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Wednesday, 7 December 1983
Page: 3440


Mr MACPHEE(10.34) —I am sure that at this time of the evening the former honourable member for Hunter would not have expected such low key conciliatory presentations. The honourable member for Kingston (Mr Bilney) obviously wrote his speech quite some time before the presentation of the Prices Surveillance Bill and the bringing on of this debate. Today the President of the Australian Council of Trade Unions said in Melbourne.

The Federal Government's Prices Surveillance Act in its present form poses the first serious threat to the prices and incomes accord.

I venture to say that it is not the first serious threat. Rather it is a revival and an aggravation of a very serious threat posed by the determination of the Food Preservers Union, some of the building industry unions, and some other militant unions to try to break the accord by getting more than is awarded in wage increases by the Australian Conciliation and Arbitration Commission. It is important to note that the honourable member for Kingston has spoken with the same rhetoric which was used by this Government before the election and shortly after the election but which now bears no resemblance to what is happening today . The President of the ACTU, with whom the present Government has formed this wonderful accord, has said that the ACTU and the union movement might have to reconsider the commitment in the wages area of the accord if the prices side was not adhered to, adding the planned legislation we are now discussing destroyed the prices element in the accord. Indeed, Mr Dolan, the President, went on to say that not one member of the Executive of the ACTU supported the legislation in its present form. One is finding that the Government is trying to be all things to all people. It is trying to impress the trade union movement with the fact that it is moving in respect of prices and it is trying to claim the support of the business community by saying that it is not really doing so. It is all done with mirrors. It is all cosmetic.

I move on to a further statement by the President of the ACTU. In relation to a series of questions posed by him at his Press conference he said:

Unless these questions are positively answered, the ACTU will not accept the Prices Surveillance Authority as established as satisfying the basic conditions of the Accord.

He said that he would be having talks with Labor Party officials on the issue next Monday. I ask: What communication is this that there will be a discussion next Monday, when the legislation will certainly be through this House and most probably through the Senate as well?

The Executive resolution added that if the Federal Government staisfied the ACTU that the Authority was capable of operating consistently with the objectives of the accord, the ACTU would co-operate with it. One has to ask why this has not been done before. Why is that that the parties to this great accord have not resolved their differences, despite what the Treasurer (Mr Keating) said in his second reading speech were lengthy and apparently almost continuous meetings between the trade union movement and other interested parties in the preparation of this legislation? Why was it introduced into this House if not one member of the Executive of the ACTU supports it? With due respect to the honourable member for Kingston, that Press release alone puts the lie to his pious hopes that the Bill now before us is in line with the accord. Nevertheless , the Treasurer himself said that. In his second reading speech he said:

Substantial portions of the Government's prices and incomes policy are now in place. Establishment of the Prices Surveillance Authority will help to complete the implementation of this policy and will encourage price restraint as a counterpart to the wage restraint being exercised by wage and salary earners under the wage fixation principles established by the Australian Conciliation and Arbitration Commission.

It is the view of many employers, many economists and the Opposition that, far from implementing a policy of wage restraint, what we have before us is the application of the full consumer price index, which can only lessen the capacity of employers to employ all of those who are now in jobs, let alone those in the lists of the unemployed. Many employers would agree with this statement a little later in the second reading speech:

The best form of price restraint comes from the effective operation of competitive market forces.

They would be asking why the price of labour is guaranteed automatic indexation- indeed, it seems under this measure something over and above that if industrial muscle is strong enough-when the prices of goods and services are treated differently. The employers before the Australian Conciliation and Arbitration Commission observed that the capacity of the economy-that is, the market-place of which the Treasurer speaks-to sustain wage increases was such that wage increases were not justified. Nonetheless, under threat of industrial action by the two parties to the accord, the Government and the ACTU, the Commission, having regard to its own statutory duties, felt it had to grant wage increases, even though it knew that they must reduce competitiveness and reduce the capacity of industry to employ people.

We find, as the honourable member for Kingston said, that the Bill does not apply to State authorities. He said piously, as the Treasurer said, that there will be consultations with the major State government authorities to try to get them to observe similar guidelines. We know that from the outset of the working party mentioned in the second reading speech the States rejected the idea of any surveillance over their authorities, and that includes all the four Labor States . They are anxious to get revenue regardless of where it comes from, regardless of the expense to the consumer, regardless of the impact on inflation or jobs and regardless of the fact that it is fundamentally in breach of the spirit, if not the letter, of the prices and incomes accord.

