, LW51AR(; U: 8.-W P: 4 THURSDAY 122 : 7ov 7 3
SPEECH BY THE PRIME MINISTER, MR E. G. WHITLAM, TO THE
LABOR COUNCIL OF N. S. W. TRADES HALL, SYDNEY THURSDAY 22 NOVEMBER 1973.
PRICES AND INCOMES
I welcome this opportunity to address the Labor Council
of N. S. W. on the forthcoming referendums on prices and incomes.
Your council is the largest State trade union organisation in
Australia. Clearly the attitude of the one million members of
the 110 unions affiliated with this council will play an important
part in determining the success of the referendums.
I believe it is undeniably in the interests of these
people and all of the wage and salary earners of N. S. W. that
the referendums do succeed. For what we are seeking the power
for the Australian Parliament to make laws about prices and about
incomes will enhance our abil. ity to try to ensure that the
prosperity of our nation is a reality for all our people, and not
just an illusion. Such a power will not be a cure-all but it will
add significantly to the armoury of economic weapons which we can
deploy) particularly in the fight against inflation.
No section of the community can be more aware of the
effects of inflation than the trade union movement. No section of
the community is more constantly engaged in trying to achieve a
real improvement in living standards in the face of inflation than
the trade unions. With one possible exception, it is their members
who suffer most from rising prices. That exception would probably
be pensioners and other people on low fixed incomes and the
trade union movement has always shown a vigorous concern about any
erosion of the value of their benefits and savings. / 2
The Government has demonstrated beyond doubt its
determination to deal with the problem of inflation. Not that we
concede for a minute that the overall economic picture should be
regarded gloomily. This year we have lifted our national growth
rate to) a near record of We are enjoyingj conditions of
buoyant business prosperity. We are intent on keeping things
that way. Nevcrtheless we rus~, t recognise, and we have recognised,
that Australia, in common with the rest of the world, is undergoing
a period of hiqh inflation. Rising prices must obviously diminish
to an extent the benefits of any general prosperity, particularly
for wage and salary earners. Already we have acted by introducing
a series of carefully timed and related anti-inflationary measures.
We have established the Prices justification Tribunal. We have
cut tariffs. We have revalued the dollar twice. And other fiscal
and monetary action has been takcn when needed.
I would mention in this context our decision this we]'
to cut tariffs on television sets and other electronic equipment.
Primarily this has been done to ensure that ~ Australians do no-' L
have to pay excessive prices for colour television sets. We are
sure that Australians will be able to benefit from this decision
without any drop in the level of employment in the industry. / 3
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one measure we have not been prepared to take to counter
inflation is to create unemployment. We are not prepared to see
a return to the situation in 1972 when economic action taken by
the previous government resulted in 130,000 people being out of
work. We repudiate firmly and unchangeably such an antiquated
and harmiful approach to dealing with inflation. Indeed, within
months of coming into office, the Labor Government has reduced
unemployment as nearly as possible to acceptable limits.
I have already mentioned however, that, despite the
action we have taken to try to counter rising prices, the Australian
Government is denied a full complement of economic powers to deal
with this problem. The power to make laws about. prices and
incomes resides with the States. They have been unwilling or
unable to use effectively their power to contain prices. This
applies particularly in Victoria and Queensland, all of
which are dominated by non-labor governments. The Australian
Government has asked the States to refer their powers to it so that
national action can be taken but the three largest States have
refused co-operation.
It -is against this background that we are now taking
this question to the people in the referendums to be held on
8 December. This approach is based on the firm conviction that
inflation is a national problem which demands national answers.
All comparable countries have the powers that we are seeking.
We are asking the people to give us nothing more and nothing less
than the economic authority which the governments of these countries
command. / 4
The trade union movement is, of course, solidly behind
us in seeking the prices power. It knows that this power wijll
provide the chance for hard-won wage and salary gains to catch
tip on price increases. It knows that it will give the elected
government the opportunity to protect the incomes and savings of
pensioners and fixed income earners. It knows that it will give
homebuyers the prospect of stabilised * costs for land and materials.
The Government does not intend to rigidly apply wideranging
price control. It will make flexibl. e and selective use
of the powers which it is seeking. However, it should have the
ability to prevent, where necessary, excessive rises in the price
of essential commodities. I am confident that with the continued
support of the trade unions and other sections of the community,
that we will be given this ability on 8 December.
T'he union movement however, is not solidl. y supporting us
in seeking the power to make laws about incomes. I know that the
fear of a number of officials is that this power might be used to
introduce a freeze on wages. I have said before, and unequivocally
I will say again, that the Australian Government has no intention
of taking such drastic action. You have more than just my pledg~ e
on that; a freeze on wages and salaries would be contrary to
the statement in the A. L. P. Platform that " good industrial relations
will be best achieved by agreement initially arrived at between
trade unions and employers." I also believe that even our opponents,
if ' they were returned to office, would be forced to recoil from such
a free2ze because of its arbitrary and heavy-handed nature. The
disruption and disharmony that this type of action would cause,
would. I believe, deter them.
Despite this, we are all aware that the Australian
Council of Trade Unions has called upon affiliated bodies to
campaign against the incomes power. The ACTU Executive on
October decided that this proposal. is " beyond ACTU policy".
I am not suggesting that too much significance be read into the
use of the world " beyond"; but it is interesting that the
Executive did not say that the proposal is " against ACTU policy".
The substantial ground of objection by the Executive
is that " the A. C. T. U. will under no circumstances accept a wage
freeze and will actively campaign against any proposal to
implement a wage freeze in this country." I have already pointed
out that the incomes power and a wages freeze are definitely not
the same thing. You have the undertaking of the Government and
the Australian Labor Party that there will be no freeze; and you
can make the realistic assessment that any blustering inclination
towards it by our opponents would disappear if they had the chance
to consider such a move.
