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Award pledge an objective, not a promise: PM -

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ELEANOR HALL: The Prime Minister said today that it is an objective, not a guarantee, that no
worker or boss will be left worse off by the award modernisation process.

But the Federal Opposition says this is another example of the Government promising something that
it can't deliver.

In Canberra, Sabra Lane reports.

SABRA LANE: The former Prime Minister John Howard made this promise back in 1995 before he won
office.

JOHN HOWARD (1995): Under no circumstances will a Howard government create a wages system that will
cause the take-home pay of Australians to be cut. Under a Howard government you cannot be worse
off, but you can be better off. I give this rock solid guarantee: our policy will not cause a cut
in the take-home pay of Australian workers.

SABRA LANE: Labor used that pledge to hammer the Coalition relentlessly and now it seems the Rudd
Government might find itself subject to a similar campaign.

The Australian Industrial Relations Commission is currently whittling down more than 2,500 national
awards to just 130.

The Government has previously said it doesn't want either workers or businesses to be worse off at
the end of the process - something the Deputy Prime Minister Julia Gillard was reminded of two days
ago.

JULIA GILLARD: We set that as an aim of the award modernisation program. We set no disadvantage to
employees as an aim. We asked the industrial umpire to do this job for us. We have got five year
phase-in periods for the transition and we are achieving a reform that Australian employers have
begged for...

CHRIS UHLMANN: But those aims are irreconcilable, aren't they?

JULIA GILLARD: ... and for more than two decades...

CHRIS UHLMANN: Those aims are irreconcilable. Can your aims be met?

JULIA GILLARD: They are being met Chris.

SABRA LANE: But yesterday the Industrial Relations Commission found it was impossible to satisfy
the request that neither workers nor employers would be worse off, saying the two objectives are
potentially in conflict.

The Prime Minister was reminded on radio this morning that he'd hammered John Howard over his
promise.

NEIL MITCHELL: You insisted that he guarantee no worker would be worse off under his system. Can
you make the same guarantee?

KEVIN RUDD: Well we are consistent absolutely with what we said prior to the election which is our
objective is as described.

NEIL MITCHELL: Big difference.

KEVIN RUDD: Well, uh.

NEIL MITCHELL: Big difference.

KEVIN RUDD: Well, prior to the election did we provide the language that you just described? We
said we had this as an objective. We are conscious of the fact that we are dealing with hundreds of
thousands of workers under currently 4,000 separate awards.

We therefore have set up the best mechanism through Fair Work Australia, the AIRC and the Fair Work
Act to bring that into being but all these individual circumstances will be worked out through the
system over time.

SABRA LANE: A long defence of the Government's policy aims ensured when the interviewer pressed Mr
Rudd and asked if he could guarantee that bosses wouldn't be worse off either.

NEIL MITCHELL: Sorry, you've lost me. Will no employer be worse off?

KEVIN RUDD: The objective for both Neil, for employers and employees consistent with what we always
said is that when we introduce this modern award system, that it's not intended that there would be
a disadvantage for employees or employers in terms of increased cost.

NEIL MITCHELL: So we are talking about objectives and intentions?

KEVIN RUDD: Exactly.

NEIL MITCHELL: Not guarantees?

KEVIN RUDD: Well we have been consistent about that.

SABRA LANE: The Government's language now is that it's an objective, not a guarantee.

On AM Mr Rudd said the changes would be phased in over five years giving workers and employers time
to adjust.

KEVIN RUDD: We will work always to ensure that in the implementation of this overall scheme that we
can have a system whereby employers and employees can deal with any costs associated with this over
that period of time.

PAUL HOWES: It was inevitable that some people would be left worse off.

SABRA LANE: That's Paul Howes from the Australian Workers' Union. He says it was an open secret in
the union movement that there would be winners and losers under the Federal Government's
rationalisation process.

PAUL HOWES: Either employers or employees are going to be left worse off and that is the reality
that's been the case since the award modernisation process stated.

SABRA LANE: And on ABC2 the Small Business Minister Craig Emerson acknowledged some businesses will
face higher costs.

CRAIG EMERSON: The commission is ensuring that any costs increases are minimised for businesses so
that they are phased in over that five year period and that we have a proper safety net for working
Australians, especially our vulnerable working Australians.

SABRA LANE: And the shadow treasurer Joe Hockey says he's not surprised.

JOE HOCKEY: Because it over-promised in relation to award modernisation and it just seems as though
everything Julia Gillard touches turns to clay. This is another example where the Labor Party
promises but cannot deliver and in this situation it was patently clear that if you were going to
have single and national awards someone was going to lose out - inevitably small business - in the
process.

ELEANOR HALL: That's the shadow treasurer Joe Hockey ending that report by Sabra Lane.