The Treasurer said that this Bill incorporates legislative guidelines which will require the Authority to exercise its powers and perform its functions having regard to the need to maintain investment and employment including the influence of profitability on investment and employment. The accord upon which this legislation is based shows that neither the Government nor its partner in the accord, the ACTU, acknowledges or understands the importance of profits, investments and jobs. One contrasts with objective (A) objective (C) in the second reading speech which states:

(c) the need to discourage cost increases arising from increases in wages and changes in conditions of employment inconsistent with principles established by relevant industrial tribunals.

The Treasurer, in his second reading speech, made the following sad statement.

This approach thus places an obligation on business to comply with the wages side of the prices and incomes accord which matches the commitments already given by the overwhelming majority of unions. The Government recognises that, where a company has clearly and strongly resisted attempts at breaching the wage system, it should not be subject to a second possible penalty and in these circumstances it is not intended that the Authority would disallow cost increases. If necessary, where it is clear that a company has taken all reasonable steps to resist a breach, a ministerial direction under section 20 will be issued to the Authority that the resulting cost increases should not be disallowed.

This House and the employers of Australia are entitled to know by what criteria the Treasurer will conclude that a company has taken all reasonable steps. Is it a question of how much the company bleeds? Does it have to withstand a strike of two weeks, four weeks, six weeks or more? If it is in the situation that H. J. Heinz Co. Aust. Ltd was in, will it find that when it has passed on an extra $15 , $16 or $20 over and above what the Commission authorises it can then pass its price increases on to the consumer, the consumer of products such as that being, again, the ordinary men and women of Australia. The second reading speech indicates that those kinds of consumer goods will be exempted from coverage by the Authority. We are entitled to answers. We are entitled to certainty. Will the Treasurer ask the Conciliation and Arbitration Commission, for example, whether a company has reasonably behaved in withstanding a claim over and above that which the Commission will authorise?

This is not the first problem facing the accord but it is an aggravation and continuation. It could be a fatal problem facing the accord if the effect of the ACTU's opposition to this Bill is to encourage the Foods Preservers Union and other militants to go over and above the accord and, therefore, over and above the idexation of wages. It is bad enough that the accord locks our centralised wage fixing system into indexation. There is a world of difference between a centralised system and criteria which necessitate the automatic application of a consumer price index to award wages. But it is worse still when one sees a Budget which has been framed on the basis of the accord, which is based on the application of indexed wages and to which the national wage case gives effect and then finds, as this Bill is being debated, that the ACTU Executive unanimously says that it does not support the Bill. That is a great start for the accord. The Government, through the Treasurer, has an obligation to inform the House why this situation has occurred. For a government of great consultation and communication it has let itself down very badly indeed.

Let us look at the accord itself. Quite apart from the disasters into which the accord has led us, the accord itself posed a major danger to Australia in that the union militancy and power, which we know exists in Australia, are not subject to any kind of sanction or limitation. It is all a matter of honour. Until today it looked as though the accord was being carried out to the letter but now it appears that even the letter is not good enough for some unions and the Government has probably opened up the kind of anarchy which the most pessimistic critics feared when the accord was announced. The Government said, when it gave a commitment to the accord, that it would create a better industrial relations climate by encouraging the settlement of disputes without recourse to legislative or common law penal provisions. The Government then set about systematically dismantling any and all legislation which could be seen as restraining the unlimited use of strikes, boycotts and other industrial tactics which unions may use to attain their ends. But the ACTU wants even more stringent control over the employers. At the same time as the Government is taking away restraints over union behaviour it is being asked by the unions to impose even more stringent controls over employers regarding prices than is contained in this legislation. Who is the Government to let down-the unions or business?

In the name of the accord Labor has already abolished the Industrial Relations Bureau. It has introduced and passed legislation which enhances further the position of the trade unions as an elite in our society. It has repealed the Commonwealth Employees (Employment Provisions) Act, the legislation which the previous Government introduced to protect the provision of vital and essential services in the community. I am sure most people would agree that in the absence of any constitutional essential services powers it is reasonable for a government to have legislation such as the CEEP Act to use as a last resort in national emergencies. But the Labor Government repealed the legislation at the very time that it was preparing this legislation to interfere with management regarding prices. It has also removed the power of the Commonwealth to invoke the no work as directed no pay provisions against Commonwealth employees who take industrial action to disrupt services to the public. That is a common law right generally available to employers in the private sector but Labor believes that the Public Service unions should be immune from such measures. So much for service to the public! The Government has restricted the ability of the Commonwealth to redeploy or retire surplus or inefficient public servants.

