PRIME MINISTER:
Ladies and gentlemen, Mr Andrews and I welcome you to this news conference to mark the launch of the detailed explanation; what I might call a premium explanatory memorandum of the Government's proposed workplace relations changes. These changes are big, but they are fair. They will further boost the Australian economy, thus generating more jobs and higher wages.
The Australian economy has come a long way in the last 20 years, particularly in the last 10 years. We have learnt to do our work better and smarter. We have learnt to work together as never before. And these changes represent the further necessary steps to maintain the momentum of the last 15 to 20 years. We cannot, as a nation, stand still. Those who argue and counsel doing nothing will condemn this country to declining competitiveness, diminishing job opportunities, and over time, lower wages.
It's also important to remember that an industrial relations system is only as good as the contribution it makes to the strength of the economy. All the rules and regulations in the world will not save jobs or boost wages if the economy sags and goes into recession. We all remember that in the early 1990s we had an infinitely more regulated labour market than we now have or will have as a result of these reforms, yet that didn't stop a million people being thrown out of work, nor did it stop a slump in real incomes.
There are three major changes contained in these proposals and Mr Andrews will say a little more in detail about them. They are the creation of a single national industrial relations system. The simplification of the agreement making process - simpler for both employers and employees - and also a better balancing of the Unfair Dismissal Laws. So let me remind you again that the Unfair Dismissal Laws we are better balancing only came onto the statute book in Australia in 1994. They are not some kind of Magna Carta fathered inherent right which has existed for generations.
The issue has been raised already as to whether guarantees about the take home pay of 10 million Australian workers should be given. Let me say again that my guarantee is my record. My guarantee is my record. I am proud of the fact that under my Prime Ministership the workers of Australia have become better off than they were under the Prime Ministership of Paul Keating and Bob Hawke. Unemployment now is lower than it has been for 30 years. Real wages have risen by 14.9% in the last nine and a half years. Interest rates are lower, taxes are lower, the sons and daughters of the employees of Australia have better opportunities of getting jobs. The opportunities for apprenticeships and traineeships are better than they have ever been. As never before in this country, we live in a workers' market. And that is something that has to be kept constantly in mind as we examine these reforms.
Let me also say something about international comparisons. They are always instructive. The unemployment rate is a good indicator of the relative success of labour market policies. Germany now has an unemployment rate of 11.7%, France 9.9%, Spain 9.4%, the Euro area generally, 8.6. In the United States, it is only 4.9. In the United Kingdom it is 4.7 and in New Zealand it is 3.7. In Australia it is 5. One of the reasons it's low in Australia now is the contribution that past reforms have made. And our proposition is that if we are to maintain momentum, not only to keeping it as low as it is now, but to drive it even lower, we need these further reforms. There's plenty of international analysis which demonstrates the link between the rigidity of labour markets and the relatively high unemployment rates of a number of countries.
And can I also make the point that even after these reforms have been implemented, the Australian labour market will be more highly regulated than the labour market in either New Zealand or the United Kingdom. Both of which since 1997 in the case of Great Britain and 1999 in the case of New Zealand, have had Labour Governments with an untrammelled opportunity of bringing about some kind of reversal of previous policies.
The final point I would like to make before handing over to Mr Andrews is this - that as well as outlining in detail the changes that are being made in this 68 page booklet, we've also set out in detail the terms of reference of the examinations of the existing award structure, and also a detailed analysis of the impact of labour market policies on families, particularly labour market policies which address issues of workplace and family balance.
I would like to conclude my introductory remarks by simply repeating again that we have come a long way as a nation. We've done better, we've worked better, we've worked smarter. We have a lot to be proud of. We have a lot to be pleased about. But if we now down tools, we now pretend we can stop, we can go into idle - we'll end up going backwards.
Economic reform, as I've said to many of you before, is like participating in a race towards an ever receding finishing line. You have to keep going, not because you think you'll eventually reach that finishing line. Frustratingly you wont, but if you don't keep going, the other people in the race will and they will run past you. That was the fate that befell West Germany in the 1970s and 80s. It was the pride of the Western World as far as economic performance was concerned, but it stopped the process of reform. And now it is seen as one of the weaker performing economies of Europe with an unemployment rate of 11.7%. I do not want, and I do not intend that that will happen to Australia. And that is why these reforms, to which my Government is very strongly committed are necessary and why we intend to proceed with them. Kevin.
