Mr GARRETT (7:29 PM) —I rise to oppose the Workplace Relations Amendment (Better Bargaining) Bill 2005. I reflect on the comments of the member for Goldstein, including his assertion that the industrial relations agenda that has been introduced by the government will see a lessening of the confrontational approach that he maintains has characterised relations between workers and employers over time. I refer the member to the activities taking place at the Boeing plant near Newcastle, where a number of employees—aircraft maintenance engineers who had been performing their tasks with competence and without complaint from the employer—sought to collectively bargain agreements in the workplace and were promptly thrown out onto the street. They are still there on a picket line. I visited them, and I again pass on my support to them.

Above all, the government’s approach to industrial relations included in the proposals outlined in this bill can be characterised as the pursuit of ideology over genuine political necessity. There has been no substantial argument mounted to advance the proposition that the current industrial relations landscape is holding back Australia, its growth and its prospects. Indeed the statistics offered by members opposite, including the member for Goldstein, that Australia is experiencing a period of economic growth and buoyancy give the lie to the proposition that the industrial relations scheme is an impediment to that growth. Yes, business groups have brought forward an agenda, and the government has embraced their views. But there has been a notable scarcity of hard data which shows clearly that we would be better off if the proposals contained in this legislation were adopted.

The case has simply not been made—neither have the public accepted the case, because the public too smell an ideological crusade. Their lack of confidence and support for the government’s industrial relations agenda is evidence of that fact alone. They certainly are aware of the practical and fair system we currently enjoy, which has served the country well. I think it is worth reviewing in some detail what that system entails and how it has developed so that we can analyse the intention of the government to take it apart, and this will give a clearer indication as to why the opposition is opposed to the government’s agenda.

The member for Goldstein and others referred back to the 1990s, but I want to take the House back much further than that. In Australia for over 100 years fairness at work has been guaranteed by the various checks and balances arising out of the rights and obligations enshrined in state and federal industrial laws. Members would know that these rights and obligations are found in industry awards and that there are specialist tribunals, known as the ‘independent umpires’, that have overseen the preservation of the notion of fairness at work. It is a good system and it works, and it is that system, a system of fairness, that is under attack by the government. The prime ministerial statement of 26 May, subsequent statements in the House and now legislation reveal the government’s plans to take out fairness from the Australian workplace.

The government’s intention to dismantle or modify the industrial relations system at both the federal and state levels, replacing them with a single system that will be a shadow of that which it replaces, is the evidence. The proposed changes are extreme. They come with little prior public debate and with little justification, and critically they remove fairness from the system. The government’s proposals will strip most workers of their right to challenge unfair dismissals, reduce the role of unions in our community, strip away the powers of the Industrial Relations Commission and reduce minimum wages and conditions—that is clear. Yet Australia’s history demonstrates a commitment to fair minimum wages over the period of the federation to today. One hundred years ago the term ‘living wage’ was in fact used, and now we talk of a federal minimum wage. But we have always had labour laws that acknowledge and provide for consultation with, and participation of, all stakeholders in setting those standards; workers have been represented by their unions and employers by their associations. This was part of the great and successful Australian compact that historians refer to.

Yes, the method of setting wages has varied from time to time, but the general principles have always been the same. In 1907 Henry Bourne Higgins, President of the Commonwealth Court of Conciliation and Arbitration set out the sentiments of Australians in the Harvester decision when he said that a minimum wage for an unskilled worker should be fair and reasonable based on the ‘normal needs of the average employee regarded as a human being living in a civilised community’. Justice Higgins believed that that amount must be something more than the wage decided by ‘the usual but unequal contest, the higgling of the market, for labour, with the pressure for bread on one side and the pressure for profits on the other’.

For 100 years, courts and tribunals have considered and set rates for a fair day’s pay. The latest figure, now expressed as the federal minimum wage, set by the Australian Industrial Relations Commission is $484.40 per week. It is worth noting that the Henderson poverty line, a measure for poverty developed in the 1970s to calculate a wage that allows for a minimum standard of living, is $568.11 per week for a family comprising two adults, one of whom is working, and two dependent children.

As is often remarked upon on this side of the House, the federal government has appeared in every wage case since 1996, and on every occasion it has argued that the Australian Industrial Relations Commission award a lower wage increase than has been awarded. The government has been a consistent voice in this place to deny workers award increases in their wages. Had the Industrial Relations Commission done as the government wanted, the minimum wage would be $434 per week, or $134 less than the Henderson poverty line. This is the future for Australian workers under the Howard government’s industrial relations agenda.

