PRIME MINISTER
TRANSCRIPT OF THE PRIME NITNISTTEq THE HON P J KE-ATING, M7P
PRESS CON FERENCE, PARLIAMENT HOUSE. PERTH
7 DECEMBER 1992
IF& OE PROOF COPY
PM III just give a brief overview of the meeting. We'rc nom, about two thirds the way
through the Council of Australian ivennunents' agenda, and there have been many
positive outcomes and Ill refer to those in a moment. On the protocols, on the
crvlronnient, forests, rnicro econornd.; rerorm of electricity and gas, Asian language
development and a few others I'll mention inore comprehensively in a moment,
We had a lona and 01gorous discussion on industrial relations where there was not
agreement between the Comnmonweath and particulaly the State of' Victori a, and
where I said that the Commonwealth was determined to trve the workforce Of
Victona choice. a matter the LiberalS often refer to it t~ hoice as to whethcr
they wish to accept the opportunity of enhanced access to the coverage under the
federal jurisdiction for awards, an option they would lose when State awardi
tvirminate in March of nex~ t year.
I argued to Mr Kenriett and to Mr Stockdale and others-and you miaht have seen
those charts about the factor shares betwe~ en wages and profits, that already at this
stage of the cycle the profit share -is at the level of the golden mncan of the 1960s,
and of coursc with any volume In the economy, any volume ubvc overheads wil
certainly just produce a hi~ her level of profits on the bottom line ul'cornpanies
which will tale the profit share above the ' 60s experience. And urcourse, the
concomitant wage share is at the 1 960s levels, levels where we all believed were
such as they would promote Investment aind allow the econorny to develop. My
question then was what are you asking for' Are you sayinlg that the profit share
is not hi~ h enough at this stage, in absolute 1evels or at this stage of' the cycle, that
the w3Ae share should be lower'? To which of course I had no replies Because
there isn't a reply Wagcs in Australia are competitive Willh Countries with Whom
we trade, and their unit labour costs are nearly 10 Me cent below wherc thcy wet.
a decade ago.
So I bild Mr Kennett that the Commonwealth would be legislating to extend
Section tI I of the Australian Industrial Relations Arbitration Commission powers
ror coverage for those employecs or groups of employees in Victoria who sought
such coverage. who exercised the choice and who sou~ h such coverage. We'rq
nol imposing coverage, we're leaving the opportunity there for people to make a
choice as to whether they want coverage.
Secondly, that in relation to the adopion of legislation under the ratified ILO
ggrecmrefts, I again reaffrrmed the Commnon wealth's willingness to consult with
states about the detail of that legislation. Need I say, these are for two of these
treaties, treaties which were ratified some timc agu with the agreement of the
States This is for thin~ s such as minimumn rates and equal pay, and it Is putting
into legislation the adoption of the content of the ULO ratifications which arc
Interniationally agreed minima agreed by thc employer, employee, and govcniment
representatives in the ITO. subsequently 4gtcvd by Australian States. subsequenitly
rautied to which we are Si'in clTect. Hardly a basis for Objection And of course,
what point could anybody argue that they don't agree with the principle of equal
pay for equal work. Or in the later to be ustified termination of employment
convention, that there people will have, a$ ain legislated international nimaU
under that convention, but about whcth we've agreed to consult, and consult we
will. We've established today a mechanism chaired by Peter Cook fur that
i; Qnsultation, as he i3 the appropriate M~ inister
So, we take the view, and I miade this point, that Australia in the last decade has
adopted a much more consensus, cooperative model in industrial relations, we
have adN-ance4 in tvi tn ur the change in our conomy materially since that
adoption, that there can be no complaint about the rac. to; sharts in the economy
beween wages and profit% and the 11Otion that we should drive wages down to
peas~ ant levels, or sonmething approaching it, is not what is holding the economy.
What has slowed growth in the economy is lack or demand, not the price of
labour. And it is demand which is now pickint; up, we've had 2. 1 per cenit growth
over four quarters, a lot of that demand has come from the public sectut wlikl, is 4
result of the Comm~ onwealth stimulus, and Australia is growing now faster than
ally ur iiie countries; of the Or--CD area.