ANDREWS:
Thanks Prime Minister. Can I just remark on two or three things of detail in the proposal which will be available to you. Firstly that this is a major step towards the creation of one simple single system of industrial relations in Australia; something for whom the time has come and that many support. The reality is we do not exist with separate colonial economies as operated in the 1890s and the early part of last century when the current system was first created. We need a system as the Prime Minister said, to meet the conditions of the modern economy in an increasingly internationally competitive world in which we live and this is a major step towards creating a single system of national industrial relations in this country.
Secondly, in relation to those who are covered by awards. We will retain modern award protection in this legislation and for those who choose through their unions to be covered by an award rather than some other industrial arrangement, then the award will remain. In relation to the awards, the wages components of awards will be set by the new Australian Fair Pay Commission; bringing a new degree of economic rigour and analysis to the setting of minimum wages in Australia.
We are, as you know, proposing to remove four matters from the list of allowable matters; namely jury service, notice of termination, superannuation and long service leave. In relation to existing awards, existing employees and new employees employed under those awards will nonetheless retain access to those provisions. For example, if a nurse receives double the community length of long service leave under his or her award, then that nurse who's currently employed will continue to have those provisions grandfathered for him or her. And in addition to that somebody who in the next year or two or three, some time in the future, takes up employment under that award, then those conditions will be grandfathered for that person as well.
Secondly, in relation to agreements, as you know the proposal in the legislation will be to establish a new Australian Fair Pay and Conditions standard consisting for the first time of matters legislated at the federal level and that will comprise wages, a 38 hour ordinary week, annual leave, sick leave, personal leave, carer's leave. In addition to that a number of matters which are commonly found as entitlements under awards will, if there is no specific mention of them in an agreement, remain as part of the conditions of employment. So things like public holidays, rest breaks, meal breaks, incentive based payments and bonuses, annual leave loadings, penalty rates, overtime; those matters will if there is no specific reflection, mention of them in the agreement between the parties, then the award conditions will continue to prevail. What it means however is that there will be the ability to have much greater flexibility in terms of the way in which those matters operate in terms of bargaining or negotiations between the parties and they will be able to vary them in a way in which they can't at the present time.
Finally can I say that there will be an ongoing, an important role for the Australian Industrial Relations Commission. The Industrial Relations Commission will have a role particularly in relation to protected industrial action, in relation to matters like strikes and lock outs. It will also have a range of powers which it will be able to use to enforce particularly where third parties are being harmed by industrial action and it will have a role in terms of dispute resolution at the present time. We are also encouraging parties in keeping with our approach that the best workplace relations are those which are agreed between the employers and the employees at the workplace level encouraging parties to also determine the manner and the method by which they resolve their disputes in the future.
PRIME MINISTER:
Any questions?
JOURNALIST:
Mr Howard, Labor and the Unions describe this reform as an all out attack on the pay and conditions of Australian workers. You've told us that your guarantee is your record, but can you look Australian workers in the eye tonight and guarantee them that nobody will be worse off under this system?
PRIME MINISTER:
I can look the workforce of Australia in the eye tonight and say look at what has happened under my Prime Ministership over the last nine and half years. I can tell them that this reform will further strengthen the Australian economy and I can tell them directly that the foundation of more jobs and higher wages in the future is a stronger economy. All the regulations in the world can't generate a strong economy out of thin air. And the measure of the worth of an industrial relations system is its contribution to the economic strength of the nation. And that is why I believe this system will deliver more jobs and higher wages.
JOURNALIST:
Why can't you guarantee that all workers won't be worse off?
PRIME MINISTER:
My guarantee is my record.
JOURNALIST:
Mr Howard will it mean that workers in industries that are doing well will do better and those that are in industries that aren't doing well will do worse. In other words, there will be more market based and less, perhaps less homogenised then it is now?
