It's Been A Big Week For The Senate

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This article was published on Friday while the Fair Work Bill was before the Senate. See below for an update on the passing of the Bill.

The Rudd Government has nearly reached its halfway point with large parts of its agenda not yet implemented. As newmatilda.com readers will be aware, important election promises that remain undelivered include the Carbon Pollution Reduction Scheme, the Government’s post-WorkChoices industrial relations reforms, the "education revolution", the national broadband network and paid maternity leave — just to name five key policies.

I don’t subscribe to the theory that once the half-way point of an electoral term is reached, governments suddenly become unable to pass legislation, expend political capital or otherwise implement their agenda. But there is no doubt that it does get more difficult — as the Government is finding this week with several important bills, all of which require the vote of the Greens and Senators Nick Xenophon and Steve Fielding.

The most important for the Government is undoubtedly its industrial relations legislation, the Fair Work Bill, which Julia Gillard has spent large parts of the past year developing. Given that it was WorkChoices above everything else which helped Labor unseat John Howard, the Government has an obvious mandate on this issue.

The Government only needs the support of one cross-bencher to get the bill passed.

The Bill has inspired the usual stunts, prevarications and general weirdness from Steve Fielding, forcing Gillard to offer some amendments to sweeten the deal. One might reasonably question why a Senator from the Family First party would vote against an industrial relations bill that will restore many of the rights and protections of lower-paid workers (many of whom, as Kevin Rudd never tires of reminding us, are members of families). Indeed, Fielding voted against WorkChoices when it was passed by the last Senate. However a glance at Fielding’s blog suggests he is no friend of organised labour, railing against minor aspects of the Bill like union right of access and unfair dismissal.

(In the early hours of this morning, after a 17-hour debate, the Senate finally passed the Bill with a number of amendments, including
that the definition of small business be changed from 15 to 20
full-time equivalent workers. However, at the time of publishing, the Bill had
gone back to the Senate for a second vote after the Government used its
numbers in the lower house to defeat the amendment.)

This week saw a swathe of Labor bills get voted down, despite the farcical absence of Northern Territory Liberal Nigel Scullion for the alcopops vote. Scullion was apparently lost in a stairwell "having an impromptu meeting". A second division was held and the alcopops tax was voted down. Senators make a good living and don’t actually have to be in Parliament that often. You would like to think our elected representatives could at least do us the honour of turning up to vote.

The alcopops debate has been running for some time, after Labor unveiled it last year as a canny way to raise extra revenue while at the same time appear to be doing something about the problem of teenage binge-drinking. As I pointed out last year, Australia’s alcohol regulations are inconsistent, taxing different types of alcohol at different rates and favouring wine at the expense of spirits.

Nicola Roxon’s alcopops tax wouldn’t have done anything to address this issue, but the Coalition’s vote against the tax-increase will hardly reduce problem drinking. Fielding, who campaigned hard to try and ban alcohol advertising in sport, instead ended up ensuring $300 million in excises will be returned to distillers. Fielding had apparently won a guarantee to see an extra $50 million spent on alcohol education and harm minimisation programs, which will now also go by the wayside. It’s a typical example of self-defeating, wilful behaviour from the man elected with less than 2 per cent of Victoria’s primary vote (with the help, it should be remembered, of Labor preferences).

The defeat of the alcopops tax also causes Wayne Swan more problems preparing his upcoming budget, which will certainly be tens of billions of dollars in the red. The tax was expected to raise something like $500 million a year, which will now disappear from the Commonwealth’s bottom-line. You could argue that with $42 billion stimulus packages being splashed about, $500 million here or there makes little difference. But that figure is also roughly the amount the Productivity Commission estimated it would cost the Government to implement a limited scheme of paid maternity leave — a core Labor promise that now appears to be on the backburner. With states like Western Australian apparently unable to sell enough bonds to fund themselves, money is tight just now in the treasuries of Australia.

Also voted down this week was the bill to set up RuddBank — officially known as the Australian Business Investment Partnership. This measure was meant to inject liquidity into the construction and infrastructure sectors, which have recently suffered from the global financial crisis. This measure will now have to wait until the May budget, which will not help the uncertainty surrounding many of the Government’s cherished "nation-building" infrastructure projects.

If the Fair Work Bill is defeated, it will give Labor a very handy stick with which to beat the Coalition in the run-up to the next election. But it will also leave Work Choices — one of the most hated pieces of legislation in recent memory — largely intact. It’s a reminder for Labor, if any were needed, that, despite its continued popularity, it is still a minority government.

Labor will have to do more deals with the independent senators simply in order to govern.

UPDATE: The Senate looks set to pass the Fair Work Bill after Julia Gillard negotiated a deal with the independent senators over the definition of a small business. The definition was contentious because it defined the threshold where unfair dismissal laws would apply.

Under WorkChoices, that definition was changed to businesses employing up to 100 employees, which in practice meant all but big businesses were excluded from unfair dismissal provisions.
The new deal will see a transition period where the limit is set at 15 “full-time equivalent workers” — presumably calculated at something like 15 times 38 hours — before reverting in 2011 to Julia Gillard’s preferred position: a simple head count of 15 workers.

It’s another huge victory for the Deputy Prime Minister, who has again proved herself a canny negotiator in the Senate — and a crushing defeat for the Coalition, which has found itself sidelined again on a critical piece of legislation that in many ways represents the core of the ideological difference between the two major parties. As Gillard watched on from the box, Labor’s Senate leader Joe Ludwig struck a triumphal note, claiming: “This is a complete political humiliation of the Coalition”.

It also highlights the capricious decision making of Senator Fielding, whose strategy recently has been likened by one observer recently to tossing a coin.

In the short term, this is a welcome and morale-boosting victory for the Government. In the long run, however, it may even be a political advantage for conservatives, if the Liberal Party finally decides to move on from the commitment to labour market deregulation that almost certainly cost it the last election. Of course, that’s a big if.

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