I am very pleased to hear from the member for Mayo that there should be protections for employees because that is what the Fair Entitlements Guarantee Bill 2012 is all about. He harked back to the glory days of the Howard government, and I was reminded of what the Howard government did to Canberra and to the Public Service. It contrasts very dramatically with what the Gillard government is doing for the Public Service and its support for the Australian Public Service and for Australian workers. As the member for Canberra, which is an electorate with thousands and thousands of public servants, I have been a strident supporter of the Public Service for years, having been a former public servant for 10 years before I set up my own microbusiness, and I am a strident and strong supporter of the public sector in general.
The Gillard government has ensured that we have a stable public service and that we continue to build a stable public service.
We are always working towards making sure the Public Service is resourced to tackle current and future challenges and at the same time we are always looking to remove inefficiencies where they exist. We have been doing that since 2007, tackling a range of areas where we can drive greater efficiency in the Public Service, and we have recently done that with the recent announcements on travel and publications a range of other measures. So we are constantly looking for improvements in the Public Service and greater efficiencies at the same time as trying to ensure that we have a stable Public Service.
My passionate and strong advocacy for Canberra and for the Public Service is well known and well documented in this House, as is my support for smalland micro-business sector that work with and support the Public Service. I would like to use this opportunity to draw to the House's attention the fact that this evening my colleague the Minister for Small Business and I, as well as the shadow minister, will be launching the Parliamentary Friends for Small Business. It is the first time an organisation like this has been established. We are very much looking forward to the launch of that initiative. It was an initiative that I discussed with the former Minister for Small Business early on in my term and I am really pleased that we are finally getting it off the ground tonight. A am looking forward to all parties continuing to engage with small and micro businesses on their concerns to ensure that they are heard in the policy arena.
The reasons that members like me need to defend the Public Service and workers and to stand up legislation like this bill is because they are constantly under threat and attack by those opposite. The member for Mayo reminded us of what the Howard government did in terms of workers entitlements. It reminded me again of what he did in Canberra and also throughout Australia to the Australian Public Service. Those opposite are constantly criticising the Public Service. They are constantly criticising the value and the worth of the people who work in it. As a Canberran I have lived through the boom-and-bust mentality of those opposite and I know how damaging their policies can be.
I was one of the 30,000 Australians who lost their Public Service job when the Howard government was in power and they took the cleaver to the public sector. I was at that time posted to India and after only being there for four months I was told that my position had been abolished. I was asked to stay on for the year so that I could take part in a major integrated country promotion of all Australia's achievements in the nation. But then I was brought back here and basically had to reapply for my job. There were 50 of us in my cohort of workers in the public diplomacy sector before I left the shores of Australia for India. When I reapplied for my job in Australia there were only eight left. At the same time my now husband had resigned his job from the Canberra Time. We came back and did a bit of part-time work. The knock-on effects of Public Service job losses is not just by the individual but also by the spouses who may not be able to get employment themselves and also by their families and also the broader community.
I remember when I was in DFAT I came back to farewells being held in bulk. That is the legacy of the Howard government in terms of the Public Service. In that time, as I mentioned, 30,000 jobs nationally were lost. Over five years there was a decline in the Commonwealth Public Service here in the ACT of nearly 16,000 permanent jobs—15,800 to be exact. As I mentioned, it is not just the Public Service that feels the impact of that; here in Canberra every small business paid the price of the axe that was taken to the Public Service jobs. Many local shops were empty or only half full and house prices plummeted. The growth industry was removalists. People left town— our population dropped dramatically. It took us many years to rebuild in terms of an economy and in terms of growth.
It was the workers who lost out, workers who lost their entitlements as well as their income. As I said, it was not just public servants who experienced this; it was also businesses. Both business and non-business bankruptcies at that time jumped sharply as a result of the cleaver that was taken to the public sector.
I would just like to remind the House that the budget surplus that the Gillard government are committed to is designed to protect us against any further global economic turmoil and, however difficult this task will be, I know that the Gillard government will always seek to protect jobs and grow jobs, as we have—800,000 jobs, in fact—which is in stark contrast to those opposite, who proudly boast about Canberra-bashing and demonising the Public Service. The introduction of this bill will benefit a range of sectors—and it is not just in Canberra that this will be felt; it will be felt right throughout the nation—and it will have a significant impact on employee benefits.
