Friday, September 05, 2014

Abetz says fears of revised workplace legislation 'neutralised' by Coalition

Workplace Relations Minister Eric Abetz says voters no longer believe the Coalition will bring back WorkChoices because the government has "neutralised" Labor and the unions' political attack over workplace laws.

And in comments designed to reassure business groups and his own backbench, Senator Abetz said workplace laws remained a "top priority" for the Coalition as he promised further changes to IR laws in a second-term Abbott government, guided by a wide ranging Productivity Commission review.

In an exclusive interview with Fairfax Media days before the Coalition marks its first year in office Senator Abetz, a 20-year senate veteran and upper house leader, has declared that he isn't going anywhere and that "the prospect of retirement does not excite me in any way".

Senator Abetz said workplace laws had been a "political hot potato and a huge negative for us" when he took charge of the portfolio but after four years the policy area "has been cooled down substantially, temperature wise, which is if I might be so bold which is exactly what the Coalition wanted".

"We have been able to basically neutralise [Labor] and look ... if you want your changes to last you've got to do it in evolutionary steps, not revolutionary steps and clearly as it now transpires Labor did overreach with the Fair Work Act," he said.

The Tasmanian senator said Labor and the Australian Council of Trade Unions would try to mount a scare campaign against the government on workplace law changes but "you can't just chant WorkChoices and expect people to run away. People aren't believing that anymore".

"If I might say, that was part and parcel of, if I might say a performance indicator I set for myself, that if people were to chant WorkChoices the public would say 'Nope, we don't believe you. This is sensible, reasonable policy'. Labor tried it at the last election and it clearly did not work."

Senator Abetz also confirmed he and Treasurer Joe Hockey had "basically settled the terms of reference" for the commission's review of work laws. That review is expected to get under way this year and report back in the months before the election due in 2016.

Fairfax Media obtained a leaked copy of the draft terms of reference in March that included pay and conditions, union militancy, workplace flexibility, penalty rates, and the Fair Work Act's impact on unemployment and under-employment. It's understood the final terms of reference will remain largely unchanged.

At the same time, the government has faced growing calls from sections of its backbench and supporters in the business community to move more rapidly on workplace reform, with some MPs and some sectors calling for penalty rates to be cut.

But in comments that will be greeted coolly by some in his own party room, Senator Abetz stressed changes to penalty rates would continue to be determined by the independent umpire, the Fair Work Commission.

"I do not want to be in the business of setting wages, that is why you need a good Fair Work Commission," he said.

The Productivity Commission inquiry would be a chance for voters, business and other organisations to have their say on Fair Work laws and after the inquiry is complete "we as a government will then determine that which we believe will be good for a second term agenda," he said.

"Because we promised no changes other than in our 38-page policy document [released before the election] there is no great rush with this," Senator Abetz said, adding that there were still two years to go until to the next election.

The imposition of an appeals body for the Fair Work Commission  - which could potentially overrule commission rulings on wage rises - was still being considered, as was a report on the efficacy of the Road Safety Remuneration Tribunal. Senator Abetz said he hoped the Australian Building and Construction Commission would be restored and the Registered Organisations Commission to improve union transparency would be established by the end of the year.


Eric Abetz launches attack against public service union

Senator Eric Abetz has launched a scathing attack on the main union representing public servants by saying it has been deliberately misrepresenting the government's position on bargaining negotiations.

In the Senate on Tuesday, Senator Abetz said the Community and Public Sector Union should stop scaremongering and "instead help its members negotiate what small productivity backed increases are possible given the mess left by the former Labor government".

"It should abandon its 4 per cent per annum pay claim that will cost 10,000 jobs which will be most severe in cash-strapped agencies like the Australian Crime Commission, which is having difficulty offering any increases without cutting jobs," he said.

His verbal assault came on the back of a Dorothy Dixer from Liberal Senator Dean Smith and is believed to have been sparked by an opinion piece by the union's national secretary Nadine Flood in The Canberra Times.

"The CPSU has been falsely claiming the government is stripping public service rights and conditions - this is incorrect," Senator Abetz said.

"The government bargaining policy aims for less complex enterprise agreements that do not repeat rights, conditions and responsibilities already provided for in legislation elsewhere.

"The CPSU claims the government wants to cut public servant superannuation when the contribution rate is actually set by the trust deed, a legislative instrument subject to parliamentary scrutiny.

