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ACTU wages debate



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PETER R E ITH M P FEDERAL LIBERAL MEMBER FOR FLINDERS SHADOW MINISTER FOR INDUSTRIAL RELATIONS

ACTU WAGES DEBATE

C O M M O N W EA LTH

PARLIAMENTARY LIBRARY M IC A H

The Government appears to be suffering from what can only be described as "policy paralysis" while unionĀ· leaders bid up the size of wage increases.

Some media commentators have tried to portray the current debate within the union movement on wages as a struggle between the "irresponsible" left wing unions and "responsible" ACTU leaders such as Bill Kelty.

This ignores the fact that Mr. Kelty's plan for award restructuring - even if implemented in its current form - would provide the vehicle for substantial across the board pay rises while doing nothing to enhance productivity.

The Kelty plan would on conservative estimates produce an increase in average weekly earnings of at least 8-9 per cent, with some workers on Mr. Kelty's own admission getting increases of up to 20 per cent. There is no way that the economy - in its

current parlous state - can afford increases of this magnitude. This would, of course, be in addition to tax cuts.

Nor would the Kelty plan do anything to improve productivity. As I pointed out in my policy paper issued last month, while award restructuring could be used to enhance labour market flexibility, the ACTU's approach would overall make the labour market even more rigid and inflexible. In particular the Kelty plan does not provide for wages to be based on productivity and would further

entrench notions of comparative wage justice.

The outcome of Thursday's Special Unions' Conference will be presented by the ACTU leadership as a victory for "commonsense" and "moderation". However the true nature of the debate is underscored by recent remarks by Mr. George Campbell.

In the Melbourne Sun on Friday, 3 February 1989 he is quoted as saying:

"Our differences with Mr. Kelty are not really that great -Bill believes that a general increase can be achieved through restructuring and we believe it can't."

The significance of the CPI result last week is simply to put pressure on the ACTU leadership for even higher across the board increases as part of the award restructuring process. The benefit of the plan, from the point of view of the ACTU, is that award restructuring already incorporates the across the board

increases sought by Mr. Campbell. The only issue is the quantum and on that Mr. Kelty obviously takes the view that 20 per cent would be a reasonable upper limit.

M E D I A R E L E A S E

To talk about wage increases of this magnitude is irresponsible in the extreme. The Government appears to have been struck dumb while union leaders such as Kelty bid up the size of wage increases. It is time the Government took back the reins from Mr. Kelty and made it clear what it considers would be a

responsible wage outcome. At the same time it should use the hearings before the Arbitration Commission commencing next week to get the award restructuring process back on track so that it can make a genuine contribution to improving Australia's appalling productivity record.

6 February 1989

For further information contact Peter Reith (059) 79 3188