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Monday, 28 November 2005
Page: 85


Senator GEORGE CAMPBELL (5:50 PM) —I did not expect to be on my feet so quickly. I thought that the chair of the committee would have at least been able to take 20 minutes to explain the position of the government and perhaps give the press the answers that she was not able to give them at the press conference convened last week—without any notice to the opposition, of course—to report on the committee’s report. I will start my comments tonight by going to the opening paragraph of the submission made to the committee by the Department of Employment and Workplace Relations. That paragraph sums up the ideological belief behind this legislation by the government. It says:

A central objective of this Bill is to encourage the further spread of workplace agreements in order to lift productivity and hence the living standards of working Australians. The Government believes that the best workplace arrangements are those developed between employees and employers at the workplace.

That is the kernel of the government’s argument for this legislation—all 1,200 pages of it. The Workplace Relations Amendment (Work Choices) Bill 2005 is 700 pages long and the explanatory memorandum is 500 pages long. At this stage, we do not even know how many pages of regulations there will need to be to give effect to the bill.

We know, however, that there will be one regulation that is at the heart of this government’s agenda. You always have to be careful of this government when they produce anything in this parliament because they have become so adept at using Orwellian doublespeak to say one thing and mean another. They never give you the factual story of what they are on about. There is one regulation that we know is going to be there, and that is a regulation to give the minister the power to determine what is prohibited content. That means the minister can come in here at any time, day or night, and put in place a regulation which can retrospectively make provisions in agreements illegal. Like the power to backdate some provisions in agreements in the building industry in Victoria, that power is going to reside in the minister’s office and will be constantly ready for use.

Barnaby Joyce be warned! Be warned, Barnaby, because they will be able to sit down with you and make an agreement to protect Christmas Day, Anzac Day, Easter Sunday—whatever the iconic holidays that you want protected are—but remember this: after the bill is passed, it is open to the minister to come into this chamber and prohibit those from being dealt with in agreements. Under the current legislation, that is available to him.

We also know, courtesy of the Employment Advocate, that employers are the ones who are going to be exposed to the $33,000 fines if they seek to register an agreement—which may cover unfair dismissal or union involvement in dispute resolution et cetera—that covers one of the issues that is determined to be prohibited content. And that list can change at any time—remember that. A lot of employers and employees out there could sit down in good faith and negotiate agreements—whether they be AWAs, collective agreements or whatever—and suddenly find that without their knowledge the rules of the game have changed and the goalposts have shifted and all of a sudden they are in a legal bind in terms of the operation of this act.

When the government says that it believes that the best workplace arrangements are those developed between employees and employers at the workplace, how can you believe it? The minister is going to give himself the power to oversight every agreement—in whatever form that agreement takes—that is entered into in this country. What the government really means is that the best form of workplace arrangement is one in which the employees and employers do what it says and carry out the government’s instructions. The government is going to be constantly sitting there as the dead hand over agreement making in this country.

Let me come to the economic issues. They say that this bill is to encourage the further spread of workplace agreements in order to lift productivity. Let us look at the facts. The government have not made, and nor have they attempted to make, an economic case for the changes proposed in this legislation. They never even addressed this issue. They had some modelling done by the Centre for Policy Studies at Monash, but it has never been published; it has never been put on the table. The government never made it available to the committee—they would not even give the committee a synopsis of what was in the modelling.

What is worse is that the modelling was done after the bill was drafted. After the bill was drafted, they said, ‘We’d better go and talk to somebody and see if we can get a bit of modelling that underpins and supports this argument.’ But it obviously does not; otherwise, it would be out there. It has been rumoured that there has been modelling done by Treasury, but again it must not be very good for the government’s argument because otherwise it would be out there being used to support their position on this legislation. The reality is that the reason the modelling has not been presented is that they know their claims that there will be more jobs, better pay and a stronger economy are simply false. They are more Orwellian doublespeak.

Let us look at the facts on the issue of jobs. I decided to go back and do a little bit of research of my own to compare what was being said by this government about job creation to what actually happened in fact. The reality is that from July 1992 to March 1996, under a Labor government, the annual job growth figure averaged 2.34 per cent. During the term of the coalition, from 1996 to now, annual job growth has averaged 1.94 per cent. Over the period of Labor’s 13 years in office, annual job growth averaged 2.23 per cent. What is more significant, perhaps, is that in the period from July 1992 to March 1996 68 per cent of the jobs created under Labor were full-time jobs, whereas under the current government 51 per cent of jobs created have been full-time jobs. Under a heavily regulated workplace relations system—as described by the coalition—jobs were created at a faster rate than they have been under the John Howard’s government’s dog-eat-dog IR system. And it is going to get worse. They are ABS statistics—checked with the Parliamentary Library.

Let us go to the question of wages. We have heard Senator Troeth babbling on about wages and the 14.9 per cent she claims for wages growth since 1996. That is simply wrong. Let us look at the facts. ACIRT has done some research based on ABS data which showed that wages growth across the economy from 1996 was actually 3.6 per cent. Worse, their information showed that the top 10 per cent, the top percentile of wage earners, had double-digit growth of 13.6 per cent. Over that period wages for people in the top 10 per cent of wage earners grew by 13.6 per cent. For the bottom two deciles wages grew by 1.6 per cent. There was a huge disparity between the wages growth for people at the bottom and the wages growth for people at the top. When Senator Troeth talks about the wages growth in AWAs for women, what she does not tell you is that the bulk of the women that they are counting in that survey are people who are operating in the managerial class. They are people who are operating in the top two percentiles of wage earners. They are not people at the bottom; they are people at the very top of the pile. The bulk of AWAs at the present point in time cover people in the managerial classes.

