Unfair Dismissal Laws A Blot On The Escutcheon Of Small Business: Howard

In an address to the Council of Small Business Organisations of Australia in Canberra last night, the Prime Minister, John Howard, returned to the issue of the unfair dismissal laws, describing them as “a blot on the escutcheon of small business”.

HowardHe urged small business to lobby other parties in the Senate and promised that the government would resubmit the laws if they are rejected by the upper house.

Howard’s comments indicate that the government is preparing the ground for a double dissolution election trigger over the coming year.

In his speech, Howard said: “I want to assure all of you that we will not weaken or tire in our efforts to secure the passage through the Senate of further reforms of the unfair dismissal laws. They remain to me one of the great blots on the escutcheon of small business. I hold strongly to the belief that if we could get rid of the restrictions we’re trying to get rid of we would see more jobs generated in the small business community. There is no reason, according to our current advice and according to current economic indicators, there is no reason why unemployment in Australia can’t fall to a figure approaching six per cent by the end of this year.

“If we could get those unfair dismissal changes through the Senate, you could go as close as possible in delivering a guarantee that you could get unemployment below six per cent, and for the first time in over 20 years have a five in front of the unemployment figure in this country. And I want to say to all of you we will continue to push very hard on that. If the legislation is rejected again in the Senate, we’re going to put it up again and we’re going to keep pushing and trying and urging you to talk to people who are obstructing it in other political parties because this is something which is fundamental to the flexibility of small business needs and it’s also very important, very important indeed, ladies and gentlemen, to the prospects of achieving further falls in unemployment in Australia.”

The Concise Oxford Dictionary defines ‘blot on the escutcheon’ as a stain on the name or character. An escutcheon is a shield or emblem bearing a coat of arms, the middle part of a ship’s stern where the name is placed, or the protective plate around a keyhole or door handle.

Text of John Howard’s speech to the Council of Small Business Organisations of Australia.

Well thank you very much Ella, to Mike Potter, to my Ministerial and Parliamentary colleagues, and particularly to Joe Hockey the Minister for Tourism and Small Business. Ian has had to return to the Parliament, one of the few privileges of being Prime Minister is that you have a permanent pair with the Opposition Leader and that means you can come and address things like this, although I have known occasions when pairs have been cancelled but that’s by other less responsible Oppositions than I hope the one we have at the present time.

Now, can I say first and foremost how important it is that the Government be represented at a gathering like this at the highest level because all of my political life, as Ella indicated, I’ve had a very strong commitment to the small business community of Australia. And I regard the role of small business in the growth and development and underlying strength of the Australian economy as absolutely irreplaceable and quite fundamental. And you can plot the surges and the slow downs in the Australian economy over the years according to the strength and vitality of the small business community.

It is important, not only as a generator of wealth, it’s also very important as an employer of people, it’s also very important as an innovator and it’s very important in, I believe, maintaining the fundamental vitality of our economy. Because the risks are really taken at a small business level, the chances are taken, the experiments are made, and new techniques and new attitudes are embraced at a small business level that sometimes don’t occur in larger, more conservative organisations.

There’s little doubt that over the last year the Australian economy has performed better than many of us expected. There’s also little doubt that as you go around the world the Australian economy is outperforming those of most other Western developed societies. And it’s fair to say that over the last few years we’ve had a rate of growth that has impressed the rest of the world and on occasions surprised all of us here in Australia. And I want as Prime Minister to express my thanks to the men and women who run small business in Australia, and Ella is absolutely right, the growing proportion of women in small business is one of the major features of the growth of the small business sector over the last 10 years. She’s absolutely right in relation to that.

