Mr McCLELLAND (11:07 AM) —Our apologies to the member for Greenway, whom we caused to lose his speaking spot a short time ago on the appropriation bills. He will be able to continue shortly.

The position of the opposition is that we will oppose this bill but will formally move a second reading amendment. I move:

That all words after “That” be omitted with a view to substituting the following words:

“the House declines to give the Bill a second reading and condemns the Government for:

(1) introducing legislation that impedes the ability of the Australian Industrial Relations Commission to independently determine fair minimum wages for Australian workers and their families;

(2) attempting to limit wage increases for low paid workers in circumstances where it has placed increasing financial pressure on Australian families by:

(a) being the highest taxing Government in Australia's history;

(b) failing to stem rising household debt that has now doubled under the Howard Government;

(c) failing to address record bank fees that have doubled since 1997;

(d) forcing thousands of Australian families to pay high medical bills as a result of a dramatic decline in bulk billing;

(e) forcing Australian families to pay an additional 30% for the cost of essential medicines;

(3) attempting to suppress the wages of working Australians in circumstances where it will not take action to limit extraordinary executive salaries and executive severance packages; and

(4) calls on the Government to abandon its policies that favour the big end of town and do something to ease the pressure on Australia's millions of working families”.

In many ways, the intention of the Workplace Relations Amendment (Protecting the Low Paid) Bill 2003 is quite extraordinary. Effectively, it seeks to intervene in proceedings before the Australian Industrial Relations Commission when it is determining the national safety net award rate. The national wage case is currently before the Australian Industrial Relations Com-mission. This bill would effectively create a situation where parliament could intervene in those proceedings to determine the outcome. It is not a case of authorising executive action—for instance, authorising the minister to intervene in those proceedings and make a submission, as indeed he has the power to do and has done under the act; rather, it is for the parliament to legislate and to dictate in a significant respect how the commission should resolve its deliberations, exercise its discretion and give decisions in this very important issue. For instance, clause 4(1)(a) specifies that the operation of the act, if passed, applies not only from the day of commencement but also:

Clearly, it will have the effect of intervention in a legislative way by this parliament into the current deliberations on the national wage case. That is an exceptional, if not unprecedented, step. In my view, it is not an appropriate exercise of legislative power.

Historically, the Australian industrial relations system has had the very important role of determining fair wage outcomes for the Australian community. In some ways, it is unique to Australia. By and large, my perception is that the Australian people feel very comfortable with the Australian Industrial Relations Commission. They may find the Australian industrial relations climate distasteful from time to time, with extremists from both sides of the employment equation—representing organised labour on the one hand and big business on the other—going about their various machinations and power plays, but what reassures the Australian people that at the end of the day there will be a sensible and balanced outcome is the fact that the Australian Industrial Relations Commission has been a part of Australia's history, virtually since we became a nation.

As I have pointed out in this House before, the Australian industrial relations system has received the praise of international statespeople, none higher than Pope John Paul II who, on his visit to Australia in 1986, said:

Our fundamental objection to this legislation is that it skews the commission's function away from balancing competing considerations—on the one hand, the desire of workers for decent wages to support their families and, on the other, a desire for corporations to obtain a profit. There is obviously a need for both. The question is how we obtain that balance. The answer, quite simply, is that the Australian Industrial Relations Commission—rather than this parliament, which is based on a partisan outlook on life—is the body to do that.

Why will the bill skew the debate against the interests of working Australians? It will do that because it specifies that the commission, in exercising its discretion and coming to its conclusions, must as a primary consideration consider the effect of its decisions on employment.

Obviously the commission will consider that matter but, if this legislation is passed, the parliament is saying that this is the primary focus you have to have. We say that there are a range of matters that have to be balanced but, again, it has to be left up to the Industrial Relations Commission. The point I want to make is that the commission already considers those matters; indeed, as a result of the current legislative framework, it is obliged to consider those matters. For instance, section 3(a) of the act, under the `Principal object of this act', states that one of the objects of the act is `encouraging the pursuit of high employment'. That is in the current act. I would also emphasise that section 90 specifies that, in exercising its powers, the commission is required to take into consideration the public interest, and for that purpose it is to have regard to the objects of the act `and, in particular, the objects of this Part'. `This Part' includes section 90, and it includes section 88B, which states that, when the commission performs its function in ensuring that a fair minimum wage is established, it must have regard to `economic factors, including levels of productivity and inflation, and the desirability of attaining a high level of employment'. That is stated in paragraph 2(b) of that section.

