"* PLEASE CHECK AGAINST DELIVERY"*
9 OCTOBER 1995
Thank you for the invitation. It's a great pleasure to be with the CFMEU for its Biennial National Conference. As Prime Minister I trust you'll ask me to the next.
I am keenly aware of the importance of the CFMEU's political support for the Government in the past, as you should be aware of the many values and perspectives that we share.
Not least, we abhor the implications for Australian workers of the Coalition's industrial relations policy.
We also share an understanding of the importance of the Accord for the wider economic and social good of Australia.
The Accord has meant that we have achieved great reforms without industrial mayhem.
And these goals have all been reached with continued protection of both the jobs and social well-being of the least advantaged.
If the Government could ask one thing only from the CFMEU it would be this:
that the union and its members re-affirm their support for the Accord processes.
We all know that at various times over the period of the Accord that some of the
more powerful in the union movement could have got more for themselves if they
chose. It is a testimony to the maturity of strong unions that they recognised the
interest of the broader community and chose not to exploit their strength.
The social benefits have included considerable real expansions to social
security and the social wage, and to the development of a comprehensive
superannuation scheme that our opponents would never have had the
imagination or capacity to implement.
The benefits also have included industrial peace, which has seen strike activity
fall to well under half the average of the Howard/ Fraser years. Last year
Australia had the lowest number of disputes since 1940, and the number of
working days lost was around 70 per 1000 workers, compared to 590 per year
under Howard.
The figure is worth repeating. 70 compared to 590. One eighth of what it was.
And we are living through not five minutes of economic sunshine but a record
period of economic growth, the longest sustained period since records were
kept. Some people may have forgotten, but economic growth once used to go
hand in hand with strikes.
Could we just pause and reflect on what Australia might look like with the
Coalition's anti-worker industrial relations policy, without an Accord?
Imagine the types of consensual policies that would be delivered by Peter
Costello as Treasurer.
Imagine the sort of intelligent industrial relations solutions that would emerge
with Peter Reith as Minister.
Imagine John Howard leading workers and firms through some of the
innovations of the past 12 years, such as BHP's Steel Plan, or the Toyota Plant
developments indeed, imagine John Howard simply understanding why the
Accord has been so important.
Few things are certain in political life but these things are:
There would be no consensus under a Coalition government.
Co-operation and understanding would be diminishing commodities.
Conflict would increase.
Perhaps the most important benefit from the Accord is that there has been an
effective extra mechanism to control inflation: having wage outcomes consistent
with low increases in unit labour costs.
Increasingly these have taken the form of bargains showing sensitivity to the
circumstances of particular enterprises, and increasingly there has been an
appreciation of the need for trade-offs and productivity offsets.
We hope and trust that the maturity in pay arrangements that has been such a
key characteristic of the Accord will be with us for a long time to come.
In all good partnerships reaffirmation of the essentials matters.
Without our joint understanding of the links between costs and employment, and
what this has meant for social justice and progress towards economic efficiency,
we would only have interest rates to control inflation and manage the economy.
We would have Peter Costello using the threat and the actuality of higher
interest rates to keep price pressures down. And even he knows that this works
only through the creation of higher unemployment.
This is the Coalition's recipe for economic management Peter Costello, Peter
Reith, John Howard and no Accord.
On the topic of economic management it is opportune to put to rest a large fib
that Honest John has been putting about.
The oft-repeated fib indeed, Andrew Robb used it on the Sunday program three
times last week is that real wages have declined under the Accord. As if the
Accord has been bad for workers.
It is demonstrably false.
It is true that real wages fell slightly in the 1980s when the Government and the
union movement together had to address-the appalling mess left to us in 1983 of
double-digit inflation and unemployment. It wasn't an accident that there was
wage restraint over the 1980s. This was a necessity.
It was through this wage restraint that employment grew so quickly and inflation
fell. And this meant a 20 per cent increase in real household disposable
incomes per head by June 1995.
But since the beginning of the 1990s there has also been an important increase
in real wages, as measured by the best indicator, real full-time total earnings.
The recovery has meant that in the whole period since 1983 the increase in real
wages has been 7.2 per cent.
7.2 per cent. Real. Not a fall. The Liberals say there has been a fall. It is a lie.
And that's not to mention the myriad of tax cuts under the Accord or the likes of
supplementary payments or FAS.
But I'll get back to the Coalition in a few minutes.
Before doing so I want to raise a few issues of particular concern to the CFMEU.
We will all recall that after the Builder's Labourers' Federation was deregistered,
its assets and property were placed in the hands of a custodian.
