Senator O'BRIEN(1.15 p.m.) —I rise today to refer to an article which appeared in the Financial Review on Monday, 2 December—that is, last Monday. On page 5, under the heading `Just set a single minimum wage, says business', the Financial Review reports as follows:

The BCA—

which stands for the Business Council of Australia—

which represents the chief executives of Australia's biggest companies, says there are "strong arguments" for setting the minimum wage level about $9.19 an hour—the lowest level in most Federal awards—in its submission to the national wage case prompted by the ACTU claim.

I was somewhat taken aback by that proposal, and even more taken aback, considering where it came from.

I would like to tell the Senate that, when you apply what is the fairly standard weekly 38 hours that most people are entitled to as full-time employees, $9.19 an hour amounts to the princely sum of $349.22 per week, or $18,159.44 per annum. I would also remind the Senate that, in the Institute of Applied Economic and Social Research document on poverty lines in Australia for the June quarter of 1996, that figure of $349.22 is below the poverty level for a couple with one child or a single parent with two children—those figures are $372.83 and $360.29, respectively.

The Business Council is proposing a minimum rate—in fact, the only rate—to be struck in the test case being conducted by the Australian Industrial Relations Commission as the basis for setting wages for all employees in Australia. I think it is even more remarkable that the BCA would make such a submission when you note who the Business Council is. The Business Council is an organisation representing the chief executives, predominantly, of the major companies that operate in the Australian economy. I have here its annual report which lists all of those chief executives. I will not name them all individually, but there appear to be about 40 of those people involved.

Having looked at what the BCA has said, I think you also have to look at what position its members bring to the debate on wage levels in Australia. Therefore, I would like to put on the record other material which also appears in the Financial Review but in editions which were published earlier this year. On the front page of the Financial Review of 28 August, there is an article entitled `Our first $2M-a-year salary man'. In part, that article states:

A survey compiled from annual reports of the top 350 listed companies by Remuneration Planning Consultancy also indicates that the growing trend towards linking pay to company performance is boosting pay increases for chief executives.

By analysing remuneration statements in annual reports, the survey concluded that CEO salaries jumped by 15 per cent overall last year while the number of chief executives on six-figure salaries increased by 17 per cent.

Another part of that article states:

. . . the mid-point salary for CEOs of companies with the largest market capitalisation—$5 billion plus—was $1.1 million; a figure 4.2 times higher than the mid-point for companies with the smallest market capitalisation of $100 million or less.

I think a fair assumption is that the chief executives who comprise the Business Council of Australia will fall in or above the category that is referred to as the `mid-point salary for CEOs'.

However, there are a couple of individual members of the Business Council who have also had their salary levels reported in the Financial Review recently. An article on page 1 of the Financial Review dated 30 October, under the heading `PM attacks executive pay rises', states as follows:

"It is an obligation that is also to be accepted and to be met in full by people on high incomes." Yesterday's comments came after it was revealed Coles-Myer chief executive Mr Peter Bartels received a $1.2 million—or 76 per cent—increase in his package in 1995-96 to $2.8 million.

The article of 28 August to which I referred earlier reads:

BHP's chief executive, Mr John Prescott, has smashed the $2 million-a-year salary barrier after receiving a $300,000 pay increase in the year to May 31.

Later it says:

Mr Prescott's pay rose from $1.9 million in the 12 months to May last year to more than $2.2 million, according to the BHP annual report released yesterday.

An article on page 25 of the Financial Review of 15 January 1996, which was much earlier in the year, reports Don Argus as receiving a salary of at least $1.3 million, with a proposal for share options to be available on top of that.

Why do I mention those three chief executive officers? Because they are all members of the Business Council. That is the body that has gone to the Australian Industrial Relations Commission and said that the commission should set only one rate of pay for Australian workers: $9.19 an hour, $349.22 per week, $18,159.44 per annum—and I am extrapolating those latter two figures.

