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Wednesday, 30 November 2005
Page: 129

Senator HUTCHINS (6:07 PM) —The incorporated speech read as follows—


I rise to record the reasons for my opposition, and the opposition of my Party, to this bill.

If we pass this bill its consequences will be experienced in every yard, on every site, at every store, and in every factory in the Commonwealth.

And each of those workplaces, this Government has now put on notice to every worker that their penalty rates, their safety rates, their protection from the sack and lockout and their right to a fair minimum wage is now up for the chop.

There will be no mitigation, no fairness, no recourse and no justice in the industrial relations system that this bill will impose.

Now, after 9 years of the Howard Government, the veil has finally slipped.

Now the unadulterated abuses of the trust the Australian people placed in this Government have begun.

And in doing so, now begins of the end for the Howard Government.

The Impacts of this Bill:

The reality of this bill will be found around the kitchen tables, in the backyards and on the patios of Australia.

This bill will shatter the corner stones of household budgets and quality time in ordinary family life.

We all know that Australian families are struggling to balance time with the kids and their partners as well as making ends meet at the end of the week.

It is no surprise that the average household spends $126 dollars for every $100 they earn just to try and make do.

The current industrial relations system has allowed them to afford childcare, school fees, caring for ageing parents and the occasional day out.

The day to day reality of these issues make a mockery of the Prime Minister’s claim that real wages only increased by 1.4 per cent during Labor’s last term in office.

That’s because in tackling the inflationary wage price spiral, the Hawke-Keating Government kept faith with Australian families with a 40 per cent real increase in the social wage.

I can remember the struggles of the 1980s quite well, as I was a young union official working with workers in the transport industry. I can remember the pain of the Accord, but also the security that came with it, the knowledge that if you fell sick or were out of work, that your kids and family would be taken care of.

But now that security has gone. We’ve been told that it’s ‘user-pays’ from now on, and it’s not the place of Government to secure a fair wage to support a worker and their family, who now ought to make their own way in the world.

So, in so many respects, this legislation is the final chapter, the final nail in the coffin so to speak, of that great social compact the Hawke-Keating Government established during its time in office.

What workers will lose:

There are two levels of attacks against workers’ pay and conditions contained in this bill.

At one level, there will be the loss of conditions on the shop floor, occasioned from upsetting the balance between the needs of employees and employers.

At a much wider level, there will be a slashing of wages economy wide, because the Government is kicking out the award safety net out from underneath many workers and is radically altering the way in which the minimum wage is calculated.

I’ll discuss each of these impacts in turn.

This bill will seek to slash the number of allowable matters under a Federal Award to just five matters:

  • Ordinary rates of pay
  • Hours of work
  • Annual leave
  • Sick Leave and
  • Parental Leave

For a number of years the Government has been out to cut the number of allowable matters in an award—originally down from 20 to 13 and now from 5.

Allowable matters are important because they regulate a minimum standard of overtime amounts, training entitlements, public holidays, termination, types of employment and the like.

They provide certainty for employees, knowing that if they have to work late for instance, they will receive a fair reward for doing so.

Now imagine you are “Billy”—the worker who figured so prominently in the Government’s $55 million dollar dud of Liberal Party advertising.

Billy’s agreement removes many of the twenty provisions of current awards in just one sentence. It says that overtime, leave, public holidays and the like are all encompassed in the ordinary hours and salary of work. Full stop. No ambiguity.

That means if Billy is told to work 10 hour days, 7 days a week for six months and then only come in a couple of hours a week for the rest of the year, then it’s bad luck to Billy.

It’s bad luck to Billy if he is currently paying off his mortgage on overtime and the new agreement strikes out overtime. Billy losing his house is the price of the new flexibility.

It’s bad luck to Billy that he gets the sack for ‘operational reasons’. He won’t have unfair dismissal protections anymore, and it’s bad luck to Billy that he has to spend his own time and money keeping up with training because an employer is not obliged to provide this anymore.