But after the amalgamations that resulted in the formation of the CFMIEU it was
appropriate that this control be transferred to the CFMIEU, and indeed, this was a
judgement made by the Industrial Relations court in August. It is a decision that
the Government supports.
Well, Jeff Kennett has appealed against this finding.
The Federal Government finds it unacceptable that the CFMEU does not have
control over these assets, and today I can tell you that we will intervene in the
appeal and offer you support.
We are on your side here. Kennett never knows when not to push his luck. He's
manic about belting unions.
irAnd I cannot let the opportunity pass without acknowledging the untiring efforts
of Stan Sharkey.
The CFMEU has also been encouraging the Government to support the ratification of the new ILO Convention concerning Occupational Health and Safety. Australia takes its ILO obligations and the ILO standards very seriously, and has now ratified 57 ILO conventions.
As a major mining country, Australia made a strong commitment to the development of the new ILO standards on safety and health in mines which were adopted at the 1995 international labour conference.
Mining is obviously an area where these matters are of particular significance.
We do not want a repeat of last years Moura Mines Disaster in Queensland.
I should mention here the very important international role played by the Joint
National President of the CFMEU, Mr John Maitland, who was the Chairman of
the workers' group in the committee which developed these important standards.
Australia will be considering the new convention as a priority with a view to its
early ratification. Again, we won't be letting the CFMEU down.
Australia also actively supports the current efforts of the ILO to improve its
effectiveness and promote observance of its standards, especially the human
rights labour standards. As part of its current activities the ILO is identifying
obstacles to ratification in countries which have not endorsed core human rights
labour standards.
We will be examining ways in which the promotion and observance of ILO
standards can be encouraged in the Asia-Pacific region. This will be the subject
of recommendations by a tripartite working party which, under the Chairmanship
of Michael Duffy is considering the matter and will report to the Government later
this year.
The CFMIEU has expressed a concern which has been shared by the
Government for some time. It relates to the contracting-out arrangements that
place people outside of the PAYE system.
It was perhaps a mild curiosity in the past, but it is now clear that it has become
endemic in the building trades.
It is an activity that robs the Government of tax revenue.
It is an activity that undermines the award system.
Tr~ It is an activity that puts in jeopardy the rights of those who were previously
protected as employees.
It is also an unethical activity. The two words that come to mind are rorts and
scams. The CFMEU understands this well..
In saying that we need also to acknowledge that this is a difficult area. But it is
an area in which reform has to take place.
In the Budget the Government announced that it would be amending the PAYE
provisions of the Income Tax Assessment Act to ensure that they cover
payments for labour which were always intended to be covered. In the past our
attempts to fix this problem have not been sufficient.
We know it is hard, but I want to reaffirm today that the Government has made
progress and legislative change will be announced shortly.
It is also relevant for me to acknowledge to this group that we are currently going
through a necessary but possibly apprehensive period for workers involved in
the forestry industry. Obviously we all need to wait to see how the current
consultations develop, but several things can be said with some confidence.
They are that the government does not resile from wanting to have a world class
forest reserve system in place for the longer term. But we similarly recognise the
importance of having a wood products industry with sustained and significant
employment, and with an increasing emphasis on domestic value adding.
We must make sure that in this industry, as in others, we use the rich resource
base that we have to create jobs for Australian workers, in a way that also
provides for the highest standards of environmental protection.
Over the ensuing weeks these issues will be vigorously debated and I look
forward to a full contribution from those of you with a direct stake in the issue of
forest policy.
I want to spend what time remains to answering a few broader questions of
interest for the CFMIEU. Naturally this must bring me back to the Coalition,
because the industrial relations debate is the real policy question for Australian
workers. It is here that the essential issue of take-home pay will be decided.
Its already clear that the Coalition does not understand the value of the Accord.
And given the clear benefits of the Accord, this says something about the
Coalition's capacity to understand and judge policy.
Oh, they say, so the Accord reduced strikes and conflict, helped expand social
protection for the disadvantaged, allowed a threshold cut in inflation, facilitated
the introduction of a comprehensive superannuation scheme, and allowed us to
make the significant industrial reforms essential to our international
competitiveness? " Is that all?", they say. Well, we better throw the Accord out.
Somehow it says it all about them: ditch the Accord and keep the British
monarchy.
You have to ask, why?
They say that the most important possible reform to Australia will be in the area
of industrial relations.
John Howard said last Friday that: essential elements of our industrial
relations policy will remain".
