Hansard debates

Mrs McARTHUR (Western Victoria) (14:42): Well, before I commence what I intended to say, I would like to say that Ms Terpstra has once again demonstrated her ideological objection to the private sector, to those people that create jobs and employment and those people who ensure that there is tax coming into the system. Without businesses employing people, there would be more unemployed. It happens every time she needs to speak about enterprise and business. She has no idea how it works, and she continually runs it down. Well, these are the people doing it tough frequently. They are often the very, very small businesses, the sole traders, that this government has totally failed to support. There are many of them, and they are the backbone of our community.

In rising to support Mr Davis’s motion, which rightly notes the catastrophic consequences of the COVID lockdown on Victorian small business and the impact the Premier’s new secure work pilot scheme will have on this vital part of the state economy, I find it difficult to believe the Premier could even advance this idea. It is the wrong policy, as I will argue, but most of all it is at the wrong time. Even in a benign economic environment it would do nothing to address the problem it seeks to fix; in the situation we face now it is truly catastrophic.

I will address that situation first with some statistics: 141 000 jobs have been lost since the start of the pandemic, by far the worst performance of any state—and we know how the second wave occurred as well—and nearly three times as bad as the next worst state, in fact; 146 500 women are unemployed, the highest on record; 18.2 per cent of young people are unemployed, the worst figure in 22 years; and 20 per cent, one in five Victorians, are either unemployed or underemployed, the worst in Australia. These are the results of this government’s mishandling of the pandemic. But even before COVID hit the Andrews government had slowed the economy with 29 new taxes, blown more than $1 billion in project overspends and overseen an astonishing increase in the public sector wage bill. Victorian debt figures were worrying before; they are now truly terrifying. The total projection prior to COVID, $70 billion, will now rise to $150 billion. That is more than $34 000 for every working-age Victorian, and from a base figure of just $21 billion when the Andrews government took office in 2014. Yet this is the time this Premier has chosen to launch an attack on enterprise, on the very businesses we need to grow to provide employment, tax revenues and the economic activity which can dig us out of this debt hole.

And the timing is not wrong just because of our spiralling debt. It is also of recent history that government stopped business dead for six months. How can they possibly believe that now is the time to hit business with the threat of a new tax on jobs? And believe me, a pilot will morph into a tax. A levy is a tax. The Premier can talk of a levy all he likes, but there is no doubt employers will see it as a tax, a threat, adding complexity as well as cost and conjuring up yet another disincentive to operation.

Across the Murray River we see the opposite approach, with an open economy, payroll tax cuts, tendering support, small business rebates and incentives to attract business headquarters to that state. Now the borders are open they will be flocking over there. There is no doubt which is the more attractive business environment in this country, and this latest proposal will only exacerbate that difference to the cost of our businesses and our economy. So the timing is clearly wrong, but in my view the policy is too. It is unnecessary and likely to be counterproductive, and not just because of the existing $450 and $1500 payments from state and commonwealth specifically for those forced into COVID isolation but unsupported by paid leave.

In the longer term it attacks the wrong target. Casual employment is not some new huge and growing threat. It is an established and stable part of our employment market, a tried and tested tool which has provided the flexibility which enables growth. Since the time of the Hawke and Keating governments, when casual employment grew from about 18 per cent of employees to 24.4 per cent, the level has remained very steady at around a quarter of the workforce. This is evidenced not just in ABS statistics but in multiple academic studies and parliamentary reports. The simple reason it exists at this level is that it works for all parties. Casual work is not an imposition but a genuine choice for many people. In particular those with caring responsibilities and those studying find it provides flexibility—

Mr Gepp interjected.

Mrs McARTHUR: Well, they could not work full-time, Mr Gepp. It provides workers with a premium in the form of a loading, usually 25 per cent, to compensate for forms of paid leave not otherwise payable. These are people with legitimate, often longstanding jobs and long-term relationships with their employers. They are casual workers, but they have employment contracts, and they understand the 25 per cent loading just as employers understand the trade-off and value the simplicity and certainty it affords.

The Premier spoke of the too-hard basket in reference to this policy, but he is wrong to think that casual contracts are in it. What he should seek to address, if he genuinely wishes to address the problem he identifies, is those who are outside the legitimate workforce—those paid cash and in the black economy. These are the people who genuinely cannot afford not to work, and tackling their employers, not legitimate small businesses, would be the priority of any government that sought social justice, not just headlines.

What then are the consequences of this misguided action? I have huge reservations about a policy which will force employers to double-fund sick and carers leave for casual employees via an expensive and almost certainly bureaucratic complex new mechanism. It is particularly damaging in what should be a recovery phase of our economy, where small and family businesses need the ability to flex up and flex down. Established businesses were new businesses once, and across our economy huge numbers of the permanent full-time jobs which now exist began as tentative expansions enabled by flexible casual contracts. As Charles Cameron, chief executive of the Recruitment, Consulting and Staffing Association, said:

The impact of doubling sick and carers leave entitlements for casual employees and requiring employers to foot the bill will have a devastating impact on future job creation in Victoria.

It is extraordinary to think that in an economic downturn the Premier proposes breaking one of the best tools we have to fix it: a flexible employment market. He fails to recognise the importance of casual work to individuals who need flexibility, to expanding businesses which need to mitigate risk and to an economy which is far less dependent on the union-dominated, full-time, often male industries that he seems to understand.

Finally, I take issue with the way in which this policy has appeared fully formed without any public discussion or consultation with employers, the very people who will have to both fund and administer it. There are far better solutions than this, and working with business would have been the best way to start. It is deeply unfortunate that doing so seems to be against everything this government stands for. As the Attorney-General noted in commenting on this policy, the better policy approach is to strengthen the ability of workers to choose to move from casual to permanent full- or part-time employment if that is what they want to do. This is what has been under discussion in the industrial relations working group process between government and employee and employer representatives over recent months. This is the appropriate level for these discussions.

The Premier’s misguided attempt to hijack responsibility is the wrong policy at the wrong time from the wrong level of government. What starts as a small government-funded pilot will become, on introduction, a new tax to the tune of hundreds of millions of dollars. It stymies business, disincentivises recovery and undermines an essential part of our employment mix. It fails to understand why the existing balance the casual premium creates is not just necessary but valued by employees and employers alike. It misses legitimate cases of insecure employment in the black market or self-employed contractors, for instance, and illustrates once again the Labor Party’s deeply unfair, ignorant and damaging belief that employers are inherently exploitative of their staff and must be legislated into morality.

Even for the Premier this policy shows a new level of disconnection from reality. I can only hope for the people of Victoria that it ends up damaging not our economic future but his credibility. This is an appalling tax. It is a tax; a levy is a tax, and that is what it is. I urge the chamber to support Mr Davis’s motion, which asks:

That this house recognises that Victorian small businesses have done it very tough through the COVID-19 pandemic and that now is the wrong time to foist a new tax onto the small business sector already struggling to recover from the lockdown.

I think we need to support business, certainly not tax them. We want to encourage employers to employ more people and employ them legitimately. If they want to be casual workers, then they get paid the 25 per cent loading. Permanent employees get their entitlements, as they should and as they are entitled to. Casual workers get their loading. Some work as students, and sometimes a visa does not allow them to work. So was Ms Terpstra encouraging illegal workers? Is that what she was suggesting in her previous presentation? If part of your visa says that you cannot work then you should not be working. If you are only entitled to work for a certain amount of time, you should only be working for a certain amount of time. We must encourage people to obey the law, and that means employees as well as employers. I urge the chamber to support this motion.