Affairs and Trade, the Department of Defence, Department of Finance, the Department of Prime Minister and Cabinet over three nights. Very happy to come back to that during questions or the like. Of course, it’s been a big week on the news stage internationally as well. Larry has asked me to focus on all of the issues very specific to contractors and IR sector and the like.
But of course, we’ll reflect a little on the times that we’re in, and the times we’re in at present are certainly incredibly challenging ones for Australians and for people around the world. We can see that manifesting itself around the world with the degree of disruption that’s happening.
Obviously, there’s the disruption in terms of conflicts, the tragic conflicts in Ukraine and Gaza, the disruption that’s happened caused by rogue states like Russia, North Korea, Iran. The way in which China is quite happy to encourage that destabilisation and indeed to provide funding, inputs and assistance, that is all about trying to destabilise the Western order, as it has been known very much since World War II. And of course, in particular the place of the United States in that. So, it is a global environment at present that is profoundly different from the one any of us grew up in and the decades ahead. We will see quite a different shaped world, I suspect, for the way in which countries engage with one another, where what had been a period of certainty and stability under US leadership is now more contested because of the rise of influence economically and militarily of countries like China, but also increasingly many other large countries around the world.
But within democracies, we’re seeing huge disruption as well. That’s coming about in large part because people are feeling like they’ve had it pretty tough these last few years, and they’re feeling like they’ve had a pretty tough these last few years because they have had it pretty tough these last few years. This is a room full of people who know as well as anybody the extent to which the price of everything has gone up. And for most people take myself, for example, saying to Larry, before. I left high school, I finished up at Gawler High during Keating’s recession we had to have. That was the last time in Australia where school leavers wondered if they’d get a job. But since then, unemployment has been pretty low continuously. Since then, since those early 1990s. Economic growth in Australia has continuously been pretty good. And since those early 1990s, inflation in Australia has been pretty low. Up until a few years ago. And then we’ve had this environment coming out of Covid where people have gone backwards in real terms across the country, like Australia and many other comparable countries for the first time in their living memory.
So, we’re seeing your household finances going backwards. That’s going to drive a lot of disruption. Driving a lot of anti-incumbency vote. Votes against incumbent governments. And that is well and truly what Donald Trump capitalised on over the course of this week. Do Americans feel better off after four years of Joe Biden and Kamala Harris as president and vice president? The answer is no. And for all the noise and all the lights and songs and dazzles, and Donald Trump’s dance moves and whatever else that took place during the US campaign it actually largely all comes down to that one question. Did Americans feel better off or worse off after the last four years? Do they think their country was heading in the right direction or the wrong direction? And for a majority, as it has turned out, the places where the votes mattered, the answer is they felt worse off, and they wanted change and they gave affect to that change.
Now in Australia we face many similar circumstances. People are feeling worse off than they were a few years ago. And in fact, things are looking worse off too. When the Albanese Government was elected and I packed up my office as the then leader of the government in the Senate and literally swapped offices in Canberra with Penny Wong, who was then the leader of the opposition in the Senate. So, boxes were swapped from one location to the other. When that happened, Australia was seeing the effects of inflation. The effects of Russia’s invasion of Ukraine and what that had done in spiking oil prices, the effects of supply chain shocks around the world and what that was doing to global inflation. But on every measure, inflation in Australia was lower than in comparable developed economies. So, we were feeling those global pressures because we can’t be exempt from them, but we were doing better than other countries. Close to three years later, three Albanese Labor Government budgets later. To make the political point. Australia’s inflation is now running worse than most other developed countries. So other countries have managed to bring their inflation rate down faster and more effectively and with that interest rates. Interest rates were cut again in the US just this week. They’ve just tossed out their government. But their economic performance, their inflation raises, their interest rates are actually coming down faster.
So, that’s why Australians are well and truly feeling that pain and that angst. And whether you are literally people who are on those statistics that banks are now revealing about increases in hardship payments and increases in people who are behind in relation to their mortgages and payments, or whether you are people who are lucky enough, like me, probably like a good number of you to be able to get by and to not have those pressures, but still know that the price of everything has gone up a hell of a lot and that it’s hitting the hip pocket along the way.