I do want to thank those men and women for the contribution that they have made to Australia’s economic strength and Australia’s economic recovery. I also want to thank the small business organisations, and particularly COSBOA, for the way in which you have represented the interests of small business to the Government and to the public service here in Canberra. It’s not always easy, you will have disagreements, you will have periods of anger, you’ll have periods of feeling that you’re not being listened to, you’ll have feelings of not being able to penetrate the impenetrable, a wall of indifference some people have even said, of ministers in the bureaucracy. I hope that’s only been a passing phase because I can say on behalf of the Government we have tried, and I know those who advise us in the public service, in the tax office and elsewhere, have also tried very hard over the last year to listen to your concerns in a number of areas. And I want to touch on a few of those things and also a few issues that I know are very important to small business people into the future.

Can I reiterate a couple of basic objectives of the government in areas that I know are very important to small business. We’ve had a lot of industrial relations reform over the last six years, but we need more. I regard what we have done in the area of workplace relations as being essentially work in progress, we’ve made a lot of progress but we still have a distance to go. And I want to assure all of you that we will not weaken or tire in our efforts to secure the passage through the Senate of further reforms of the unfair dismissal laws. They remain to me one of the great blots on the escutcheon of small business. I hold strongly to the belief that if we could get rid of the restrictions we’re trying to get rid of we would see more jobs generated in the small business community. There is no reason, according to our current advice and according to current economic indicators, there is no reason why unemployment in Australia can’t fall to a figure approaching six per cent by the end of this year. If we could get those unfair dismissal changes through the Senate, you could go as close as possible in delivering a guarantee that you could get unemployment below six per cent, and for the first time in over 20 years have a five in front of the unemployment figure in this country. And I want to say to all of you we will continue to push very hard on that. If the legislation is rejected again in the Senate, we’re going to put it up again and we’re going to keep pushing and trying and urging you to talk to people who are obstructing it in other political parties because this is something which is fundamental to the flexibility of small business needs and it’s also very important, very important indeed ladies and gentlemen, to the prospects of achieving further falls in unemployment in Australia. Because you all know that the great capacity for making further gains on the unemployment front is to give greater flexibility to small business operations around Australia.

Now I know that there has been very properly debate as a result of the release of the human rights commission paper on maternity leave, there has been debate on that issue. I think it is a debate this community should have, I believe we need a very broad debate on issues of population growth, we need broad debate on issues related to the fertility rate in this country because all of them bear very heavily on the economic future of this country and they bear very heavily on our capacity, with an ageing population, to fund the public services that that ageing population is going to need. And a legitimate part of that debate is asking ourselves as a community whether we have the right range of policies which provide the maximum number of choices to men and women with young children. And particularly to those who are having their first, second, third children to amass the right set of policies in order to give them the maximum number of choices. And one of those issues is clearly the issue of maternity leave. And I also want to say to you that I will not support any policy in relation to maternity leave that imposes an additional burden on the small business community. I want to make that very clear and I say that as somebody who is not resistant to an examination of all of the options that are involved in this area and I’m not resistant in any way to further change, but it shouldn’t be a change at the expense of the small business sector. The small business sector already carries a large number of burdens and imposts, which are part of overall national policy. And I don’t believe that there should be additional burdens and imposts as a consequence of changes that might be made in this area. And in any event I think if Governments were to move unwisely in implementing a policy in this area, which involved an additional burden on small business, so far from that improving the opportunities for women in the workforce, I think it could well work in the opposite direction and I think that is important that we don’t make that mistake.

The other issue that I want to touch upon very briefly is that of public liability insurance and insurance matters generally. People in my position should always be very careful of sort of over dramatising things and indulging in too much rhetoric because it’s easy to talk about a crisis, it’s easy to talk as though Armageddon is around the corner, and it’s easy to needlessly scare people and in the end if your rhetoric has no common sense, or to use an expressions that a lot of politicians properly use, it doesn’t pass the pub test, then I think you can lose your impact and you can lose a lot of credibility. But we do have a very serious problem in this country in relation to insurance generally. Government’s at both levels have obligations and I’m certainly not going to spend my time tonight attacking the state governments or attacking local government, what I want to say tonight is that each level of government has a responsibility to try and respond to some of the difficulties that are there. It may not have been of the government’s creation, either state or federal, but it is a national problem and we each have responsibilities.

