PRIME MINISTER
*** PLASE CHECK AGAINST DELIVERY'*
SPEECH BY THE PRIME MINISTER, THE HON P. J. KEATING, MP
THE ACTU CONGRESS
MELBOURNE, 27 SEPTEMBER 1995
It's a great pleasure to be here.
There is no more important partnership for the Government than our
partnership with the ACTU.
There is no more important partnership for us, and no more important
partnership for Australia.
The last dozen years have proved this.
It has been proved in an Accord which has provided us with the motor and
the means of essential change; and with low inflation, and industrial harmony
and cooperation, and much else that now characterises modem Australia and
distinguishes us from countries which have-gone down neo-conservative
paths meaning no consensus, no safety net, no accommodation of the
social imperatives as we confront the economic ones.
The Accord proves the value of the partnership, but it is proved in other ways
as well.
It is proved in the social programs. In programs for Australian families and
Australian women. In the Working Nation programs for employment and
training for young Australians and Australians coping with structural change.
It is proved in the social policies which together make Australia's social safety
net among the most comprehensive and sophisticated in the world.
The value of our partnership is proved in the egalitarian reforming character
of the Australian Government in both social and economic policy and,
beyond these realms, in policies for Aboriginal and Torres Strait Islanders, in
environment policies, in policies for the advancement of our nation and our
nationhood, including our progress towards a republic.
The value of our partnership is proved in the continuation of a Labor
Government a Labor Government still charged with zeal for reform and still
aware that its responsibilities are forever to Australia's working men and
women and their families.
It is not the easiest partnership to maintain, especially in times of change.
But who can say now, after twelve years of the most thoroughgoing reform in
our country's history, that our interests cannot be reconciled not only
reconciled, but made a force for the nation's interests?
No one can say that.
And when we have doubts about each other, it is worth bearing this in mind.
It is worth reminding ourselves of what might have been if the Fraser
government had continued, or we had adopted Thatcherism through Howard
or Hewson.
Think what sort of country we would now live in. How would the opportunity
and wealth be spread in the New Right Australia of the old John Howard? Or
the Old Right Australia of the even older John Howard?
Never forget what our opponents have stood for in the past decade and a
half. Don't think for a moment that Hewson was an aberration. Hewson was
not an aberration. He was a Liberal.
Like John Howard. John Howard has been every kind of Liberal it is
possible to be old right and new right, Fraserite and Hewsonite, wet and dry,
hard and soft, honest by name and rank opportunist by nature. What kind of
Liberal John Howard is depends on which-way the Liberal Party thinks the
wind is blowing. And if they can't get a reading here, they take one in
America. But in the end there is only one John Howard and he is a deeply
conservative and reactionary chap. The most conservative Liberal leader, he
once said, in the party's history.
The man who believed in all the things that John Hewson believed in but now
wants Australians to believe he doesn't; the man with the airbrushed past; the
man without policies. The man who wants to keep the monarchy and abolish
the Accord.
The man who wants to be Prime Minister and lead Australia into the 21st
century. John Howard may want to keep his policies and his ideas hidden. He may in
fact not have any policies or ideas beyond this industrial relations policy of
his. But the next election whether he likes it or not will be about policies.
The next election will be a referendum on ideas for Australia.
And one of those ideas is the Accord. The Accord has been a defining idea
in the past decade and only a fool would abandon it for the next.
That's the rub. That's what matters.
The partnership between us has achieved great things. But the most
important thing is yet to come. It always is.
The most important thing is what we do to see that Australia goes into the
21st century strong and secure, that the wealth and opportunity is shared,
that our kids have hope and faith in their future, and belief in Australia.
That we keep the great Australian democratic goals out in front, that we do
the things necessary for our economy to compete in the world, and the things
necessary to build a good and fair society and that we don't surrender the
power to do them.
I know it depends on trust and I know that trust is tested by events. I know
that there are people who ask if the reforms of the past decade have been
worth the pain: people who say the change is too rapid and too stressful and
that it is not giving us the economic and social results which we have a right
to expect.
But the fact is that the economic changes were essential, and they have
given us extraordinarily good results, kept us up with the international game
and set us up for the 21st century.
And if this intemrnationalisation of the economy has put pressures on our
communities and on our traditional social goals in Australia, we have resisted
the pressure with far more determination and far more success than most
other countries.
