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Tuesday, 19 April 1966

Mr E JAMES HARRISON (Blaxland) . - The honorable member for Cowper (Mr. Robinson) said that the word " decentralisation " had virtually outlived its usefulness. He said that no government had tackled this problem realistically. The honorable member has not been in this House for very long. Apparently he has not studied the work of the Labour Government that went out of office in 1949. Otherwise, he would have been aware of the calling together of the ministries of each State by the Labour Government led by Ben Chifley to deal with this problem, as a result of which a plan was evolved. The Labour Government that was defeated in 1949 made it quite clear to the States that decentralisation was a matter that had to be faced on a joint Federal and State basis with the Federal Government being prepared to provide the necessary finance if the burden of cost on the States became too great. It was due to the effort of the Labour Government that the woolen mills at Wangaratta and the big Email factory at Orange, which now employs between 1,600 and 1,800 people, were established. If the Menzies Government had continued me policies of the Labour Government instead of shelving them we would not now be faced with the problems that confront us. These problems are very real and they will become more acute as each year passes.

I was interested in the remarks tonight of the Minister for National Development (Mr. Fairbairn). Honorable members opposite who have taken part in the debate referred repeatedly to what they call the four weak spots in the economy. I do not agree that these are the weak spots and I join issue first with the Minister. As his first weak spot in the economy he selected the motor car industry. This claim would be amusing if it did not indicate the tragic nature of this Government's planning. Back in 1960- 61 when the credit squeeze was imposed we were told that the motor car industry was a luxury industry. We were told that activity in tie industry would have to be restricted. As a result we saw the number of new car registrations drop from 224,000 in 1959-60 to 215;000 in 1961-62. Tonight the Minister told us that this industry is one of the soft spots in the economy, notwithstanding that about 430,000 new vehicles are being registered annually. It is amusing to try to appreciate the way this Government arranges matters. It is following the pattern it has followed ever since it came to office. It never makes up its mind about a matter until the exigency is upon it. That is why when the history of this Government is written it will prove to be the blackest history of any Commonwealth Government that has enjoyed a long term of office. Not one plan indicating advanced thinking has ever emanated from this Government. In the paper presented on 31st March the Treasurer, dealing with this important matter of the economic situation, said -

The rate of growth in demand did in fact ease during 1965.

But he did not say why this was so. Under this Government there has been a tapering off of everything planned by the former Labour Government. This has meant that the standard of living of Australian workers has been reduced. What concerns me most about the planning of this Government is the fact that, whether the Government recognises it or not, we are developing in this country a two unit wage system. Either the wife goes out to work in order to supplement her husband's income or overtime is worked by the husband. In many instances men are trying to do two jobs. All these things reduce the productivity standard in the community. Once the two unit system of employment becomes general, the standard of living is reduced. The report for 196-3 of the Department of Labour and National Service shows that 32.9 per cent, of married women between the ages of 20 and 44 are working. Also, 23.5 per cent, of married women between the ages of 45 and 64 are working. As far back as 1961 married women accounted for 43 per cent, of the female work force. So, under this Government the situation has developed that in order merely to retain present living standards, let alone improve them, a man must work overtime or have a second job or else his wife must work in order to' supplement his income.

Why is this happening? Let us briefly trace the history of what has happened since this Government came to office. In 1953 the present Prime Minister (Mr. Harold Holt), who was then Minister for Labour and National Service, argued strongly against retaining the C series index, which for 30 years had been the standard used in fixing the basic wage. A new system of basic wage fixation was introduced with the setting up of the Commonwealth Conciliation and Arbitration Commission. I am not attacking the Commission. It was given a job to do. In 1953 the Commission increased the basic wage by 5s. Od. a week. In 1956 the basic wage was increased by a further 10s. Od. a week, which was an amount about equivalent to the amount that would have been granted had the C series index been used. In 1957 the basic wage was increased by 10s. Od. a week. In 1958 it was increased by 5s. Od. a week and in 1959 by 15s. Od. a week. The 1959 increase of 15s. Od. included only about 2s. Od. to take care of the upward trend in prices year by year. In 1960 following a review by the Commission no increase was granted. In the 1961 hearing the Commission laid down certain principles. I think it is well to remind ourselves occasionally of the findings of this Commission that deals with the living standards of the people. One of the things that the Commission said in 1961 has been lost sight of by this Government. In its judgment the Commission said -

A suggestion has been made that had costs in Australia been lower the export of manufactured goods may have been greater. It is, of course, riot possible to reach any Arm conclusion on this proposition. If there were any truth in this suggestion it would be a matter of balancing the desire of this community to maintain a just and reasonable standard of living for employees against a need to increase the export of manufactures. Taken to its extreme it might be postulated that a severe reduction of wages might lead to a reduction of costs and therefore an ability to export more. On the other hand, such a reduction would have such a devastating effect on our internal consumption that unit costs would inevitably go up and it is highly speculative whether exports would increase.

Here is the relevant feature which this Government loses sight of -

All in all, we agree with the view that the more important thing is for secondary industry lo have a buoyant internal market in order that unit costs may be reduced and thereby make it possible for our manufactures to be sold more cheaply, lt is also, incidentally, by no means clear to what extent our export of manufactures may not be inhibited or controlled by international cartels.

This Government has never paid any attention to that judgment. Our best market is our internal market. Gradually over the years our internal market has been reduced so far as purchasing power is concerned. All that the 1961 decision of the Commission achieved was to restore purchasing power to the May 1960 level by adding 12s. a week to the basic wage. In its 1961 judgment the Commission said -

Having therefore considered the standards of the seven basic wages of the last decade-

Between 1950 and 1961- we regard as most appropriate for present adoption and for future maintenance the standard of 1960. lt follows from what we have said on the subjects of capacity, standards, and productivity that the new basic wage-

The judges were dealing wilh the productivity basic wage - the standard of which will in our expectation and hope be maintained for some time, combines in the result our conclusions on fundamental factors in a three-fold way in that firstly it is fixed at the highest amount the capacity of the economy allows, secondly it adopts as a standard that set by the basic wage of 1960 and thirdly it takes account of productivity increases up to and including I9S9-60.