The Working Poor:

When I was chair of the Senate Community Affairs inquiry into poverty in Australia, I was struck by the evidence that Australia is increasingly being split down the middle between the haves and the have-nots.

This was evidenced in the rise of the working poor in Australia—something that has never before been witnessed in the 100 years of our Federation.

There are now over 2.4 million Australians living in poverty despite at least one person in the household in which they live having a job. Two key trends have been driving this—the growth of casualisation on one hand and the rise in unpaid overtime on the other.

Casualisation will only get worse under this legislation. Australia has the second highest rate of casualisation in the OECD, second only behind Spain on 27 per cent. I would suggest to any right thinking person that over 1 in 4 workers being casual is as about as flexible as you want.

Even so the Government’s claims that the workforce is not sufficiently flexible evaporates in an instant in the face of that data.

But what we will now have is a situation where an employer can call people in for 2 and 3 hours of work, not paying them penalty rates, and then telling them to go home. They could well lose more money in childcare and petrol costs in getting to the job.

If they refuse the work, then they can get the sack, no questions asked.

It’s no secret that cutting penalty rates and hours of work is only going to increase casualisation, which the Community Affairs Committee noted was the main reason for the growth in the working poor.

The second surprising issue was the massive growth in the amount of unpaid overtime worked by employees. Over one third of workers reported recently working unpaid overtime, and that that unpaid overtime was often worked on a regular basis.

So not only does this turn the balance between work and family on its head, but it’s clear that many employers are taking advantage of the job insecurity that many workers now face. By striking out overtime, the Government will only further this trend.

This also then calls into question how this legislation is going to create jobs at the level of the micro-economy. Surely employers will now just be able to direct workers to continue on after their shift has finished, rather than actually hiring casuals or more staff. The logic of the Government’s approach simply does not add up.

AWA’s and the No-Disadvantage Test:

A related trend has been the insidious growth of AWA’s in sectors where employees are traditionally vulnerable—often in low skill service industries.

Now a common law contract might be appropriate for a highly skilled professional, but the experience of AWA’s in the hospitality and service sector shows they are just a tool to drive down wages and conditions.

A joint study by 151 Academics noted that with successive AWA’s:

‘in the first and second periods, penalty rates were abolished all together in 54 per cent and 44 per cent of cases respectively, and overtime rates were abolished in 40 and 44 per cent of cases’

The Democrats’ thirty pieces of silver was the ‘no disadvantage test’, which held that no AWA could contain terms which on total balance were less that were what were protected by the award.

No such guarantees exist for AWA’s under the new legislation. Naturally, there won’t be much left in awards for AWA’s to be measured against, but that no disadvantage test is going, because it is allegedly ‘too complex for business’—surely doing a few sums can’t be that hard!

This will be the real evil behind the legislation, as ordinary workers, especially vulnerable casuals and those with low skills, are shunted into AWA’s once their collective agreement’s expire, they will see a real loss in their take home pay—all in the name of flexibility.

Minimum Wage Setting:

There is a second, wider set of attacks that this bill has on the wages and conditions of Australian workers.

Those attacks are contained in the provisions governing the Orwellian Fair Pay Commission and the method of setting the minimum wage.

John Howard has been parroting the line that we are to trust him on his record.

But the record is that in 4 of the last 8 Government submissions to the national minimum wage case, the Government argued for an increase below the rate of inflation—a net decrease in real wages.

Moreover, the difference between the Government’s submission and the fair level as determined by the AIRC was over $50 per week or a difference of $2600 per year.

So it’s quite clear that John Howard really says one thing and does another.

The Government won’t bear the political odium that will come from its desire to drive down wages and the cost of labour—that’s why it has passed the buck to the Fair Pay Commission.

That Commission will turn the tradition of centralised wage setting in Australia on its head. Since the Harvester judgement, wages have been set on the basis of a fair remuneration for employment, not the employer’s capacity to pay.