Bearing in mind that minimum rate of $9.19 an hour that the BCA is asking for, in 1995-96 Mr Bartels received over $50,000 per week, Mr Prescott received over $40,000 a week and Mr Argus received over $25,000 a week. If you look at it in another way, Mr Bartels is receiving over 140 times the level of salary that he is proposing, Mr Prescott is receiving 110 times the level of salary he is proposing and Mr Argus is receiving more than 65 times the level of salary that his organisation is proposing.

I think you have to ask the question: how removed are people belonging to the Business Council from the reality of battling on wages of the level that they are proposing for Australian workers? What credibility should be given to arguments if we are talking about the minimum level? Are we talking about a level of pay that has something to do with people being able to live on it? What credibility can be brought to such an argument?

Monday's article goes on and says:

But the BCA argues that any minimum wage increases for the low paid be traded off against increased unemployment.

Its submission backs the Federal Government's position that award career structures and wage relativities are no longer relevant in an era of enterprise bargaining.

It argues that the AIRC must break the link between a needs-based approach to minimum wage fixing and award wage classifications to avoid wage inflation.

If $9.19 an hour is a `needs-based approach to minimum wage fixing', then heaven help the Australian workers and probably those who work for the companies that are represented by their chief executives in the Business Council.

I think it is really important to extrapolate further in relation to this matter that the Business Council and the federal government agree on that latter point—that all that awards should have in them apparently, if one can believe the article in the Financial Review, is a basic minimum wage, with no classification structure, no relativities, leaving that for determination at the enterprise. You have to then say: what does that mean if they are successful in the context of the legislation which has been amended and now passed through this chamber and accepted by the House of Representatives—that is, the Workplace Relations Bill?

The Workplace Relations Bill has set up a mechanism for reviewing Australian workplace agreements to be judged against the standards in awards to see whether they were acceptable; that is, that overall they had to be no worse than awards. Here we have a proposal from the Business Council, supported by this government, to say, `Let's not look at awards as legislative documents which set minimum rates of pay for different levels of skill.' That is what their proposal means. They are saying, `Well, let's set up an award with one rate in it,' which the Business Council says is $349.22 apparently. One hopes that they are not tampering with the minimum hours as well. They are saying, `Let's set up an award with one rate of pay, and let the enterprise sort that matter out.'

In the context of the legislation that has been passed here with amendment and accepted in the House of Representatives, that will mean the only wage standard that Australian workers will have to protect them when negotiating an Australian workplace agreement, the only protection under this proposal—remembering that there are many vul nerable workers, particularly those seeking a new job, who can be asked to sign an agreement before they start—will be that they be entitled to no less than $9.19 an hour; that will be the only protection in relation to wages. So really, if this is the secret agenda of this government and the Business Council, it ought to be, and stands, condemned. It is absolutely reprehensible.

I go back to the first point I was making. Look at the standards that the members of the Business Council set and accepted for themselves. If you look at the average that was referred to there of $1.1 million for the chief executive officers of the top 350 companies, that is 55 times the level of wage that they are proposing be the minimum. The Business Council and the government agree that we ought to get rid of everything else except a minimum standard in awards. This is a really serious threat to the Australian people. It is a really reprehensible thing that the government would put through legislation based upon an existing award system, and would subsequently go to the Australian Industrial Relations Commission and say, `Now strip away those minima,' because that is what they are saying. They are saying, `Let's get back to one rate in the award—no classifications, no relativities.' And what is it going to be? Let us call it $350.

If that is the minimum protection that this government believes Australian workers are entitled to in relation to their systems of negotiation, then it is unfortunate that Senator Murray has left this chamber. He was part of pursuing the agreed amended bill through this chamber and I think he would have to be extremely concerned that he has been sold a pup in relation to the negotiated package. The goal posts have been shifted and, really, there is a despicable campaign on to harm the interests of Australian workers—and he perhaps has been an unwitting partner in that campaign.