Worldwide technological change has increased wage inequality everywhere,
but our response has been to offset this trend through a sophisticated social
security system and a social wage.
Nowhere has there been more change in Australia than in our workplaces, in
the labour market and in industrial relations: change towards fewer and
larger unions, change to enterprise-based bargaining and a reduced role for
centralised wage setting practices, updates to and restructuring of awards.
The case is unarguable the changes had to be made and they have been
made well. We need to draw confidence from that experience and faith in
this partnership between us.
We need this partnership because Australian industrial relations are once
more under threat and with that the well-being and security of Australia's
workers are under threat.
John Howard and the Liberals have so few ideas we probably should be
thankful for this one. Their industrial relations policy at least lets us all know
where they stand. And whatever they might do to cast a softer light on it, they
stand where they have always stood. Which is in direct opposition to Labor.
Nowhere is the difference between Labor and the Opposition more obvious.
The industrial relations policy debate we have recently entered highlights
three fundamental differences between us.
One, in the weight given to consensus and co-operation.
Two, in the value accorded to the basic needs and protections for working
men and women.
And three, in our implicit judgements concerning what it is that Australians
want in a Government.
I want to address each of these matters.
We shouldn't forget the antecedents of our reforms. Our predecessors in
office bequeathed to us a quite amazing set of doubles double-digit inflation
and double-digit unemployment. This was an achievement of no other
Government in our history, but which a John Howard government may well
match. These facts established a very obvious case for a different approach to wage
and employment matters.
And this was what the Accord was all about a simultaneous attack on
inflation and unemployment.
Over the rest of the 1980s the union movement and Australian working men
and women bargained for wages and conditions in a new spirit one which
was sensitive to the need to control inflation and reduce unemployment.
This was the restraint of mature and responsible Australians.
It delivered huge benefits to our economic reconstruction.
The Accords have delivered sustained productivity increases and decreases
in real unit labour costs. Since 1983, we have seen a 65 per cent fall in
working days lost in strikes. And at the same time we've seen the creation of
2 million jobs in Australia.
The Accord has helped create the culture in which change can take place; in
which the imperatives of competitiveness have been recognised, in which
workers' superannuation is laying the foundations of a national savings
program and all of this in the context of real protections for those at risk of
disadvantage from reform.
Each employment target has been met, underlying inflation has been reduced
dramatically, and at the same time Australia has been opened up to
international trade and regional growth.
As I said at the National Press Club a month ago why would anyone ditch it?
And why, when in the last decade the union movement has been in the
vanguard of necessary economic change and social progress, are we
confronted with an Opposition that speaks the anti-union language of the
1970s? Could it be because they alone among Australians have not changed?
To say that Australia owes a lot to the behaviour of workers and unions in the
early years of the Accord, is to grossly understate the case.
It is not a small thing to forego wage increases for benefits that tend to accrue
to the economy at large and not necessarily to those making the sacrifice.
It is no small thing to change behaviour in fundamental ways for unseen
benefits. It was no small thing to put trust in an untried institution, especially one that
was treated with a good deal of scepticism, and even derision by some.
The 1980s Accord accomplishments have left us with an economic base that
ensures strength for the rest of the 1990s. Australian workers have delivered
underlying inflation of less than two and a half per cent for all of this recovery
even though jobs growth has been outstanding. Costs are under control and
now real wages and productivity are growing.
It is now understood that confrontation between employers and employees is
not inevitable, and that conflict in the workplace is not a quintessentially
Australian way of operating.
It is now known world-wide that we are about achieving efficient economic
reforms in an environment of co-operation, consultation and consensus.
The cost restraint of the 1980s and the overall jobs growth since 1983 have
meant that real disposable per capita household incomes easily the best
single measure of individual economic welfare has increased by a very
healthy 20 per cent.
It is sobering to ask where we would be today if Australian workers and
unions had not acted with selflessness and maturity when it was most
needed. It is particularly sobering to ask what might happen in the future if the Accord
partnership is undone by our political opponents.
That is the first major difference between the Government and the Coalition.
For the Government the Accord is fundamental, for the Opposition it will be
the first thing to go.
Australian labour productivity growth has been more than twice that of New
Zealand since that country introduced its Employment Contracts Act the
Coalition's preferred model in 1991; the underlying rate of inflation is low;
industrial disputes are at an historic low; the profit share is something close
to an historic high and investment is booming but they want to abolish the
Accord. The motive can't be rational. It must be ideological. It must derive from some
loathing of unions and working people. Either that, or a loathing of common
sense. The same lack of reason appears to have infected their thinking on interest
rates. Just now they have been attempting to connect it to the level of foreign
debt, by means of an unreliable imported truck.
