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PRIME MINISTER
TRANSCRIPT OF THE PRIME MINISTER, THE HON P. J. KEATING IMP
AND THE PRESIDENT OF THE ACTU, MR MARTIN FERGUSON, PRESS
CONFERENCE, PARLIAMENT HOUSE, 22 JUNE 1995
E& OE PROOF COPY
PM: Well, here it is, here's another one. Number eight, four years of low
inflation, four years of continuing low inflation with a two to three per
cent inflation commitment in there by the ACTU and the Government.
That means another four years of economic growth. It means another
four years of decent rates of employment. It is the difference between
us and the Coalition about how we run Australia and how they would
run Australia. The difference between Australia and most other OECD
countries because what you have seen from the Government and the
ACTU now In the last month or so, certainly in the last six months, is
appropriate weight on monetary policy, appropriate weight on fiscal
policy and appropriate weight on wages policy. A bit on monetary, a
bit on wages, a bit on fiscal. If this didn't exist, it would be all on fiscal
and all on monetary and as a consequence we would be like a lot of
other OECD countries, we would be sitting there as Robert Reich, the
American Labour Secretary, said, with that rotten choice between high
employment growth and lousy wages or high wages and lousy
employment. We have come right up the middle and the Accord has
taken us there on ever occasion.
This Accord, and it is I think, worth recording just over the years what
we have done with this instrument, this point of agreement with the
work force: the stabilisation of the economy in the early 1980s, the
Medicare adjustment, the productivity and skills formation Accord of
the middle to late 1980s, the enhancement of the change to award
restructuring and the enhancement there of skills, the devolution of the
wages system to an enterprise bargaining system, Accord Mark VII
which had the focus on jobs and employment and now this one Accord
Mark Vill which is, as we say, sustaining growth, low inflation and
fairness.
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And, Isn't it a maturity of Australia or of the great trade union
movement of this country, that it leads the anti-inflation constituency.
It Is the key player in the anti-inflation constituency. Not business, but
the Australian Council of Trade Unions and the trade unions
themselves they with the Government in this Accord.
So, what we will see out of this is what, can I say, the Liberal Party
could never deliver because they never want to. They never want to
talk to the workforce and they never want to talk to trade unions. What
they can never deliver is low inflation. Howard could never deliver it
as Treasurer, would never deliver it as Prime Minister low inflation,
sustainable rates of economic growth and good rates of employment
growth. We have got another target in here of 600,000 jobs over the
life of this document after having reached the other target of half a
million jobs in two thirds of the time in Accord Mark VII.
So, I would like to, again, just say how pleased I am to be able to be
doing this with Martin Ferguson. How delighted I have been with the
spirit of co-operation and the democratic participation of members of
the work force and trade unions in this process and to think that we
could come up with, again, something of this weight and quality when
we see last week how the Coalition were treating us with their
document about regional development. Announcing things that they
have no intention of ever implementing. Compare the immorality of
that with the high principal and morality of this and that is all the world
of difference between this Government and our arrangements with
ACTU and the Coalition.
I'll invite Martin to add to my remarks.
MF: Thank you very much Paul. As Paul has said, it is 12 years and our
engines are still running. I must say, what more does the Australian
community want? Sustaining growth which is about a better Australia,
low inflation and fairness. We are pretty proud of this agreement
because it effectively means that Paul Keating and the Government in
association with the union movement is about leadership, but more
Importantly, responsible leadership.
What are the key cornerstones of the agreement? A decent wages
system. We're going to deliver a competitive Australia, enterprise
bargaining going forward, more and more enterprise agreements. We
also understand and, I suppose, it is the Labor way, it is about a sense
of fairness at work and in the community and at home. So, we have
locked that up once again.
In essence, Australia knows that through almost to the turn of the
century, what the wages system is. It knows that enterprise bargaining
is going to go forward, but it is going to go forward in the context of
delivering to the lowest paid, and that is about fairness. But also
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delivering on the jobs front 600,000 additional jobs and, I think, that
is pretty important because that is about economic prosperity for
Australia and also fairness. There is nothing better for an Australian
working person than a job.
