MATTERS OF URGENCY
Senator KOVACIC (New South Wales) (17:05): Every Australian worker is entitled to be paid what they have earned. Deliberate, intentional underpayment is wrongdoing and should attract strong consequences. But that is not the reality of the question before us.
The question is whether parliament should expand a serious criminal offence to superannuation before the existing offence has been properly tested and reviewed, which it hasn't. I chaired the Senate inquiry into the existing criminal wage underpayment offence. The committee was not convinced it was having the intended effect on the small number of businesses that deliberately and persistently underpay their workers.
Seventeen months after section 327A commenced and after almost $50 million was committed to a dedicated Fair Work Ombudsman criminal function, experts, unions and practitioners still could not agree whether it had reduced deliberate wage underpayment. At the time of the inquiry, there had not been a single referral for prosecution—not a single one. Why is this the case?
Part of the problem is that wage theft is not even defined in the Fair Work Act. The term is used to describe everything from deliberate exploitation to genuine mistakes that may have been corrected in an extraordinarily complex workplace relations system that is crushing Australian small businesses. Criminal law must distinguish between the two.
That complexity is real, and we can't pretend that it is only complex for those who are bad faith actors. The ABC, major charities, major banks and even the Department of Employment and Workplace Relations have struggled to correctly interpret workplace entitlements and have underpaid their workers. Small businesses with a fraction of those resources are expected to navigate that same system and are labelled thieves when, despite their best efforts, they too are sometimes unable to.
Superannuation adds another layer of complexity. Employers must determine the correct earnings base, navigate choice and stapled fund rules, verify fund details, comply with SuperStream and now ensure that contributions reach the correct fund within seven days of pay day. A processing failure, classification error, rejected contribution or system breakdown is not necessarily deliberate theft.
The answer to genuine mistakes is to simplify the system—clearer awards, clearer superannuation obligations and less compliance complexity—not to keep expanding the criminal law as though every error reflects dishonesty or a deliberate act. Labor's instinct is always the same: if a law isn't working, add another law; if enforcement isn't working, create another offence.
The government treats businesses, especially non-unionised small businesses, with outright hostility and contempt, even when it is obvious that they are struggling to navigate the complexity that this government has created. It is a wonder that business confidence has plummeted. Productivity is lower, and our regulatory burden is higher than the OECD average.
Business is drowning under red tape. Since 2000, the number of federal regulations has doubled. The federal rule book has tripled in size, and compliance roles have doubled since 2010.
That has a cost. Every hour spent navigating unnecessary complexity is an hour not spent hiring, investing, innovating or improving productivity. Good policy should do two things: come down hard on deliberate exploitation and make it easier for honest employers to get it right.
Don't set them up to fail with your complexity. This government can't get either right. They should make the laws we already have work.
Workers deserve effective enforcement, and businesses doing the right thing deserve a system that they can actually comply with. Question agreed to.