I do not believe that the incomes power is against the
interests of trade unions. Indeed, I would point out to you that
the ACTU Congress the supreme policy-making body of the
organisation as recently as 4 September carried without dissent
as part of its economic policy for the ensuing two years a demand
that " direct regulation over non-wage forms of incomes as a means
of ureve nting excessive increases in these incomes" be introduced.
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There is no way that any national Government could act
on this demand without the incomes power which we are seeking.
It would be a legislative nightmare although perhaps ultimately
a lawyer's delight in the courts for us to frame and seek a more
restricted power. How would we define non-wage incomes for the
purpose of an amendment to the Constitution? I do not believe
that we could achieve the necessary precision of definition. I
believe that the public would be so confused by any attempt to do
so that, in keeping with the result of so many referendums in the
past, people would play safe and reject a proposal of this kind
in favour of the status-quo.
In making my opening broadcast on the referendums on
national television on Tuesday night, I said that, if powers over
prices and incomes are to be effective, they must be uniform,
immediate and unchallengeable in their application. Even if we
were to attempt to succeed in an attempt to acquire a limited
power over incomes, that power could not be either immediate or
unchallengeable in its application.
So we are left with the proposition that, for the national
government to do anything about non-wage incomes, it must be given
the power that we are seeking now. In keeping with our attitude
towards price control, we would only apply our authority over
incomes flexibly and selectively. Even then, it would be a mistake
to regard this as a purely negative power. It would, for example,
enable us to ensure the eventual attainment of equal pay for all
women in the workforce. It would also permit the Australian
Parliament to make allowances for inflation, if necessary, by making
periodic adjustments to wages and salaries, as it is already making
periodic adjustments to pensions.
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On this last point I was amused recently when my attention
was drawn to a statement made by Mr Snedden, when he was Treasurer,
in an interview published in the " National Times" in February 1972.
He was asked about his attitude towards quarterly costs-of-living
adjustments to wages. And he said: " It's curious if you go back
to I think it was ' 53 when the adjustments were suspended, they
were doning damage at that time in a different environment. The
curious inversion now is that if you had quarterly adjustments you
would reduce the wage increase." The changing attitudes of
Mr Snedden become curiouser and curiouser! The only effective way
that he could pursue such a policy would be for the Australian
Parliament to have the power to make laws about incomes.
Aside fromL Mr Snedden's vagaries, a strong economic
argument can be made for the introduction of regular cost-of-living
adjustments to wages and salaries. The argument rests on the view
that some wage and salary demands are forced very high by the
fear that more moderate pay increases will be rendered inadequate
by rising prices. The Australian Government at present does not have
the power to introduce cost-of-living adjustments to counter this
problem. It is unable to do more than ask the Conciliation and
Arbitration Commission to do Clearl,, it would be a qreat
advaintagje to unionist!: to Le able tr; cnter , waye and salary negotiation
or award hearings with the knowledge that the Government could, if
necessary, subsequently adjust upwards any new wages or salaries
achieved through these processes, if their value was eroded by rising
prices. / 8
I also ask you to consider the use to which income
powers have been put by the State Government in NJ. S. W. To m~ y knowledge,
no N. S. W. Government of any political complexion has used its
legislative authority to decrease or freeze wages or salaries.
In fact, any legislative action has always resulted in an improvement.
The only action to diminish pay has always been taken by the
Industrial Commission.
The general reduction in wages in N. S. W. during the
Depression was made by the Commission, for example. Then we can
look at what has happened to cost-of-living adjustments in this
State. In 1953 the Commnission followed a Commonwealth court
decision to abolish these adjustments to the bas-ic wage. Otate
legislation in 1955 reouired the restoration of the adjustments.
This legislation was abandoned in 1964 but the State basic wage was
increase sign~ ific antly by the Parliament to equate it with the
Federal basic wage. Finally, we can examine the history of the
movement towards equal pay for women. A State Industrial Corriissicn
decision failed to adopt completely a 1950 Commonwealth court
dlecision to increase the basic wage of one pound a week arid to lift
the female basic wage from 54 per cent t'-o 75 per cent of the vale
rate. Legislative action in the N. S. W. Parliament in 1956 redressed
this decision and introduced a program for the attainment of equal
pay. In short, legislative action based on. the State's incomes
power, even if it has not been used to a great extent, has been in
favour of employees for 40 years. This means that no party in office
has been prepared to use that power to reduce workers' pay. I argue
that this provides a positive indication that no party in control 9
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of the national Parliament would use an incomes power to reduce
or freeze wages and salaries.
The Australian Labor Party has gone further than giving
an unequivocal commitment on this point. Our Federal Executive
declared in October that the implementation of prices and incomes
powers " can only he successful with the direct involvement of the
trade union ntovemcnt in the formulation and aOnministration of any
policies affecting trade unionists." All overseas experience hWE
proved that policies on incomes cannot work without a broadly-based
community consensus and the co-operation of the bulk of the trade
union movement. Lny failure to achieve this cornsensus anC this
co-operation has inevitably led t~ o a failure of such pol icies
overseas. Thus there can be no question of coercing the bull of
the union movement or of the business world as we would need their
support to make any action on incomes effective. However, the
powers we seek would prevent any small recalcitrant minority from
imposing its will contrary to the consensus of the community.
My final point is that division within the labor movement,
often based on short-term considerations, has usually resulted
in the defeat of constitutional amendments put to the people by
rcferendum. Members of the labor movcment have come to regret
these earlier failures in subsequent generations. On this occasion
I hope that we can learn from our history and minimise any
disputation which might result from doubts or fears.