Senator O'BRIEN(11.25 a.m.) —I want to refer to the objects clause of the Workplace Relations and Other Legislation Amendment Bill 1996, particularly the object that Senator Mackay and some others have referred to. The object, as it is proposed to be amended by the deal between the government and the Democrats, would read:

(a)   encouraging the pursuit of high employment, improved living standards . . . low inflation and international competitive through higher productivity and a flexible—

and the words are then added—

and fair labour market.

I think the only flexibility that the bill will introduce into the labour market will be a downwards flexibility for the low paid, for young job seekers and for casual and part-time employees. We ought to remember that the government is responding to pressures from the business community who are demanding a more flexible labour market and labour market reform.

Let us have a look at how flexible and fair the labour market is. I refer to an article in today's Australian which talks about what has occurred in our labour market in the last couple of years. It does not just fix on the pay of ordinary working people; it fixes upon the increases that have been paid to business executives, as well as the general labour market. On the front page of the Australian there is an article which deals with this matter under the headline `Howard blasts executive pay rises'. In the third paragraph it says:

The pay packets of senior management rose by 6.5 per cent on average in the year to September—the same pace as in the year to June, and faster than the figure in early 1996—according to the latest survey by

Cullen Egan Dell, which is scheduled for publication this week.

That acceleration has taken place at the same time as general wage and salary pressures have eased from a peak of 5.1 per cent in late 1995 to a two-year low of 3.5 per cent in September.

A day after Coles Myer revealed its chief executive, Mr Peter Bartels, enjoyed a 76 per cent remuneration package boost to almost $3 million last year despite a slump in the company's profits, the Prime Minister, Mr Howard, called yesterday for `equality of sacrifice' from high income earners.

What is fair about this and what is the bill going to do to address this? It is all very well for the Prime Minister to make high-minded calls, but this bill is the government's, and apparently the Democrats', response to these sorts of circumstances.

Business has been one of the key instigators of this so-called reform package. I do not think it really is reform, because I thought reform was about improving things. I do not believe that this bill, particularly as it is described in its objects, will do anything to improve the situation. As I said earlier, it is talking about flexibility. But when you look at the rest of the bill, the flexibility will be downwards for the majority of Australian people, particularly those who are without power in terms of their employment relationship.

We looked at that particular object. As amended, it talks about a flexible and fair labour market. At the same time, we looked at what is actually occurring in the labour market and who is benefiting. Those who are in positions of privilege have obviously helped themselves at the same time as calling upon those who are in a position of disadvantage—those in an ordinary employment relationship—to take hold of their expectations and to accept less.

In terms of that power relationship, the Senate Economics References Committee looked at the question of bargaining and the Australian Democrats' position, as I think represented by Senator Murray, was set out in its report. At page 339 of the report the Australian Democrats' recommendation states:

It is recommended that the bill seek to expressly encourage collective over individual bargaining, but allow for individual bargaining of AWAs where the conditions of the AWA as a whole are superior to the award, and that the employee genuinely and freely agrees to the AWA.

I do not believe that anywhere in the objects clause is there effectively reflected an object which expressly encourages collective, over individual, bargaining. I make that point because the Labor Party will be moving an amendment to the objects clause which will have the effect of giving that importance to the issue of collective bargaining over individual bargaining.

Clearly, individual bargaining is not in the interests of ordinary Australians. It may be in the interests of business executives in a position of power and in a position to influence their boards to give them increases far and away above the sorts of pay increases that have traditionally been available to the ordi nary Australian worker; that is, the majority of the community that this parliament is supposed to be serving. We are not here simply to be serving the interests of business executives who repeatedly, allegedly in the national interest, call for this workplace reform agenda, as they call it.

Another aspect of the objects clause of this bill that I wanted to touch upon was the question of the organisation of employees and their responsibility for the maintenance of the award system. As I said in my speech on the second reading, it is the trade union movement that actually maintains the award system. Object (d)(ii) states:

. . . to ensure that there is an effective award safety net of fair minimum wages and conditions of employment . . .

