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Townsville, 8 July 1997: transcript of doorstop interview [abolition of minimum wage]

EOE

JOURNALIST: This morning the PM was opening the way for dropping or abolishing the minimum wage rates in Australia, what is your reaction to that?

REITH: Well that's not what we're proposing. The only point that he was making is that obviously the general level of wages affects the general level of unemployment, something which he said in the US, something which he said before his recent trip overseas.

JOURNALIST: So there is no proposal before the Government of that kind?

REITH: There is no proposal of that kind, full stop.

JOURNALIST: Prior to the last election you made a promise - a rock solid guarantee the Prime Minister said that no-one would be worse off under the Coalition, that no-one would take home less pay under the Coalition than under award rates of pay. Will that rock solid guarantee be part of policy for the next election?

REITH: Well that is our guarantee, that is part of the legislation and we have stuck by that guarantee since the day it was given in early 1996.

JOURNALIST: So you have no proposal...

REITH: I have absolutely no proposal, nothing in my bottom drawer or otherwise to change the guarantees that we have given in respect of take home pay.

JOURNALIST: So we can expect then that that will be Coalition policy going into the next election?

REITH: Not only will it be, the fact of the matter is that it is today. It is in the legislation -L.A.W. law. As to the formal policy position. obviously in due course we will say more about what our policy is going into the next election but it is quite clear what our intentions are on this matter. Our policy is that we should be earning more not less.

JOURNALIST: Minister, is it your opinion that it should be set in concrete? If Australians realistically want a reduction in unemployment rates, isn't this a question we should have a look at?

REITH: The real challenge for the labour market in Australia is to introduce the flexibilities in workplace practices that will give us higher productivity and therefore the capacity to earn more. If you look at Rio Tinto, the company is prepared to offer an extra $50 a week, if only they can get sensible work practices that would give them the capacity to earn the dollars to pay for it. That is the real sort of challenge in most Australian businesses. The minimum wage is an interesting debate and obviously it's relevant but we have provided the Industrial Relations Commission with the jurisdiction to tend the safety net. But the real challenge for most businesses is their workplace practices.

JOURNALIST: So does that mean then, that you think that by other means Australia can get to unemployment rates as low as the United States?

REITH: All we have got to do is to lower the unit costs of production. And what we are trying to do is to get the golden double - that is to produce things more cheaply but aim therefore to pay ourselves more. That's what we are trying to do. And that means improving the efficiency of our operations without reducing wages. Not only with the qualification of without reducing wages, but to help people earn more. It was Labor's policy try and reduce people's wages to fix our economic problems. What we want to do is to fix our economic problems so we can earn more. And that is still our whole policy intent.

JOURNALIST: But unemployment, you would have to concede, has proved remarkably intractable, hasn't it?

REITH: Well it's been stubborn, there's no two ways about that. But if you take industrial relations reform, for example, we were delayed by Senate processes in introducing our legislation. The legislation came into effect on 1 January. The individual contracts legislation, which is an important aspect of it, was only able therefore to come into operation at the end of March. So for all intents and purposes it's only now starting to get underway. We are already starting to see people use the opportunities provided by the legislation, the motivation to do things more efficiently and all those other aspects of the law having an impact. We had our first individual contracts in the meat processing industry in Queensland just recently. Now if you can get rid of the tally system people can still earn good dollars, but we can rejuvenate the meat processing industry and the export income and the jobs that would come from that. In other industries we're just starting to see some of the fruits of our legislative labours.

JOURNALIST: Just on the Hunter, Minister, you're obviously being kept up to date, what's latest today?

REITH: Well, I haven't had a report on events today. I think the point to note about the coal industry generally is that really since l January when the Workplace Relations Act came into operation there have been a lot of pressures to try and improve workplace practices. So we have seen companies, for example, going to individual contracts. We have seen companies cut out the payroll deduction of union dues, we have seen attempts to change workplace practices, we have seen companies adopt real strategies to make things happen, and this is yet another example, I suppose, of forces at work in the coal industry. The coal industry's employee relations practice is not good. The level of days lost to industrial disputes in the coal industry, is the worst industry performance of any industry in Australia, 7,707 days lost per thousand employees per annum, that is a very high figure. It is no wonder that the reputation for reliability is not as good as it should be and the companies, some of them particularly have been pushing out the boundaries for reform and obviously we encourage that.

JOURNALIST: Can you go any further than encourage it? I mean CRA and Rio Tinto come to you because they are not making much ground they come to you for more support.

REITH: We've already done a lot. We have put in place the legislative framework to make these things happen. We've given them the opportunity. We are not in the business, however, of running people's employee relations. We have talked to all sorts of parties, unions, employers, organisation of various sorts in the development of the legislation, including Rio Tinto. But ultimately they have got to have the primary responsibility for the management for industrial relations.