Further, section 90 itself, as well as referring to those objects in paragraph 2(b), specifically provides that the commission, in taking account of the public interest, shall have regard to `the state of the national economy ... with special reference to likely effects on the level of employment and on inflation'. So, as the act is currently worded, the commission is required to have regard to these factors in balancing its role, on the one hand, of determining what is a fair and reasonable outcome for Australian workers and, on the other hand, of having regard to the national economy, the profitabilities of business and so forth.

To emphasise the significance of what the government is attempting to do, I want to underline the importance of the national wage case, which has been an annual event, if you like. Not only does it form the basis of a national safety net award; it has spin-offs in that, invariably, the state tribunals will, as a matter of course, flow on from the decision of the Australian Industrial Relations Commission with some minor modifications. So this federal legislation, which goes to the primary decision-making process in wage determination, has potential repercussions for all Australian workers whose employment is governed by a basic safety net award. That safety net award is important because it underpins the employment relationship to prevent workers who, I think fair-minded people would concede, are not in a position to bargain effectively with an employer one on one, unless they possess special skills.

For instance, as Justice Higgins said in the famous 1907 Harvester case, the concept of a freedom of contract between employer and employee is, in the main, `like the freedom of contract between the wolf and the lamb'. Indeed, to understand the origin and impetus behind minimum wages in Australia, it is worth having regard to that famous Harvester case. The House will recall that the Deakin government, in the Excise Tariff Act 1906, granted relief from excise duties for goods manufactured in Australia under remuneration and conditions which were declared by the President of the then Court of Conciliation and Arbitration to be `fair and reasonable'. In interpreting those words, Justice Higgins said that you have to have regard to what is a social wage. In 1907, almost a century ago, he said:

So this is the living wage concept that goes back almost 100 years. Later, Justice Higgins said in the decision:

This, again, is the concept of a living wage—the ability to provide food, shelter, clothing and frugal comfort for a family. Of course, when Justice Higgins spoke in 1907 he referred to `workmen', but if he were deciding the case today he would most certainly give equal, if not greater, attention to working women. That is emphasised by the fact that, according to the most recent ABS employee earnings and hours survey, women are much more likely than men to be paid according to base awards—26.4 per cent of women in the work force, over a quarter of women, as opposed to 16 per cent of men.

The significance of the underpinning safety net wage is in the fact that average weekly total earnings for employees on awards was found by the ABS to be $430.20. This is slightly below the full-time minimum wage of $431.40—again reflecting the reality that a higher proportion of women are engaged in part-time and casual work. The award safety net overall protects the most vulnerable employees in our society: those who are without special skills, high levels of education or technical skills. They are basically unskilled workers working to sustain themselves and their families. Overall, their earnings are far less than the earnings of those who are able to engage in collective bargaining. The Australian Bureau of Statistics figures show that, in May 2000, an employee on the basic safety net earned about $234 per week less than workers on collective agreements who, on average, earned $860.80 per week. In fact, we are now seeing quite an alarming disparity in earnings not only at the chief executive level, which we have been vocal about, but also within the general work force itself. It is this situation that the award safety net is so vital to addressing.

Returning to the amendment that I moved at the start of this speech, it is so important when you look at the pressure on families today. The government repeatedly says in question time and on other occasions that real wages dropped during the period of the 1980s and early 1990s. If you look at the concept of remuneration only in terms of wages, there was restraint to wage growth during that period—but that was the whole purpose of the prices and incomes accord. In the early 1980s there was a recession. The recession was mainly caused by inflationary pressures which had been substantially wage driven. Indeed, I remember there were some very successful industrial campaigns early in that time. The wage growth exceeded the capacity of the economy to sustain it, resulting in substantially wage driven inflation. I am not an economist, but this was an important fact.

All parties in 1983—the government, the unions and the employers—said, `This can't go on. We're going to wreck the economy; we're going to wreck jobs. There needs to be a better way.' Accordingly, they sat down and negotiated a prices and incomes accord where, in exchange for price restraint, there would also be wage restraint. As part of that equation, to assist workers in sustaining their living standards despite wage restraint, the government introduced the concept of the social wage: the provision of Medicare, some tax relief and, importantly for Australia's future economic prospects, superannuation. All this in combination did result in a suppression or reduction of wage pressure through the 1980s and early 1990s. I do not think there is a fair commentator that would say that Australia would be sustaining its current standard of living if the parties had not sat down to work that out and work through those outcomes on a cooperative basis. Interestingly, if you look at what occurred in Ireland—another economy that has fared very well despite recessionary times—it did much the same thing. It had what was called the `social partnership' between the government, the unions and employers. Even two years ago, it had another package of significant tax cuts for wage restraint. Again, these cooperative measures have delivered successful economic outcomes.