The argument is that this legislation will make a stronger economy. It is very difficult to prove or disprove that. All we can do is look at some historical facts. Let us look at New Zealand, because that is the model that this is built upon. When he was in opposition Peter Reith told me that he went and doorknocked New Zealand and that the New Zealand public were in love with the Employment Contracts Act, that it was the best thing that had ever happened to any democracy in the Western world and that they would set about introducing it here. And he did. I give Peter Reith credit: he never went back on that promise. He set about introducing it tooth and nail into this country—and, finally, we have the New Zealand Employment Contracts Act in another form in front of this chamber.

When the Employment Contracts Act was introduced into New Zealand in 1991 it swept away awards ensuring minimum pay and conditions for thousands of workers. It created an environment supporting individual contracts over collective bargaining, outlawed strikes for multi-employer agreements, supported take it or leave it bargaining and undermined the role of unions. It is very familiar when you look at what is happening at the moment in this country.

In New Zealand at that time productivity growth actually stalled. Australia’s productivity growth moved ahead of New Zealand’s by some 23 per cent over that period. Real wages in New Zealand fell by four per cent. Underemployment trebled and a New Zealand Treasury budget report of 1993 said:

An increased dispersion in wages is expected over the next three years. Wages of professionals, managers, and other skilled people, especially those employed in the profitable and productive export sector, are likely to rise above the rate of inflation. On the other hand, the wages of the unskilled, especially part time and young workers (where turnover may be relatively high) will probably have no wage increases and new entrants may start on lower pay rates than existing workers.

That is exactly what happened in New Zealand and there is an abundance of evidence for it. If you look at the median incomes for those in the 15 to 25 age group, in 1986 in New Zealand they were earning $14,700 per year. In 1996, after five years of the Employment Contracts Act, they were earning $8,100 per year. From 1984 to 1998 the top 10 per cent of households increased income by 43 per cent and the bottom 50 per cent of households decreased income by 14 per cent. Ninety per cent of New Zealanders were worse off in 1996 than they had been in 1981. That is from a New Zealand Treasury working paper. That is not a claim that I am making. It is not a claim the unions are making. That is from a New Zealand Treasury working paper. The biggest growth in the New Zealand economy after they introduced the Employment Contracts Act was in food banks. They were holding national conferences of food banks, and in Auckland alone they grew from 16 in 1990 to 130 in 1994. Families were forced into poverty and there was a massive rise in the working poor. That was a result of moving to an employment system which is similar to and has been the foundation for this bill that we are debating in the Senate tonight.

Professor David Peetz in his evidence to the Senate inquiry summed it up very well in response to a question. He said:

Under this regime there is the capacity for the employer to unilaterally reduce pay and conditions once an agreement has been terminated. So there is quite a bit of scope there to reduce the pay and conditions of employees and the labour costs. This means that, if you have reduced labour costs, there is less of an incentive on employers to invest in labour saving technology, to invest in the deepening of capital. In many ways that is what we saw in New Zealand. Labour productivity growth fell off because employers no longer had the incentive to invest. It is not just a matter of investing in labour saving technology; there is also the question of investing in training and in the skills development of the employee. So you can see it degrading not only the physical capital but potentially the human capital.

This is already happening here, as you can see when you look at productivity figures. Productivity growth in this country was at its highest when we had collective bargaining as the basis of our industrial relations system. Under the traditional awards system between 1964 and 1982 productivity grew at 2.6 per cent per annum. Under the accord period from 1983 to 1993 it grew 0.8 per cent per annum. Under the collective bargaining system, which was there from 1993 to 1998, it grew at 3.2 per cent and under the current system since 1999 it has grown at 2.3 per cent. More importantly, multifactor productivity under the award system was 1.3 per cent, under the accord was 0.65 per cent, under collective bargaining was two per cent and under the current system has fallen to one per cent. Under this bill it will get worse.

The reality is that the government have not presented any evidence to justify these changes, because there is no evidence to produce. They do not have, they cannot develop and they cannot show an economic case for the legislation they have introduced into this parliament. The reality is that productivity is likely to decline rather than grow under this new system. That was substantiated by submissions made by 151 experts in labour law and labour relations from universities all around the country—professors, associate professors, lecturers and so forth. They said that there is a multitude of legal problems and flaws in economic reasoning with the proposals, potential social problems will be created by the legislation and the government really have nothing to stand on.

The reality is that this legislation is not about good public policy; this legislation is about ideology. This is legislation to introduce the ideology that has driven this Prime Minister for a very long time. For some 30-odd years he has been flogging these ideas. Bad law is bad law no matter who makes it. Bad laws are eventually broken because people will resist them. That is inevitably the fate of this legislation. The government will not listen to criticism; they will not listen to reason and argument in respect of some of the elements of this bill. They have a completely biased approach that was demonstrated clearly in the way they developed these proposals.

They made an announcement in May. The Prime Minister released a booklet on Work Choices. Employer organisations, the employers’ unions, got a briefing from the government about what was in the Work Choices legislation, but nobody else did. The workers’ unions did not get the briefing, the community groups did not get the briefing, and other stakeholders who were likely to be affected did not get the briefing in respect of that matter. What we did get in the Senate inquiry was that employer organisations came along and said that under this legislation they believed wages would go down. That was the belief of employer organisations that appeared before the committee. (Time expired)