TRANSCRIPT OF THE PRIME MINISTER, THE HON P J KEATING, MP
PRESS CONFERENCE, CANBERRA
OCTOBER 1992
E& OE PROOF COPY
PM: Well I thought I would give you some comments about the Liberals
industrial relations policy. Well this policy completes thc Liberal double.
Firstly, they want to tax everything you consume with a 15 per ccnt goods
and serviccs tax and now they want to cut your pay. So, it is prices up and
-wages down, as though alrcady wages in Australia are too high when our
labour costs are 10 per cent what they were a dccade ago. It is essentially a
return to the dark ages of the common law of master and servant, the
Liberals have now rctreated to the past to dig up the common law of master
and servant last used in thc 19th century to apply to Australians. They are
going to force nearly 8 million people, 8 million working Australians on to
individual contracts which each person has to sign with their employer,
where they have no bargaining rights, and in many cases no bargaining
power, and no protection against dismissal. The policy reduces minimum
standards, it freezes pay and conditions by abolishing awards, but even
when the award is abolished it doesn't prevent an employer from sackins
someone on a supposedly frozen award. It basically has an over-riding aim
and that is basically about cancelling federal and State awards and
replacing them with individual contracts, enforceable only at the common
law.
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It is the most crude industrial policy ever proposed by a major Australian
political party. It is not about flexibility, because everything we need now
in flexibility is available nder enterprise agreements. It is not about
productivity, productivity in this workforce of ours increased by a huge 2.6
per cent in the year to June, and we see evidence of even stronger rises
coming through with all the innovative industrial agreements, enterprise
agreements being signed. It is not about wages verses competitiveness,
because Australia is more then 10 per cent more competitive then when
Labor came to office nearly a decade ago and we have one of the lowest
inflation rates in the world. This is all about forcing Australian employees
off awards and rcgistered agreements, cancelling their existing entitlements
and telling them they can either take the bosses contract or take the sack.
And for every infringement of the contract each employee will be fined up
to $ 5000. This is an unbelievable document and it could only be produced
by a party which under Dr Hewson's leadership has become an extremist
organisation. So, first it was the Reserve Bank and the Treasury that
annoyed the Opposition, then it was the car companies, then it was the
churches, then the tourist industry, the construction industry, people who
rent, and now it is the 7.6 million Australian employees they want to put the
boot in to. I mean, you really wonder where it will end, where this craven
push from the right will ever end. I think it is about the worst policy I have
seen in my public life. Questions if you have them.
J: Well the policy, Prime Minister, does have safe guards for workers doesn't
that make it a little hardcr to attack?
PM: What safe guards? It has minimum rates, it doesn't have safe guards at all, it
has minimum rates, some would lose their current pay rate. If you take, for
instance let me give you an example of a nurse, nearly half of his or her pay
is in shift and penalty rates and that all goes to the minimum rate in the
award, and if they don't take it they can take the sack.
J: What advice have you receivcd, Prime Minister, about the legality of the
proposal to close down State awards, for instance, and push them into
federal awards?
PM: The document is only an hour or two old so I haven't taken any advice, but
the Liberals are saying they will use the full constitutional power of the
Commonwealth, I assume the power, the corporations power, in the first
instance, and other powers to cancel, so that the legislation is valid, to
cancel awards and certified agreements.
J: workers and employers can't agree on whether to work in or outside the
system, the existing award conditions will remain, that makes no one
worse off.
PM: Yes, but for how long? What is an award worth after three years? I mean
once you disturb it it is not an award, you understand, what remains is not
an award, they made that very clear, they've made that quite clear, what
remains is the rate of pay'and the conditions, but no award status, and you
can be sacked while you are in that position. Do you understand? Let me
find the reference, I mean, this is really crude stuff. It says: " Although the
award pay and conditions, page 13, will continue that relationship between
the employer and cmployee will not be legally governed by an award".
" Will not be legally governed by an award". Therefore any future variation
of that relationship will need to be negotiated between the employer and the
employee.
1: How much impact will it havc on ALP party funds, PM, with the obvious attempts
to shut off unions?
