Mr STEPHEN SMITH (3:14 PM) —The MPI today is about the adverse impacts that the government’s extreme industrial relations proposals will have on Australians, particularly working Australian families and middle Australia, and on their living standards and quality of life. These extreme proposals are unfair and they are divisive. They are certainly extreme, and they will have a twofold effect. Firstly, they will reduce the living standards of working Australians and, secondly, they cut away at the values, virtues and characteristics that Australians have held dear for a very long time. The combined effect of that will be to undermine the quality and the value of life of working Australians and Australian families generally. It is not just the Labor Party or the labour movement making these analyses. We now find senior members of our community, in particular, senior leaders in our churches, making these points on a regular and repetitive basis.

The Prime Minister made his ministerial statement in this place on 26 May, and on the weekend, on 8 or 9 October, we saw the government’s 68-page preliminary explanatory memorandum. The framework is essentially as we saw it in May: an attack upon living standards, an attack upon our values and virtues, an attack upon our quality of life and an attack upon the capacity of Australian families to make ends meet and to enjoy a decent quality of life. As I say, it is not just Labor saying this. We find Archbishop Pell, Archbishop Aspinall, Archbishop Jensen, the Australian Catholic Commission for Employment Relations and the National Council of Churches, again and again since May, expressing concerns about the attack upon living standards, the attack upon quality of life and the attack upon our values and virtues.

On the other hand, the government try to pretend that none of these things are at issue. The government simply say, ‘These proposals are good for you and good for the nation.’ They are spending millions and millions of taxpayers’ dollars on a Liberal Party political advertising campaign to try to persuade the Australian public of that. They will not tell the Australian public the truth. They will not tell the Australian public how this is an attack upon their living standards and an attack upon values, virtues and characteristics that we have held dear.

The first thing the government will not tell you is that these proposals will make working Australians worse off, and there is a very good test to prove that is the case. Repeatedly in this place since May we have asked the Prime Minister to give a guarantee that no individual Australian employee will be worse off as a result of these changes, and consistently and persistently he refuses to do that. This was something of a surprise to us, because this was a guarantee he was happy to give in 1996 when he had Peter Reith and Alsatians and balaclavas. He gave what he then described as a rock solid, ironclad guarantee that, under his proposals in 1996, people could be better off but no-one would be worse off. He did it with Peter Reith and the Alsatians and balaclavas, and we were surprised that he did not do it with Minister Andrews. Kevin is not your Alsatians and balaclavas type—he is more your opera glasses and poodles type—but he does follow his instructions.

The Prime Minister says, ‘My guarantee is my record.’ And his record, he says, is 14 per cent growth in wages in real terms since he came to office and a 12 per cent increase in real terms in the minimum wage since he came to office. What a surprise that after 14 years of consecutive economic growth—we are now into the first quarter of the 15th year—set up by the structural reforms of the last Labor governments, the Hawke and Keating governments, we might have an increase in real wages.

Mr Andrews interjecting—

Mr STEPHEN SMITH —The minister interjects and says that under Labor it was two per cent. I distinctly recall that when the Prime Minister left office as Treasurer in 1983 he left us with a 10 per cent inflation rate. When he returned to office in 1996 the inflation rate was two per cent. Last time I looked, an effective calculation of the real wage was to judge that against the inflation rate. We battled against a 10 per cent inflation rate that the government, under Malcolm Fraser and John Howard, left us.

So he says his guarantee is his record. Let us have a look at his record on the minimum wage. The Prime Minister says that, under him, the minimum wage has increased by 12 per cent in real terms since his government came to office. The government first made a submission to the Industrial Relations Commission in respect of the minimum wage in 1997. So, if you take the period when the government came to office, from March 1996 until now, it is the case that the minimum wage has increased by 12 per cent. If you take the period from the government’s first submission in 1997, the minimum wage has increased in real terms by 9.7 per cent.

All of this is not because of John Howard’s best efforts but despite them. John Howard has consistently opposed the decisions made by the Industrial Relations Commission in respect of the minimum wage. If John Howard’s submissions to the Industrial Relations Commission on the minimum wage since he came to office had been accepted, the minimum wage would be $50 a week or $2,600 a year lower. The consequence of that is that the minimum wage under John Howard, if his submissions had been agreed to, would have been reduced in real terms by 1.55 per cent—not a 12 per cent increase—since he came to office. That is at the start of the government’s attack on living standards. John Howard wants to get through the back door what he has not been able to get through the front door, through the Industrial Relations Commission, since he came to office. That is why he wants to take an axe to the minimum wage, an axe to the Industrial Relations Commission and an axe to the living standards of the nearly two million employees who are entirely dependent upon the minimum wage.

Why would he do such a thing? He would do such a thing because he has an economic view that by reducing the wage level at the lower end of the scale you somehow magically increase or improve employment. Anecdotally, that means this: you have a cleaner on $25,000—rule of thumb, the current minimum wage. John Howard’s thesis is that, if you reduce that by $2,600—let us just say to $23,000—somehow we are magically going to have two cleaners. Or there is his productivity and competitiveness argument that, if you reduce the cleaner’s wage by $2,000, somehow the cleaner is going to become more productive. The essential public policy assertion that the Howard government makes—that by reducing the living standards of those people on the minimum wage we will somehow magically increase employment—is an economic misnomer. There is no credible economic theory to that effect. Indeed, more recently we have seen serious economic analysts and labour relations and labour market analysts underlining that point.

