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Tuesday, 16 October 1984
Page: 1702

Senator GRIMES (Minister for Social Security)(10.15) —I move:

That the Bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows-

The purpose of this Bill is to facilitate the financing of redundancies in the stevedoring industry and thus to contribute to the continued stability of industrial relations on Australia's waterfront and to improve the efficiency of stevedoring operations generally.

Honourable senators will be aware of the importance of a stable and efficient stevedoring industry for Australia's economy and for its trading relationship with other countries.

I will now explain briefly to honourable senators the background to this Bill. Successive Australian governments have had a history of active and statutory involvement in the industry going back to 1942. 1977 saw the culmination of a series of developments which enabled Government to withdraw from its regulatory role in the industry and to leave the parties to manage their own affairs. As a result of the National Stevedoring Industry Conference chaired by Sir Richard Kirby in 1976-77, detailed agreement was reached between the parties and the Federal Government to this effect.

Nevertheless, there remain certain statutory levying arrangements which were retained for a variety of detailed reasons which need not be gone into now. These are controlled by a representative statutory committee, the Stevedoring Industry Finance Committee. Other levies on employers are managed by the Association of Employers of Waterside Labour.

The arrangements that I have referred to briefly here, Mr President, were and are concerned with the employment of waterside workers.

Other categories of labour on the waterfront have not been covered by government-involved centralised industry employment and financing arrangements. However, the industry itself has instituted such arrangements for most categories of ancillary labour.

Prior to 1978 the proceeds of a statutory levy, the Stevedoring Industry Charge , were administered by the Australian Stevedoring Industry Authority which was abolished as part of the new arrangements entered into at the beginning of that year. The levy covered employers' contributions to the pension fund for waterside workers, idle time payments, long service leave payments, provision of amenities, the administration of the authority itself, provisions for long service leave liabilities and redundancy and transfer payments.

There are now two types of statutory levies:

one is a general levy on man hours which finances employers' retirement fund contributions, long service leave provisions, administration costs, the Port Conciliator Service and, in non-permanent ports, attendance money, guaranteed wage and retainer and annual leave; and

the second is a special levy on tonnages and on man-hours employed on bulk cargoes, which has been used to pay out the so-called Australian Stevedoring Industry Authority deficit.

This second levy needs to be put into historical perspective, Mr President. A substantial round of redundancies occurred prior to the introduction of the 1978 reductions and this was funded by allowing a shortfall in the long service leave fund of the Australian Stevedoring Industry Authority amounting to some $25m. This is being paid off through the statutory special levies introduced in 1978 which are nearing the end of their lives.

Further technological change, improvements in overall productivity, changes to trading patterns and conditions of recession led to a need for substantial workforce reductions beyond those already achieved. Since the introduction of containerisation in the late 1960's, significant reductions in the industry's workforce have been achieved, without industrial disruption, through the co- operation of the parties. By way of illustration, the number of ''A'' register waterside workers has declined from 21,259 in June 1966 to 6,489 in July 1984, or, by nearly 70%.

Estimates of the number of redundant waterside workers have been put forward by the Association of Employers of Waterside Labour and are based on an extensive independent manpower needs survey commissioned in 1983. That study, by a firm of consultants, represents a welcome attempt to address the manpower needs of the industry in a considered, scientific manner.

The industry has identified an overriding need to further reduce idle time costs by reducing significantly the number of waterside workers. This is beyond the capacity of the industry itself to fund on a centralised basis. It approached the Government with a proposal that the industry redundancies be financed through the statutory levy arrangements. This has already been attended to by the Government adjusting existing statutory levies.

The industry also proposed that a loan of $15.5m taken out by the Association of Employers of Waterside Labour to fund redundancy payments to waterside workers in 1983 be re-financed through the Stevedoring Industry Finance Committee to enable the Association to borrow further funds to deal with redundancy among ancillary labour.

That proposal has the general support of various user and other interest groups which have been consulted through the Stevedoring Industry Consultative Council. The Stevedoring Industry Finance Committee, which is comprised of representatives of the Association of Employers of Waterside Labour, the Broken Hill Proprietary Company Limited, the Australian National Line, the Waterside Workers Federation and a Government-appointed Chairman, also supports the proposal.

The Government has accepted the proposal and this Bill is designed to implement one aspect of the necessary measures-the re-financing of the AEWL Loan through the Stevedoring Industry Finance Committee.

Clause 3 of the Bill introduces a new section 8A into the Principal Act, the Stevedoring Industry Finance Committee Act 1977. That section authorises the SIFC to pay to the AEWL an amount sufficient to enable the AEWL to discharge the loan which it took out in May 1983 and contains provisions to ensure that the debt is discharged accordingly or that the payment made to the AEWL is recoverable by the SIFC.

No amounts are specified in the legislation because the precise amount needed to discharge the loan will depend upon the date of repayment; that is, upon the amount of interest due at that time and upon the amount to be paid under the agreement as a consequence of the early repayment of the principal sum.

As honourable senators will have realised by now, this Bill forms only part of the proposals that have been accepted by the Government.

I turn now to the reasons why the Government accepted these proposals. First, there is an undisputed need to reduce the excessively high level of idle time and its associated costs. Based on existing conditions it is estimated that redundancy payments to the 543 WWF members identified by AEWL as redundant will be some $22m.

This would be paid out over 7 years at an average annual cost of $6m including interest. This compares with estimated savings on idle time payments of $9.8m per annum. Other savings ($2.8m per annum) will arise in liabilities which would normally accrue to employees made redundant.

There will be no cost to the Federal Government because the redundancy payments will be financed by the industry as has been the successful practice in the past . Procedures for collecting and disbursing levy payments are already in place.

Re-financing the AEWL loan through the SIFC will enable the AEWL to deal with claims by other unions for redundancy payments, thus reducing the number of workers in ancillary areas to more realistic levels. The level of redundancy payments has yet to be negotiated but is expected to be in accordance with past practice in the industry. Any agreement reached will go before the Australian Conciliation and Arbitration Commission and will be subject to assessment in the light of the national wage guidelines.

In accepting the industry's proposals in this matter, the Government is recognising the serious joint efforts being made in the industry to improve its efficiency. It is expected that the industry will continue this review process and the Government looks forward to hearing of further progress.

I commend the Bill to the Senate.

Debate (on motion by Senator Reid) adjourned.