Now the Fair Pay Commission will be told to address employability as an issue in determining wages—code for what employers consider affordable. To understand the reasons for this you have to delve into the John Howard’s tortured ideological heritage.

John Howard recently described low wages as an ‘article of faith’ for him and his Government. I say low wages because those opposite are pent up with a belief that low wages are connected in an exact bouncing-ball arrangement with high employment.

This may have been true in the factories of a Dickensian novel, but it is certainly not true in the contemporary post-industrial Australian economy.

There are a number of factors that govern levels of employment, especially demand but also the competitiveness of Australian industry with imports.

The fact is that in many industries, lowering the cost of labour will not be meet with an increase in employment, as the effect of those reductions in labour costs would be felt in an economy wide loss of demand, but also because of the nature of production it is unlikely that the marginal return on further employment would be sufficient to justify more staff.

This is especially the case in industries such as the transport industry, where profit margins are generally already at their most advantageous point for the employer. In the event that the cost of labour is lowered—as this bill attempts—it would encourage a race to the bottom between various competitors for the pool of semi-skilled labour.

Some time ago the Beyond the midnight oil report noted the relationship between low wages and low levels of safety in that industry. Strong collective wage determination and bargaining processes create a level playing field across the industry, so as to not allow one firm to under-cut their competitors via attacking the decency of their employees’ wages.

It is these most vulnerable workers who need the protection of collective agreements. Their families cannot afford a race to the bottom, as in many cases they are already there, already struggling to make ends meet.


I indicated earlier that this bill is the end of the chapter for the great social reforms of the Hawke-Keating Governments. In my time here, I have witnessed the slow ebbing away of the great foundations of the Australian social democratic compact.

Many of my colleagues have used the term “extreme” to describe this bill. I do not think extreme fully encapsulates the indecency of this legislation, as to label something extreme implies it never the less has continuity with what went before it.

There is no continuity between this bill and the past 100 years of wage determination in this country. That system survived oil shocks, two world wars, post war reconstruction and provided the foundations for the strong economy we have today.

I think age is a testament to its strength, not a visage of its weakness.

But what is weak are the limp excuses the Government has proffered to sate its ideological fetish.

It says we need to lock in higher productivity, yet the changes it has introduced since 1996 have been responsible for a 0.9 per cent decrease in average annual productivity. That’s a loss of almost three complete years of productivity growth—we are three years behind.

If anything its outdated, it is the Government’s world view. It idolises a labour market without guarantees, with the balance all in the employers’ favour, and a race to the bottom with India and China.

It was these very circumstances—and the associated discrediting of that world view—which led to the foundation of the first Commonwealth Arbitration and Conciliation Courts.

Having lost the battle of ideas, John Howard now seeks to change the facts and wants take Australia back to the idolised adolescent dreaming of his early political youth.

Someone should remind that man of the massive difference between his early earnings as a solicitor and those earnings of the average men and women, who provided for a family and gave people like myself the best start in life they could.

I have no doubt that posterity will vindicate my party’s position in this debate.

I have every confidence in Manning Clark’s great description of Australian politics as a struggle between the ‘straighteners’ and ‘enlargeners’ of life will haunt this Government.

I know we must and will win this fight. It is a fight for the decency for ordinary folk, people whose sole ambition is to give their children a better start than they had.

And finally I know only my Party will give them the industrial rights and time with the family that they need to realise that hope.

I wish to conclude my remarks on this bill by thanking the Senate and my colleagues for the indulgence shown to me this last few weeks as I recover from major surgery.

I would particularly like to record my appreciation to the medical and general staff at Nepean Private Hospital, Banksia Ward and Critical Care Unit/HDU for the wonderfully dedicated and professional manner they cared for me before, during and after surgery.

Finally I would like to express my sincerest gratitude to Associate Professor John Cartmill; his professionalism and humanity lead me through the labyrinth.