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Monday, 28 November 2005
Page: 104


Senator EGGLESTON (8:19 PM) —The new workplace relations system, Work Choices, will replace an outmoded system which was designed more than a century ago to meet the needs of a very different nation. The emphasis will no longer be on arbitration and centralised wage fixation. Rather than focusing on industries, there will be an emphasis on direct bargaining between employers and employees at the workplace level, either in the form of a collective agreement or an individual agreement known as an Australian workplace agreement, or AWA. AWAs will allow for individual effort to be better recognised, and employees who show enterprise and initiative can be better rewarded.

A more flexible system will ensure higher levels of prosperity and productivity into the future. It is interesting to note that between the 1970s and early 1990s, under Australia’s antiquated industrial relations system, our labour productivity grew by around 1.2 per cent annually. Conversely, from the mid 1990s, when reforms to the system were introduced, productivity growth increased to in excess of three per cent per annum. The Workplace Relations Amendment (Work Choices) Bill 2005 reforms are not revolutionary but evolutionary and build on previous reforms to the workplace relations system which were commenced—to give credit where credit is due—under Prime Minister Paul Keating. However, Mr Beazley has said that there is no need for further labour market reform, commenting in April this year:

The industrial relations lemon has been squeezed dry.


Senator Abetz —Who’s the lemon?


Senator EGGLESTON —I think he is called Beazley. It is a great shame for the nation that the modern Labor Party, the party of Kim Beazley, has lost its reformist zeal and effectively stands for nothing. This was the party that floated the dollar, brought down protective trading barriers, deregulated the banking sector and embarked upon a raft of privatisation of government enterprises—all with the support of the Liberal Party, I might add—and in effect transformed the Australian economy. Mr Beazley’s only plan for workplace relations is to turn back the clock. If Labor wins the next election, he has undertaken to undo the Work Choices reforms. Indeed, it is quite likely that Labor would do away with AWAs altogether. These are the very same AWAs that have seen workers on average earn 100 per cent more than employees on awards and 13 per cent more than employees on collective agreements. Like his fellow traveller Dr Gallop, the Labor Premier of Western Australia, Mr Beazley wants to put people back on awards to effectively make them worse off. He wants to take them right back to the 1970s.

Who can fail to forget the hysteria from those opposite and from their union masters when the Howard government introduced the Workplace Relations Act almost 10 years ago? What of all the doom and gloom that was predicted a decade ago? Today, in practice, Australia has a more productive labour force and increased living standards. Indeed, since 1996, real wages have increased by 14.9 per cent, almost 1.7 million new jobs have been created, strikes are at record low levels, inflation is low and unemployment is at its lowest level in almost 30 years. So much for all those predictions of doom and gloom.

Let us look instead at the so-called halcyon days of industrial relations under the Labor Party. I am sure that we all remember the much vaunted accords. What did they deliver, you might ask? The answer is stunted and stagnated wages growth—almost no growth at all. In fact, over 13 long years, real wages grew by just 1.2 per cent. Those on the minimum wage actually went backwards, experiencing a decline in their wages of five per cent in real terms from 1983 to 1996. That is the woeful record of the union movement and the Labor Party in government. Kim Beazley recently made the proud boast that:

We achieved 13 years of wage restraint under the Accord. The wage share of GDP came down from 60.1 per cent when we took office down to the lowest it had been since 1968.

This is from the leader of the party that has the effrontery to claim to be the friend of the workers.


Senator Abetz —The workers don’t believe them.


Senator EGGLESTON —I am sure they do not, Senator Abetz. They have more intelligence than that. Their intelligence is shown by the fact that they have kept on returning the Howard government to office. Contrast that record of Labor with that of the Howard government since 1996. Real wages have increased by no less than 14.9 per cent.

So what of Labor’s record of job creation when it was last in government? In December 1992, when Labor was still in office and Kim Beazley was minister for employment, the unemployment rate peaked at 10.9 per cent. Indeed, in Labor’s last two terms in office the unemployment rate averaged 9.2 per cent. In June 1996, shortly after the Howard government was first elected, the unemployment rate was more than eight per cent. In the intervening period, the unemployment rate has fallen by around three per cent so that in October this year it stood at 5.2 per cent. In fact, employment is at a record high level of more than 10 million people, with 7.1 million people in full-time employment. The average annual jobs growth under the coalition has been 175,000 jobs, compared with 101,000 in the last seven years under Labor. During Labor’s final two terms of office, just 53,400 full-time jobs were created.

Research commissioned by the Business Council of Australia has indicated that in the absence of the government’s workplace relations reforms the average unemployment rate would have been 8.1 per cent in 2004 rather than 5.8 per cent. In other words, unemployment is over two per cent lower than would have otherwise been the case. I am confident that Work Choices will create enhanced employment opportunities in service industries such as tourism in particular. It is the tourist industry more than almost any other which will benefit from these changes.

Finally, let me say something about the creation of a unitary workplace relations system. This new federal system will apply only to constitutional corporations. This generally means companies and businesses incorporated under state and federal legislation. As a result, the changes will not apply to those employees not employed by constitutional corporations, and consequently they will remain within the state system. In Western Australia, this has been a matter of some controversy. Australia is a federation with a Constitution that gives the federal government very defined powers and which effectively diffuses powers between the central government and the various states. As many authorities, including Professor Greg Craven, have observed, the spirit of federalism is under some stress in contemporary Australia. The external affairs power and other powers have been used in ways never envisaged by the founding fathers to effectively broaden the scope of federal power and to take on responsibilities which are seen in some quarters, perhaps, as more rightly those of the states.

In Western Australia there is a body of opinion that would prefer Work Choices did not create an overarching national workplace relations system and that the states retained their ability to maintain their own systems so that there was a choice between the federal and state industrial relations systems. This view is based on the experience Western Australians had when the Gallop government came into office and immediately abolished workplace agreements and the industrial relations system which Mr Richard Court had introduced during his period in office. In the view of many, Geoff Gallop and his government took industrial relations in Western Australia back to the 1970s. As a result, many WA industries switched to the federal system and in WA there is, I have to concede, some concern that if and when the Labor Party regains office federally—which I doubt will be in the near future—the option of switching back to a, hopefully, more congenial state system will not exist. I have explained the argument for choice within the forums of the government and put the Western Australian position. Now, having listened to the arguments on both sides, I have decided on balance to support the concept of a national system for corporations because of the economic benefits to Australia as a whole.

In conclusion, Work Choices is a system that will ensure greater productivity gains for industry and workers across this country. It is a system that will allow employers and employees to sit down together to negotiate wages and conditions whilst supplying the safety net of the Australian fair pay and conditions standard. Under the Howard government’s program of reform, Australia has undergone much needed changes such as the introduction of an indirect taxation system and reform of the waterfront. Industrial relations reform is perhaps the most important step forward in making this country a more internationally effective economy, so giving all Australians a more prosperous future in an ever-changing and more competitive world.