It is proposed to be amended in the government-Democrat deal to read:

. . . to ensure the maintenance of an effective award safety net of fair and enforceable minimum wages and conditions of employment . . .

On its face, that seems a reasonable amendment, although it could go a lot further. In terms of what happens elsewhere in the objects to the bill, there is no proper recognition of the fact, in the amendment or in the bill as it stands—when I say `the amendment', I refer to the government-Democrat deal on the amendment to the objects clause—to the importance of the trade union movement to that process.

It is fine to have high-minded objectives for maintenance of the safety net system but, on the other hand, elsewhere in the bill—even as it is proposed to be amended by the government and Democrat deal—it seeks to diminish organisations' ability to organise and, in fact, gives primacy to individual contracts over the award system, thereby undermining the ability of the union movement to maintain that safety net for the future.

I am sure that the union movement will do an excellent job with limited resources, but realities are realities. I believe it is an object of this legislation to make the maintenance of the award system a more difficult task for the union movement, specifically by not recognising their importance in the objects—as they would be recognised if those objects were amended as proposed in the ALP amendments to this clause.

I have said a fair bit about the interests of the business community. What tends to be their newspaper, the Australian Financial Review, is a newspaper which I know a lot of members of the Senate have great regard for. Today in the Australian Financial Review there is an article by the economics editor, Mr Mitchell. I wanted to refer to that because I think it is giving us a few clues as to where we are going in the context of the objects of this bill. On page 17 of today's Australian Financial Review, in a story entitled `Consequences of compromise', there is reference to the deal between the government and the Australian Democrats. I relate this to the objects of the bill that I have just referred to, in particular, the importance of the trade union movement and how the objects do not particularly give the importance that the trade union movement has to the maintenance of the award system. Alan Mitchell says:

The other important compromise made by Mr Reith was on the question of freedom of association. The Government's intention had been to abolish the "conveniently belong" rule under which unions have been granted effective monopoly rights to represent particular classes of workers.

Workers were at last to be given the right to join the unions of their choice.

Now, at the behest of the Democrats, the right of workers to choose their unions is to be restricted.

Instead of the old conveniently belong rule there is to be a "more conveniently belong rule".

That is, incumbent unions will be able to maintain their monopoly rights to represent particular workers if they can demonstrate to the AIRC a) that the workers "could more conveniently be members" of the incumbent union and b) that the workers "would be more effectively represented" by the incumbent union.

Of course, employers who don't want the problems of managing workplaces in which workers have a choice will think this is wonderful.

But one of the most important objectives of the Government's reform—to make unions more accountable to their members—has been seriously compromised.

Apart from the fact that I believe that Mr Mitchell is particularly ill-informed on the subject of the representative character of unions, I want to go to what he said about the whole package, and that includes this question:

It also means that the Government, having compromised on its legislation, must now clearly articulate to the AIRC in its submissions and public statements how it wants the regulation of the labour market to be managed.

In the final analysis the commission must have regard to the policies of the elected Government—and all the more so when that Government has a strong popular mandate for reform.

Mr Howard must also take every opportunity he gets to reform the AIRC itself, to populate it with commissioners sympathetic to reform.

In other words, the newspaper that seems to be the advocate of the business community is saying that the Prime Minister should nobble the outcomes of this legislation by fixing the jurisdiction with biased opponents. That is what the article by Alan Mitchell is suggesting, and that, I think, is a fundamental problem with this bill—the objects clause does not properly express the role of the trade union movement in making the award system a fit and proper one for the Australian community.

With that in mind, I think we have to have a good look at this objects clause. The Democrats no doubt will mount some sort of cogent case for the deal that they have done. But let us wait and see about that, because I believe that they need to further consider their position and consider the Labor Party amendments on these matters.