PRIME MINISTER:
I have no doubt Louise that it will be more flexible. What you have described to some degree happens now. It's very interesting that if you look at the remuneration under Workplace Agreements - they're higher. The remuneration is much higher than it is under collective agreements or awards. I'm told in the non-managerial area, it's 5% higher than collective agreements and it would also be higher than in awards. In the managerial area its 19%, producing an average of 13%. Now I mention that set of figures because Mr Beazley has promised to strangle AWAs. That's the language he's used. So Mr Beazley, if he's going to strangle AWAs, he's going to strangle the opportunity of those people earning higher wages. So he is the wage cutter, not me.
JOURNALIST:
Prime Minister, your policy is titled WorkChoices, can you guarantee every worker the choice to remain on their award or to move to an award?
PRIME MINISTER:
Well you can't, for example, terminate somebody's employment through reason of the fact, or by reason of the fact that that person won't go, won't sign a Workplace Agreement. That remains something - and incidentally the ACTU ad on this subject was calculatedly wrong because it suggested that somebody who'd worked for a firm for 15 years could be sacked if they didn't sign a Workplace Agreement. We've chosen WorkChoices as a title because there will be far greater choice under this system. There's a lot of choice now. And as I said in my introductory remarks and as the document says, this builds, in a significant way, on changes that have already been made. But there's quite a lot of choice available now. We think we're going to provide a lot more choice. But we're going to provide it in a way that is fair and a way that's balanced. In all of these things you have to strike a balance.
This is not, as the Labor Party and the unions have so falsely claimed an attack on the living standards of Australians. Why would I want to cut the living standards of Australians? I have spent nine and a half years as Prime Minister lifting them, introducing policies that have lifted the living standards of Australian people. It defies commonsense that any Government would want to cut the living standards of Australians because the foundation of our future prosperity will be found in a cooperative workplace culture. And the more that you can get individuals focussing on agreements at the workplace level, the better off the nation will be.
JOURNALIST:
On the question of ads, do you think you owe it to the Australian people to tell them how much of their money you'll be spending to sell these changes?
PRIME MINISTER:
Well I will certainly when the full extent of the programme, the full extent of it is known. Certainly the Australian public will be told. It won't be the hundred million dollars that Mr Beazley's talking about. It will be significant, but precisely, I can't give you a precise figure at the moment. But I will when I can tell you.
JOURNALIST:
Prime Minister, just looking at penalty rates, you're talking about choices and cooperation. But obviously there's going to be incentive on one side, but pressure on the other for workers to move towards these new agreements. Do you have a percentage of workers you expect to move off penalty rates, or what sort of pressures do you....
PRIME MINISTER:
Oh look I can't get into those percentages Catherine no. You never can. And it's silly to try and put percentages. What you have to do is to bring about changes that strengthen the overall economic performance. Can I go back to what I said at the beginning. In the end the worth of an industrial relations system is the contribution it makes to a stronger economy. And I believe that this set of changes will produce a stronger economy, that's why I believe it will lead to more jobs and higher wages. Now you asked me to try and quantify in percentages and thousands - I can't do that.
JOURNALIST:
(inaudible) providing options for people to move away from penalty rates for workers. What sort of protection is there for them given there will be this new pressure and all of a sudden a new environment where there will be a new system whereby so many will be without penalty rates?
ANDREWS:
Catherine, I think you have to keep in mind the, just the major demographic shift which is occurring in the population. The reality is that we are facing in many places, a demand for workers today. The indications are that in not 10 or 15 years time, but as short as 4 or 5 year's time, we will have even more demand for workers in Australia. When I talk to employers around this country, whether its in a small regional town or a multi-national corporation in the headquarters in one of the major cities of this country, what they say to me over and over and over again is we are looking for all the workers we can find and we want to retain the workers that we can find. That's the background that this is operating against. But if people want to, for example annualise their salaries or to put all their entitlements together so that penalty rates and overtime is all put into a higher rate of pay which the worker can take home and the workers want that, well then we don't believe we should stand in the way of it.
JOURNALIST:
Prime Minister, can you explain the rationale for increasing the duration of an AWA or individual contract from 3 to possibly 5 years, and will that not turn off some potential, a number of employees from moving on to a contract that will remain in place for 5 years?
