It’s my pleasure to rise and speak on the Fair Work Amendment (Protecting Penalty and Overtime Rates) Bill 2025. I do join with my colleagues in raising serious concerns about this bill. In doing so, I just want to commend the excellent dissenting report handed down by coalition senators Kovacic and Sharma in the bill inquiry by the Senate Education and Employment Legislation Committee. The coalition supports penalty and overtime rates; that is not in question in any respect. But, on this side of the chamber, we are concerned about the long-term impact of this bill on employee choice, flexibility, business viability—particularly the viability of many small and family businesses—as well as national productivity.
As this excellent dissenting report makes clear, this bill hits small businesses extremely hard. It risks retrospective application. It does give rise to all sorts of uncertainty. It impacts on employee choice. And it also imposes a risk to work-from-home arrangements. From my perspective, the biggest concern with this bill is the risk to small and family businesses. Small businesses are being hit with new compliance burdens almost every month under the Albanese government. Evidence shows that owners spent 15 hours a week on compliance, which is time taken away from running their businesses. The very big difference between a small business and a large corporation is that small operators cannot absorb the extra costs of meeting regulatory burdens. Of course, that does lead to real pressures on so many small businesses and business quotas. At a time in our country when so many families and so many small businesses are under pressure, they do not need anything to make their job more difficult. I really don’t think the government cares very much about small business. If it did care about small business, there is a very good case for an amendment to exclude small business, which will be put forward in this debate to be agreed to by the Senate.
I do want to make this very important point. The Fair Work Commission already has adequate powers to safeguard penalty rates through the better off overall test. This bill is a solution looking for a problem. The bill has arisen as a result of the retail industry wanting to pay their workers 35 per cent more. Labor has introduced this bill to kneecap this attempt to pay workers more, because it would undermine the influence and power of the unions. So here we have a sector in our economy wanting to reward workers, and the government—because, as we know, every Labor senator in this place is a representative of the union—come in here and they undertake and fulfil their union business and agenda. But, of course, the unions don’t care about small business. This government doesn’t care about small business. This bill is further evidence of this. The bill would enable unions to bring applications to vary existing awards, placing an unfair burden on employers trying to maintain stability for their businesses and their employees. This adds considerable red
tape to small business, which already faces 35 major Fair Work Act changes under Labor, 34 of which disproportionately affect small business.
The other really important point I would make is that, by constraining the commission, the bill undermines independents and risks unintended consequences in award variation. As coalition senators Sharma and Kovacic have so competently reiterated in their dissenting report, this bill could operate retrospectively. The committee in its majority report denied that, but the evidence to that effect was absolutely clear. Of course, this creates a greater burden for businesses, particularly small businesses, and greater uncertainty for them. It exposes employers to union-driven variations of existing awards.
As I said, this bill poses a particular concern for small business. One of the amendments that’s been put forward is that small businesses should be exempt from the bill’s operation. If Labor cared about small business, it would agree to this amendment.
COSBOA is one of the key stakeholder groups which has warned that this bill will discourage employment and drag down productivity. The minister, in fact, has no idea how many small businesses will be impacted by this bill. What we really need from this government is a clear, focused plan to address the needs of small business in the economy. We need policies that make it easier for businesses to expand, hire young Australians and provide opportunities for them to get a foothold in the workforce.
I have to say, as a Victorian senator, that the situation is particularly dire in Victoria everywhere I go because of the regressive policies of the Allan Labor government in Victoria and the massive debt and deficit at a state level, combined with the massive debt and deficit of this government. Businesses are saying, ‘We don’t want to trade anymore in Victoria.’ Businesses are actually saying, ‘We are looking to go to other states.’ I know of multiple businesses which either have packed up shop or are planning to move interstate because they do not get a fair go in Victoria.
Small businesses make up 97 per cent of all Australian businesses, employing millions of Australians and driving innovation, diversity and resilience across every community. They embody the liberal value of enterprise where hard work, risk-taking and initiative are rewarded with success and opportunity. Small businesses are not just economic units; they are often family owned and community based businesses supporting local jobs and community organisations. However, under this government, small businesses face record insolvencies, higher compliance obligations and rising operational costs. Unlike those opposite, we will always back small businesses, not burden them, so they can create jobs, build prosperity and keep communities strong. That is exactly what we are trying to do with this amendment. I don’t have a high degree of confidence, but Labor can try and restore the faith of small business by supporting this amendment.
The bill also removes choice for workers who may prefer higher base salaries, stability in income or flexible arrangements over fluctuating penalty rates. The bill could limit work-from-home flexibility, with employers first forced into intrusive monitoring to meet recordkeeping rules. Many workers prefer the stability of a higher, more consistent base salary. This helps with budgeting, growing superannuation, borrowing capacity and avoiding income volatility. Women, in particular, highlighted problems where fluctuating penalty earnings make Centrelink and child support estimates very unreliable.
Employers should have the freedom to choose pay structures which best suit their circumstances. By forcing a one-size-fits-all framework, the bill locks employees out of arrangements which might better support them. Even if the majority of employees want a particular arrangement, the commission—and this is particularly egregious—is prevented from approving it if any hypothetical worker might at some point be worse off. This denies employees the ability to strike a balance between financial security and workplace flexibility, and this goes to the heart of denying employees proper choice in the workplace. It also undermines debates on remote work and flexible hours—issues that matter deeply to today’s modern workforce. Instead of empowering employees, the bill strips them of genuine choice. True reform should expand workplace options. True reform should drive the will to invest. True reform should excite young small businesses to grow and to hire more employees, not hamper their growth, not hamper investment and, in many cases, not shut them down. Of course we’ve heard a lot about productivity in the last few weeks. The productivity roundtable was nothing more than a cover, after Labor spent three years telling Australians that there was nothing wrong with the economy—everything was going just fine. We got through the election. Now the government, at least the Treasurer, is admitting that reform is required, and much more needs to be done to address rapidly declining productivity, rapidly skyrocketing costs of doing business and a very depressed investment framework for so many businesses.
Australia and Australian businesses need policies which boost output not entrench, rigid one-size-fits-all arrangements. Business groups warned that the bill would make rostering more rigid and complex, diverting resources into compliance instead of productive work, and that existing above award arrangements that deliver higher pay and stability could be invalidated, leaving some workers worse off. Again, that goes to the lack of flexibility in employee choice. We know, in the climate where Australia’s productivity has gone backwards under Labor in just three years, it has fallen by more than five per cent. This is the last thing that so many businesses need.
Since the coalition left office, living standards have plummeted by around six per cent. Australians are working harder, but they are getting less in return. The government needs to understand that it’s not the government that creates jobs; it’s businesses—large, medium, small and family businesses. In this depressed climate that we are currently in, where our economy is whimpering along, businesses need every possible opportunity and encouragement to invest. As I say, in Victoria, so many businesses are struggling just to keep the doors open, while looking further afield to states like South Australia and New South Wales where they see a much more investment friendly climate.
This is a disappointing bill before this parliament. As the Senate committee inquiry heard, this government did not want to have confirmed the Fair Work Commissioner has both the power and proven track record to safeguard penalty and overtime rates.
The important point to also make is that the commission is not only empowered but required, under section 134 of the Fair Work Act, to maintain a fair and relevant safety net for employees. The Fair Work Act is several thousand pages. It is an enormous burden particularly on small businesses. This is going to make things so much tougher, and, frankly, small and family businesses deserve better.