What Just Happened?

2016's final sitting of Federal Parliament was dominated by skirmishes over three pieces of legislation which the public understood virtually nothing about: the so called "backpacker tax", and the Government's double-dissolution-triggering Registered Organisations and ABCC bills. I consider myself reasonably well-informed, and even I didn't know what was going on. I decided to find out what happened so you don't have to.


1. The Backpacker Tax
The discussion about the "backpacker tax" is somewhat misleading because there is no specific tax on backpackers in the Tax Acts you can point to. Unlike the tax on edible chocolate body paint.

Got your refund right here ;)

Previously, people on working holiday visas (a technical term which has been rendered into the shorthand "backpackers") could be treated as residents for tax purposes if they passed one of the standard tests for residency - for example, if they were in Australia for more than six months of the year. This allowed backpackers to access the tax-free threshold and low income tax offset, which significantly reduced the tax paid by people on these visas.

In the 2015 Federal Budget, the Government - the one which is still in power - declared that people on these visas would specifically be treated as non-residents regardless of the length of their stay, removing their access to the tax-free threshold and taxing them at 32.5% of their first dollar as happens with other non-residents. For all of the spin put out by the Government throwing blame for the chaos of last week every which way by themselves, let me just quote then-Treasurer Joe Hockey on Budget Night:

And anyone on a working holiday in Australia will have to pay tax from their first dollar earned, rather than enjoying a tax‑free threshold of nearly $20,000. This will save the Budget $540 million.

The whole messy saga was a problem of the Government's own making with farmers and Nationals MPs concerned that the increased tax rate would discourage backpackers from providing the cheap labour rural Australia relies upon.

Instead we were treated to rolling politics-as-theatre coverage of the standoff which was wholly deficient for the purposes of figuring out which tax rate should be adopted. All of this obscured what actually happened: the Government working with the Greens to repeal its own budgetary measures.

For the record, it appears that the adoption of any of the 19%, 15%, 13% or 10.5% positions advocated for during the debate would have left backpackers better off in Australia for tax purposes compared to similar economies. Coverage of the tax debate completely ignored the systemic exploitation and poor working conditions that backpackers are subjected to in farm-based employment, but we should be used to our intrepid reporters being unable to consider more than one issue at a time.


2. The Registered Organisations Bill
The Registered Organisations Bill, from what I can tell, aims to impose upon union officeholders obligations akin to what the Corporations Act imposes on company directors, as well as attempting to strengthen financial management and disclosure obligations.

It sets out quite significant penalties for conduct such as "recklessly or dishonestly failing to act in the best interests of the organisation," which may incur fines of $360,000 and/or 5 years' imprisonment.

Again in my view, the standards to which unions will now be held is no greater than what is already widely agreed to be good practice. Some avenues for deeper analysis may include whether union officials sanctioned under the new regime will have access to equivalent defences available to company directors such as reliance on others in good faith (this is available) and the business judgement rule (which may not be). Typically this opportunity was passed up for the much easier to digest narrative surrounding Nationals senators voting against the Government's gun restrictions.


3. The ABCC
The narrative surrounding the Australian Building and Construction Commission is far more complex, in part because it has been around for years and during that time it has remained shrouded in mystery. The most distinguishing feature of the ABCC, or its ALP-introduced successor, the Fair Work Building Commission, is that nobody - not in politics, not in the media, not in the general public - knows what it actually does.

According to its boosters, the ABCC is supposed to be "the tough cop on the beat" for the construction industry. This is a hackneyed phrase devoid of all meaning. Are there police who aren't tough? Is toughness a desirable trait in police over say, competence? Are the ABCC the police? (According to some people they're worse.) Are there tough cops around who aren't on the beat but are on the rhythm instead? The Government says that the ABCC will clean up the construction industry, but they have never to my knowledge said how this will be accomplished.

McNulty will clean things up (right after he cleans himself up)

However, Labor and the unions have done a similarly poor job of explaining what the ABCC does and why its reincarnation is a bad thing. Sure, the CFMEU has been eager to point to the fact that during the first iteration of the ABCC there was an increase in workplace accidents and deaths. Was this due to a covert war  the ABCC was waging on CFMEU officials? Nobody knows because that case was not made. The increase in site accidents implies correlation but no causation.