But, I also say, it is about social justice. I go through the agreement, I
have a look at maternity payments, think about the needs of families. I
think Accord Mark VIII is family friendly because what do families
want? They want a decent social safety net and they want jobs and
they want safety net wage increases. So, to my way of thinking, we
hold our head proud today as a union movement. It is 12 years on. It
is a better union movement today because of the Accord process. It is
a better Australia today because of the Accord process. Because
without the Accord process, you know, John Howard couldn't deliver
this. We offered it to him once or twice and he ran away from it. He
was afraid of making the hard decisions and working through the tough
issues with the union movement and with the Australian community.
So, it is on the table. It is out there for people to debate. The same
way in which since, you know, February 1983, we have been prepared
to sit down and work out a decent structure and put it to the Australian
community for consideration. That is about democracy. That is about
an independent Australia.
Again, on behalf of the Australian trade union movement, thanks for
the opportunity to sit down in a responsible way, make the hard
decisions again, because I think that is what Australia wants people
who are prepared to lead in a responsible way. Create jobs, lock in
low inflation and create a better work place, not just a competitive work
place, but a family friendly work place. Thanks very much.
PM: We are happy to take questions.
J: Mr Ferguson, the Accord has been negotiated without the direct
involvement of the transport sector which is industrially and
economically one of the largest in Australia. How does that effect its
validity and viability?
MF: I tell you what, there is one peak council in Australia the Australian
Council of Trade Unions and I think, there are a few differences with
the Transport Workers Union at the moment, but they will be resolved.
This agreement is not just about unions, this is about the future of
Australia. I think, working men and women and their families will
welcome this agreement. Because what do they want? They want
jobs, they want low inflation, they want decent wage agreements,
enterprise bargaining and safety net improvements, the social justice
structure. So, we are offering something of substance. I believe that
this agreement, not only will be endorsed by all Australian unions, but
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more Importantly it will be welcomed by the Australian community at
large.
J: Martin, given that we saw an 11 per cent wage rise in the vehicle
industry recently, how can you ensure a cap on wages growth?
MF: I'll tell you why, because since 1983 we have delivered on every
undertaking to the Australian Labor Government. We have locked
ourselves in, yet again, to an underlying rate of inflation of two to three
per cent. Don't worry about the outcomes. Have a look at the
productivity improvements. Have a look at the work place change.
Have a look at the reduction in industrial disputation of 65 per cent
since 1983. Have a look at in excess of 500,000 jobs in the last two
and half years. So, in essence, I say, we have shaken hands, we have
got an agreement and we will deliver. The vehicle industry workers
are entitled to nine, ten, eleven per cent, whatever they negotiate with
their employer provided they also continue to deliver as they have on
productivity.
J: Prime Minister, how do you believe the business community will
respond to this initiative?
PM: Getting the trade unions and the Government to commit themselves to
two to three per cent inflation over the period, I mean, what more could
they ask for, with all the other commitments to economic growth? And,
as you know, I met with the Metal Trades Industry Association as an
example of one group earlier this week on Monday who wanted to be
part of this process, who wanted to talk about it and, I think, you will
find that that body, a lot of the issues that they propose are actually
incorporated here. So, I think, business is going to treat this
tremendously well.
Frankly, what other, I mean, there would be no other government/ union
workforce relationship anywhere in the 27 member states of the OECD
where a thing of this comprehension and detail and strength
commitment would be available. The whole movement towards a
flexible enterprise based bargaining system, which is allowing the
productivity increases Martin speaks of, which is protecting them now
at the low inflation rate that is, the contestability of the Australian
market the fact that it is now a contestable market with low tariffs and
competition policy and where we are seeing shifts in productivity after
having got the aggregate wage movements in the 1 980s, to getting
within sector wage movements now flexibly, but with the safety net. It
is a model where virtually, because the Accord and wages are holding
such a strong part of the whole economic adjustment, this burden has
lifted from businesses back. Otherwise they would be doing it at the
company level and that is why, by and large, I think they will support it.