PRIME MINISTER:
No I don't think it does. I think it just recognises one of the realities of what we want to create and that is a more durable, trusting culture at the workplace level. And part of that is to want to remain associated with each other for as long a period of time as possible. If you want to vary the conditions of the agreement during its duration you can always do that and deposit those variations. Yes?
JOURNALIST:
Mr Howard you've said that your record is your guarantee. Labor and the Unions may read between the lines today and say well no you haven't come out and said that no Australian worker will be worse off.
PRIME MINISTER:
Well the unions and the Labor Party will attack me yes. They will attack me whatever I say. If I use some other formula of words they would attack me. What I'm saying to the Australian people in the end, have a look at what's happened to your wages, your interest rates your employment prospects and those of your sons and daughters under my Prime Ministership. That's all I'm saying and I'm saying that very directly to them. And that is worth more than a form of words, because it's a track record of somebody who's devoted his public life to improving the living standards of average Australians. I didn't come into the Prime Ministership to try and destroy the living standards of average Australians and I'm very proud that I've delivered these improvements to average Australians.
JOURNALIST:
Mr Howard if an employee feels that they're being unfairly coerced to give up something like their penalty rates, what recourse do they have if they're being forced to sign an agreement and they want to stay on an award?
PRIME MINISTER:
Well there are a whole lot of recourses. I mean one of them in today's conditions, labour market conditions, of course is to go to another employer who will pay them better. The reality is that we do live in a workers' market. And what's important to understand is that you can not look at any of these things in isolation from the economic conditions and it's not just the current buoyant conditions, but it's the long term demographic change of which Mr Andrews has spoken.
JOURNALIST:
If it's impractical to move employees.....
PRIME MINISTER:
Sorry, I didn't quite catch that.
JOURNALIST:
Sorry if it's impractical to change jobs, you feel you're being unfairly coerced by your employer, what legal recourse does a worker have?
PRIME MINISTER:
Well you can't be, for example, if you have an award arrangement at the present time and your employer sacks you by reason of your not signing an agreement, that's unlawful.
JOURNALIST:
Can we assume that these changes have been to Cabinet, and if they did go to Cabinet, was there a family impact statement, as...
PRIME MINISTER:
Well if you have a look at the back of the document you will see a family analysis. And these are the sort of changes where the whole framework in which they are considered by the Cabinet is in the framework of their impact on families. What you've got to remember about family impact statements is that they're not some kind of clinical file note that appends each piece of legislation. When you're dealing with salaries, you're dealing with people's working conditions, it's family, family, family because it's the take home pay, it's the working conditions of either both breadwinners or one and half incomes, whatever the arrangement might be, or a single income family. So every time we look at these things we think about their impact on families and the best news for families is that their wages are higher, their jobs are more plentiful and their children are finding it easier to get jobs than they did 10 years ago
JOURNALIST:
Mr Andrews.
PRIME MINISTER:
Can we have Michelle? Michelle was trying...
JOURNALIST:
Mr Andrews, can you clarify this list of default conditions. Will that shrink over time as new awards come in with fewer conditions written in?
ANDREWS:
You're talking about penalty rates and overtime and those matters Michelle?
JOURNALIST:
(inaudible)
ANDREWS:
Yes, those matters will be set out in the legislation so it will be legislated for and as I said if there is no specific or express reference to them in an agreement, then there is default provision, namely the provisions that pertain in the relevant award.
JOURNALIST:
And over time the awards will have fewer conditions, new awards and so on...
ANDREWS:
But these are being set out in the legislation Michelle, it's not something which is reliant upon the award, it's reliant upon what is in the legislation.
JOURNALIST:
Mr Andrews, as I understand it employers under this package, employers for the first time will now be able to take civil action against unions if they believe there has been a breach of the IR Act of this particular Act, can you explain what the thinking is behind that, is that just to give employers greater leverage to stop unions that they believe are damaging their business?
ANDREWS:
Well parties will be able to take civil action against other parties where a party believes that there has been action taken which is in breach of a contract or which causes damage then the normal law that is that one can bring a civil action will pertain to this area as well. It's not as if action couldn't be taken in the past; there was though an artificial barrier, namely a particular section of the Workplace Relations Act which created a hurdle which had to be jumped before such action could be taken. We believe that in relation to contractual arrangements between parties, if someone breaches a contract and that causes damage then the way in which the law ordinarily operates should apply here as well.