So. on industridl reldtions I hNA-you could say we've agreed to disagree, but
around the basii of the Commonwealth Cove; ruient giving Victorian employees a
choice as to whether they want to go on single employer contracts with recourse
only to the common law, or whetherT thty opt rot choosing the enihanced access for
the federal jurisdiction of the Australiwi Industrial Relations Commni3sion.
In relation to the other ar eas, in the protocols we've established it basis and rules
for the proper Wnictioninl of the Council of Australian Governutents and the
Ministerial Councils, and we've also decidcd to review the number of Ministerial
Councils which are now 48 to more closely align them~ with thc structure of the
Federal Giovernmrent's administrative arrungement3 order a~ 3s g uidt to the Sort Of
model we might have.
On the environment, we have agreed with the Stutcs on ESD and ( 3roenhouse
straegies. This is quite an historic agreement involving work of environentalists
and indust ry, and is a sound basis for further decisioms. 1 think the main flavour of
that is we now have a decision-makcing framework for better land use planning
across the country which we've nevci-had in this nation before,
In forests. we adopted a forest strategy which provides a sound b& 43i for fUture
planning and more confidence for the forest industries. In rduis to water, a
primary national resource, we've adopted certain principles and sought a report on
better pricing, transferability of water rights and the use ofwvater. And in other
mnicro-economic related reformi areas, in electricity we4 have reaffrrned our decision
in May to separate power generation from distribution, making the point that
separate accountin$ is not enough. that we actually want a separation of
deneration and distributioni assets. In gas. where we are working towards the
objective of a free and fair trade in gas in the country. and setting up a report to
achieve it. And also adopting a proposal for enhanced Asian language
, development in the Austaliwi education system.
That is the progress to date. That's about, I'd say, 60 per cent through our agenda
of the Council of Australian Governments, and my coulleague die Treasurer John
Dawkins will share the Loan Council Meeting to follow this aflernon..
J Prime Nfinister, aren't some of the States. including the Labor Statc of Quensland.
concerned about your legislation. while it's directed specifically at VictV1ria, 111ay
have unintended consequences on places like NSW and Queensland, which already
have a number ofenterprise agreements which are outside the State award system"'
WM No, but they have the status of awaids, just as in the Commonwealth arca an
enterprise agreement has the status of an award. Even thougih it may be jointly
entered anid agreed by an employer and employee or a reprewentative uternploym. s
and is no longer the subject of scrutiny by the Cummrnssion still enjoys the status of
an award. There is still an arbitral structure, That's why, while it is national
legislation, the trigger will be the absence of an arbitral structure. That's why
Queensland doesn't have a worry in that respect. In relatiuji to soine of theA other
matters, that is the equal pay, terminations ct cetera, we've agreed to let them me
the detail of the bill, and that's why it's flne
get any support fromn any of the States today f'or your ILO conventions now,
have you?
PM: Yes, absolutely.
J. States antendments
PM. No, no there's no States amendments. Labor States were arguing the casc with me
aganst the conservative Sovernments rtpi-esented about the nature of the Viqtorian
reforms, so-called
3 But they've all evpresscd tconcem.
P M. They've said they'd like to be party to tbe consultations. I'm very happy to reaffirm
that, and we've set a structure up But I've made it very clear that the tArst and
principal change is the extension of enhanced acCCss for employccs for coycrasc by
the Australian Industrial Relations Cornmnission,. which does not rely on the
ce'dI affairs power.
J. You 3aid you'd consult on that, but you'rc also soing to rush it through the sy1stemn
by Chrictma~ s
PM-No, we Aill Rush through are yuui words We will consult. full stop. And then,
I hope. expeditiously put it through.
I. So doesi that mean it's not likely to go through before Christimas'.
Pm. rm not sure whether we cmhi di lift sonie of it beflore Christmas. but if we can and
we can comsult, we'll put it through. Certainly the cqual pay, and the minimums.
which have already been ratifitd, Lct me state the point a& air, these ar'e 11.0
conventions already ratified with the agretrrments or the States. and they aze for
internationally agreed minima. Who is Suing to tvgue in this country? What are
the Liberals goinS to stand up and say, they don't agree with equal pay, they don't
agree with somebody doing the mirnt woik being paid equaUy?
I Can you just clarit that Mr Keatin'g, you're goin to put through the arbitration
amendments befbire Christmas if you can, and you may put through the JLO
cotvention amendmients as well if it's possible to do thai berbir Clu ssitas?