So, why is Australia doing worse? Doing worse because of the things that are affecting industries and businesses like yours. The way in which the Albanese government has pursued the most aggressive and productivity sapping reforms to industrial relations. So, those types of things that you are being hit with, are of course, hurting productivity across the Australian economy, driving up costs further and making your job of doing business that much worse. Just looking at the stats of what Australians are feeling, the cost of living over the last two years. According to the ABS, Employee Living Costs Index is up 18.2% in Australia. For many of you, the input cost of doing business on your goods and your staff has gone up even more dramatically.
That, of course, is in part because of things such as the Closing the Loophole legislation. Wonderful name, isn’t it? Closing the Loopholes. Makes it sound all very nice and innocent. But of course, this has created big new red tape burdens for employers, and especially for contractors and for those working in labour hire and other contracting sectors. And it’s impacting, especially those who don’t have vast human resources budgets, staff and specialists to be able to work through. It’s restricting the ability of businesses to be flexible and workforce planning, especially again in the subcontracting sector and it really is disrupting employee relations.
The Master Builders Association described those closing the loophole reforms as “a nightmare from a complexity for perspective and a cost perspective and a risk perspective”. Right across the board, they gave them away. And indeed the example was given an average residential home, something so many of you will be so familiar with. That when it’s being built, there will be between anywhere between 15 and 25 specialist contractors coming through throughout the various phases of that period. The evidence that the MBA and others gave was that these laws would mean that for every one of those subcontractors, that every single one, the compliance burden goes up. The things that they have to check and insure against and of course, costs in terms of the way in which they employ and engage themselves, potentially with other subcontractors, all goes up where they’re caught by regulated labour hire arrangement orders. Civil Contractors Federation made similar points. And it’s partly what’s driven the real negativity in terms of Australia’s productivity performance.
Productivity performance is really quite striking. It now, in terms of productivity measures, takes 6.3% more labour in Australia to produce the same level of goods and services as it did in 2022, 6.3% more. So that, friends, is a demonstration of just how businesses are being affected, that they’re not getting the same output for the investment in terms of getting their employer to do the jobs. They’re not getting it because individuals are slacking-off or not working hard, they’re not getting those returns because there is so much extra red tape with businesses having to spend their time and money dealing with. Take the casual conversion and flexibility laws. Those new rules really dramatically reduce employer discretion in workforce planning. We’ve committed, the Liberal Party. Should acknowledge my state Liberal Party colleagues who are here as well to John, to Dave, to Josh and honorary mention Connie, not as a Liberal Party colleague, but we can always hope. But thank you to state parliamentary colleagues, thank you all for being here. But we’ve committed as the Liberal Party federally that we will simplify and reinvent a definition of casual workers to give employers and employees confidence and certainty. It’s a commitment that Peter Dutton made in the budget reply speech earlier this year, along with a number of others targeted to really help businesses there in terms as tax measures, such as greater levels of support for instant asset write offs, or in terms of other things, to really try to simplify that retail environment.
What the Albanese Government has done in terms of its IR reforms there, they’ve deliberately created uncertainty for businesses. They repealed the definition of casual workers in the Fair Work Act, and they’ve left it up to the Fair Work Commission, who they’re stacking full of union officials, to instead make decisions about whether or not an employee is a casual or a permanent. So, business carries the uncertainty. Employee carries the uncertainty. And of course, the risk of that is that fewer people get the jobs to start off with or have the flexibility and the benefits of working in that casual employment.
The government is going to war really over that casual employment definition and has done it in a way again create more union power and given the unions the incentive to litigate to pursue businesses anywhere and everywhere that they think there are opportunities to expose or to create greater drive for permanency and greater drive for union members. Equally, of the different laws governments rammed through in this Parliament, the same job, same pay laws. Again, all of the slogans behind the titles of these new laws closing the loopholes, same job, same pay. They’re hard to disagree with in terms of the titles, but it’s the detail that is hurting sub contractors and industries right around. Same job, same pay implications, restrict flexibility and make it harder for subcontractors to manage costs or manage skilled labour demand. They impose very much a one size fits all model for industries, and the unions are aggressively going after industries using these laws.
The Electrical Trades Union warned employers earlier this year that they should cave in and accept clauses in new pay deals, or the union will litigate more through the Fair Work Commission and taking action under these new laws to tie businesses down. The ECU’s national secretary said that the union would go full bore to ensure labour hire workers were all captured under the same terms, and contractors all under the same terms of those that are working alongside them. So much for flexibility, so much for competition, so much for any incentive, so much to bargaining. They’re just wanted to drive everyone to the same highest level of cost and complexity.
