EMBARGO: 5 pm S
PRIME MINISTER'S WEEKLY BROADCAST A FAIR GO FOR INDEXATION
Sunday 14 September 1975
The vast majority of us earn our living as employeesas
wage and salary earners. So we have a natural concern to see 0
that our wages keep pace with movements in the cost of living.
No Government has done more than mine to protect and indeed,
improve the real value of workers' incomes. With the support
of the trade union movement we have fought a long, successful
battle to bring in wage indexation. If it succeeds wage
indexation will be counted among our principal achievements.
It not only safeguards employees' living standards; it is an
essential part of the Government's battle against inflation.
I want every Australian worker to understand the
real benefits of wage indexation. Indexation is a new word:
some people may not be quite sure what it means. It means that
if the cost of living goes up by a certain percentage, wages
and salarieslare increased by the same percentage. So it's
basically a very simple idea; but it took us a great deal of
argument and persuasion to get the Conciliation and Arbitration
Commission to'agree to it. Indexation is not something we can
introduce on our own, though certainly we have done what we
can for our own employees in the public service. We had to
convince the Commission that indexation would work. We had
to convince the Commission that it wouldn't push wages ahead too
fast and add to inflationary pressures in the economy. We had
to show that by safeguarding workers' living standards, indexation
would discourage excessive wage claims by unions at a time when
the nation couldn't afford them.
6 The Coamission accepted our arguments. It decided
to give indexation a try. It insisted that if indexation were
granted, unions should not claim wage rises in excess of the
cost-of-living adjustments and the increases that flow to all
workers from national wage cases based on national productivity.
This doesn't mean that workers' living standards are frozen.
It means that, so long as inflation remains a serious problem any
rises apart from those for cost-of-living or productivity should
be granted only on the basis of changing work values. The
Commission also agreed that some rises may be needed to help
certain unions catch up with other workers if their members were
seriously disadvantaged. This seemed to us like a pretty fair arrangement.
It meant that all workers would be protected against inflation,
no matter how strong or weak their unions were, no matter what
their bargaining power. We are the first Government to give
this real protection to the wage earner. You may remember that
there was a system of quarterly adjustments for workers in the
late 1940s and early 1950s. The Liberals abolished these
adjustments and left workers completely at the mercy of cost
of living rises. Mind you, the old system wasn't anything like
as good as the present system of indexation. Adjustments were
applied to the basic wage only;-our system applies to the total
award wage and we have asked the Commission to apply it to
over-award payments as well. It gives genuine, total protection
to the worker. Together with the tax reforms announced in our
Budget last month, Australian workers will be better off than
ever before better off in their take-home pay, better off in their
protection against inflation, better off in their real living standards.
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I make the point strongly that we don't regard
indexation on its own as an adequate protection for the worker.
It must be ta: ken in conjunction with our new tax system a
system that is fair to all, and will put another $ 5 a week and
more in the pay packets of the average wage earner. And remember
this: under-the Labor Government the wage earner is benefiting
in other important ways. He is saving on his mortgage payments,
he is saving on his health insurance. Medibank alone saves the
family man $ 2 to $ 3 a week in medical benefit payments..
Still, indexation is the basic protection for the
wage earner and his family; his key to security in difficult
times. With indexation, no worker need fear the effects of
inflation. OfL course the fight against inflation will continueit
must continue. Our whole Budget has been framed for that
purpose, and indexation itself willehelp keep inflation down.
There are signs that it is doing so already. Certainly the
number of industrial disputes has fallen dramatically since
indexation was introduced. So we're building up a new climate
of stability and security for the worker secure wages, stable
industrial coi~ ditions. We have to work hard to ensure that this
climate is maintained.
S I have to say frankly -that despite all our efforts
indexation is under attack. Not surprisingly, it's under attack
from some employers. These employers don't like the idea of
regular increases in their wages bill, even when these increases
discourage much bigger and more costly rises. But there is
a much more dangerous attack on indexation from another quarter.-
It comes from a handful of powerful unions. These unions are
seeking rises from their members far above the indexation
formula. If these rises are granted rises of $ 35 a week in
some cases the whole indexation system will be in jeopardy.
All our efforts to protect the worker from inflation, to establish
secure and stable industrial conditions, to create the right
climate for a national anti-inflation drive, will be destroyed.
That must not happen. You may say that it's the job of any union to secure
the-highest possible wages for its members. That's certainly
been the rule in the past, but in today's conditions it ignores
two things. It ignores the fact that some unions are much
stronger than others, and can win bigger rises for their members
where other unions can't. It leaves the weak and unorganised
worker at a disadvantage. And it ignores the fact that unions
in key industries, by using any tactic they choose to win higher
wages, will force employers to sack workers so they can meet
the higher wages bill. In other words, any increase in wages
outside the indexation system must be gained at.. the expense of
fellow workers, and ultimately at the cost of their jobs. Workers
who accept indexation are inevitably the victims of those who won't.
Their jobs are threatened by a minority of workers in key industries.
We can see examples of these tactics right now in the oil and
petrochemical industries in New'South Wales and Victoria. / 3
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I want to make it quite clear that the Australian
Government will stand firm on indexation. We don't regard
the present system as perfect; we'll keep looking for ways to
improve it. We'll do everything to see that the ordinary worker
gets the protection and security he needs. I ask every wage
and salary earner to play his part in making indexation work.
It's a struggle for the entire trade union movement. Decent
and responsible unions must not be cheated out of the benefits
of indexation by the selfish actions of a minority.
Indexation has been given a trial by the Commission
but the battle is far from won. The Commission still has to decide
whether indexation should continue. Everything will depend on
the willingness of unions to co-operate. The alternative to
indexation is not just higher pay for some workers and lower pay
for others. The alternative is industrial chaos and inflation
on a scale that we have never seen before.