Michael Sukkar MP

Paid Parental Leave Amendment Bill

The fact that Labor’s position on this bill, the Paid Parental Leave Scheme Amendment Bill 2014, is so indefensible is highlighted by the fact that the member for Perth spoke about every single related topic without actually dealing with any of the substantial aspects of this legislation. Let me bring the debate back to the Paid Parental Leave Scheme Amendment Bill, because for the last 15 minutes we have had a frolic on a number of other topics.

The bill before us today presents yet another measure from the coalition to reduce the red tape on business. I must say that the member for Perth, to her credit, mentioned small business once. So you are one up on the member for Hotham—you mentioned it once. This is a small business measure. I know members opposite do not know much about small business. Not many of you have ever run or had much to do with small business, but this bill is about small businesses.

Opposition members interjecting—

Mr SUKKAR: Your actions do not represent it today, do they? We have a situation here where the bill in front of us seeks to replace $44 million of cost burdens on small business with $7 million from the government—and members opposite, in an unconscionable way, are blocking that. This is one series in a series of steps that the government is taking to slash cumbersome and unnecessary regulations. It also reaffirms the government’s commitment to support women to have a child and to return to work—a commitment underlined by our Paid Parental Leave Scheme.

The history of the bill before us today also demonstrates the complete and utter lack of understanding of business possessed by those on the opposite side of the House, as I have said. When I was reading about this bill I was pretty baffled to read about Labor’s years of obstruction to what seems like a very straightforward measure. To the credit of the now Minister for Small Business, the Hon. Bruce Billson, the genesis of this bill was a private member’s motion back in 2011, and it should have been put to bed then. If we cannot get bipartisan support on something as basic and as straightforward as this, we have problems. It was voted down then and again in 2012. Now in the Senate we see Labor and the Greens locking arms together as usual seeking to block it and they want to introduce a confusing and water down version of the amendment. I will come back to this in a moment.

The bill here today—irrespective of the frolic that the member for Perth went on—simply seeks to relieve business of the burden of having to act as the pay clerk for the Paid Parental Leave Scheme introduced by the former Labor government. As I have said, it is not a radical amendment being proposed. It will save businesses $44 million a year and the not-for-profit sector $4 million a year. I want to echo the comments of the member for Mitchell when he said that those compliance burdens that would be lifted if this legislation is passed are likely to be reinvested by small businesses. That means upgrades to capital. That means more hours for casual workers. These are important things.

The Labor Party think that you can just put on another burden—a bit like a camel struggling under the weight of a pack: ‘Just a bit more; it can take it.’ That is what is weighing down small business—that mentality that you can keep loading small businesses with compliance burdens. In small businesses and family owned businesses, that is difficult. Having grown up in a small business family, I know that every time there is an additional government obligation—an additional form to fill out, an additional requirement—it is the owners who have to do that work. Often they cannot afford to employ additional people to do that, so generally it means that very late at night they are the ones doing that paperwork. We want to make sure that small businesses are relieved of an unnecessary burden in this case.

I have spoken about the $44 million saving at a national level, but in my home state of Victoria it will save approximately $11½ million a year. Businesses of all sizes as well as organisations in the not-for-profit sector will be freed up to focus on what they do best—creating wealth and employment. Businesses have much more important tasks to undertake with their resources rather than acting as a pay clerk for the Paid Parental Leave Scheme. Business has been telling us this for five years. Employer groups first raised their concerns and their objections to the mandatory employer under the PPL scheme during public consultations back in 2009, before the scheme was even implemented. Unsurprisingly, the former Labor government ignored those representations. We have also heard from employers through the legislative review of the PPL scheme and through businesses contacting us directly about the burden the pay clerk duties place on the operation of their business.

I would say to members opposite, do not believe us, do not trust us; listen to small businesses. They are crying out for it. Again, just last year, the Australian Chamber of Commerce and Industry conducted a survey of its members on the PPL Scheme. These statistics have been quoted in this debate by some others, but they are overwhelming, so let me quote them again.    In the survey, 84.3 per cent of businesses either agreed or strongly agreed that ‘the government should not require employers to be the paymaster for the Paid Parental Leave Scheme’. The additional costs to employers were outlined in the Paid Parental Leave Evaluation Phase 2 Report, with the extra workload the main cause for concern. It said that among the 29 per cent of employers who felt additional costs were involved, 94 per cent, so basically all, said these costs involved them taking on extra work, while 51 per cent said the workload of current staff had been increased by PPL. The median number of staff hours needed to implement PPL was 11 hours. The median cost was $1,783.

