PRIME MINISTER
FOR PRESS 17 DECEMBER 1978
ELECTORATE TALK
I would like to talk to you tonight about the National Wage Case
decision bought down by the Arbitration Commission last Tuesday.
The Commission has decided to grant in full the wage increase
of 4 percent sought by the trade unions at the hearings.
This decision to award the 4 percent flow-on is the worst
possible Christmas present that could be made this year to the
unemployed. How long is it going to take before trade union
leaders and the Arbitration Commission come to understand that
price operates in the market for labour as it operates for
everyth,, ing else.
When there is too much of any commodity in the market and the price
is raised then the quantity sold must fall. The tragedy in
this case is that the commodity we are talking about is labour
the lives and wellbeing of people. If there are more
people than jobs and the cost of employing people goes up then it
becomes harder to find work.
What prudent business manager would raise the price of his
product when it is already hard to sell? Yet, that is what has
happened just now.
The Government argued against any increase at all based on an
irrefutable proposition first put forward by a Labor Government
Treasurer some years ago, that one man's way increase is another
man's job. There is no worse time for this decision to be made
than when tens of thousands of school leavers are coming onto
the labour market.
Already as a result of trade union activity over the past few years,
wage prices for these youngsters are so high that they constitute
a positive deterrent to employers. Young men and women entering
the workforce for the first time could once acquire the experience
they needed at comparatively low wages. But for some time, it
has been starkly apparent that many employers consider they are
unable to get a reasonable return from unskilled staff at
present salaries. / 2
Now these salary levels have been raised by another 4 percent
as 200,000 school leavers are about to start their search
for jobs.
The President of the Arbitration Commission, Mr Justice Sir
John Moore, has awarded the full flow-on of 4 percent in a
climate of concern about the growing level of strike activity.
With clear signs that some trade union leaders are unwilling
to accept wage restraint he has said that if the number of
disputes continued to grow it would throw into question the
future of the present system of national wage case hearings
before the Arbitration Commission.
It is a topsy-turvy world when the trade unions embark on a
campaign of action which hits at the ability of industry to
provide jobs for the trade unions' own members.
The Gover ' nment is calling for a report as a matter or urgency
on how wage fixing at these hearings can be made consistent
with the Government's economic aims, and particularly with the
aim of increasing employment opportunities.
Because the States are also involved in this wage fixing process
they have been asked to cooperate. Their wage fixing tribunals
often leap-frog Commonwealth tribunals and the results can be
serious. In the meantime, let me emphasise that the Government remains
determined to continue the fight against inflation, a fight
which is having results in reduced inflation, lower interest
rates and developing business confidence.
Indeed, a short while ago the Confeasration of Australian Industry
and the Bank of New South Wales reported that manufacturing activity
strengthened markedly in the last three months of the year,
with most of those taking part in the survey saying it was their
best three months for four years.
The struggle of the past three years against the excesses which
the Government inherited at the end of 1975 is one which must
continue if economic recovery is to be consolidated. Wage restraint
is essential to raise the level of job activity and to fight
unemployment without a resurgence of inflation.
I can only call on the trade union leaders to show restraint in the
interests not only of their own trade union members, but of the
nation as a whole, in particular in the interests of those who
are at present unem-loyed. Their success at the last National
Wage Case Hearings can help no-one. It harms the young and
adds to the ranks of the unemployed.