I want to run through the details of the bill in terms of what it is actually designed to achieve. It will establish a basis for advancing unpaid employee entitlements so that eligible employees who lose their jobs and are owed entitlements are actually paid those entitlements when their employer is insolvent. Replacing the General Employee Entitlements and Redundancy Scheme, it will allow the Commonwealth to provide financial assistance in the form of an advance to cover certain unpaid employee entitlements when the end of the person's employment is linked to the insolvency of their employer. After an advance is made, the Commonwealth will assume the individual's right to recover the amounts advanced through the winding-up or bankruptcy of the employer.
Eligible employees will be covered for the following unpaid employment entitlements: wages of up to 13 weeks; redundancy pay, which will be capped at a maximum of four weeks pay per year of service; payment in lieu of notice, which will be capped at five weeks; annual leave; and long service leave. The key changes that this bill establishes include removing eligibility requirements associated with deed-of-company arrangements and mirroring bankruptcy arrangements; extending eligibility for entitlements that crystallise after the appointment of an insolvency practitioner, which is essentially to cover that portion of the entitlement that the insolvency practitioner is not obliged to pay; simplifying transferof-business rules, with effect from 1 July 2014; and removing the discretion to accept claims that are not made within 12 months of the end of a person's employment or the appointment of an insolvency practitioner.
The bill also includes arrangements for ministerial and/ or departmental discretion to be used in a number of specific non-routine circumstances where the act of discretion supports the objects of the bill. These amendments are designed to address minor technical faults.
Clauses 12 and 25 of the bill refer to exclusions for changes in terms and conditions in the six months before the insolvency event; and, following the introduction of the bill, the department has reexamined these provisions and advised that the current drafting is not sufficiently wide enough to capture redundancy and payment in lieu of notice, as these are contingent liabilities that arise only on termination of employment. So the department has recommended that these provisions be amended to correctly reflect the intent that redundancy and payment in lieu of notice are captured.
I have highlighted some of the Gillard government's commitments to the Public Service and also to jobs but I also want to remind the House of the commitments to employee fairness that have been the tradition of Labor since its inception, since the beginning of the party. That is the reason we were established: to protect workers rights and conditions. I was reminded, when looking at this bill today, of work that I did in the Attorney-General's Department in the early part of my career, where the Labor government established the Insolvency and Trustee Service. It was the first service established to actually address bankruptcies and ensure that there was some legislation, and an agency, introduced to ensure that workers rights and entitlements were protected. Prior to that, we had seen what happened in the late eighties. There were a number of businesses that went bankrupt where the company director essentially left the country, in many cases with huge swags of money, leaving employees with nothing.
They were left with no pay, no entitlements, no conditions—nothing. So the initiatives and the legislation that we introduced, and it was the first such legislation for the nation at that time thanks to Labor, were designed to ensure that there were some protections for workers. As we know, these things change over time and we become more aware of gaps in legislation and it is good to see that we are constantly updating legislation to ensure that we are constantly looking out for workers and looking after workers to protect their rights and entitlements.
I commend this bill to the House. I believe it exemplifies all the best that is Labor and all that is good about Labor. The reason I joined the Labor Party is that it is all about workers' fair rights, workers' entitlements and ensuring that they are protected when the company or organisation that they work for goes belly up, becomes insolvent. It is unfair for workers to be exposed. Quite often it is not about an inadequate board of directors. Quite often it is about the circumstances and a business can no longer be solvent. But workers should not have to pay for bad economic circumstances or bad decisions by the board of directors. They should receive their fair share of entitlements and conditions, and that is what this bill addresses.
I want to come back to the Public Service and remind Canberrans of 1996, when the Howard government was in power, and remind them of the fact that at that stage there were 30,000 Public Service jobs lost in Australia, nearly 16,000 of them here in Canberra. House prices plummeted, local shops closed down and removalists found theirs was a growing industry as people left town. It took us a long time to recover from that.
I draw the House's attention and also Canberrans' attention to the comments made by those opposite about their desire to get rid of 20,000 public servants. I ask them to consider what that will mean for the Canberra and also the Australia of the next decade. Do we want to go back to 1996 when we did experience that slump in the local economy? It was not just about the local economy here in Canberra as it did have a significant knock-on effect throughout the region of Eden-Monaro and throughout the capital region of Canberra. If you went down to the South Coast you saw three out of four houses up for sale. Again, it had a knock-on effect all around here in terms of the farms and properties around this region and it had a knock-on effect for Queanbeyan. So it just does not affect the public sector here in Canberra; it affects hundreds of thousands of jobs throughout the region. I remind Canberrans to remember 1996 and reflect on the potential for 20,000 job losses.