PM: I should say substantial because every employee in this country; only a third of
employees are covered by unions, the rest are not. But they'll all he forced to sign
up to common law contracts and will drag out the master and servant law from the
19th century. MiTha6irCi ewson's new Australia.
J: The United Statcs have survived quite well without an award sector Mr Keating
a bit of an hyperbole there, this cleaning up structure that is 19th century.
PM: Do you think so Tonm ( Burton)? You are such a radical you are, I know and T
realise that, I know you are a social scientist and the rest. The fact of the matter is
that in this country we now have all the flexibility in the world under enterprise
agreements, all the flexibility in the world; flexibility as to hours, as to penalty
rates, as to the nature of working weeks, flexibility in relation to women and their
requirements, The only flexibility there isn't available now is flexibility down,
which is what the Liberal Party wants. So those righits which are protected now
under the basis of a certified agreement which becomes an award give people a
guarantee that they won't be pushed on the minimum rates and lose rates of pay
and conditions that they formcrly had. What is the problem? Is Australian pay too
high? Is the wage share in GDP too high? Does anyone argue that? We've got a
wage share in GDP at 1960s levels.
J: Do you think this debate is about minimum award rates?
PM: This is about taking away the bargaining power of Australians in their work
relationship with their emiployee. So an individual pcrson signs up with say BHP,
or an individual person signs up with ICI or Coles or whoever it might be or a
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smaller business or a smaller individual employer. Thiere is no group basis
bemause they make clear that unions will not be able to sign, they make that
abundantly clear.
J1: You've already said that only 1/ 3 of Australians are now covered by unions. Two
thirds of Australians arc coping quite well without union backing.
PM: It Is not the union backing, it is the process within which the whole industrial
framcwork, rates of pay and conditions, and conditions of work have been set.
Most Australians have enjoyed the benefits of a hundred years of industrial
negotiation, industrial and wage practice, whether they belong to a union or not.
They make it clear here
' Workplace agreements ( pg 10) can be concluded only between indivdual
employers and one, some or all of their employees, unions or employer
organisations or any other agent of the signatories cannot be parties to a
workplace agreement
So this can only be signed by the individual. You've got the negotiating power of
one person against the company, this will all happen to you, you'll have to sign
under them, under the Liberals an individual contract with News Limited or John
Fairfax.
J: Everyone has got an individual employment contract, except the union negotiates
on your behalf.
PM: That's right.
J: That won't change, the union will still he there to negotiate.
PM: Journalists are not quite in the same position as the rest of the work force because
of the fact you can demand executive salaries and be treated accordingly in your
negotiation.
J On the subject of flexibility, surely the Gazal case has just showed there's not that
much flexibility when it comes down to it and if Gazal closes down and those
people don't have jobs what's the satisfaction of having flexibility to them?
PM: I don't know the details of the case, I don't know the issues involved in the case,
but there are apparently a lot of issues involved there about what is owcd to
employees, about where the assets of the companies are.
3: Arc you saying that the existing system has basically reached maximum flexibility
apart from downward flexibility?
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Pm: rm saying we've moved off a craft structure which the liberals never had the wit
to change. Where we had a craft basis, so if you're a metal worker and a rate was
struck with you, that rate went right across the whole of Australian industry for
anyone dealing with mctals. We've moved off the craft structure to a much more
enterprise and industry structure, and within those structures we're now getting all
the flexibility on a company or enterprise basis, and nobody is objecting to that,
they are all supporting that. But there are protections in there and if those
protections go, your only recourse is at the common law.
J: ( inaudible)
PM: It's got unlimited flexibility, it's really up to the imagination of the managers and
employees.
J: The Structure doesn't need to change any more to encourage or promote forward
flexibility?
PM: The proliferation of these agreements and more productivity based arrangements
to the workplace are going to be important for the whole economy because that is
the way of getting productivity you're not going to get it out of central bench
decisions. But having in the 1980s got aggregate wage flexibility, that is getting
the profit share up and the wage share down as we did, now to get within sector
flexibility and intra-sector flexibility is now happening right across the country. I
published in thc House the other day one hundred agreements, the nature of those
agreements, and this has all been done with total harmony.