The second area where there is an attack upon the living standards of working Australian families is in respect of conditions. At the moment we know that so far as conditions and entitlements are concerned we have the so-called 20 allowable matters and the no disadvantage test. It is the 20 allowable matters and the no disadvantage test which are the measures against which any individual agreement or collective agreement has to be judged. A judgment will be made as to whether, overall, an employee who goes onto an individual or a collective agreement is at a disadvantage when compared with the award. Currently we have 20 allowable matters. The government is proposing to knock off four allowable matters out of the 20. It is proposing to knock off long service leave, notice of termination, jury service and superannuation.

The government make a lot of saying, ‘We are going to enshrine four allowable matters as a legislated minimum standard: annual leave, personal or carers leave, parental leave and ordinary hours of work.’ That leaves 12 swinging. The 12 that the government leave swinging—at risk—are some of those things which are most important to the lifestyle, the living standards and capacity to make ends meet of working Australian families. They include such things as public holidays, rest breaks, meal breaks, incentive based payments, annual leave loadings, allowances, penalty rates and loadings for shift and overtime. They go right to the hip-pocket nerve of Australian families. In the great sleight of hand, the government try to pretend that those things will be protected.

If you look at page 8 of the 68-page explanatory memorandum, which should be entitled ‘No Choice’ rather than WorkChoices, the government says this:

It goes on to say:

It goes on to say that an AWA:

What does that mean? That means that an individual contract—an AWA for someone like Billy, who the Prime Minister in question time today was happy to say would be forced onto an AWA with such inferior conditions—simply needs to refer to the removal of those provisions. I drew the House’s attention to this yesterday with the Tancred Fresh AWA example. On page 4 of 12 of that AWA, under paragraph 14, ‘Wages’, it states:

So, under the government’s new changes, you will find a one-line entry which will say your rate of pay is inclusive of public holidays, rest breaks including meal breaks, incentive based payments and bonuses, annual leave loadings, allowances, penalty rates and shift or overtime loadings. And, once you say that your pay includes those things, the government’s so-called default provision goes by the board: those things are lost. They were lost for the people who signed this agreement in Rockhampton, and they will be lost for Billy, the government’s and the Prime Minister’s most precious example.

Overnight the minister has been making great play of the fact that the agreement that I referred to yesterday in the House was not actually registered by the Office of the Employment Advocate, because the Office of the Employment Advocate said the pay rate—which essentially gave 16c an hour for the loss of all those entitlements—did not meet the no disadvantage test and had to be improved to the princely sum of $1.31 per hour for losing all those matters. What of course the minister did not say overnight is that, under the government, the no disadvantage test which includes those things goes. So, Minister, thanks very much for proving the point that we were making yesterday. I am quite happy to say, as I said on radio this morning, that the agreement that I referred to was the agreement that was signed by an employee and not registered by the OEA but, under the system that you are proposing to adopt, the Tancred agreement, as referred to by me in the House yesterday, would have been registered—proving the very point that we are making.

That deals with the living standards argument so far as the government is concerned. The government also does not like to hear how these extreme proposals are an attack upon the values, virtues and characteristics of Australian society. For over 100 years, we have prided ourselves on essentially being a fair and egalitarian society, saying that people were entitled to a fair go. Wasn’t it interesting in question time today? One question to the Treasurer about his attitude to the churches not being entitled to have a view, and he reeled off a whole range of things that might be relevant to this area. What was the one thing he did not mention? Fairness—no mention of fairness.

When the Prime Minister was asked about his favourite example, Billy, what did the Prime Minister say? The Prime Minister said that he was happy for Billy to take his chances, that Billy could either sign or not have a job. The Prime Minister, both on The 7.30 Report last night and today, is essentially saying that he is happy for there to be a three-tiered employment system in Australia: those people who have jobs, those people who want to move between jobs and those people who do not have a job and are trying to get into one. At each level in the system of three tiers you will be treated more and more unfairly, depending upon which point in the cycle you are in. Billy is obviously going to be treated most unfairly; those people trying to transfer between jobs will be treated unfairly; and those people who have jobs will take their chances, as minimum standards, safety nets, salaries and conditions are attacked by this proposal.

The other point which the government do not make but which we find the churches making is that the government do not believe that the trade union movement has a legitimate role to play in modern-day Australian society. Unfortunately for the government, the churches and Labor do. It was very interesting to see the government’s private briefing for business and industry on Sunday morning. Nothing could have been better predicated to show how this is a massive shift in the bargaining power of the employer further against employee. Nothing could have given that signal better. The government are quite happy to sit there and say, ‘We don’t see a role for the trade union movement in the economic and social affairs of Australian society.’ Well, we do, and there is one classic illustration: who was it that came to the rescue of the asbestosis and mesothelioma victims of James Hardie? Not one person in that room on Sunday at the private briefing had lifted a finger for those victims; it was the organised trade union movement.

These so-called reforms—these extreme changes by the government—are nothing more than an attack upon the living standards of working Australians. They are an attack upon the values and virtues, underlined by fairness, that we hold dear as an Australian society. They indicate a view that the organised trade union movement has no role to play in the modern social affairs of Australian society. All of those things we reject and will reject day in and day out until the next election, when the government will find its judgment coming from the people.