He has many times recently said that Jobsback! in which there were only four
minimum conditions for workers is the correct approach.
He has consistently supported the Western Australian state legislation in which
there are also four minimum conditions only.
He looks enviously at New Zealand which abolished awards in 1991. He wants
us to be like them.
And we should never forget what goes on in the minds of that Shadow Cabinet of
theirs. It is the same Shadow Cabinet that wanted to scarify workers at the last
election. And they have not changed.
The big issue which will come back to haunt John Howard, Peter Reith and Peter
Costello and the rest is very simple: they don't guarantee workers' pay.
It's as simple as that. If workers sign workplace agreements that remove some
of their award conditions there will be no compensation to ensure that the value
of the package is maintained.
The Government guarantees that pay can't be cut. If workers trade-in some
award conditions, they will see increases in pay to cover it.
In other words, we have a true no disadvantage test. The Coalition does not.
Workers will lose under the Coalition.
And workers will lose big under the Coalition.
And when workers lose, families lose the families of so-called battlers with
whom our opponents claim to have so much in common.
And when the low paid become lower paid, and less secure, the fabric of society
begins to change. You can't knock the low paid about without knocking Australia
about you can't do it.
Remember that Peter Reith's July speech set out the minimum conditions that
would provide the basis for the Coalition's approach. It did not include penalty
rates, overtime wage rates, or holiday leave loadings, to name a few.
And don't hold your breath for travel allowances or tool allowances they just
won't be on if the big goal is " flexibility".
Watch this word " flexibility" from the Coalition.
It means pay cuts. For " flexibility" read " pay cut".
It's not as long as " incentivation", but it is much more pernicious.
Flexibility. Whenever Howard or Reith say this, ask: why doesn't he admit he
wants the pay of the least powerful to fall?
Well, what will the Coalition's policy of flexibility mean for some typical CFMEU
workers? Let me show you.
Take an ' Operator Level 3' miner, who receives an area allowance of $ 8.11 per
day, a service increment of $ 1.77 per day, and who works a fairly typical 6 hours
of overtime a week.
If the overtime is paid at the base rate instead of at time-and-a-half for the first
two hours and double-time after that, the loss will be $ 69.30 a week.
Assuming the holiday leave loading of 17 per cent goes too, this worker will lose
a total annual amount of $ 7,100.60. This is a cut of 18.8 per cent for one of the
Coalition's " battlers".
What about a " Log Band Sawyer'? A typical person in this job might work 8
Shours a week overtime, and at the moment they receive the annual leave loading
of 17.5 per cent. Working the same number of hours under the Coalition policy,
the log band sawyer stands to lose at least $ 2684.85 a year, or a real cut of
about 10 per cent.
How about a typical ' Leading Hand Linesman'?
Today they receive industry, tool, leading hand and special allowances worth
$ 55.60 per week. If they work 8 hours of overtime a week which is fairly typical
they stand to lose just from this being paid at the normal rate a total of $ 65.70 a
week. Taking away the holiday leave loading which is worth $ 317.50, the total loss for
the year for the linesman would be $ 6139.90, a 20 per cent cut.
This is flexibility, Howard-style. Flexibility downwards.
And somehow we don't think that Mr Costello will find it in his heart to
compensate these CFMEU workers through the social security system.
He and Mr Howard say they are pro family, but they're anti family income
support. Pro family and anti overtime rates. Pro family and anti penalty rates.
Pro family and pro " take the contract or take the sack".
But, what does the Coalition say about the examples I have given?
It can't happen, they say, because no one will be forced off an award if they don't
want to be. That is, if you like your current arrangements that's fine, you can
have them. There will just be a lot more choice. What a great system no-one
can lose!
Now I can only say to this one simple thing: Mr Howard and Mr Reith are either
very ignorant about how labour markets work, or they are trying to fool everyone.
What sort of choice is there for workers asked to sign an agreement or risk
losing their jobs?
And we know that this is already happening under the Western Australian
legislation. Ask Jeff Allen who was sacked in WA for refusing to sign a " flexible"
workplace agreement.
It should be no surprise that the Coalition seems to have the lowest support in
Victoria and Western Australia where workers are having first hand experiences
with these realities.
We also don't know what will happen to workers on workplace agreements that
become whittled away from inflation. Why won't the Coalition explain more to
voters about how they can expect to maintain their conditions? They are the
same voters they are crying crocodile tears over.
The other large bit of ignorance or dishonesty on the part of the Coalition here
concerns job mobility.
How can those applying for a job hope to get the award conditions if they want
the position? How does " choice" work here?
