CHECK AGAINST DELIVERY EMBARGOED UNTIL DELIVERY
SPEECH BY THE PRIME MINISTER
INTERNATIONAL METALWORKERS' FEDERATION
ASIAN REGIONAL CONFERENCE
SYDNEY 25 JANUARY 1989
It is a pleasure indeed to address the Asian Regional
Conference of the International Metalworkers' Federation and
to welcome its delegates to Australia.
You are welcome for many reasons.
The international trade union movement of which you are a
significant part has played a leading role in protecting and
advancing the interests of the men and women who make up the
workforce of the global economy.
In our region, trade unionism has been an important force
for decency and the equitable sharing of the fruits of our
massive economic growth. No doubt one of the challenges you
will be discussing is ensuring trade unions in the region
keep pace with the economic growth.
Internationally the trade union movement has been at the
forefront of many of the crucial struggles being waged for
human rights and the rights of trade unionism including,
not least, in Poland and South Africa.
Fortunately, Australia does not have to tackle domestically
the question of fundamental human and trade union rights.
Our most pressing concerns have been economic issues.
Within Australia, at a time of unique pressures on the
Australian economy, the trade union movement has been an
essential partner of the Government I lead in equipping the
Australian economy for the future.
As a result of this intimate partnership, Australia is
better able to face the challenges of competing efficiently
on the world's markets. In particular, the partnership has
created job opportunities for almost one and a quarter
million Australians who would otherwise be unemployed.
Australia has a rich trade union heritage. Australian
workers in the middle of the last century created one of the
first, and one of the most successful, trade union movements
in the world. Among its early pioneering achievements in
improving the wages and conditions of Australian workers was
the famous landmark victory, won in this city and in
Melbourne, of the eight hour day.
During the 1890s, an era when the Australian economy saw
boom and bust, strike and lockout, Australian workers made
the historic decision to advance their goals through
political as well as industrial means. And so they founded
one of the world's first labour parties the Australian
Labor Party.
It is as leader of that Party, as a proud and committed
trade unionist, and as Prime minister of my country that I
welcome you to this country and to this city. I am sure
that you will find in Australia a positive and constructive
atmosphere for the deliberations you will be undertaking.
My friends,
You are meeting at a time of great change in the Australian
economy and in the economies of our region.
The significance of the Asian-Pacific economies for world
economic growth has become a well known international theme.
This is hardly surprising given that the region accounts for
around 40 per cent of world output, some 35 per cent of
the world's exports, and is home for some 15 per cent of our
planet's population. Those figures exclude China, and of
course the transformation underway in that vast country
offers even greater opportunities for growth in the future.
In recent years, economic growth in a number of
Asian-Pacific countries has grown some two to three times
faster than the average for OECD countries.
Trans-Atlantic trade has now been outstripped by the
movement of goods and services around the Asian-Pacific
region.
The economic importance of the region for Australia has long
been apparent although it is true to say that for many
years we were simply not equipped to take advantage of the
opportunities that lay before us.
Indeed, when my Government came to office in 1983, we
inherited an economic crisis that was, in large part, the
result of a failure to equip ourselves to compete in the
world's markets, we had developed neither the flexible
institutions and industries, nor the outward looking
attitudes that are necessary if we are to contribute
competitively to the economic dynamism of the region.
We had become accustomed to our over-valued and unresponsive
exchange rate; our antiquated financial system; an
over-protected and inward looking manufacturing sector; a
wages system which perpetuated inflationary pressures; an
industrial relations system locked into expensive and futile
confrontation; and an education system failing to meet the
needs of our most potentially productive workers.
Today, Australians can look back on more than half a decade
of systematic reform in each of these areas. We have
floated the dollar, deregulated the financial system, cut
protection, addressed the needs of some industries directly
with industry plans, created a new era of industrial
relations co-operation and are fundamentally reforming the
education and training system.
I do not recite these facts to pat myself or my Government
on the back or for that matter to try to pretend that the
reform process is complete.
My purpose today is not to list the end products of our
reform program but rather to discuss the equally important
and, for an international trade union audience, the more
relevant methods we have adopted to achieve those goals.
Most fundamentally, I want to show what can be achieved when
Governments and trade unions work together in the interests
of all their constituents and members.
For I believe the methods and procedures we have pioneered
in Australia serve as a distinguished international model in
these times of economic uncertainty.
