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Thursday, 12 April 1973
Page: 1460


Mr Lynch asked the Minister for Labour, upon notice:

(1)   What increase in (a) the national wages bill and (b) unit labour costs will be caused by the introduction of a 35-hour week for all wage and salary earners.

(2)   What increase in (a) the national wages bill and (b) unit labour costs will be caused by the introduction of a 33-hour week on the basis publicly outlined by the Government.

(3)   What increase in (a) the national wages bill and (b) unit labour costs will be caused by the introduction of a 33-hour week for all wage and salary earners in the (i) Commonwealth Public Service, (ii) motor vehicle industry, (iii) fuel and power industries, (iv) iron and steel industries, (v) stevedoring industry, (vi) building and construction industry and (.vii) retailing industry.

(4)   Can he say what the inflationary effects will be in respect of parts (1), (2) and (3).


Mr Clyde Cameron (HINDMARSH, SOUTH AUSTRALIA) - The answer to the honourable member's question is as follows:

(1)   and (3) As the honourable member will be aware, an Interdepartmental Committee appointed by the previous Government to assess the cost of a 35-hour week was not able to produce definitive estimates because of the great diversity of possible assumptions that could be made. On the assumption that a reduction in working hours would not be accompanied by any increase in productivity the Committee estimated ultimate increases in unit labour costs ranging between 8 per cent and 18 per cent, depending on further assumptions regarding the effective reduction in ordinary hours of work, the way in which production would be made up (if at all), etc. Estimated increases in unit labour costs of the order indicated would add between $1 ,800m and $4,000m to the current national wages bill.

In view of the tenuous nature of the assumptions made, and in particular the assumption of unchanged productivity, I do not believe the estimates represent a useful indicator of the effective cost of introducing a 35-hour week.

The Committee also estimated that a levelling of working hours to 35 a week in the Commonwealth Public Service would add approximately $100m or of the order of 8 per cent to the total Commonwealth Public Service salaries and wages bill. An increase of the order of $100m to the national wages bill would raise unit labour costs by approximately 5 per cent assuming no increase in productivity. The Committee did not estimate costs in respect of industries referred to in parts (it*) to (vii) of section (3) of the honourable member's question. Estimates that might be made on available data would be no less tenuous than those already given ' in this answer to the honourable member's question.

(2)   and (4) The policy of the Government is to support a 35-bour week only in those industries which have sufficient capacity to absorb it. Introduced on this basis a 35-hour week should not have any significant inflationary effect.







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