"Duplicative content recently inserted into enterprise agreements pretending to fix a certain super contribution rate can't legally constrain the rate contained in public service superannuation law.

"Yet the CPSU continues to deliberately misrepresent the reality and ignore the government's stated position that the rate will not change."

He revealed 65 agencies covering 76 per cent of the workforce had started the bargaining process -  117 agreements affecting 160,000 federal public servants would eventually need to be agreed on -  and told the Senate that median public servant pay rises had outstripped inflation by 14 per cent in the past decade.

Mr Abetz, Prime Minister Tony Abbott's point man on public service issues, added he was now less inclined to meet with the union that had sought a fresh meeting with him.

"Last November I addressed the CPSU national governing council where I indicated I was always willing to engage in constructive dialogue with union representatives and that I'd look forward to the use of telephones, emails and meetings rather than megaphones," he said.  "Sadly this has not occurred. 

"While my door will always be open to stakeholders with genuine concerns, I'm reluctant to acquiesce to a stunt meeting designed to further spurious claims about the government's bargaining policy."

Ms Flood stuck by her statement enterprise agreements guaranteed a 15.4 per cent super rate and said Mr Abetz's refusal to meet with the CPSU was extraordinary given he was the minister responsible for public sector bargaining.  "Minister Abetz is wrong in law and in fact," she said.

"Protections contained in many APS agreements don't constrain changes to the PSSap (Commonwealth Superannuation Corporation) Trust Deed, they provide a 15.4 per cent employer contribution regardless of the employee's choice of fund."

Management at the Department of Human Services sent an email to 34,000 staff hitting back at Ms Flood's column.

The senior public servant representing Human Services at the negotiating table, Jo Talbot, told the DHS workforce Ms Flood's opinion piece contained misleading information.

"Ms Flood claims that part-time working mothers face working up to 52 hours extra a month without overtime," Ms Talbot wrote. "This is misleading and in fact scaremongering.

"The department's working draft agreement outlines that part-time staff will be paid their ordinary rate of pay for each additional hour worked within the bandwidth up to 152 hours in a settlement period.

"Part time staff will be entitled to overtime rates if they work more than 152 hours in a settlement period or if they are required to work outside the bandwidth."

Ms Talbot said at the moment part-time staff could access overtime once they had completed their part-time hours.

This meant in some instances part-time staff could receive more pay than a full-time staff member for completing a standard five-day week.

"The department does not consider this to be appropriate and is trying to address this as part of the new agreement," Ms Talbot said.

Ms Flood said: "I note DHS's response in face backs up exactly what we were saying. That is under their proposal, part-time staff can be forced to work full time hours without overtime."


Power price predictions

Do you think you're paying too much for electricity? Would you like to see an end to hefty annual price rises, maybe even a fall in prices that goes beyond the abolition of the carbon tax? Well, be patient. The econocrats are working on it.

It may surprise you that they've been in the process of reforming electricity prices for the best part of 20 years, and they're far from finished. They got part of the power system working well, had a bad slip with another bit, and the jury's still out on a third. But they're working away and are confident of success - eventually.

The national electricity market - covering all of Australia bar Western Australia and the Northern Territory - is actually a creation of our econocrats, their grand experiment in market competition.

Before this, we had separate, state-owned monopolies that charged us pretty much what they wanted to charge, particularly because our demand for power kept growing every year. The reformers' bright idea was to link up all the eastern and southern states and turn them into a market by making all the individual power stations compete against each other to feed electricity into the national grid at the lowest prices possible.

Buying the power at the other end of the grid would be various electricity retailers, which would deal directly with households and business users. These, too, would be required to compete with each other to win our business, since we'd be free to buy our power from whichever retailer we chose.

Linking the power stations in the wholesale market with the retailers supplying power to you and me would be the high-voltage transmission and lower-voltage distribution network (the "poles and wires", as the pollies keep calling it).

Since it would never be economic to build rival networks, this would have to stay as a monopoly. And being a monopoly, whether it was sold off or remained government-owned, the prices it charged the retailers - and they passed on to us - would need to be closely regulated to prevent rip-offs.

The reform of the first part of the system has worked really well. Competition between the electricity generators has been cut-throat, prices haven't changed much over the years and no power stations are making excessive profits.

But the cost of generating the electricity accounts for only about 30 per cent of the retail prices we pay. The big problem has been that faulty rules have prompted the regulators of the network operators' charges to grant them excessive increases, to the point where "network charges" now explain about half of retail power prices.