But why am I diverging to that, despite not being an economist? Fundamentally, these things are all at the heart of the considerations of the commission in determining what is a fair and reasonable outcome. The commission, for instance, is entitled to have regard to pressures on family generally. There are a number of pressures on family, in terms not only of simply buying goods but also of obtaining services. We have pointed out a decline in bulk-billing, meaning that more families have to pay more for their doctors—I will not make this the subject of my debate or the Minister for Employment and Workplace Relations will stand up and go crook, no doubt. We point out that, if the government's legislation goes through, families will shortly have to pay an additional 30 per cent for their medicines. For those on pensions and concessions, this increase is from $3.70 to $4.60; this will not apply to wage earners. Non-pensioners' costs will rise from $23.10 to $28.60 per script. We would also point out that private health insurance premiums rose by seven per cent—although it may well be that, regrettably, those on the base award rate cannot afford private health insurance. We have also pointed out that, on the one hand, the cost of school education has more than doubled in the 12 months to September 2002 and that spending on child care is now $800 less per child-care place than it was in 1996. On the other hand, we have seen families coming under increased pressure as a result of taxes, including the GST. We point out that the tax concessions introduced as part of that effectively evaporated after a period of two years.

As a consequence of these pressures, we are seeing a dramatic increase in total debt. Total credit card debt has tripled under the current government to almost $22 billion. We are now seeing more households on a revolving door cycle of credit cards; they are using funds from one credit card to pay off another credit card to pay off another credit card. At the end of the day, for many workers and their families on these very low wages, this only results in a situation where they literally have to go to payday lending authorities at exorbitant interest rates simply to keep the debt collectors away from the door. On average, every Australian owes $31,000—double what they owed in 1996. These are all dramatic and significant pressures facing Australian families and we believe that the Australian Industrial Relations Commission is entitled to have regard to all those pressures in determining what are fair and reasonable outcomes for Australian workers and their families.

The government say, `We are not hard hearted. What we are about is trying to improve the living standards of a greater number of Australians by enhancing employment. We believe that if we suppress or reduce wages outcomes then more employers will be willing to employ more people.' As a matter of analysis, if Australian wage rates were the same as they are in South-East Asian countries then Nike, for instance, might consider setting up its business in Australia to take advantage of those cheap wage rates as opposed to technological sophistication. But, again, it is a question of balance. Early last century there were many households that could afford domestic servants because the cost of engaging servants was so tremendously cheap; they were basically engaged for the cost of providing a roof over their head. If taken to one extreme, all of this could sustain a viable argument that increased employment would result from dramatically low wages—at least in the short term. But, surely these are all questions of balance and what standard of living we want to sustain in our community. I submit that the only standard of living that we want to sustain, as a minimum, is for Australian workers to be able to provide, as Justice Higgins said almost a century ago, the basic living wage of `food, shelter, clothing, and frugal comforts'. Even though what constitutes that criterion would clearly be different now, 100 years later, that principle must be very much at the bottom line, literally the safety net, below which you do not want any Australian worker having to attempt to survive and sustain themselves and their families. That has to be the primary underpinning factor.

To point out and respond to the government's argument, the Australian Industrial Relations Commission have not been satisfied that there is compelling evidence that safety net increases have significantly affected employment growth. They have skilfully balanced all of these competing factors in the desire for a reasonable standard of living and the need for profits. I believe they have approached their task in a balanced way. In fact, in May 2002 in their decision in the last safety net wage case, they said:

that is, the safety net award reliant industries—

Again, that is because the commission has had a balanced approach. One commentator who has analysed the effect of these decisions has said that while you might get some short-term effects from the long-term economic output, to skew the focus of business to driving down wages may be contrary to the long-term economic interest. That is because, as J. Nevile commented:

These are all complex matters; I do not have the answers to them. I am certainly not an economist—indeed, I am illiterate when it comes to all things economic. But these are things that the commission is entrusted to deal with and it has done so skilfully and with balance. Quite simply, the commission is the body to do it; not this parliament. The parliament should reject this legislation.

The DEPUTY SPEAKER (Mr Mossfield)—Is the amendment seconded?

Mr Albanese —I second the amendment and reserve my right to speak.