I think we need, as a community, to change many of our attitudes towards what we expect when misadventure strikes us. I think we have to understand that as a community we are running the danger of going down the American path of becoming too litigious. Six years ago when we had the common sense and gumption to introduce uniform national gun laws in the wake of the Port Arthur disaster I said that I was determined that Australia would not go down the American path in relation to gun control. I want to say in relation to the challenge of public liability insurance I hope all of us will work hard not to go down the American path so far as the easy resort to litigation is concerned. Because I think it will involve very considerable costs in the long term.

Now a number of things are needed. We do need to reform the law of negligence in this country. And I welcome the fact that most of the states are starting to move in that direction. Now we can argue about whether you should do it here and there or whether every single thing they’re doing is in the right direction, but there’s no point in my trying to analyse that tonight. And that is ultimately something that has to be dealt with at a state parliamentary and a state legislative level. But we are starting to move in the right direction. I would like us to go a little further. I think as well as reforming the law of negligence it may well be that we’ve reached a stage in the Australian experience now that we have to look at certain activities and in effect quarantine them all together from concepts of the law of negligence. The idea that a local sporting or charitable activity should be something where the law of negligence automatically applies, the law of negligence in its present form automatically applies, I think that is a notion that we should question. I think most Australians would take the view that you go to a local football match to watch your children play as part of the local soccer or Australian Rules or rugby league or rugby union, I’ll cover all of them, club and if something happens there, unless a person has behaved in a malicious or totally reckless fashion the idea that you should in effect expect to be compensated or covered and thereby the organisation staging the event required to take out public liability insurance, I think that is a notion that really we have to start to question. Because I don’t think we can any longer afford a situation in this country where those sorts of events run the risk of being abandoned or only staged in circumstances that place an unfair burden on people who participate in them, I mean if we’re going to maintain that sort of situation I think we’re going to have a lot fewer of those events and we’re going to have a situation where the quality and the nature of our lives are fundamentally altered. We boast about the fact that we are one of the great volunteer societies in the world. Now if we are to maintain the volunteer tradition in Australia we have to fundamentally rethink the attitude we have towards liability and the application of the law of negligence in this country. And I hope that in considering the various changes that they are making, I hope that the state governments of Australia, and I welcome in a very positive way the measures they’ve already taken and we’ll continue to work with them in a constructive fashion.

The Federal Government of course has very little legislative writ as far as the law of negligence is concerned, very little. We can make speeches, we can give leadership, we can express views, we can encourage, but in the end the fundamental decisions have got to be made by state governments because they control and can alter the law of negligence in this country. But we do have a direct role in a number of areas, particularly medical indemnity insurance, which although is not generically relevant to the small business sector it is obviously very important to all of you as individuals and it’s very important to the medical profession and it’s quite important to the legal profession. And I do think that the steps that are being taken there which involve the Federal Government as well as the medical profession and the states, we are starting to come to grips with that issue and the Federal Government will be having a little more to say on that within the next week or so. Bu! t we have in relation to UMP, we have stabilised the situation, we have provided a short term guarantee which has now been accepted by the courts and we are working with interested parties, including the provisional liquidator and the Australian Medical Association in order to find a medium and longer term solution to that particular issue.