It's five years of these big increases, much more than the carbon tax or the renewable energy target, that have caused retail prices to grow so fast.  A big part of the problem is that, about four years ago, the demand for electricity, which had been growing every year for a century, stopped growing and started falling.

It fell mainly because of new laws requiring appliances to be more efficient in their use of power and because all the fuss Tony Abbott was making about the price of electricity prompted us to be more price-conscious and look for ways to reduce our usage.

The network operators began investing heavily to improve the capacity of the network to meet the ever-higher peak demand for power on a few hot summer afternoons when a growing number of us had airconditioners going full blast.

One small problem: the fall in annual demand for electricity meant the brief seasonal peak had stopped rising. For several years the industry refused to believe the downturn in demand from the network was more than a blip.

So we've expanded the capacity of the network beyond what we're likely to need for some time. But you and I are paying extra for this expansion and will continue paying until it's paid off.

The good news is the econocrats have finally woken up to the problem. Actually, they were woken up in 2012 by the fuss Julia Gillard made when she realised Abbott was framing her for price rises she didn't cause.

In 2012 the rules were changed to give the regulators greater power to limit increases in the network charges passed on to retailers. Such changes take far longer than you'd imagine to flow through, but from now on it seems likely the network component of retail electricity bills will stay fairly steady in dollar terms.

The econocrats have proposed a further reform which, when it takes effect, will require the networks to bill retailers according to the time of day and time of year when you and I use electricity. With the spread of "smart meters" - which show the precise times when each household uses its electricity - we'll be charged according to our time of use, with those of us who show restraint during peak periods paying less, and those who don't paying more. This should produce a lasting solution to the (expensive) problem of ever-rising peak demand on hot afternoons.

That leaves the question of the effectiveness of competition between the growing number of electricity retailers, big and small. Here the jury is still out. Much depends on how smart we are in finding the retailer offering the best deal - on which quest I offer some tips in my little online video spiel.


Qantas will use new private enterprise airport

Qantas has become the first major airline to sign on to fly out of Brisbane West Wellcamp Airport, nearing completion near Toowoomba, with the airport's owner throwing down the gauntlet to Brisbane.

Wagners chairman John Wagner, whose family company was building the airport, said Wednesday's announcement was "just the start".

Mr Wagner said he wanted to take existing business away from Brisbane Airport.  "Absolutely we do (but) they won't notice it," he said.

"You've got to keep in mind if we got to a million passengers a year, which I think we will in pretty short order over the next couple of years, that will be similar to a Mackay or a Newcastle.

"Brisbane has 22 million passengers and at the moment they're congested … so we're here to help them out actually."

Mr Newman welcomed the development, which had not cost taxpayers a cent, along with the competition for Queensland's main airport.

"It is great to have competition," he said.

"Competition means better service and lower prices and this airport will be in competition with Brisbane Airport and I say that is a healthy thing that's good for consumers and people will have a choice."

QantasLink, Qantas's regional arm, will use Bombardier Q400s that can accommodate 74 passengers and fly up 2519 kilometres on its initial routes to and from Sydney.

There will be two daily weekday flights out of Wellcamp – at 5.20am and 9.35am – with return flights departing Sydney at 8.50am and 6pm.

One flight will leave Toowoomba at 7.30am Saturdays, with the return weekend flight at 6pm Saturday.

Brisbane West Wellcamp is the first privately built public airport in Australian history, with no financial assistance from any level of government.

Mr Wagner said his family had invested heavily in the project – "it's closer to $200 million than $100 million, unfortunately," he said – and he hoped to have more airline announcements soon. "Just watch this space," he said.

"It's going to be important that we sell the product and change people's behaviour so instead of driving two and a half hours to Brisbane Airport that it currently is, they will come here and support the airlines that are operating here."

It is understood Brisbane West Wellcamp is also speaking with Virgin Australia.

Mr Gissing said it was fitting the services would start on November 17, the day after Qantas's 94th anniversary.

He said the Q400 turboprop's flight time from Toowoomba to Sydney would be less than two hours.

"It's just the right aircraft for this market, we believe, for the start-up," Mr Gissing said.

Mr Newman said, as well as the tourism benefits, local industries would be well served through air freight.

Mr Newman said it was "surreal" to see the airport nearly completed after just 18 months.

The airport's 2.87-kilometre runway would be capable of landing a Boeing 747, which Wagners managing director Denis Wagner said was a possibility in the shape of a cargo plane.


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