The government has announced, amongst other things, that it will introduce a new system for setting minimum wages, that they will be set by the Australian Fair Pay Commission—an Orwellian title, it is true. Clearly the government will no longer allow the Australian Industrial Relations Commission to set the minimum wage. I note the comments of senior commissioners recently in opposition to comments made in this House by members of the government that they had not taken into account the state of the economy when making award determinations. The commissioners were clear: it is part of their brief; they must take the conditions of the economy into account, and they do.

The issue of fairness involves more than just a minimum wage. Minimum working conditions, importantly, are the foundation stone of the workplace. These minimum working conditions are benefits that come on top of the minimum wage, and together they make up what is now known as take-home pay. The benefits include, but are not limited to, overtime, penalty rates, sick leave, annual leave loading, public holiday pay and long service leave. These benefits have been provided to ordinary working Australians through a unique form of regulation known as industry awards. The process of award making has built on the minimum wage and developed industry-specific awards which set fair minimum conditions for working Australians.

Australians have been the beneficiaries of a system where awards are determined industry by industry, and conditions appropriate to each industry are tested against wider community standards. That is how the system has evolved, and it works. The current legislation requires the Australian Industrial Relations Commission to ensure that a safety net of fair minimum wages and conditions is established and maintained. That safety net means that no-one negotiates an agreement which is less than the award entitlements.

Industry awards are an integral component of the industrial relations system, and the resolution of disputes over those conditions has been administered at both state and Commonwealth level through courts and tribunals. Importantly, we now face the prospect of large numbers of Australians negotiating conditions with their employers that are outside the other award conditions. The minimum conditions—the minimum hourly rate of pay, annual leave, sick leave, parental leave and a maximum number of ordinary working hours—are not up for grabs. All other minimum conditions are up for grabs in the negotiating process.

Up to now, a fair negotiating process has emerged. It is called enterprise bargaining, and it was introduced to allow enterprises to meet the needs of a more open and flexible economy. Workplaces have been able to negotiate different working arrangements that suit the needs of that particular business. Those negotiations have been underpinned by award wages and conditions. The parties have been free to bargain away some of those conditions, but enterprise agreements have to meet the ‘no disadvantage’ test. This meant that the agreement, when tested against the industry award, did not leave workers worse off. Workers could vote on an enterprise agreement and the agreement would only apply if a majority approved. The commission had the role of certifying enterprise agreements and anyone affected by an agreement had the right to appear before the commission to raise any complaints about the agreement. That was the way in which the system worked.

With the introduction of enterprise bargaining the award-making process has focused on minimum conditions, and it has allowed better conditions to be gained through enterprise bargaining. Under most enterprise agreements workers do well compared to workers who rely on the award. It is true that not all industries have embraced enterprise bargaining. Some industries, such as the retail, hospitality and health sectors, still rely heavily on the award system. Workers in these industries depend on the award system to ensure they get a fair day’s pay for a fair day’s work. But the intention of the government is that agreements will no longer have to meet the ‘no disadvantage’ test. Instead they will only have to meet the new minimum standards set in the legislation. Those minimum standards will be the minimum wage and the minimum conditions of annual leave, personal leave, parental leave and a maximum number of ordinary working hours.

The Australian Industrial Relations Commission, it seems, will no longer certify the agreements. Instead, the Office of the Employment Advocate will be responsible for ensuring that agreements do not offend the new minimum. Critically, the awards will have no role in setting the minimum standards for new agreements. In more recent years the law has changed again so that employers can offer individual contracts to workers. As the House well knows, in the federal system these contracts are known as AWAs—Australian Workplace Agreements. These agreements, like enterprise agreements, have also been subject to a ‘no disadvantage’ test through the Office of the Employment Advocate.

When you remove the safeguards, as the government proposes to do, then you have a race to the bottom. Wages and conditions are costs to businesses. In some businesses they are the major costs. With appropriate safeguards, a level playing field is created and businesses compete on factors such as know-how, experience, reliability and service. They do not compete on the basis of how little they pay their workers. The concern that the public has, and what we oppose, is the prospect of the government taking away this level playing field of award wages and conditions—in so doing, employers in industries such as cleaning, hospitality, aged care, security services and the like will be forced into a new race to the bottom.