PM. Ifit's Possible, except the third element, the separations have to be ratified first
3 So the ones that are ratified you would try to get through before Christmar=)
PM' -if it's pus~ ble. and with consultation,
J. Well in this case, this task force that's been se. t up. Mr Keating, are you SoinS to
move bcforc thait reports" Wouldn't that rcpuit to another Premniers' Conferen"?~
PM No, it's not a task force at all. It's a working group, at workin& party bet-ween the
Commonwealth chaired by Peter Cook, our industrial relations Minister, and
whoever the States wish to nomninate.
I: The States would be putfint3 on officials in positioris?
PM: No, I think Ministers, probably, or officials or both.
J_ So this dotsn't report back to a Premiers' Confetrence?
PM-No.
3. And you can't see this delaying the introduction of that second draft ofilegislation
at all"
PM: No. thcre are two possible delays in it. One, that we can't get the draflinS
completed and introduced in time, and therc's something in the Consultation
which causes us to redraft or do somcthing else. In other words, it's a
reaffirmation of what wc've already said But can I just say that as a1re sult of our
legislation. today in VIctoria the power strike. I understand. is not going ahead.
Again. it makes the point, the Liberals are always talking about choice yet they
object to Victorian employees. instead of the gun-at-the-head policy of take the
contract or take the sack, ofwhich of'courst there is no choice, we're actually
saying you can choose, if you wish, to be covered by the federal Australian
Industrial Relations Commilssion. Now, I don't think Mr Kennett can argue a point
of frusiration here ofthis legislation If there's a free choice ror the comnmunity of
Victoria
J: Mr KeatinS. Mr rahey hai just maid that this is basically Soing to.. miany Urf the
States... tax on employmentcosts"
M Laura, can I just ansv~ er that point straight away. I have agreed as Treasurti to
miany additions to Ilic 6lobdl limnits to States, tu pay redundancies, to cut the size of
llitli wurkrotixc and make their GBEs more efficient. None of us Is entitled to
short-change eniployes ivin tedunawtes on whiiJz they believ~ e always existed,
and it's n~ ot a % alid ease to be saying that it's a cost to the States which they can
tiiove by just soagely, without consultation. removing a right which someone
formerly enjoyed.
J But they're not just talking about redundancy, Mir Keating. they're saying if you
establish a national framework for all particularly in the area of teachers. there
will be another efrect in the setting of wages, and the States will lose control.
PM. But that' 3 Ot udse now A larbv proportion of State employevs " c covcrod by
federal awards now. And that's nothing to do with this Government, it's just the
way the Arbitration Conumission has developed over timne. A substantial
pruportivii of' State employe" are covered by federal awards. Pic fact is, the
Liberals had no reply to the ractu: share point. that the profit sharc is already hi~ h.
very high rbi this stage of the cycle. that the wage share is competitive with any
country we wish to compare ourselves with. that the levels are ones which
Snitcd high levels of investment in the Australian economy in years gone by.
and that thc whole point of their policy is basically to cut people's income.
J: I thought Mr Kennett's point was, when you said that, was that basically the only
thing, that was rising was unemploy-ment.
PM. it wasn't his point at all They hid no come-back to the essenitial point. that their
policy is basically a red-neck, small business group generated policy which they
had dropped on the people of Victoria without consultation, in Parliasnentary
shtin~ s in the dead of night, without any consultation with the national
Government which has a mandate ror a cooperative policy, which it's introduced
now for over a decade, which is producing high levels of productivity, which has
arranged in an aggregate way the factor shares to generate high levels of
investment in thV101O, Mild Will qgaif III Ol:' 9O0i. flu CAMISUltatkili Uut Urtle Mlug,
rtt policy which basically weks to Scnerate more activity by Cutting people's4
wages. Now. ' wc rcjvt that We Av the wage levels itt this country aic adcqualt
to promote the investment we need. But the problem has been demand not labour
C03 id tNS is basically a red-neck agenda which the Commonwealth will never
accept. I can't set how the Liberals, always so keen to talk about chice, wle
afraid of Victorian employees makin* a choice of their own volition to exercise the
enhani, ed opportunity of coverage undcr thc federal award systwm.
ends