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Friday, 3 December 1976
Page: 3223


Mr LIONEL BOWEN (KINGSFORD-SMITH, NEW SOUTH WALES) -I direct a question to the Minister for Employment and Industrial Relations. I refer to the thesis that the Minister espouses that partial indexation of award wages is good but that full indexation of awards is always bad. Has the Minister seen reports which indicate that if full indexation of awards had been given in the 2 decisions relating to the March and June quarters, the effect of indexation in September would have been a mere 0.4 per cent? Therefore, does it not prove the stability of full wage indexation because it guarantees there will be no compression of relativity? Is the Minister aware that the Government's own bungling of the Medibank issue guarantees that the December consumer price index will now escalate from an estimated 2.7 per cent to 5.7 per cent and therefore there are many factors other than wages which affect the consumer price index? Accordingly, will the Minister now support the Conciliation and Arbitration Commission and support full indexation of award wages to prevent confrontation with the trade union movement and to give some stability to future wage increases in this country?


Mr STREET -The Conciliation and Arbitration Commission has never said that there should be automatic application of the full amount of the consumer price index to wages. What it has said is that at each quarterly hearing it will listen to the case and decide for itself the extent to which the CPI should be applied and the method by which it should be applied. The fact is that if full indexation is automatically applied every quarter in Australia, with inflation running at the present level, there is no way in the world in which Australia's competitive position can improve; in fact, it will go back. The average inflation rate of the Organisation for Economic Co-operation and Development countries now, from memory, is slightly less than 9 per cent. I think it is about 8.8 per cent or 8.9 per cent. The Australian position is still worse than that average. We will not restore our competitive position until we get our inflation rate down to that average or below it.

The fact is that partial indexation, of itself, does not need to compress relativities. It depends on the method of application of the partial indexation. For example, if 50 per cent indexation was being applied across the board, there would be no compression of relativities. If it is applied only at the botton end of the wage scale there is compression of relativities. It depends on the method by which it is applied. The Government, as it has in the past, will continue to put, in the public interest, a case at the quarterly hearings of the Conciliation and Arbitration Commission which will protect the interests of Australian workers so that they do not price themselves out of jobs.







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