I mean they know one thing for sure. They know the Coalition would
never have proposed this. Do you remember this? Let me remind you
23. Jun. 95 0: 07 No. 001
of John Howard's Industrial Relatiurs Bill. We were going to see it
beforo the last election. Do you remember that? Then we were going
to soc it two days before the last election. Do you remember all that?
We never ever saw it. It never, ever appeared and they know that only
Labor and the unions can basically give Australia a low inflation rate,
without a draconian monetary policy that crushes tile life out of the
economy. And, while some people in business may skip down to the
local polling booth to vote Liberal, they always hope that the Liberals
don't make it and that this sort of sense prevails. And I think they will
keep on hoping.
J: Prime Minister are you promising that when nearly 600,000 new jobs
are delivered, there still won't be upwards of 800,000 people out of
work?
PM: We are seeking to get to 5 per cent unemployment by the end of the
decade. And. as you know, the success we had with Accord Mark VII,
we had a 500,000 target in there. We have now had 630,000 jobs
since the election 630,000 We reached the 500,000 target in
two years and we have had the largest fall in unemployment, since we
have been keeping the records, In the last twelve months. One of the
things that made it difficult lu get to 5 per cent In the 80s. despite the
very high rates of employment growth, was that we couldn't get into the
long term unemployed. But Working Nation actually lets us through
the case management and the job compact, actually get the long term
unemployed back into the mainstream of the workforce. And that is
why, I think, we have been so delighted to have a quarter of this years
jobs go to long term unemployed people. So it means as we come
down that we won't reach that sort of, if you like. floor at around
6 per cent, or 6 1/ 2 per cent, we will be able to break through the floor
this time with the Working Nation type initiatives to get within reach of
that 5 per cent unemploymont rate.
J: How can you do that with the levels of growth that are forecast in the
Budget?
PM: Well we made it clear in the Budget Papers that these are over tho
cycle consistent with getting there. I mean we are still talking about
3 3/ 4, 3 1/ 2, 4 per cent GDP growth.
J: You have gut two levels of safety net rises here and they are timed
with the superannuation levy. What is the reason for the two levels
and how does that gel with the super payments.
MF: I'll tell you what the Accord is about, It's about fairness. In an
enterprise bargaining situatiur a lot of workers can do better than the
safety net because they can deliver on productivity. So what we have
effectively said in this Accord agreement is that we really want to share
the benefits of growth across the whole Australian community. So we
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have created an opportunity now have a look at the different figures
but also the issues that go to the determination of these matters.
We are committed to trying to deliver a bit more to the lowest paid in
the community. John Howard is not interested in that. Go and have a
look at what he suggested, as you know, in Victoria. He is suggesting
an all-up hourly rate of about $ 9 per hour for an unskilled worker.
No overtime or shift penalties. So we are not just committed to
maintaining the safety net and a decent award structure. When the
opportunities permit, we are going to share the benefit of growth to the
lowest paid in the community.
PM. Yes, let me just add to that. That we have seen a level of profitability
almost now at unprecedented levels in the economy. We have seen
economic growth of the order of 4 to 5 per cent for the last few years.
In such an economy, it Is right that we support the people who are
living on award minimums, or award rates who are not picking up any
additional over-award payments. And not only is that there, but you
see on page 6 of the document that we, again, are opposed to any
actions to undermine the efficiency of the arrangements and the
no-disadvantage test. See, you understand what the Coalition are
about, they are saying people can have a choice of staying in the
award system. But if they get out of it, they lose all the award
protections. 1.6 million Australians change jobs a year. So in
three years, basically you have got the largest part of the workforce,
over half the workforce, will have already lost the award protections.
So, as Martin just said, whether it is overtime or shift penalties, or meal
allowances, they go by the board and you get back to base rates.
So what we are saying here is because the economy can afford it, let's
put more in there for people just on minimum rates, award rates, and at
the same time let's make clear the importance of the no-disadvantage
test.
J: Mr Ferguson do you believe industrial relations will be as big an issue
at the forthcoming election as it dominated the last one to some
extent?