Employers have been consistent and strong in their opposition to having to act as pay clerk and we have listened. When it comes to business, every additional cost, every additional piece of regulation that you have to comply with impacts your bottom line.    For the past six years, government in this country has been hindering not helping business, but this is changing.    Today’s bill is just one in a suite of measures being introduced to slash red tape in Australia.

On 26 March, we held the parliament’s first ever red tape repeal day. More than 10,000 acts and regulations were repealed, removing more than 50,000 pages from the statute books. We are saving more than $700 million in paperwork costs per year. Benefits to for small business include repealing the carbon tax, which will not only remove a $9 billion a year hit on the economy but also save over $85 million a year in monitoring, record keeping and reporting costs; establishing a dedicated small-business hotline at the Fair Work Ombudsman so small businesses can access fast, binding advice on employment terms and conditions; using standard contract terms for government procurements under $200,000 and credit cards for payments under $20,000 so small businesses can be paid sooner; amending the personal property securities regime to reduce the burden on hire firms; and of course, moving the pay clerk burden of administering paid parental leave from small business to the Family Assistance Office, saving employers $48 million a year. We took a clear promise to the 2013 election to remove the pay clerk burden and today we are honouring that promise. That is why we will not pass Labor’s amendment to this bill in the Senate.

In March, having twice voted down this amendment, Labor and their partners the Greens further demonstrated their lack of appreciation for the business environment by introducing a watered-down amendment. Labor is seeking to remove the paymaster role for businesses with fewer than 20 employees but, of course, without any explanation as to how this cut-off would be calculated. There are many hundreds of businesses in my electorate which certainly have more than 20 employees. They are by no way large enterprises. The concept that a business that hires between 20 and 100 employees is somehow so well-resources that they can act as the pay clerk for PPL is just wrong. That is why we believe this is an unacceptable position. This is now what business wants and this is what the Australian people want, as they told us last September.

The government wants to see this election commitment fully implemented and we are asking those opposite not to be mindlessly opportunistic in their opposition but, after years of obstruction, to see reason and support us in this. This is not controversial. This helps small businesses drastically. Again, our amendment to the payroll system—unlike their approach—is not even mandatory. What more flexibility can we give small businesses than we are giving them in this bill? We are giving businesses freedom to choose. We do not pretend to have a better understanding of a business and its resources than the owner. It is quite astounding that members opposite would seek to presume to have that knowledge or insight because we know that the Labor Party ignored small businesses for six years. They do not care about small business but we do on this side.

We are asking employers to decide what is best for their business and for their workers when it comes to administering the PPL Scheme. If an employer has administrative capacity and has found the role to be beneficial to their organisation, they can opt in and continue to act as a pay clerk for the PPL Scheme, if the employee also agrees. Based on the research and on the evidence directly from small businesses that I highlighted earlier, I doubt there would be many employers opting in to continue in that role.

Between 1 July 2011 and 30 June 2013, some 125,000 employees received paid parental leave from their employer. Some employers might continue to administer paid parental leave but it will be their choice. An argument has been put forward that by no longer making it mandatory for employers to administer PPL, somehow employees going on paid parental leave will lose their attachment to the workforce. I find that an absolutely bizarre argument. I am not sure what the evidence would be to back that up. It is an argument that does not pass muster. Furthermore, the administrative costs being placed on businesses, which have clearly been calculated, far outweigh the imagined benefits put forward by Labor of employees feeling more ‘connected’. Again, I think the Labor Party are really grasping at straws in a desperate attempt to justify an approach they have taken which is to be mindlessly opportunistic in opposing the legislation.

The Department of Human Services already administers PPL payments for approximately 24 per cent of employees. It makes sense therefore for the department to be responsible for the majority of payments and we will ensure the resources are available to department to do so. On this side of the chamber we want paid parental leave to work for everybody: employers and employees, as well as the government. That is what we are putting forward here in this legislation.

The government, of course, has a more comprehensive plan for paid parental leave in this country, a scheme that will give mothers every opportunity to return to their careers. Our genuine, fully-funded paid parental leave scheme will help keep mothers engaged with the work force like never before. We remain committed to introducing it from 1 July 2015. In the meantime, I would ask members opposite not to obfuscate. Deal with the matters at hand in this legislation. It is an indefensible position, I know, and it might be tempting to try and talk about everything other than what is in this legislation. But stick to the task at hand. The bill we have before us today is a sensible move to alleviate unnecessary red tape from the existing PPL scheme in order to get employers back to business. I commend it to the House.