J: Prime Minister, if everything is fine and we have all the flexibility we need
then why are there a million people out of work and why are we going into
the red at the rate of a billion dollars a month on the current account?.
PM: Because ' d emand ' is down and because our economy has not been able to
produce enough goods and services. The answer to the first question is
because demand is down, and two, because the economy has not been able
to produce enough goods and services. It's not because the rates of pay are
too high.
J: Mr Keating, you have got 11 per cent unemployment under your industrial
relations policy, don't you think voters are going to find a change and this
change palatable?
PM: There's also 7.6 million people employed under our industrial relations
policy, with 6 million in 1982. In New Zealand there arc fewer people
employed today than therc was in 1982. In Australia there arc 26 per cent
more people employed than in 1982. So wagcs are not the problem. The
wage share in the economy I produced a US Labour and Commerce
Department survey last week where Australia is way down the bottom in
terms of wage levels amongst OECD countries. I mean, what do they want
to do, these people push us into coolie rates? Is that what you're
advocating?
1: But in the US, Mr Keating, there's about 12 per cent more jobs than there
are in Australia with the sort of IR system the Opposition is talking about.
PM: Where do you
J: They have participation rates in the order of 72 per cent, the US.
PM: They have much lower participation rates than Australia, much lower.
J: According to research by Professor Gregory they haveRarticipation rates of
more than 7 per cent.
PM: They've got a participation rate, as I understand it, of about 55 and we've
got, I think, 62. So if we had their participation rate, we'd have
unemployment down to around 6 or 7 per cent. That's the US position.
There's no way US participation is as high as this country.
J: According to Professor Gregory's paper, which was published 2 months ago,
they had rates of participation of something like 72 per cent and it would
mean another million jobs in Australia under an IR policy like theirs,
PM: Yes, but even if its true, so what? The thing is, it's not true. Anyone, I
think, who has been through the US economy and particularly with the huge
participation in this economy by women in the ' 80s, these very high
participation rates Look at our participation rates, just look at us
compared to what we were a decade ago. If we had the same participation
rates today that John Howard had we'd have unemployment, I think, with a
6 or ' 7 in front of It.
J. But doesn't the US experience suggest that with a more flexible labour
market you'd get more jobs?
PM: I don't necessarily think that's right. If you're saying, is flexibility desirable,
yes. But this is not about flexibility, all the flexibility in the world is there
now, that's the point. All the flcxibility in the world is there now. This is
about pushing people into weak bargaining positions, pushing nearly 8
million Australians into a weak bargaining position so that they either get
the sack or take the boss' contract, and if they want to argue about it they go
and hire a barrister and go to the court, and take it a couple of years to have
it heard.
3: They have got the Office of Employees Advocate, though.
PM: Oh yes, I know.
J: Doesn't that give them an avenuie for some recourse?
PM: That is a Liberal Government appointed trade union. A Liberal Government
appointed trade union.
J: So you don't think that it would be very effective for the employee?
PM: Well hear what they had to say about it. This is thcm at their best. They
said: " The Coalition will create the Office of the Employee Advocate. The
Employee's Advocate will protect the rights of employees
I thought that was a job unions did
" who have legitimate grievances.
Again I though it was thc things unions did. So are we going to have) are
we, a Liberal Party appointed trade union? That is, our democracy has got
to such a point that people will not be choosing to have themselves
organisationally represented, their representation will be decided for them.
The Liberal Party used to attack countrics which had those structures.
3: The ACTU yesterday released some research which appeared to show that
people werc largely in favour of thesc workplace agreements as long as they
had a safety net, and that looks very much like what Mr Howard has put out
today.
PM: No, it's not like what Mr Howard put out today. It's not, it's not about
existing rates of pay, it's about minimums. It's not the rate of pay you would
actually receive. I'll give you the example of the nurse who works all sorts
of rates, or the shop assistant who works all sorts of hours and gets a higher
rate. So your rate of pay and the minimum are two different things. And
anyway, the minimum that obtains only obtains without the force of an
award, which I've just read to you, and you can be sacked anyway.