MF: Yes, I think it will be because I think Australian people acknowledge
that we have come a long way in the 12 years. But, you know what,
we have held Australia together and we have delivered economically.
It is a better Australia. They also want a sense of security as we go
forward. They know what the industrial relations system is doing in
Australia at the moment, it is delivering where it counts at an
enterprise bargaining level. They also want a decent social safety net
in the form of the award structure and safety net increases. So I think
it will be an important issue because it is about Australia going forward
In a sensible and fair way. We don't want division and a lack of a
sense of cohesion and commitment to where we want Australia by the
turn of the century.
23. jun .95
7
J: Prime Minister I have heard it said that you weren't initially a very
enthusiastic supporter of the Accord back in the early 80s. What is it
that has sort of swung you around to it and how important do you think
the Accord has been to you in all the elections that Labor's won?
PM: Well I think we started with what was going to be a one-off adjustment
to wages through the Medicare adjustment and that was, in essence,
about the totality of it. Where I think what has happened is we have
realised that people did know that the 1 970s and the early 1980s were
a disaster for Australia. John Howard had 18 per cent wages growth In
1980-81 18 per cent. We had a recession In 1982-83 and we came
out of it with 11I per cent inflation out of the recession with 11 per cent
inflation. Investment was smashed, employment had been dashed,
unemployment was in double digits and growing. So there had to be a
better way. And I think what has happened is with a lot of goodwill, on
all our parts, we have realised we actually had an instrument we could
do a lot with. I mean I think one of the things that matters in this Is
trust. There has to be a bit of trust between people. I mean the
Accord has always delivered. The ACTU has always delivered on
wages, always. We delivered on inflation. The Government has
always delivered for them. So when I say something to
Martin Ferguson, as Leader of the Government, or to Bill Kelty and
they say something to me, that's it. I mean we believe them and they
believe us. And, therefore, with that lubrication you can then go down
. look at the paths we have been down. I mean the Accord is now
doing things we could never have envisaged. You know, the change
to the award system, the movement to an enterprise bargaining
system, the development of occupational superannuation for the whole
workforce, meeting the terms of trade adjustment of the middle 1 980s,
the massive employment imperatives of three years ago. And, now,
we are talking about, you know, low inflation. I mean what
commitments do you get from the Business Council about low
inflation? Any restraint on executive salaries? Any restraints on
profits? I mean have they got a document that is headed " Sustaining
Growth and Low Inflation"? I mean when they are giving something
away, or they are making a commitment? Well, of course, they
haven't. I mean this Accord has been such a flexible and good thing
and it has been made to work by imagination and by trust and by
consultation and by a sense of democracy in the negotiations with the
workforce and I think this is the point. I mean the Coalition, they
regard this as poison because we have won, frankly, the industrial
debate in every election since 1983. And we will win it again. And
they know that. They know that and they regard it as poison because
In the end all they want to do is hop into working people. They want to
hop into working people, they want to take away the no-disadvantage
test, they want to push people out of the award protections and they
want to cut their wages. That is what John Howard has always been
about. He has opposed every wage increase since 1981, bar the last
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two safety nets of ours. He has supported, weakly on the side, the
payment of $ 16 since 1981.
J: Mr Ferguson how do you explain the decline in union membership over
the last 12 years?
MVF: We, as a union movement, have failed to put our own house in order.
In the growth areas of Australian employment, there is no running
away from it, in the service sector, there was room for improvement
and that is what we are about now. We have put in place a
recruitment strategy and we have committed resources. So I am not
running away from that particular issue. But, I'll tell you what, we also
understand what working people want and working people in those
growth sectors want jobs, a low rate of inflation, the protection of the
award safety net system, in association with a decent social safety net.
So, yes, union membership is down. But I'll tell you what, we have
delivered on every other front, we have met every undertaking to the
Commonwealth Government.
J: Could employers be included formally in Accord Mark IX?
PM: They didn't want to be included. The MTIA said we want to be part of
the process and we said " fine, come and see us, have a talk".