In addition, the Government has made it clear that it intends to revoke section 45D of the Trade Practices Act-another step to put the trade unions beyond the laws which apply to the rest of the community. Trade union power can be as monopolistic and restrictive as any use of corporate power, yet objective (B) in the second reading speech is aimed at hitting the apparent monopolistic and restrictive use of corporate power. At the same time it is removing that power in the hands of certain trade unions. The imposition of collective boycotts on innocent third parties, often small businesses and therefore, collectively major employers, is an abuse of power of the most serious kind. Section 45D has had some success in curbing this abuse but the accord commits the Government to remove the curb and restore the abuse. The Transport Workers Union is particularly anxious to flex its muscles against owner-drivers. It has been agitating for the early removal of section 45D. The Opposition will vigorously oppose the repeal of section 45D, as it is opposing this legislation, unless, of course, there is a guarantee from the Government, which I am sure will not be forthcoming, to have equally effective legislation enshrined in the Conciliation and Arbitration Act. Otherwise, the prospect of secondary boycotts becoming a common and legitimate industrial tactic will convince investors that militant unions will ultimately triumph over the moderates. If there are no constraints on militancy, moderate union leaders will find it increasingly hard to retain office. Prices will also rise and there will be more work for the Prices Surveillance Authority.

The prices and incomes accord has given trade unions a system of wage indexation which no other country would even contemplate. It is only in Australia that the myth is perpetuated that an increase in prices represents a capacity to pay increased wages. The Federal Government had a great opportunity through the National Economic Summit Conference and the subsequent Premiers Conference to expose the absurdity of that proposition once and for all. It did not even try to do so. Instead, it has condemned Australia to a resurgence of the wage price inflation spiral which has been so extremely damaging to our economy in the past, and which has been so unnecessarily effective in condemning so many Australians to unemployment. In the final analysis, it was this which forced the Australian Conciliation and Arbitration Commission to grant the 4.3 per cent increase in September, even though it knew that the employers were right in making out their case that they had no capacity to afford such increases without worsening inflation and worsening employment. All the predictions of the relevant departments confirm that that was so.

We all know that the prices and incomes accord was a cosmetic action to seduce the Australia public into electing the Government on the basis that it knew best and that it could control the union movement. The important point in respect of this Bill is that the prices and incomes accord is anti-profit. Not only is it anti-profit but it is proudly so and blatantly so. Yet profitability is a major means of price restraint. It is a major means of reinvestment and job creation. It is a damning indictment of that document that the word 'profit' appears only three times in its 37 pages, and each time it is in the most restrictive context . Each time it is anti-profit. But yesterday's profits are today's investment and tomorrow's jobs, and none of the parties to the accord understood that. They do not understand the fundamental economic truth that without profitability there will be no investment and without investment there will be no jobs. The accord concerns itself, to the exclusion of almost all else, with the distribution of income, not with the creation of income. Nowhere does it get anywhere near recognising that money must first be made before it can be appropriated through taxation and given to the needier members of society. The hard truth is that there are no longer enough wealthy people to soak. Maybe that will start to be driven home as the 4.3 per cent wage rise flows through to the wage packets. It is now flowing through all of the awards. It is estimated that the increase will push nearly one quarter of a million Australians, most of them trade union members, into a higher tax bracket.

Unemployment is now at a post-war record, with the prospect of a further deterioration between now and the New Year as employers struggle to absorb increased wage costs. Of course, they also have to meet associated costs, many of which are the responsibility of the four Labor State governments. I refer to costs such as payroll tax, superannuation and penalties and the recent savage escalation in charges by those State Governments, including electricity and gas tariffs and petrol excise. It is no wonder that there is some need for price increases on the part of industry in order to survive and to retain jobs. As the Deputy Leader of the Opposition (Mr Howard) said in his speech on this Bill, we are now a very far cry indeed from what the Premier of NSW called for at the Summit Conference, that is 'jobs, job, jobs'. The Prime Minister (Mr Hawke), in his Curtin Memorial Lecture, was trying to find other ways in which he could get people out of the registered job market so that he could give the appearance of reducing unemployment while not creating jobs.

This Bill, as part of the essential framework of the accord, is defeatist. If one looks at the August Budget, which also is based on the accord, it is also defeatist. The September consumer price index shows the effect of the wages pause and its benefits in bringing the inflation rate below double digit figures for the first time in two years. The effect of the measures now proposed will be to deter investment and job creation. At the same time there are no deterrents in this Bill to protect the employer against the ravages of militant unions. Let us take a situation where a union says: 'The 4.3 per cent rise is not enough. We will belt our employer around the ears until he concedes more'. He is able to concede more if the price surveillance mechanism says that he has bled enough, that he has lost enough production and allows him to pass on an over-award wage increase in the form of prices. To do that is to defeat the accord. It is to defeat the decision of the Arbitration Commission to prevent and settle industrial disputes. The Opposition finds that the fragile consensus between the Government and the Australian Council of Trade Unions is broken down. It is the employers who are being hounded. Therefore the economy will be greatly set back in the process. This Government has failed, and this Bill is a symbol of its failure.