It is a very peculiar place to go looking for the problem or the solution. And
a very peculiar way to go. If they were being rational or honest they would
send out a truck which explained the link between the Accord and interest
rates. Because if you don't have the Accord to control inflation, you only have
interest rates to do it. If you haven't got an Accord and you want to take the
heat out of wage pressures the only medicine is interest rates.
The unarguable fact is that high interest rates always mean lower growth.
And increases in interest rates to combat inflation must mean higher
unemployment. I do not mean to imply that the Coalition wants higher interest rates and less
employment growth. I do not necessarily think that they are nasty although
there is some evidence of this. But I'm more inclined to think that they are
prey to primal prejudices particularly against unions and workers.
They see a productive partnership between governments and unions and
workers as some profane cabal. Some horrid thing. Some anathema.
In fact, the Accord is a living, breathing and dynamic institution, responsive to
outside pressures, accommodating of world economic forces and flexible to
the contemporary circumstances of the Australian labour market. It has been
also a significant contributor to social equality through support for Medicare
and, most recently from Accord VIII, expansions to superannuation, and paid
maternity leave all on a means tested basis.
No one should forget that when wage restraint was most needed the Accord
delivered it.
When the adverse terms of trade change of 1985 caused a significant
devaluation of the currency it was through the Accord that the devaluation
was made effective and real. The partners supported a small real income cut
in order to ensure that employment growth would not be at risk.
When the extreme labour market pressures of the late 1980s emerged it was
the Accord processes which kept a lid on inflation when almost no outside
economic commentator thinking of similar pressures from the past believed
it was possible.
And when it became clear that some movement towards productivity-based
wage adjustments was necessary to ensure competitiveness, again it was
through the Accord that this was institutionalised and became a reality.
Today the Accord continues to support enterprise-based identification of
workplace-specific needs and this is highlighted and emphasised in the 1993
Industrial Relations Act.
The Accord is thus clearly an institution motivated by and sensitive to
contemporary economic imperatives.
But through all this one thing has never changed, and never will.
It is that the Accord and the Government's industrial relations policy will
always reflect the value we give to protecting the disadvantaged in the
workplace. Nowhere is this more clearly evident than in the concept of the Government's
" no disadvantage" test to workplace reform.
The Government does not pussyfoot around with this issue: " no
disadvantage" in agreements means exactly that.
Some awards can be taken away in a workplace bargain, and over the course
of time and because of the particular imperatives of workplaces, some
employment conditions should and will be changed.
But award conditions can only be varied if the total package of remuneration
is not diminished through this process.
Put simply, no worker can be made worse off, by law, from the signing of a
workplace agreement.
This is the difference between the Government's approach and that of the
Opposition. The Opposition in government will have legislation that guarantees that some
conditions can be lost, and lost without compensation.
That is, workers' overall incomes are clearly in jeopardy.
This is a crucial development in the policy debate.
It is clear this is true from listening to what Peter Reith and John Howard
have said about their planned reforms.
They have said that they support the current Western Australian State Award
legislation. They have never backed away from the essential lack of a true
no disadvantage test in Jobs back!
Both the Western Australian and Jobsback! approaches allow agreements
which do not include some basic conditions; for example, overtime pay,
penalty rates and holiday leave loadings.
And most significantly, these reflections of what their industrial relations
system would look like do not offer compensation for the loss of conditions.
Does it really matter for the incomes of working Australians? Yes.
Some examples are instructive.
Nurses. There are over 150,000 registered nurses in Australia. A typical
nurse works enough nightshifts and weekends to increase his gr her pay
above the base rate by an average of 22 per cent a year. This is worth about
$ 5000 a year.
Unskilled labourers. For unskilled labourers who work overtime the number
of hours accorded the higher pay rate is about 10 per week. If these hours
were paid at the base rate approximately one million Australian labourers
would experience an income cut of about $ 5000 a year.
Of Australia's 360,000 drivers who work just 8 hours of overtime, reducing the
rate to that of base pay would cost them about $ 6000 a year.
Bar attendants at this week's AFL Grand Final would see their wages
reduced by at least $ 40 for their day's work if the penalty is removed. And if
this is regular weekend work for Australia's 50,000 bar attendants, it amounts
to an annual income loss of over $ 2000.