The principal element of our strategy for economic reform
and reconstruction has been the Prices and Incomes Accord
which was agreed between the Australian Council of Trade
Unions and the then Labor Party Opposition prior to the 1983
elections. The Accord was based on the realisation by both the union
movement and the Labor Party that the economic problems
facing the nation could not be solved in the old ways of
confrontation and division but required instead a concerted
effort to build a new and productive national consensus.
We have been able to act upon the great truth of industrial
relations and, indeed, of economic management in general.
Where sectional interests are pursued, sectional gains may
result. But whatever these gains, they will be fewer than
the gains that flow from a consensus approach where national
priorities are set and pursued on a co-operative basis.
The Accord has allowed us to embark on a strategy which has
produced economic achievements of fundamental and lasting
importance not only to trade unionists but to all
Australians.
Nowhere is this better illustrated than in our record of job
creation. More than 1.2 million jobs have been created in
the Australian economy between April 1983 and December 1988.
This is a rate of job growth about twice the OECD average.
This tremendous achievement was the direct result of the
conscious decision by the trade union movement, through the
Accord, to accept wage restraint.
It would have been easy for trade unions in 1983, faced with
the crisis of recession, vanishing job opportunities, bleak
investment prospects and confrontationist industrial
relations policies, to have pursued their traditional
priority of assisting its employed members through campaigns
for wage increases.
But it is to their lasting credit that they eschewed that
traditional, but in that case profoundly inappropriate,
policy and instead applied themselves to the essential
national task of increasing economic competitiveness and
creating new jobs for those without them.
This has been achieved while industrial confrontation, which
under the previous Government caused so much bitterness at
home and so much damage to our reputation abroad, has fallen
by nearly 60 per cent.
At the same time, an integral part of the Accord was the
recognition that real wage restraint should be compensated
through real increases in the social wage. My Government is
proud that its social justice record is second to none.
Through major increases in Government assistance for low
income families, real increases in pensions and benefits,
reforms of the education system, the restoration and
improvement of Medibank, and assistance for first home
buyers, we have significantly eased the burden of restraint
on those who are most in need in our community.
Underpinning all this have been our reforms of the taxation
system, which have ensured that those who benefit from the
returns to capital pay their fair share of the tax burden,
and that other forms of non-wage income no longer escape
taxation. As a consequence, we have been able to reduce
taxation for ordinary wage and salary earners. Over the
next couple of months we will be negotiating, with the trade
union movement, a wage/ tax trade off which will deliver
substantial tax relief targetted in the first instance to
low and middle income earners.
Let me add a further point that is too often overlooked,
especially by our political opponents. Real wages have
fallen, causing job growth, dampening inflation andcFoosting
our international competitiveness. But real disposable
income has risen indeed it has risen by 6.7 per cent per
head since T รต TTT This has come about mainly because many
more people have jobs, and benefit levels have increased.
In other words, the Accord has ensured that where sacrifices
have been necessary, they have been shared equitably, and
when, as has inevitably happened, those sacrifices have
borne fruit, their benefits have been shared equitably.
Constructive government-union relations in Australia are now
a fact of life. They are an essential element of a wider
network of nation-wide consultations involving business and
community groups which are essential to the resolution of
the important issues of economic management.
Such processes have helped create, in Australia, a community
more prepared to accept change, including changes which
sometimes, on the face of it, may seem to run counter to the
immediate interests of some of its members. Where this has
happened, such as in our reductions of industry assistance,
those who are suffering personal loss in the interest of
greater community gain have been compensated.
This consultative approach has laid the foundations for
Australia to undertake the difficult but utterly essential
task of economic reconstruction.
For too long in the easy decades after the Second World War,
Australia was content to earn a relatively high standard of
living through reliance on seemingly limitless production of
those abiding features of the Australian physical and
economic landscape: wool, wheat, meat and minerals.
We did not attempt seriously to diversify our economy into
manufactures and services, preferring to rely instead on
building walls of protection behind which inefficient local
producers could cater for the basic needs of our small
domestic market.
Such policies were called, paradoxically, industry
assistance schemes. In fact of course they provided
anything but assistance to an economy that should have been
trying to compete on world markets instead of shirking the
challenge. Their legacy was a less flexible economy, too reliant on
protection and regulation, too insulated from the dynamism
of the regional and global economies and, as we experienced
in 1985-86, too vulnerable to the fluctuations that bedevil
commoditiy markets.
