PRIME MINISTER
EMBARGOED UNTIL DELIVERY
REMARKS BY THE PRIME MINISTER AT THE OPENING OF
MEETING BETWEEN REPRESENTATIVES OF THE ACTU, BCA AND CAI
ON WORK AND MANAGEMENT PRACTICES
MELBOURNE 24 SEPTEMBER 1986
As you know Ihave been drawing attention for some time now
to the need for management and labour to work together more
effectively and more efficiently.
This is because Australia's international competitiveness
and thus our ability to create wealth and jobs ultimately
depends on how productively we use our natural resources and
capital eqjuipment.
This has always been the case. But pursuit of greater
productivity has become even more urgent over the past year
or two.
The 15 per cent decline in our terms of trade since the end
of 1984 is now costing Australia about $ 6 billion a year in
lost income.
It has also highlighted, once again, the vulnerability of
Australia's living standards to fluctuations in commodity
prices and the importance of seeking to reduce this
vulnerability by expanding efficient export-oriented
enterprises in the manufacturing and services sectors.
The substantial real depreciation of the $ A has given
Australian industry a massive competitive advantage and, of
itself, has prov'ided a new impetus to necessary structural
reform within the Australian economy.
But it will take sustained restraint in nominal wages growth
and significant improvements in the productivity of our
trade-exposed industries if that enhanced competitiveness is
to be preserved : clearly the higher we can lift our
productiveness in the years ahead compared with our
competitors the less of a burden has to be borne by
adjustments to wages growth and living standards over the
intervening period.
A large number of factors impinge upon our productiveness.
These include, as you know, levels of capital investment and
skills formation and the efficiency with which we use our
existing capital stock. Each of these has been the focus of
Government policy development.
It is widely recognised that the thrust of general economic
policy is to support longer term adjustment in the balance
of payments, including by creating the conditions which will
permit, in time, a lessening of the role now required of
monetary policy.
Less well recognised is the major steps which have been
taken: To encourage innovatiort and industrial research and
development; To reformlour education and training systems;
To restructure certain key industries, including by way
of sector-specific plans;
To reform the tax system;
To facilitate increased exports; and
To develop a more outward-oriented economic structure.
We will continue, in the months and years ahead, to put the
necessary policies in place on a broad front : general
policies in respect of the Budget, interest rates, ongoing
restraint in incomes claims etc and more specific policies
addressin~ g more directly the efficiency of industry.
These policy initiatives, combined with modest wage
outcomes, are in themselves crucial. But they are all the
more potent in the context of the substantial real
depreciation of our currency which has occurred since the
end of 1984.
No single element of this mosaic would have been sufficient
on its own. The effects on our trading performance build
cumulatively and reinforce each other. They take time to
have their full impact.
The purpose of this meeting today is to address yet another
element of the mosaic which will determine our living
standards and job prospects in the longer term.
To preserve for the future the beneficial effects of the
depreciation we, as a community, need to look carefully now
at the way in which work is organised and managed so as to
remove barriers to making the best use of our resources.
And it is possible to do that. today in the knowledge that
the community as a whole and the workforce in particular
is ready to contemplate and participate in the necessary
processes of change.
From my private discussions with representatives of each of
the groups here today I know it is common ground that a wide
range of work and management practices have developed in
less demanding times which are no longer affordable and
which cannot be justified on grounds of efticiency or
safety. Many of these practices are industry or plant specific.
They can involve, for example, artificial restrictions on
the use of skills and training, artificial restrictions on
the use of productive time, excessively bureaucratised
management structures inse-nsitive personnel practices or
manning levels inappropriateeto modern conditions and
technologjy.
Their range and diversity suggest that it would not be a
constructive use of time, on an occasion such as this, to
seek to codify or catalogue all of the possibilities.
Moreover the significance of any given arrangements will
vary as between plants.
And on that aspect it also seems common ground that this
meeting, being a meeting of peak councils, cannot resolve
issues which in their nature require detailed knowledge of
particular industries, enterprises or plants.
Rather the objective today is to discuss how best to
encourage in practice the most productive dialogue between
those able to effect change in ways, moreover, which can
maintain the momentum for change and reform even as
productive technologies and trading conditions continue to
evolve over the years ahead.
The community is looking for leadership from this group and
firm evidence of commitment on both sides to the reforms
which are widely recognised to be necessary.