JOURNALIST:
If a whole generation of workers in a particular company or across an industry that has an enterprise bargaining arrangement trade away some of these things like penalty rates or overtime rates or meal breaks, in return for higher pay, what recourse would future workers coming into that workplace or that industry have to try and reclaim some of those things if in future they wanted to reinstate meal breaks or rest breaks?
ANDREWS:
Well these are a matter for negotiation between the parties each time there is an agreement negotiated. So if an agreement comes around every three or four of five years, then whether it is a current group of workers or a new group of workers, then they have got the ability to negotiate. But can I point out that negotiation goes both ways. That is if someone is going to give up something in order for some greater flexibility within the workplace so that they can be more productive, then particularly given the environment of the labour market at the present time, they will be demanding something in return - that's the normal process of negotiation and bargaining and we are simply seeking to aid that process because that will deliver better benefits, better outcomes for the Australian economy.
JOURNALIST:
Prime Minister will the five year transitional arrangement for farmers and other non-incorporated businesses, do you think that will be enough to allay concerns within the National Party about this package and do you envisage the teething problems that you had with the GST; that those sorts of teething problems... with the implementation in relation to this particular package?
PRIME MINISTER:
The five year period is two years longer than the National Farmers Federation is contemplating. I believe in that five year period that all of these matters will be resolved, I really do because five years will allow a settling period for the states, for them to assess what they intend to do, presumably they will go ahead with their High Court challenge and we are all of course subject to decisions of the High Court. Our advice is strong - but if there is a court challenge, we will all of course be part of that process. If the High Court rules in favour of the Government, then the states will have to consider whether to maintain their current systems or not and also in that five year period, unincorporated businesses will have an opportunity of assessing the relative merits. I think the five years is a little longer than had been expected and I think it will be seen in a very positive light by the affected businesses who are the people I am most concerned about.
JOURNALIST:
Could you relate for us, how these new laws will relate to the striking Boeing workers at Newcastle just to give us an example of - they're after a collective agreement, they've been on strike for 120 days, what choice will they have?
ANDREWS:
Well that's a matter of negotiation between the workers and the company. The great majority of workers, as I understand it, at Boeing have entered into an agreement with the company but there is a dispute about the form of agreement, there is a difference of opinion about that. We will have in place dispute resolution procedures under the new proposals which may provide some additional assistance to resolving the dispute, but ultimately it is a matter of agreement or otherwise between that group of workers and the company.
PRIME MINISTER:
But the stance being taken by Boeing is perfectly lawful under the present system. That has to be understood. The stance being taken Boeing and those men and women are free to return to work at any time and there is no question that their remuneration is going to be less, they are taking a... engaged in a strike to make a political- industrial point; well they are entitle to do that but the company is entitled to take the attitude it has and that is sanctioned by the present law. There is nothing in these changes that will give the company as I understand it, any greater or lesser authority. It's just that under the present law the company is taking a stance. They're welcome to come back, their remuneration is not an issue, and I mean that's their decision - that is not the result of an unfair law or perfidy by the company.
JOURNALIST:
But what sort of choice is it for workers?
PRIME MINISTER:
I beg your pardon?
JOURNALIST:
What sort of choice is it then for workers to be told, if you want this job, you must sign up to an individual contract or there is no job?
PRIME MINISTER:
Well that is, that is a right or a situation that exists under the present law. I mean for heaven's sake, I mean that's not something that is suddenly been created here, and I don't think that is an unreasonable thing and those situations vary. I mean firms have a variety of arrangements and employers do have some rights in relation to these arrangements. The key issue is whether the exercise of those rights unfairly penalises the individual worker and the important thing is the rights of the worker, not so much the rights of organisations and if I can go back to the Boeing example - remuneration is not an issue, it's the form of the agreement which is the issue and quite frankly the stance being taken by the company is a stance that's valid under the current law. I mean the question of whether it's the right thing for the company to do in its interests or whatever is a matter for it to decide. I am not stressing a view on that. Two more questions.