They did. They brought a document to us. We had a long discussion,
but they made the point they don't want to be a formal part. They want
to put a view. Because they know that, in the end, the burden of
responsibility that falls on the peak body of th * e workforce, the ACTU, is
not their responsibility. You know, so they can be part of the process,
but, in a sense, they are not the ones who decide the issue about
wage outcomes. But being part of the process isn't, in a sense, being
in the process and that is what they want to be. In it, but not
essentially a formal part of the documentation.
J: Mr Ferguson, it's been suggested that some of the... . for most.. for many
low-paid workers, the subsequent pay increases that you're
announcing today will actually be eaten up by the superannuation. If
that's right, don't you expect them to be rather angry about that?
MVF: No. Because I think you don't understand the support out there in the
community for the development of a decent long-term retirement
incomes policy. Working people want access to superannuation it
was the Accord in the 80s that gave them access to superannuation. I
tell you what John Howard went missing when we wanted to discuss
these issues. They have suddenly discovered that this is an important
election Issue this is the polling again. So I believe there is an
overwhelming move by the community to embrace the Government's
announcements on the superannuation front. I would also say that's
why we have got two potential ranges of increases. It is about insuring
that working people especially the lowest paid as we move forward,
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have access to the benefits of economic growths. So we will deliver on
superannuation, and we will also deliver to the lowest paid through the
award safety net, and decent safety net increases.
J: Can it be summed up that 19% of their income, for very low income
earners, could go on superannuation isn't that a very large whack?
MF: Well, 19% of their income a fair slice of It comes from employer
contributions, backed up by 3% worker contributions a pretty decent
offering from the Commonwealth Government. And that's what the
Accord is about it's about bundling up 15 19% superannuation, a
terrific savings pool for the purpose of investment in Australia, and
ensuring that we as a community go forward on the basis that when
you get to retirement, you can retire to some dignity, and I think that's
pretty important. That's about fairness in Australia.
J: How did...( inaudible)... in relation to interim wages to the employment
goal work, Mr Ferguson? Could it mean, for example, that if the
economy slows more than expected, through the next year, that those
safety net pay increases would not go ahead?
MF: What it effectively means is that we have committed ourselves not
just to delivering on the jobs front but also locking in a low rate of
inflation of an underlying rate of inflation over the cycle. And
they are Indicators that we are going to take into consideration when
we talk to the Commonwealth Government about the potential
implementation of the safety net Increases. And I am pretty confident
that we will deliver we delivered on jobs in the last 2 1/ 2 years, and
we delivered on the inflation front. So you know, you take us at our
word, you tell me in the last 12 years when we haven't delivered with
respect to our undertakings to this Government. with respect to the
implementation of the Accord?
J: So you wouldn't go ahead with the safety net claims if employment
growth is slow?
MF: That's not what I said. I said that we will sit down and we will talk to
the Government, in the same way which we talk in regular basis about
how we go about implementing the Accord undertakings. And we will
have regard to our achievements on the inflation and the employment
front. But you and I both know that the Union movement can influence
those outcomes, so can a lot of other groups and individuals in the
community. So, I think the message today is also " look, we are
prepared to pull our weight, but other people in the community have
got to commence to face up to their responsibilities on the executive
salary front, and associated activities". So, there it is full box and
dice on the table for consideration and debate We are committed we
are prepared to lead and make the hard decisions. Where are the
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TEL:
J: The document here says that the 600,000 jobs, Prime Minister, is an
achievable minimum are you suggesting that you might actually
overshoot the 600,000 target? And is is it possible to better the
target by 2000/ 2001?
PM: We have set the 5% target let's try and do our best with that. But we
did exceed dramatically the last target of half a million. Remember
that it was only 3 years ago in fact less, just before the last election
when Accord Mark VII was entered into. And when I came out about
negotiations, and talked about half a million jobs, we had all the cynics
saying " ha ha tell us another one". Well, we have got 630,000 jobs.