There is no question that life at the bottom is cruel and difficult. I think we recently had an opportunity to witness what life at the bottom would be like with the industrial relations system that operates in the United States—which is somewhat akin to what is being proposed by the government. I am not suggesting that they are similar, but I am suggesting that there are similarities. It was those low-paid workers—those at the bottom of the wage heap—who were unable to pay for the petrol or who did not have decent motor cars to escape from the terrible travails that faced them when the cyclone hit New Orleans.

In this country we also have an idea what a race to the bottom would mean. I am referring to a book that I commend to the House, Dirt Cheap: Life at the Wrong End of the Job Market, by Elisabeth Wynhausen. Elisabeth gave up her job as a journalist at the Australian because she was inspired by the account of American writer Barbara Ehrenreich of her time as a minimum wage earner in Nickel and Dimed: On (Not) Getting By in America. She was hired as a breakfast attendant at the Princess Hotel in Melbourne for $11.98 an hour. She worked with a 40-year-old Russian immigrant who lived 30 kilometres out of the city and had to leave home at 4.30 am to be at work on time, which meant that she was 20 minutes early and she would go straight to work.

The staff at the Princess Hotel are required to transfer supplies from one hotel to another in the chain called the Duchess, and at this hotel employees were subjected to surveillance by the owners of the hotels. Elisabeth Wynhausen found that employees were ever fearful of being late for work or returning from meal breaks late and this fear would cause major anxiety, as they believed they would be sacked for the smallest indiscretion. Those indiscretions will be bargained away.

Elisabeth worked two jobs at this time: the first as a cleaner and the second as a breakfast attendant. The cleaning job was in the evening. She was paid by cheque, which was made out in her first name only, and she was told that tax had been withdrawn. Sometime later she found out that she was being underpaid by about $2 per hour, which amounted then to nearly three hours worth of dusting a week.

The story continues. After two days of working two jobs, Elisabeth quit the cleaning job. It is true—and the House should be aware of this—that statistics show that five per cent of all workers and 10 per cent of casual workers in part-time positions work two jobs to make ends meet. Restricting the capacity of workers to bargain within their workplace to ensure that they do not find themselves working unreasonable hours will most strongly apply to those people at the low-wage end of the employment market.

To continue the story, whilst Elisabeth Wynhausen worked full time at the hotel, she did not receive any overtime for working weekends and she was not informed that working weekends was a requirement of her employment. The salary quoted at the time of commencing employment included superannuation. Two weeks into her employment, Elisabeth was informed that the conditions of her contract allowed the company to ask her to work flexi hours, which could be any time during a 24-hour period and which could demand that she work 40 hours a week without advance consultation. Those terms and conditions that rightly have been a part of the Australian industrial relations landscape for many years will no longer be, under the industrial changes that are proposed by the government. It is those members of the work force who do not necessarily have the capacity or the high skills who will be the most vulnerable, and it is to them that the government owes the greatest responsibility.

The story finishes something like this: after discovering that she was not entitled to the tax-free threshold earnings of about $24,918 per annum, and after the rate adjustment was taken into account—she was earning just $57.09 a day, or about $7.14 an hour—Elisabeth found that she could barely cover her living expenses. Needless to say, she spoke up. She had a run-in with management regarding another employee dobbing her in for using some milk, and she was pushed to resign from her job.

The tale is an apposite one. There are only two ways that we can compete with a country like China, for example, as it builds its industrial capacity and continues to export into our market: we can be smarter and more innovative and we can apply the imagination and the intelligence of the country and come up with better ways of producing materials in competition with the Chinese or we can bring the unit costs of labour down. I suggest that that is one of the agendas that lies behind the so-called industrial relations reforms that the Howard government is proposing. At a time when the economy is buoyant, these changes may on the surface not seem—at least from the point of view of the government—to be damaging and deleterious to the social fabric, but I take no delight at all in saying to the House that I hold grave fears and concerns in the event that the economy has less robustness than it is showing at the present time.

There has been no substantial argument mounted to advance the proposition that the current industrial relations landscape is holding back Australia, its growth or its prospects—none whatsoever. What is at stake underneath the range of measures the government is committed to in its so-called industrial reforms is something fundamental to democracy, something that those in the past have aspired to and won in their long marches to freedom—that is, the right to associate, to join together and to take industrial action to remove their labour if necessary in the interests of fairness. Freedom of association is a fundamental human right; hence the freedom to strike has emerged as an essential tool for the implementation of such a basic freedom. That is why Labor oppose the government’s agenda in this House and that is why the community does, too. It does not trust the Howard government on this issue and, as long as we stand and can draw breath, we will argue for the fair rights of Australian workers in this Federation.