I. What about those workers who reach agreements that they are satisfied
with?
PM: You mean the current ones?
1: Under this proposal.
PM: Just say it again.
J1: What about the workers who do reach agreements, enterprise agreements,
that they are satisfied with, that they're quite happy with?
PM: Well some people may be. But this is about each individual signing up, and
you don't have to be a political scientist or an industrial scientist to know
that the individual's negotiating power against a company of any size is
greatly diminished from the position of group organisation. Is that a fact or
not?
J: Prime Minister, just on another matter, what did you say yesterday to Mr
Mulholland on the issue of the Fairfax bureaux?
PM: T'm not into boutique news.
J. Is it accurate?
PM: I know journos are very interested in yourselves, I know that. I said things
supportive of all of you, I can assure you) but I don't want to go into thcm
now.
I; Prime Minister, the basis of the Opposition's document seems to be an end
to what Mr Howard calls the ' outmoded notion of class envy and jealousy'.
Would you agrce with that as a philosophical point?
PM: No, this is about going back to the power that employers had in the last
century against employees. This is about stripping Australians down of
their rates of pay and their conditions. It's the Liberal Party doing what it
has always wanted to do, but now having the gall to actually propose it
baldly in a document. No other conservativc government has ever taken
thcse sorts of policies on.
9
J: Does it make it easier for you now in the run up to the next election to
differcntiate the Labor Party from thc Liberals on the basis of this policy?
PM: Their policy is a pretty novel policy to get elected on. They said, we'll lift
the price of everything you buy with a 15 per cent tax on everything you
spend, and we'll cut your pay. Now finding a distinction with that, I don't
find difficult to do because I don't want to put a 15 per cent tax on
everything, and will not put a 15 per cent tax on everything everyone buys,
and I won't be around cutting people's pay.
J: If this policy were to produce lower wages, do you think there would be any
incecase in employment as a result?
PM: I don't think wages are a problem and the cost of labour is a problem today.
The problem is basically demand.
J: If wages wcre to fall, do you think employment might increase as a result?
PM: In the case of young people where they are talking about $ 3 $ 3.50 an
hour, God help you, you couldn't get a baby sitter for $ 3 an hour. At $ 3.50
an hour, is that going to expand the number of jobs? I don't think so.
3: What about unskilled labour?
PM; I think by and large the problem is not the price of labour, it is demand.
What arc you going to do with the labour, how are you going to employ it?
J: T7hat's a good question. What exactly are you going to do to get a million
people back to work if none of these Opposition proposals are going to
work?
PM: Expand the economny, let it grow. We can let it grow, we don't need to keep
it comatose as the Liberal Party would need to keep it to keep inflation
down because they have no incomes policy. They have no agreement about
national income. So if the place is more productive, and we're getting more
output from fewer people, how do you deal with the implied redundancy?
More growth. And how do you have more growth without high inflation,
without needing to use monetary policy permanently to comatose the
economy? Answer an incomes policy. We're the only party that has it.
We're the only party that can let the economy grow rapidly, grow quite fast
and still contain inflation.
I. When will we see that growth?
PM: You saw the Governor of the central bank this morning making his points
clear, his belief about the rates of growth coming through the economy.
I. Prime Minister..
PM: I've got a Cabinet meeting on 10 minutes ago.
J: With the Victorian election just over, already the Kennett Government is
looking at getting rid of 15-20,000 public sector jobs. Would you say that
was a possibility if this policy was Hcwson's policy after the next election?
PM: That Government is going to have to live by its actions and if it wants to
decimate the public sector of Victoria it will have to run the gauntlet of
public opinion. But the problcm in Australia is not that wage ratcs are
uncompetitive. That is a key point. It is not that wage rates or that the
economy is uncompetitive. The problem is that demand is too low.
J: Has there been any recent pressure on you to halt tariff reductions?
PM: I don't want to get into that debate. Go and talk to Laura ( Tingle) about that
one. OK.
J: Can you say that that story in The Australian this morning was true?
PM: I'm not into discussing the Government's discussions. I'm already
minutes past my Cabinet appointment. Thanks.
ends