We got the half a million in 22 months. So this target here is one
which I think given the way the economy is performing a high profit
share, good levels of investment there's no reason to believe that we
can't keep on doing it. But just have a look it's been a little over a
month or so that we brought a surplus Budget in a surplus Budget. A
billion reduction In the Bond Selling program from $ 21 billion last
year to $ 6 billion this year with a long-term savings plan for the
country, which will put about a trillion dollars into the savings bank of
the country by the turn of the century by the end of this decade and
about $ 2 trillion by 2020. Fifteen percent from every person minimum
going in for every person in the workforce for their retirement. People
on average weekly earnings coming out in retirement with about
roughly a similar income in retirement. Within that short space of time,
we have now introduced this which has a commitment to a wages
system based on 2-3% inflation, the Award safety net protection's and
all the other advances in the industrial relations system, and in
enhancement of the enterprise bargaining flexibility stream. And also,
the improvements in the social wage.
I mean, I have been here for 25 years there's nothing like this under
the Coalition. What have they got? The pathetic Headland speech
which looked like it was written by a 1 st year backbencher you know,
a pathetic document. And this stuff the other day which was published
you know, from the Coalition talking about their policies ' this gives
us the flexibility of announcing a lot of major a long-term visionary
matters, but without committing ourselves to actually proceeding with
them". I mean, you know, it has become a joke, hasn't it? I mean,
there shouldn't even be a debate with the Coalition. The
Government's processes are so superior and particularly under the
Accord, with the whole workforce there is no discussion. If you jokers
didn't want a contest, there wouldn't be one whatsoever. There is just
policy mulch on the Coalition side, and rampant dishonesty. Imagine
sitting in a meeting where you could see a sleazy document like the
one like they produced lay on the table imagine that in a Labor
Cabinet, compared to the quality and morality and commonsense of
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J: Prime Minister, does this document mean that you are going to an
election campaign promising to double the maternity allowance in the
next term?
PM: No. We have set an objective there. Again, if you look at what we did
superannuation we have said that, with super in 80s, we want to
move towards a much better provision of income and retirement for
working people. And we started off with then we got it to and
then we started moving towards and we got the SGC In, and we
gradually rattled our way with economic growth and with economic
capacity, up towards and now to 15%. We do things like this you
have seen the advances with the Family Allowance Supplement: we
started at a certain level, we improve the coverage, we lifted it to other
levels. That's what we are going to do here with the Maternity
Alowance we have started with 6 weeks, and we say on the
document that we will be reviewing the allowance during the life of the
Accord with the aim of improving it as economy and budgetary
circumstances permit.
J: Could you be announcing the first adjustment of that in an election
context?
PM; Well, as economic and budgetary circumstances permit.
J: Mr Keating,.. ( inaudible).. what do YOU see as the major constraint on
achieving this jobs growth... .( inaudible)
PM; What really you are seeing today is you are seeing is the whole labour
equation in the economy committing itself to that is, the l-a-b-o-u-r
side of the equation committing itself to a system based on inflation of
the order of That really means that our core competitiveness is
going to be maintained. That means we are going to have good
productivity growth in the economy, and hopefully, decent profits. And
hopefully from that, good levels of investment we are certainly seeing
it now. So, I don't think there is any problem in us believing that we
will see that reflect itself well, well and truly in jobs. Now, we are back
to, you know, a sustainable rate of economic growth 3.7% in the last
year in the National Accounts. You saw the Budget forecasts for the
next couple of years, and the constraint we have had with the Current
Account Deficit you can see going Into place there a 4 percentage
point of GOP change on fiscal policy and a 2 percentage point of GDP
change on superannuation between now and the end of the decade,
and a 4 percentage point change on superannuation between now and
the year 2020. The Current Account problem is 2 1/ 2 percentage
points roughly of GDP, so in terms of that savings equation, I mean,
long-term savings fell during that period of high inflation in the 1970s.
And Australians were burnt once it will take them a while to come
back to it, so therefore the public sector has to save, and we have to
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go through vehicles like superannuation. But they are there. That's
the point it's all there. The structure is all there.
J, .( inaudible). . given the OECD survey yesterday given what some
commentators [ like] the esteemed Maximillian Walsh, for example?
PM: I'm not talking about I think we better leave individuals out of this,
thank you. Don't provoke me. Okay thank you very much.
MF: Thank you.
ends.