Thursday, 14 November 2019

In reply to  Mr LIMBRICK (South Eastern Metropolitan) (30 October 2019)

Mr PALLAS (Werribee—Treasurer, Minister for Economic Development, Minister for Industrial Relations):

The Victorian labour hire licensing scheme (Scheme) was established in response to the independent Victorian Inquiry into the Labour Hire Industry and Insecure Work and has the objects of protecting workers from exploitation and improving the transparency and integrity of the labour hire industry. The Labour Hire Licensing Authority (Authority) has already uncovered multiple instances of unfair treatment of workers.

Businesses that provide labour hire services were given a full six-month transition period to apply for a licence. Any provider that has applied for a licence can continue to operate until their licence application is determined. More than 4,000 applications have been received, but many businesses left their applications to the last minute, with more than 37 per cent made in the last 48 hours of the transitional period.

Before and during this transitional period, there was an extensive communications and education campaign to assist businesses in understanding and complying with the scheme. This included print, radio, digital and social media across Victoria, regional information sessions and engagement with industry associations, peak bodies, local councils, government departments, trade unions and professional associations. The Authority has spoken with thousands of providers and hosts across Victoria through over 120 forums and stakeholder engagement sessions, as well as more than 7000 Phone enquiries.

The fee structure that has been adopted was available for public comment during the development of the Labour Hire Licensing Regulations 2018 (Vic). It is the result of careful modelling by Deloitte Touche Tohmatsu (Deloitte). The consultation included the proposed option, costs, fee level and structure. A number of competing factors were taken into account for the purposes of setting the fees, including the impact on competition and small business; equity–the degree to which the parties that generate specific costs bear those costs, and the ability-to-pay of businesses with less means; certainty–the extent to which applicants will understand their fees in advance; administrative costs for business, compliance and enforcement costs. Thirty-nine submissions were received.

The Victorian Government considered all submissions carefully before finalising the fee structure in the Regulations, including comments about turnover, but determined that there was insufficient evidence to justify a departure from the economic modelling completed by Deloitte for the RIS.

There is an interim financial review to be undertaken after the scheme has been in operation for three years, and a statutory policy review after five years. The financial modelling was based on information available during the production of the RIS, and further information will now become available as operators become licensed.

As part of the interim financial review, the Authority and my Department will work together to review fee arrangements to assess whether the fees are achieving cost-recovery and the impact of fees on industry participants. in the interim, the Authority and my Department will continue to monitor the scheme and engage with stakeholders in relation to its operation.