John Howard should take a long hard look at the data. In 1994, for example,
1,731,500 people took a new wage and salary position. That's about 20 per cent
of the paid workforce.
Over 1.1 million of these came from outside the paid labour force from school,
from tertiary education, from being at home looking after children, as new
immigrants.
Let's put it differently: 42 per cent of workers have been in their jobs for less
than three years. Thus under a Coalition's first term, at least 3.6 million workers
will be facing a new employer and thus will not have the effective choice of
staying on the award.
This is a key point for the debate.
It's a key point for Australian workers.
And it's a big point for the CFMEU.
A very large proportion of CFMEU workers are quite mobile, and thus without
effective choice about keeping the award.
For example, in 1994, 43,733 building tradespersons, including 18,492
carpenters and 7,445 plumbers, took a new job. That is, over 30 per cent of the
total in those occupations in just one year.
And so did 36,603 construction and mining labourers over 40 per cent of the
total. This a lot of people to be given " flexibility".
Forty per cent cut off awards and made to " fend for yourself'. Let me get it right:
" choice" to fend for yourself.
When Mr Howard and Mr Reith say that anyone who wants to stay on the award
can do so, we hope they will be explaining to the 1.73 million taking new jobs
how they will do this.
We hope they will be writing to the 120,000 CFMEU members and describing
how the awards will be protected for the quarter or so of those who will face a
new employer in the next year.
And we hope they will be explaining to all those people who are currently
thinking of leaving their current jobs how to make sure that they keep the level of
pay. As we all know, there can be any number of reasons for leaving a job it is one
of our most basic freedoms. But if leaving the job means losing the Award, that
freedom will be seriously eroded.
And the labour market will start to lose mobility. It will become more rigid.
This point came up with a friend of one of my office staff just the other day. She
is currently on a reasonable wage working as a librarian, but wanted to transfer
to essentially the same job under the Victorian Award. She was told that the pay
would be about 30 per cent lower, and is now not going to move.
There are a great many possible losers from this approach, and it's hard to see
the overall benefits.
It is possible that I'm being a bit hard on the Coalition, and that there might be a
good reason for undermining workers' pay and conditions. There might be some
terrific purpose to all this.
So I thought I'd end by going through every possible reason for the Coalition
wanting to do this to see if it's good policy.
Perhaps they want to put the system at risk because profits are too low. Have
they checked the profit figures lately?. They are very healthy, so that can't be it.
It's not about profits.
Could it be because employment growth is too weak! But in the last two and a
half years we've created 680,000 jobs, and we have seen record falls in the
unemployment rate, so that can't be it.
It's not about jobs.
It must be to influence industrial disputes, you might say. But remember, we
have the lowest level of strikes since the figures were first collected, so unless
they want to increase strikes, why would this be the reason?
It's not about industrial action.
Maybe it's about labour costs. But they have fallen by 10 per cent over the life of
the Government, at the same time that real wages have risen. And the
extraordinary increase in real household disposable incomes of 20 per cent can't
be it either.
It's not about costs.
There is only one thing left: it's to increase the growth in labour productivity we
want to be like New Zealand, don't we?
But this doesn't work either because since the Employment Contracts Act Mr
Howard's preferred model was introduced in New Zealand the rate of growth of
labour productivity has been only 1 per cent per year, while ours has been
according to the OECD.
So it's not about productivity.
In short, it's not about policy.
I'll tell you what it is.
It's ideology and spite.
Ideology and a complete lack of understanding of the needs and concerns of
Australian working people.
Ideology and an appalling lack of sympathy for those with weak bargaining
positions. Ideology and disregard for the living standards of the great many who need
current award protections to survive the people they have the gall to
condescend to and pretend to understand and care for. The people they call
batters. The only possible reason for jeopardising the current arrangements, for doing
away with the real no disadvantage test, for undermining a fair system is
ideological a mind-set against awards, against the safety net and against trade
unions. They don't like working people and they never have.
The Coalition's approach must damage the social fabric and inevitably broaden
significantly the divide between the advantaged and the disadvantaged.
It must take us towards the kinds of labour markets they have always admired
the dog eat dog labour markets and the lands of the working poor.
If the election is going to be fought on policy, if it is to be a referendum on ideas,
if it is to be a test of imagination and understanding of what this country needs
and wants, stay well clear of the Coalition.
John Howard will not rip away at working people without a fight. I'm going to
give him the fight of his yet undistinguished life. And I know the CFMVEU will
enjoy every minute of it.