Page 2094 - Week 06 - Tuesday, 8 May 2012
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New Zealand and it was established in our early colonial days. In those days it was considered reasonable for citizens to be able to sail home to England, Ireland or from wherever they came so that they could visit their family and to do this in the knowledge that their job would still be there for them when they returned.
Long service leave was envisaged in Australia and New Zealand to allow people to return home on a boat. In a sense, Mr Speaker, it is a real and intended purpose now redundant for many obvious reasons. Even from that viewpoint, it is dubious to think that workers remaining in an industry, let alone a single employer, should be able to accumulate long service leave.
Then there are the employees who are engaged in work that looks like security work, but who are employed under legislation other than the Security Industry Act 2003. These people are excluded from portable long service even though, to all intents and purposes, their employment differs little from that of their colleagues who are employed under the Security Industry Act. If the government had thought this through a little more they might have aligned the work classifications to the relevant Fair Work Australia modern award.
Of some concern is the threat that some businesses could relocate to New South Wales to avoid being caught by the ACT legislation. Even more worrying is the risk of sham contracting that might occur because of the additional cost and administrative burden this scheme imposes on employers. So let us consider that for a moment.
Security companies often have to operate on what are, at best, skinny profit margins. Often those margins are determined by pre-fixed fixed-term government contracts. Any impost such as that contemplated by this bill will put further pressure on those margins because the contract terms do not allow them to be recovered. Businesses will have to wait until such time as they might—there is never any guarantee—be fortunate enough to land a new contract with sufficient remuneration to recover the additional cost.
Further, and contrary to the assertion in the government’s presentation speech, this bill will increase the administrative burden, the red tape burden, for business. It will do so because, as I mentioned earlier, the bill creates cross-border uncertainties as well as the fact that some employees are excluded from the scheme. There is potential for greatly increased administrative burden and, indeed, mistakes in the management of these complexities.
The minister also asserts that the scheme will reduce costs. This is also false because, as I have demonstrated before in my simple analysis, the mooted levy will create a surplus of nearly half a million dollars a year for the Long Service Leave Authority. In addition, currently employers are not required to provide for long service leave until an employee reaches five years of service. However, under this scheme they will have to write a cheque for long service leave from day one of service, not merely make provision that may never be drawn upon. This has a huge impact on the cash flow of businesses. This was the same problem that we highlighted in the community sector long service leave scheme.
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