It needs to be recognised that all aspects need to be on the
table for discussion between the relevant parties as I
said last week when announcing this meeting, that means " all
aspects of work and management practices within the overall
context of seeking to achieve the optimum investment and
productive strategy calculated to meet the economic
challenge facing this country."
I acknowledge that there are many examples of unions and
management which have worked quickly and co-operatively over
recent years to reform the way work is organised.
4.
Five caz-companies, for example, are now using Just In Time
methods of inventory control. This innovation has required
significant flexibility from and the support of workers on
the shop floor. And workers in the industry have also
co-operated in a new approach to quality control which has
required upgraded skills, greater responsibility and revised
work procedures on the shop floor. Workplace reform is also
a major element of the Steel Plan and of the recently
announced Heavy Engineering package.
These are examples in which Government initiatives at
industry level have provided an important catalyst for
change. There may be other cases in which established
consultative forums at industry level could provide a
further focus for worker and management initiated reviews.
However significant improvements in procedures have also
been initiated in the recentpast at plant level. To quote
but three examnples:
Larger companies in particular are increasingly
implementing flatter management structures and the like;
In the aluminium industry, which operates in an
intensely competitive world market, some companies have
achieved significant cost efficiencies by designing, in
conjunction with workers, broader job structures,
including through the introduction of so-called
semi-autonomous work groups ( in some cases with
improvements in pay under the C A Commission's work
value principles); and
In sugar refining there has been progress towards
multi-skilling in some plants which has led to
significant reductions in overall costs, more satisfying
job profiles for workers and greater job security for
the remaining workforce.
In each case these developments have required a major change
in attitudes, a new way of looking at what we do and the way
we do it, and a willingness to consult and to adapt.
Frequently, agreement to proceed to new arrangements was
forced by a market crisis in other words the stark reality
of the choice to become more productive or to become passe.
But not all segments of Australian industry have been as
keenly exposed to harsh world conditions. And, too often,
progress has been slow.
In our new straitened national economic circumstances the
need now is for all industries especially but not
exclusively those exposed to world trade to begin
seriously to review workplace procedures and most
importantly, to do so in a timely fashion.
It will be too late to act if we wait until an industry is
in deep crisis. The time to improve our performance overall
and to claim increased market share is now. As I ' have said
on other occasions, our competitors every day produce
quality products, on time and to budget and so must we.
Indeed many of our foreign competitors have been improving
their trade performance by improving their work performance
for years and in many areas we have some catching up to
do. In calling this meeting it has not been my intention to
imply that work and management practices are the only or
indeed the only remaining area of our economic performance
in need of reform. That clearly is not the case.
But while not the only step reform in workplace procedures
is undoubteuly the major next step in the broad agenda for
revitalising Australian industry which we initiated three
years ago. And it is for this reason that I have suggested
that most a ention be directed to this aspect today.
Having convened this meeting the proper further role of
Government in securing generalised workplace reform is of
necessity limited. However the Government is ready to
provide whatever useful assistance the meeting may later
consider necessary.
And, of course, the Commonwealth is prepared to address
these matters, constructively, within the public sector.
For example some progress has already been achieved in
respect of the Australian National Line. I will be
announcing significant reform of the Australian Public
Service tomorrow, which will contribute to greater
efficiency in the public sector. I have also asked
responsible Ministers to take up these general matters with
public enterprises within their portfolio.
History has shown us clearly that change is most readily
effected when those who will be affected by it have a clear
appreciation of the necessity for reform, the steps to be
taken and the longer term benefits to be achieved.
I applaud the constructive and co-operative spirit i. Ln which
the representatives of business and unions have approached
this meeting today. Obviously we cannot hope to make
long-lasting progress in this area except by processes based
on goodwill., co-operat ion and consultation.
This meeting today is a necessary first step in giving
greater impetus and focus t~ o such processes. Your example
here today and the degree of your commitment to facilitate
co-operative change will piovide an important signal to the
many others who have to come after you. Because, as I said
last week, to succeed T-here must be others in unions, in
firms, in industries prepared to take up the challenge and
carry those processes forward.
6.
I have no doubt that some energy, foresight and co-operative
leadership today will greatly assist Australia onto the
course of the highest possible rates of sustained growth.
You all, of course, have a commitment and obligation to your
immediate constituencies. Let us all remember that we all
have an enduring obligation to future generations of
Australians the obligation to pass on a country best
equipped to meet the remorseless challenges of an
increasingly competitive international environment.
L