The Opposition call it a scare campaign. Let me tell them for the one and a
half million Australians I have mentioned and that's just a start the scare
campaign is coming from the Opposition. Quite simply the Opposition who
like to talk about families, have a policy to take money from breadwinners.
The facts speak for themselves: in a world in which there is no compensation
for traded-in conditions, a great many working Australians must be at risk of
losing considerable income.
The Coalition's recent responses to these criticisms have themselves been
instructive. Again, they do not seem to comprehend the basic realities of the Australian
labour market.
John Howard insists that " no worker will be forced off awards if they don't
want to be".
In other words, there isn't a problem. The Coalition just wants to introduce
more choice for workers. There is either profound ignorance at the root of
this, or profound disingenuousness. Whatever the cause, it is false.
What will happen when employers say as many are sure to " take the
contract or take the sack". Who has the power here? What real choices will
such workers have?
What happens to workers who sign a good agreement but later want to return
to the award because their employer demands that they accept a new
agreement with lower wages. How can workers possibly get back what they
have lost?
And what happens to the extraordinarily high number of workers each year
who face a new employer?
No political party which says that workers can choose an award if they want
to really understands the extraordinary flows in the Australian labour market.
Or, if they do understand, they just don't care about it.
The huge number of Australians who face a new employer every year would
not have an effective choice about keeping overtime or penalty rates. They
would not be in a position to sustain award incomes if such conditions are
traded away under the Coalition's approach.
In 1994 1,731,500 Australians more than 20 per cent of the workforce
faced a new employer for a wage and salary job. Currently over 42 per cent
of the workforce has been in their current job for less than 3 years.
They are surely a significant part of this debate; because they are the people
who will be confronted with the injunction take the contract or forget the job.
In other words, under a Coalition government federal award system, and
adding those under conservative state awards, millions of working Australians
could lose valuable conditions and pay.
The numbers are not difficult to believe. After all, there are around 600,000
higher education students today and most of them will face a new employer in
the next 3 years.
Of the 400,000 or so year 11 and 12 students currently enrolled in school, at
least half will be in this position.
Every year several hundred thousand married women re-enter the labour
force in search of new jobs.
And in 1994, 600,000 employed people chose to change jobs.
The argument is clear. The Coalition can radically and quickly put at risk the
hard won wages of a very large number of Australians.
This is already happening under the Western Australian legislation. Howard
and Reith say their approach is " softly softly", but Howard and Reith know
that the forces in the labour market make a mockery of this.
Australians know the value of change, and recognise the need for efficiency
and competitiveness in our economy. But they also know the equation is
more complex than the Coalition would have us believe. They know, I am
sure, that the Accord is the expression the civilised expression of that
equation. And I don't believe they'll let it go.
If I am right in saying that Australians prefer cooperation to conflict and
continue to value our traditions of equity and fairness, they will reject the
Opposition's industrial relations policy. They may well be glad to see that
they have a policy but they will not be impressed by the nature of it.
They believe, I think, that equality and fairness are fundamental to Australia's
way of life, and they know that workplace arrangements and award
protections are an important means of delivering them.
If labour productivity growth were low, and the Coalition model was a proven
way of raising it, it would be understandable. But Australian labor
productivity growth is twice that of the place where their model is employed
New Zealand.
If there is no efficiency case for change, Australians have cause to wonder
why it is that they should risk hard won workplace incomes. Why it is that our
fundamental identification with a fair go and social and economic equality
should be put at risk?
The Australia we have created through the Accord mechanisms is a place to
be proud of. Robert Reich, the United States Secretary of Labor has recently
lamented that in his country, while employment growth is healthy, they have
created vast numbers of working poor.
On the other side of the Atlantic, while there are sophisticated safety nets, the
countries of Western Europe have poor jobs growth records. They envy the
US for this, while Reich envies these countries their relatively low levels of
poverty. In Australia we have the best of both worlds. It is clearly to a significant
extent because of the Accord processes.
I take you back to my theme. Our success in this partnership springs from
the belief we share that the incomes of all working Australians must be
protected. I wish you well in this Congress, and trust that I will be able to address you at
your next one by which time I hope that collectively we have put to rest for
all time the aspirations of those who seek to put Australia on the path to
conflict, inequality and social injustice.
Watch this space, we won't let you down.