As the Australian Industry Group said of those laws “they are productivity-sapping virus that is spreading across the economy.” Just in construction sector, in aged care, childcare, mining, education, energy all of which again adding very much to the costs along the way.
As Labor was negotiating to ram these laws through the Senate, were they had to get the Greens to agree, everyone was then given the surprise package, the surprise package of the new right to disconnect laws. They weren’t even in Labor’s initial proposals, but they were on the Greens wish list and the Greens got their wish list. And so suddenly there was this new measure of the right to disconnect, which poses huge practical problems for businesses who rely on having some after-hours availability, some after-hours flexibility. And again, is a tool that can be weaponised by unions against employers.
It’s emblematic of the very cavalier approach of IR, their ideological approach, an approach that doesn’t reflect the modern economy and the flexibilities that so many businesses need to work with and, frankly, that so many employees want to work with. But the government is all too happy to add this extra complexity and these extra burdens on businesses.
Workers are forced to lose out from that flexibility, and those costs will flow through. While they’ve been taking this pathway of heavily reregulating the industrial relations landscape. At the same time, we’ve had exposed once more the huge wrongdoings by particularly the CFMEU. That’s why we are committed to seeing real, proper, tough law reform when it comes to the construction sector.
We want to see the Australian Building and Construction Commission re-established, having been abolished by the Labor government. We want to see it re-established with tougher and stronger powers and stronger teeth, to be able to go after wrongdoing. We don’t want to see a situation where the CFMEU gets tinkered with in administration for a couple of years, and then comes back just the same. We think the CFMEU should be de-registered, just as Bob Hawke had the courage to de-register the Builders Labourers Federation, back in the day. And the penalties have got to be real for the individual union leaders as well.
Through our last term in government, Labor and the Greens spent a long time blocking more effective penalties that would have ensured that repeat offenders in the union movement paid a price for their repeat offending. As one of the judges who has overseen one of the many, many cases in relation to charges against the CFMEU, said “there is an irresistible inference from the CFMEU’s actions. They are determined that its officials will not comply with the requirements of the Fair Work Act, and that if this results in civil penalties being imposed, they will just be paid and treated as a cost of the union pursuing its enemies”.
So, the CFMEU has been clearly found to breach the law many, many times, and the judges sitting there having to reach a conclusion themselves that the union sees it just as a cost of doing business. Breach the law, get charged, get fined, pay the fine. That’s the cost of us being more militant, more powerful, more effective. Because all of those breaches that slow down activity on building sites that cost projects more money, ultimately behind closed doors, they want to use the pressure to be able to just make businesses cave into their demands.
So we’re very clear that we will bring back the tough cop on the beat and make it effective and tougher than it’s ever been before. We will pursue real reform in terms of the CFMEU. We will make changes in industrial relations rules. Which have been, ever since John Howard lost, an area that, frankly, have been too hard politically to go to. But this government has gone too far and tipped the balance back the other way. And tipping the balance back the other way, we will seize that opportunity to unwind some of those things, be it the right to disconnect and be it the lack of now a clear definition for casuals. Be it indeed the driving up of costs through essentially the enforced approach of [indistinct] basically that is being embedded and industrial relations and incentives.
We’ll have more detail that will release between now and the election, so that the inevitable scare campaign that will come from Labor and be quarantined in terms of us clearly demonstrating where we will change those laws and where we will not. Reflecting the need to give employees and workers certainty that we will respect their rights and their entitlements and their need for a fair wage and fair employment terms and circumstances. But it won’t just be in the IR landscape that we seek to reduce red tape. We will do that in terms of building approvals, environmental approvals, trying to put the pressure back on the states and territories and local government to seriously make some inroads in terms of the amount of time it takes to do business in this country, which again, is sapping up productivity, again is driving up costs and inflation right across the economy. We would seek to do so in terms of a more efficient, fairer, better taxation and reforms that we will bring forward in other areas as well.
So, against a challenging global environment, our ambition is to get Australia back to being a country that outperforms. A country that won’t be exempt from the buffers in the international environment, but one where we have confidence that we can outperform and maintain the type of better living standards that we have in this country and that none of us should take for granted. Thanks so much again for the chance to be with you, to say a few words.