In other words, it was up to June 1960. Honorable members will recall that at that point of time the economy of this country was at its most buoyant level. In fact, the economy was so buoyant that this Government believed that it had to be cut back. The working people, the Government considered, were getting into too strong a financial position and so, from 1961 onwards, the drought set in so far as wages were concerned.

As I have said, the basic wage was fixed at £13 16s., and 12s. was added to take it up to £14 8s. in order to restore its value to the level at which it was in June 1960. Surely there is no doubt in anybody's mind that the consumer price index was introduced into this country with all the support that the Government could give to the move. The Government wanted to get rid of the C series index which had been used as the measuring stick for assessing what the basic wage should be from the middle 1930's until 1953. But the Government knew that the trade union movement would continue to use the C series index as a measuring stick for assessing what the basic wage should be from year to year. The Government also knew that over the years until 1959 the Commission did in point of fact use the C series index as a measuring stick when assessing the amount by which the basic wage should be increased. The Government then decided to eliminate this measuring stick and lo introduce in its stead the consumer price index. As a result, the Commission said this in paragraph 5 of its 1961 decision -

For the specific reasons set out in the judgment we consider that in February next the only issue in regard to the basic wage should be why the money wages fixed as a result of our decision should not be adjusted in accordance with any change in the Consumer Price Index and for the purpose of deciding that issue the order giving effect to the decisions hereby announced will also provide for the adjournment of the application of the unions for increase of the basic wages under the Metal Trades Award to Tuesday, 20th February 1962, in Melbourne, when such subsubmissions thereon as are desired lo be made will be heard.

As from the publication of that decision until 1965, the Commission placed the onus upon the employers to show each February that the basic wage should not be increased at least by an amount equal to any increase that had taken place in the consumer price index. What happened? For two long years prices did not rise by as much as 2s. That was the result of shifting from the unions the responsibility of fighting for improvements and placing on the employers the onus of defending and justifying their actions if they allowed prices to rise. This Government stood by and watched all this. I believe it applauded the 1965 decision which set aside the 1961 decision. In my view, this was the commencement of the complete breaking down of wage standards in Australia. The present Treasurer was Minister for Labour and National Service during the years about which I am speaking. He was the Minister in charge of the Department which presented the Government's case to the Commission yet, at 31st March this year, when the basic wage case was before the Commission, the Treasurer said not one word about his hopes concerning the state of the workers pay envelope during the next 12 months.

By its majority decision of 1965, this same Commission laid down new principles. It refused the unions' claim for an increase in the basic wage based upon the increase in the consumer price index. And I remind the House that as far back as June 1965 the consumer price index was at a level which justified the payment of a basic wage of £16 3s. in the six capital cities. The Government wonders why it has troubles in the Post Office and in all Commonwealth departments. The reason is that the wages of all Commonwealth employees are pegged to a base of £15 8s. a week when the consumer price index suggests that the base should be £16 12s. The Government wonders why we are getting what the Treasurer has described as this weak spot in the economy so far as purchasing power is concerned. This weak spot is developing because the Government is extracting from the pay envelopes of the workers an amount which would enable them to live at the comfortable standard which was set in 1961. That is the result of the tapering off about which the Minister talks and about which the Government proposes to do just nothing at this stage.

It is of little use for the Minister for National Development to talk in the way he did tonight about the production of iron ore, bauxite or any other metal. What counts is the amount of the right type of metal into the pay envelopes of the workers - the type of metal that will allow them again to live at the standard which they enjoyed in May 1960. Meanwhile, what has happened regarding margins? In 1954, the economy could stand an increase to 2i times the 1937 margin. By 1959, it could stand an increase of only 28 per cent. By 1963, the increase granted was only 10 per cent. In 1965, we got the real insult - an increase of li per cent. That is the evidence of the tapering off in wage standards during the lifetime of this Government. It has completely destroyed wage standards.

Of course, the Government is faced with a serious situation due to the action of the employers in granting over award payments. These are being given because the employers no longer regard the Commission as a proper wage fixing authority. They go outside the wage fixing authority set up by the Government and are now giving workers wage justice in the form of huge over award pay ments. This situation represents a blot on the industrial legislation passed by this Government. If the Government does not overhaul its industrial legislation, the weak spot about which it is now talking will become a wet spot which will grow larger and larger in the years that lie ahead.

The continual reduction of wage standards cannot go on. As I have said, the first increase was equal to two and a half times the 1937 margin. On the second occasion, it was only 28 per cent, of the margin. By 1963, the increase dropped to 10 per cent, of the margin. Then there was a further drop to only li per cent., and the basic wage was not varied, even though the President of the Commission said that there should be an increase of at least 16s. quite apart from any increase of margins that might have been due.

If the Treasurer could only understand, he would realise that the weak spot about which he talks is due entirely to the fact that for the last 12 months the Government has reduced by £1 a week the wages of all workers other than those to whom the employers have made over award payments. In other words, the Government has reduced the living standards of the workers by the equivalent of £1 a week ever since the 1965 decision was published. I ask the Government to mark my words. If it does not stop the drift the employers themselves will destroy the authority set up by the Government because, irrespective of what the Commission has to say, the employers will make over award payments and in the long run the economy will suffer. The Minister has spoken about a dampening down. It is not a question of housing. The difficulty arises from the reduction of the amount that goes into the pay envelope of the worker each week.

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