JOURNALIST:
Given that you are asking the Australian people to trust you with this, trust you on your record with this, these are laws that are going to come into place, Labor's vowing to fight this all the way to the next election and beyond. Does that not oblige you to stay in the position of Prime Minister to the next election?
PRIME MINISTER:
You spend too much time sitting next to Mr Lewis in press conferences. That is your fatal flaw Mr Turnbull.
JOURNALIST:
But you are asking Australian people to trust you on this, aren't you obliged to stay there all the way through so that they can pass their judgement?
PRIME MINISTER:
Just another tricky question. Can we have Louise again, and then two more after that.
JOURNALIST:
Does this situation of demand for labour...is this going to lead to most workers, employees working longer hours and perhaps more weekend work?
PRIME MINISTER:
Well look that will just depend. I don't think you can lay down an iron clad rule about that, I just think...
JOURNALIST:
What do you think though?
PRIME MINISTER:
I think it will vary enormously. I mean the patterns of work now are infinitely different from what they were ten and twenty years ago, people have different attitudes towards clocking on and clocking off and the more flexibility, the more freedom, the more arrangements that are appropriate to an individual workplace, the better. I think you just should allow a thousand arrangements to bloom, if I can vary a famous remark in order to get the best outcomes for the economy.
JOURNALIST:
Prime Minister how many...
PRIME MINISTER:
No I thought, Gemma is it?
JOURNALIST:
Laurel.
PRIME MINISTER:
Sorry, sorry.
JOURNALIST:
What concessions, if any do you see that the Government has made to the widespread concern about the changes since they were first, the broad outline was first unveiled?
PRIME MINISTER:
Well the concerns if they existed were generated by misrepresentation. In the very first ad the union movement ran, suggested that you could be sacked if your child was sick and you could go. Now that's wrong; it's verging on the dishonest, may be it is. But it's unlawful if you read the document, to terminate somebody's employment on that basis. So that sort of set the pattern and then you had the one that I referred to earlier where the bloke said I'd been here fifteen years, sign this or you're out. Now you can't do that either. Now it's that sort of nonsense and misrepresentation which has perhaps created concern in the minds of people. Now we have sought in this document and this document embodies all of the changes, I mean not in legal jargon I hope, but the legislation when it comes in a few weeks will reflect the detailed explanation in this document and this contains protections and balances that we were always going to have. And I think it's fair to say that we looked at unlawful termination. That is, the idea of having a little bit of assistance in relation to that is something that came along in the course of things. But all the other things to the best of my recall, they are things that, protections and so forth that were always implied. I mean it was always going to be the case that if you are an award-reliant employee, the essential provisions were going to remain. Things like penalty rates and leave loadings and overtime and so forth. It was always going to be the case that you had these five, these basic fair pay and conditions standards if you went into an agreement, and other things would be matters of negotiation. We've made it clear that they have to be specifically addressed and if they're not, there's a default provision of which Mr Andrews has spoken which picks up the award entitlement. We've repeated what we said about the Unfair Dismissals. So I think you've got a situation where its not so much concessions having been made, rather the fuller explanation juxtaposed to the dishonest misrepresentation, has presented a clearer picture. I mean those early ads of the ACTU were quite outrageous.
JOURNALIST:
Well how can you tell if this is working? How will you know if this new system is successful based on wages, on productivity, on...
PRIME MINISTER:
A whole range of things. Well the general strength of the economy Catherine and I believe that these changes will produce a far more productive economy. I think they will make the economy work better and if that proves to be the case then people are going to be better off. Now that will emerge over time. It's not something that you're going to be able to do a stock take on in 6 or 12 months time. These things will develop over time. And just as our strength now is a product of earlier reforms, and I've always acknowledged that. And some of those reforms were carried out by the former Government and I've always acknowledged that. The difference of course is that we supported them when we were in Opposition whereas they've tried to stop every reform that we've introduced. So it will be some years into the future where the full benefit of this will be known. But that's what you've got to do. You've got to build for the future. We're often attacked in this game for being too short term. Now this is for the longer term security of the Australian economy. This is about keeping us in that race towards that ever receding finishing line so that the other blokes in it don't run past us. Thank you.
[ends]