It does involve a number of important social challenges and one of those of course is the need to maintain specialist services from doctors in country Australia. And the notion that specialities such as obstetrics can become unprocurable in many country areas of Australia because of the prohibitively high premiums is something that we can’t as a society simply accept. But once again we have a choice, we can’t have it both ways. We can’t have a right to sue a doctor at the drop of a hat and there being no limit on the verdict that might be obtained under a very loose and permissive law of negligence and yet complain when the obstetrician is not available when you need him or her because the insurance premium for that speciality is only procurable at a prohibitively high level. And that is the kind of challenge that is involved but as with all of these things people have to make choices. You can’t have your cake and eat it to use that old cliche in relation to many of these issues and what I guess I’d like to say more than anything about this particular matter tonight is that it’s one of those issues where some fundamental community rethinking has to take place. It’s not just a question of the Government changing a few laws and life going on as it has been before. I think it is a case where people to have to say well because the whole cost structure of insurance has altered and because the pressures on the insurance industry, on insurance premiums have so increased over the last few years, and the resort to litigation is a big part of it, the propensity of people to sue is a very big part of it but the world wide effects of events such as the terrorist attack in September of last year and other insurance calamities have also come together to create the sort of difficulties that we now face.

But that is an issue that we as a community have got to face, I have responsibility as Prime Minister, State Governments have responsibilities, the medical profession, the legal profession, the small business sector generally, we all have responsibilities and as a community we do really have to tackle it in a very aggressive and fundamental way in order to bring about a satisfactory outcome.

Ladies and gentlemen the last thing I want to say to you tonight is whenever I address a gathering of men and women in small business I’m reminded of what the Government’s ultimate responsibility is. And the Government’s ultimately responsibility is of course to create the right economic climate and I think we have a good economic climate in Australia at the present time. It’s not perfect, I hope the Government has contributed in its own way to some of those good conditions. You have certainly played a major role. We do have low inflation, we have very low interest rates, we have a strong external trade sector, we don’t have a low dollar, we have a super-competitive exchange rate and that is making a very very significant contribution. And Ian mentioned our visitors from China. I was in China last week and I did have one or two things to say about natural gas, it’s a fairly important commodity and the opportunities there for this country economically are enormous. Our exports to China have doubled over the last five years, which is a very impressive figure. China is now our third or fourth best trading partner. We are a more valuable trade ally to China than is Russia and increasingly as you move around the major cities of China you find the presence not only of large Australian corporations but also of many small businesses. China has 1.3 billion people and it has a growing middle class which has all of the purchasing power and capacity of the great bulk of the Australian people and in sheer mathematical terms you don’t need a huge middle class in a country as large as that to have an enormous potential purchasing pool for the products and the services of this country.

Now I speak to you in a sense therefore of pretty considerable optimism and hope about the future of the Australian economy. We have stared down two external economic challenges. The Asian downturn of 1997 and then the downturn that afflicted the United States and much of Europe last year. Now it’s been through a combination of good policy, of Australian adaptiveness and just a combination of circumstances that have all come together to make it possible for us to achieve all of that. But we are I think as a nation experiencing a sense of self belief, a sense of optimism and a sense of hope about the future. That’s not a call to smugness or complacency and it’s not the declaration of somebody who believes for a moment that everything in the garden is rosy. But it is the declaration and belief of somebody who believes very firmly that because we have worked together over a number of years, and I have never been reluctant at gatherings like this or elsewhere to give proper credit to some of the decisions taken by former governments in this country that have made a contribution to our economic competitiveness because you’ve got to take a longer view of these things and I think we are in a situation where people are entitled to feel a sense of stability, of security and optimism about the future. We have those good economic indicators and I hope that all of you continue to work and derive the benefit from them.

So ladies and gentlemen thank you very very much for inviting me to come along tonight. I’m sorry that in the acknowledgements I made earlier I didn’t acknowledge my colleague Rob McClelland, one of the Shadow Ministers for Industrial Relations and a number of other matters, Attorney General for the Opposition. The reason why I always make particular point of acknowledging him is because we support the same football club in Sydney and we had a good result at the weekend and we’re both feeling pretty pleased about it and it was a long time coming and we’re delighted about it.

But ladies and gentlemen, thank you very very much for having me tonight, thank you for what you’ve done for Australia over the last year. I wish you well and I can promise you that we will continue to maintain a very close association with your sector, we’ll continue to listen to you because we believe in you and we think you are very important to Australia’s future.

Thank you.

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