I decided to find out about the ABCC for myself. To understand what the ABCC actually does I took the bold, intrepid step of visiting their website, something no journalist has apparently ever bothered to do. Within about four minutes it became clear that what the ABCC actually does is try and curb the power of the CFMEU. That is its raison d'être, which it accomplishes by investigating and prosecuting contraventions of the Fair Work Act. It is fair to say that the CFMEU has been involved in a few of these.

Without delving into individual matters, most of the cases brought on by the ABCC/FWBC involve allegations of the CFMEU pressuring principals and contractors to implement union-preferred practices, or incidents where CFMEU officials overstep their boundaries on-site. There is a central theme in many of these cases where the CFMEU is accused of threatening to shut down sites if other parties don't take a union-friendly approach.

The ABCC/FWBC also investigates and brings actions against employers who use sham contracting arrangements to avoid paying their workers (who are actually employees) their legal entitlements. Designating employees as contractor is a ploy to avoid paying things like superannuation and overtime.

Of the 222 cases listed on the ABCC and FWBC websites, 7 were proceedings brought against employers for sham contracting arrangements (3%). In comparison 60 were referred to as "coercion" (abuse of power) cases brought against the CFMEU (27%) and 20 were "right of entry" (officials doing the wrong thing) cases (20%).

If the CFMEU appears to have a particularly troubled relationship with the Fair Work Act, be assured that it is because the current industrial relations regime is designed this way. In the case of United Collieries v CFMEU [2006] FCA 904, Justice Gyles of the Federal Court said in relation to workplace bargaining under the former Workplace Relations Act that

"The Act contemplates that negotiations during the bargaining period will be a power struggle with no holds barred, within limits."

The Fair Work Act is what happens when the limits of that power struggle are defined by a committee of lawyers, academics and economists, the very people who are unlikely to ever find themselves in such a conflict. It reflects the Rudd and Gillard anxieties about being depicted as anti-business, and accordingly is not what you would call a pro-worker piece of legislation.

The point is not to demonise the CFMEU, the ABCC or the Fair Work Act. Nor is the point to condone any of the reprehensible acts committed by some CFMEU officials which need to be condemned, nor to downplay the importance of having a strong union in the least skilled and most dangerous industries.

What I have tried to demonstrate here is that to accurately judge the passage of the ABCC bill, you need more information than what has been made available to you. All that you have is the most superficial tallying of "wins" and "losses", and the passage of the ABCC legislation was widely reported as a "win" for Malcolm Turnbull.

This single-minded focus in the media on whether the Government or Opposition has "won" or "lost" each procedural matter resembles nothing so much as the neurotic Colonel Cathcart from the novel Catch-22:

Colonel Cathcart lived by his wits in an unstable, arithmetical world of black eyes and feathers in his cap, of overwhelming imaginary triumphs and catastrophic imaginary defeats. He oscillated hourly between anguish and exhilaration, multiplying fantastically the grandeur of his victories and exaggerating tragically the seriousness of his defeats. 

One of the notable features of Colonel Cathcart's system of black eyes and feathers-in-cap is that so many things are viewed as victories and defeats simultaneously due to someone else having a different opinion. This was reflected in the reportage of the ABCC bill, so that while those latte lefties at Fairfax duly reported the bill's passage as a feather in the Government's cap, the Murdoch press commentators Judith Sloan and Grace Collier wrote about how it was really a black eye for the Government.


4. What is to be done?
In this age of fake news, click-bait and fact-checking, I don't have a prescription for how to fix this kind of thing. While nostalgia may tempt us to believe otherwise, network news and current affairs have always been garbage. There are limits to the resources available to long form and investigative journalism.

But is it getting worse? Consider this puff piece on Minister for Employment Michaelia Cash which completely omits any reference to a recent Senate enquiry condemning the Government's approach to public sector workplace bargaining, which has dragged on for over three years.

Consider whatever the hell this thing on George Christensen is.

*vomit*

Consider that the ALP got tired of the Murdoch press ragging on it so it made its own news site (it isn't great).

Consider the fate of QandA, which has steadily declined since the magic of its 100th episode.

In this post-fact, post-truth world, it seems there is only name you can trust: DEEP BRENDOG.