Introduction and overview of Australia
The commonwealth of Australia is the only sovereign country that comprising the whole mainland of the Australian continent. It is the world’s sixth largest country and the largest in Oceania.
Australia has a population of 25 million people and a GDP of 1.37 trillion in total and 53,500 per capita. (Wikipedia.org, 2019) Australia’s economy is very dependent on the mining and agriculture industries, however, the total employment is only taking up to 5% of the entire workforce. (Bamber, 2016)
As of June 2016, employment have grown by 1.8% to the total of 11.9 million for the past 12 months. However, the annual average is still a bit over by 1.9% since the early 1980s.
Moreover, part-time workforce took over almost two third of the total employment growth, and the total amount has grown for about 6% since the 2000s. On a more positive note, the unemployment rate has fallen slightly from 2015 to 2016 by 0.4%. However, the most recent lowest unemployment rate was at 2008 which means unemployment rate has been growing since then, but it is finally going downward for the past three years. (Anon, 2019)
For public holidays, Australia shares most of the same holidays as the fellow commonwealth countries such as New Year’s Day, good Friday, Easter Monday, labour day, queen’s birthday, Christmas day, and boxing day; with a few Australian local holidays such as Australia day, Anzac Day, Canberra day, reconciliation day. Some holidays may vary between state and territory government. (Australia.gov.au, 2019)
Recruitment practices
Australian labour law contains two segments that are governed by two different sectors, commonwealth state and common law. Issues are usually dealt with separately regarding workers, unions, and employers.
Here are a few legislations that are implemented in the Australian workforce:
- Fair Work Act Legislation
This legislation is implemented the most, it guides workplace relationship in Australia which guarantees the minimum entitlements, working hour arrangement, fairness and eliminate discrimination. (Fair Work Ombudsman, 2019)
- Amendment Acts
“Sometimes parliament make changes to existing acts by passing amendments known as amendments acts.”
- Corporation Act 2001
“The Corporation Act 2001 is the main legislation regulating companies in Australia. It clovers companies and other entities, such as partnerships.”
- Independent Contractors Act 2006
“Independent Contractors Act 2006 protects the rights of genuine independent contractors to enter into a contract for services and prevents interference by any other party.”
- Freedom of Information Act 1982
“The Freedom of Information Act 1982 gives numbers of the public the right to access official documents of the Australian government and its agencies.”
- Privacy Act 1988
“The privacy act 1988 regulates how the Australian government and its agencies use and distribute information they collect about individuals.”
- Competition and Consumer Act 2010
“The Competition and Consumer Act 2010 covers most areas of the market: the relationships between suppliers, wholesalers, retailers, and consumers.”
Selection practices (Journal)
- Assisted employee choice
Arbitrarily limiting the number of default funds available as suggested within this model stifles innovation, provides an unfair advantage for the chosen few and places barriers upon new entrants to the market. Good performing funds which are not selected will struggle to survive. A selection panel could be subject to external influences, such as political influence. While it is suggested that a selection panel should be accountable for its decisions, how can this be monitored or enforced? How can, potentially, millions of Australians be compensated for losses resulting from poor default fund selection by such a panel?
- Assisted employer choice (with employee protections)
MySuper was intended to provide a solution to the selection of default funds (all MySuper fund are by design eligible default funds). MySuper has not yet reached maturity, it is still in implementation phase hence it has not operated in an open and unfettered market. It is therefore impossible to judge how effective MySuper could be in providing a default fund selection criterion; or how competitive MySuper funds will become over time. It is difficult to comment on the long-term investment performance of MySuper funds as they have only been in existence since 2014. It is also very difficult to envisage how a heavy filter could be applied to funds based on investment performance, as past performance cannot be used as an indication of future performance. Exposure to various asset classes generally determines the performance of an investment, and higher growth entails greater risk. This must be considered in light of an investor’s time frame and risk appetite. It would be a very brave Panel Member who would accept responsibility for arbitrary decisions such as this.
3. Multi-criteria tender
We do not support this model. It seems overly complicated and restricts competition. The proper implementation and possible tightening of MySuper filters can achieve the same result without the need to exclude providers and limit competition. The process is potentially open to political and other pressures in the selection of the final list of default funds. Funds will likely move to passive investment and will all become ‘vanilla’ as they will be scared to underperform in case, they are dropped off the list. Also, it is unlikely that there will be replacement funds as any fund not on the original list will have difficulty surviving in the long term.
- Fee-based auction
We do not support this model. Fees are not the only factor in providing good investment outcomes and member satisfaction. This model would result in ‘a race to the bottom’. It is anti-competitive, stifles innovation, provides an unfair advantage for the chosen fund (or few) and places barriers upon new entrants to the market. Good performing funds which are not selected will struggle to survive or cease to exist. The selected fund(s) will likely move to passive investment to save cost and will be scared to underperform in case they are dropped off the list. Also, it is unlikely that there will be replacement funds as any fund not on the original list will have difficulty surviving in the long term.
Miscellaneous information
- Minimum wages
Minimum wage refers to the basic pay for hours worked. It is dependent on the industrial employment within the industry. Both employers and employees should be paid at least the same than the minimum wage.
The national minimum wage in Australia is $19.49 per hour and $740.80 per 38 hour week (before tax). 25% casual loading is also given to the casual employees who are covered by the national minimum wage. (Fair Work Ombudsman, 2019)
Reference
En.wikipedia.org. (2019). Australia. [online] Available at: https://en.wikipedia.org/wiki/Australia [Accessed 22 Oct. 2019].
Bamber, G. (2016). International and comparative employment relations. Sydney: Allen & Unvin.
Anon, (2019). [online] Available at: https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BriefingBook45p/EmploymentAustralia [Accessed 23 Oct. 2019].
Australia.gov.au. (2019). [online] Available at: https://www.australia.gov.au/about-australia/special-dates-and-events/public-holidays [Accessed 29 Oct. 2019].
Hor, J. and MacDermott, T. (2019). Employment & Labour Law 2019 | Australia | ICLG. [online] International Comparative Legal Guides International Business Reports. Available at: https://iclg.com/practice-areas/employment-and-labour-laws-and-regulations/australia [Accessed 29 Oct. 2019].
Fair Work Ombudsman. (2019). Welcome to the Fair Work Ombudsman website. [online] Available at: https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets [Accessed 29 Oct. 2019].