The creation of a more competitive, self reliant economy
will depend on a commitment, by the whole community, to
reform those policies that impeded adjustment.
While Australia's exports of manufactured goods as a share
of total exports are far below that in world trade
generally, signs abound that the Australian economy is being
successfully restructured.
6.
In our last two completed financial years, 1986-87 and
1987-88, manufactured exports increased by 32.5 per cent and
9.4 per cent, and services exports grew by 9.4 per cent and
13.9 per cent.
Business investment is now growing strongly, recording
13.7 per cent growth in 1987-88, with the 12 per cent growth
expected in new business investment in 1988-9 being
consistent with the latest available ABS investment
expectations data.
Not surprisingly, our domestic political opponents, under
whose administration in the 1950s, 1960s and 1970s these
fundamental restructuring problems were ignored or
exacerbated, seek to misrepresent the magnitude of the
changes that are underway.
One particular line of attack of late has been to cite
Australia's allegedly low productivity. Their so called
' labour productivity' figures are derived by simply dividing
the economy's output by the number of employees. But with
Australia's rapid rate of employment growth, we are at last
using our capital stock more extensively. When this
happens, ' labour productivity' is very low, but of course
' capital productivity' is high. There are major
difficulties in accurately measuring capital, so ' capital
productivity' is rarely cited.
Further productivity gains will follow our comprehensive
program of micro-economic reforms.
When you compare the eight years in power of the
conservatives with the achievements in micro reform under
Labor, the hypocrisy of the Oppositions's alleged concern
about productivity becomes even clearer.
Why didn't they deregulate the financial system, lower
tariffs, end the two-airline policy, lessen regulation in
communications, lower crippling marginal tax rates, improve
education retention and free up unnecessary controls on
Government Business Enterprises?
With the same drive that is transforming Australia's
industrial base, the partnership between the Labor
Government, the trade union movement and employers is now
being harnessed to another fundamental task: award
restructuring.
What better proof could be sought that Australians have
indeed learned to work constructively together than their
determination to make a success of award restructuring?
And what better evidence of the advantages of this consensus
approach could be sought than the productivity gains that
will result from this process.
Put simply, award restructuring is a process which, at the
end of the day, will help create a more flexible, better
trained and more appropriately paid workforce.
In the key Metal Industry Award, for example, there are
currently 348 separate classifications of work. This will
be reduced to some eight or nine skill levels. So for the
170,000 workers employed under this award, there will be
established clear career paths that offer the incentive of
promotion, on the basis of relevant, specific and accredited
training in new skills, to employment that is more enriching
both in the sense of job satisfaction and in its literal
meaning of being better remunerated.
In this audience in particular, I pay unqualified tribute to
both the employers and the unions in the metal industry who
have already advanced a long way down the path of
negotiating these changes.
Both the Metal Trades Industry Association and the metal
industry unions have released detailed proposals for a new,
restructured award and it is pleasing to note the
considerable amount of common ground between them.
Their lead is being followed in other industries, giving
real momentum to this crucial task.
Award restructuring is not some fiddle by the so-called
Industrial Relations Club to provide an under-the-counter
pretext for wage increases.
The National Wage Case decision of August last year made
wage increases conditional on fundamental reviews of awards.
It is a fundamental change in the structure and operation of
awards which will yield real increases in productivity.
The increases will in some cases be immediate, and in some
cases take longer. But in all cases they will be enduring.
And in all cases they are being achieved, not through
confrontationist tactics in which everyone is the loser, but
through sensible and constructive negotiations in which
everyone, in the industry and in the economy more generally,
is the winner.
My friends,
I have spoken today largely about the Australian economy and
the vital role of Australian trade unionists in managing our
economy. I am of course proud of that role and I pay unqualified
tribute to the leaders of the Australian trade union
movement for their vision and hard work not only on behalf
of their members, but on behalf of all Australians.
The example of the constructive Government union
relationship in this country provides an instructive case
study for comparable nations that are seeking to improve the
well-being of their citizens through sustainable long term
prosperity. In other words trade unions have the capacity and the
responsibility not only to ensure the equitable sharing of
prosperity within a community but to generate that
prosperity in the first place.
That is why we must never slacken our efforts to see the
spread of free trade unionism throughout the region a
confident, compassionate and effective trade union movement
that can help in the vital international task of building a
safer and a more peaceful world.