PRIME MINISTER
FOR MEDIA 20 AUGUST 1991
In the context of the Budget, it is appropriate that the
Government announce the agreements reached with the ACTU at our
meeting last Thursday.
1, together with the Treasurer, the Minister for Finance and the
Minister f or Industrial Relations, met the leadership of the ACTU
to discuss a range of issues related to economic policy and the
future of the wages system.
We reached specific understandings on superannuation and wages
outcomes. These are recorded in the Attachment to this release.
Further consultations are taking. place between us on the future
of the wages system as part of our preparation of submissions for
the forthcoming review of the National Wage Case principles.
The Government and the trade union movement are committed to
achieving greater flexibility and decentralisation in the wages
system through the introduction of productivity-based, enterprise
bargaining. This is an essential element in our strategy to make
the Australian economy internationally competitive.
As we move in this direction, aggregate wage outcomes will
necessarily become less certain, depending on the extent of
workplace bargaining based on -achieved productivity. In this
difficult transition, the close relationship this Government
enjoys with the trade union movement will be vital in containing
inflationary pressures and ensuring that real productivity gains
are secured.
04r joint commitment to work towards an aggregate wage outcome in
the order of 5 per cent for 1991-92 recognises the uncertainties
but maintains the parties' commitment to the orderly evolution of
the wages system.
To finalise the Budget estimates, we have had to settle on a
particular figure for National Accounts based average weekly
earnings for 1991-92. The Government has adopted the figure of 4
1/ 2 per cent as the most app~ ropriate for these purposes.
The trade union movement has confirmed its commitment to join the
Government in working to make low inflation a permanent feature
Of the Australian economy, recognising that its members have
nothing to gain from a return to higher rates of inflation.
These agreements deliver the major outstanding element of Accord
VI, while affirming our commnitment to continue to work together
to improve the performance-of the economy and ensure it delivers
benefits to all Australians. 739
Attachment
Agreemkent Between The Government And The ACTU
Wages outcomes
The more devolved wages system must necessarily involve a
degree of uncertainty in assessing the aggregate wage
outcome depending as it does on the extent of workplace
bargaining based on achieved productivity.
The parties agree to work towards an aggregate wage outcome
in the order of 5 per cent for 1991-92. The Government for
its part believes there is the prospect of the aggregate
outcome coming in somewhat below this figure.
In respect of 1992-93 and future years, the parties agree to
work towards wage outcomes consistent with keeping
Australia's inflation at levels comparable with those of our
major trading partners.
Superannuation As part of its retirement incomes policy, the Government
will legislate for the phased implementation of a minimum
level of employer superannuation support of 9 per cent by
the year 2000.
From 1 July 1992, subject to a threshold that omits small
payments and very short-term employment, the minimum level
will be: 5 per cent of ordinary time earnings for employees
of employers who have annual payrolls larger than
$ 500,000; and
3 per cent of ordinary time earnings for other
employees.
The Government will provide for the gradual increase in the
prescribed level of superannuation support having regard to
the schedule published in the 1991-92 Budget Statements.
This will form the basis for the broader community
discussion on the implementation of these measures.
Improvements in superannuation will be taken into account in
future Accord negotiations.
Consideration will later be given to ways, using employee
contributions and tax cuts, of increasing the minimum level
of superannuation support to 12 per cent by the year 2000.
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