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Earlier today, Senator Chaney opened the Conference of the Wool Council of Australia

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Earlier today. Senator Chaney opened the

Conference of the Wool Council of Australia

in Perth.

A copy of his speech is attached.

8 N o v e m b e r 1 9 8 9


Once again the wool industry has reminded us of both our volatility and fragility arising from the unpredictability of commodity prices - even in the rare situation where we are the major world supplier. After record years, external

events have suddenly made immediate prospects less certain.

The wool industry more than most is accustomed to such buffeting. It is primarily an export industry continually exposed to the rigours of the international market place.

It is an industry used to standing on its own feet, making a contribution which is recognised and commended by the Liberal and National Parties. It is a contribution which we will continue to support through promotion on world markets.

But promotion is only icing on the cake. Government has a far greater responsibility to provide a competitive economic framework and to ensure that industry is not impeded by unnecessary inefficiencies.

While commodity prices have an enormous impact on our economic situation, there is little we can do to influence them. As wool currently reminds us of the volatility of price and as wheat currently reminds us of volatility of

supply we need to ensure that the things we do control operate for the benefit of industry.

What we can influence is far more relevant to what we should expect of Government. If the past few turbulent years have taught us anything, it must be that we need a much sharper focus on what we can control so that we can be more

resilient in the face of external shocks, indeed even turn adversity into opportunity.

Successful nations do this. They do not wait for prosperity to fall into their laps. Japan for example steams ahead whether the world economy is favourable or not. She has learnt that accepting the challenge of change and continual

improvement must be a way of life.

Change in Australia on_the other hand is too often perceived as too hard. Indeed, there has been a pathetic failure in Australia - particularly by the Hawke-Keating Government - to come to grips with our problems and to accept the need

for continual change.

The result is that compared to the rest of the world we are falling behind. Professor Helen Hughes estimates that whereas at the beginning of this century Australia enjoyed the highest living standards in the world, we are now rated

15th. And we are still falling. In six years' time,



families in Hong Kong and Singapore will have higher average incomes than in Australia. Over the next ten years - and even on favourable assumptions - Australia is destined to grow at a slower rate than any other major economy.

Moreover, living standards are falling behind at the same time as we are building up unsustainable debt levels. Gross foreign debt at more than $130 billion is now equal to 40% of GDP, compared with 10% just 10 years ago. In terms of external debt to commercial banks, we have the dubious distinction of third place behind Mexico and Brazil, and

ahead of the Soviet Union and Argentina.

This is an unsustainable situation which will not be cured by fortuitous events overseas. We have had two, almost three, years of high commodity prices and yet our trade position has deteriorated alarmingly over this period.

The problems have been well-diagnosed. We are living beyond our means, we must produce more, become more efficient, save and invest more.

Woolgrowers do not need to be told this. They know from experience the importance of cost competitiveness, the importance of customer needs, quality, and meeting delivery deadlines. Successful producers' efforts are concentrated on continual improvement.

But they also know that a whole host of factors are outside their control - inefficiency and higlj costs on the waterfront, coastal shipping, restrictive work practices, inefficient government monopolies, and burdensome

regulations to name just a few.

The IAC estimates that major inefficiencies in domestic water transport, international liner shipping, the transport and handling of bulk commodities, domestic and international aviation, road and rail transport collectively reduce GDP by

around $9 billion annually. Inefficiency in postal, telecommunications and electricity sectors account for a further $3 billion a year.

These are unnecessary cost burdens which producers and consumers are forced to pay. And they are just the tip-of-the-iceberg. They are making us unnecessarily


Producers in this country - especially those competing in world markets - are heavily penalised by these burdens and it is in these areas that real change is possible and vital.

Changes are in fact occurring but the pace is painfully slow.

That pace can be accelerated and it must be.


The present Government talks a lot about change and points to what has been done, but it is too little, too late.

There has been a lot of rhetoric, use of the right words, but not much real action. And even where there has been some change, we are still being outstripped by our trading partners.

The Hawke Government's coastal shipping reforms for example are already years behind overseas developments. It is not enough to congratulate ourselves for doing better than we did last year. The only test is whether we are catching up and better still beating the rest of the world.

That is the test that successful economies such as Japan and West Germany impose on themselves.

But in Australia industrial relations reform for example is, we are told, difficult because of industrial relations "realities". For the same reason employers are lumbered each year with wage cost growth around double the rate in

our major trading partners and productivity growth the lowest in the industrialised world. Privatisation and increased efficiency of government monopolies are proscribed by Labor Party views rooted in the 1930s.

The reality is that effort and enterprise in this country is constantly thwarted by vested interests which want to preserve cosy arrangements. For this reason the Labor Party will not introduce real reform on the waterfront, in coastal

shipping or the labour market generally. It mutters about the need for change, holds talkfests and devises complicated, glossy bureaucratic blueprints for change that only lead us into new costly messes. It is usually a case of far too little, far too late.

The fundamental Opposition program is to accelerate the pace of change. We have specific policy proposals which will provide producers with a competitive environment. Look at what can be done as against what is being done.


The situation now:

We are facing a three-year process of negotiation between stevedoring companies and unions, supported by $300 million in subsidies from the taxpayer and importers/exporters, at the end of which there is no guarantee of any significant improvement in productivity or reliability on the waterfront.

There is no real prospect that this sort of "reform from within" will solve the problems on the waterfront.


The Waterfront Industry Reform Authority (WIRA) process has already failed its first challenge in failing to come up with satisfactory manning levels for grain loading at Fishermans Island and Port Kembla. According

to the Chairman of the Australian Wheat Board (who had initially backed the WIRA process) this failure must lead other exporters to question the benefits to be derived from this process.

What can be done to accelerate the pace of change and ensure genuine reform:

Employers must immediately be given the normal right to hire and fire employees and to determine their own manning levels according to operational requirements.

Those parts of the Industrial Relations Act that provide for Port Co-ordinating Committees and give the Commission a special jurisdiction to deal with the waterfront should be repealed.

There should be Government support for immediate changes to waterfront awards to insert permanent stand down provisions and to introduce flexible rostering arrangements.

No taxpayer funds for redundancy payments should be provided until all restrictive work practices have been eliminated and there is a commitment to genuine reform.

The Waterside Workers' Federation (WWF) monopoly on stevedoring labour should be abolished by enacting voluntary unionism legislation.

Employers should be given the ability to enter into direct agreements with their employees on pay and conditions.

Coastal Shipping

The situation now:

The high cost of coastal shipping means that it is cheaper to transport alumina to Tasmania from Italy than it is from Gladstone..... .....______________________

The Government is sponsoring a negotiated process of gradual reduction in manning levels on Australian ships. However there is no guarantee that this process will lead to a cost structure comparable to international

shipping, nor that any reduction in costs will fully be passed on to users.


What can be done to speed up the pace of change and ensure an efficient coastal shipping industry:

Cabotage should be phased out over a five year period.

Enterprise employment should be introduced.

All sections of the Navigation Act not dealing with safety or environmental protection should be repealed. This would include regulations concerning manning levels and employment conditions.

Labour Market Reform

The situation now:

The Treasurer has on a number of occasions publicly called for a more flexible industrial relations system where wages reflect the differing conditions of different sectors of the economy. He has also said that

as part of this process we need to reform our craft union structure.

This is a particularly good example of Mr Keating using the right words but ignoring available solutions.

The Government has failed to implement policies that will move us in this direction. Instead of differential outcomes, the Government has continually supported national wage decisions the effect of which is to ensure uniform increases to all industries and enterprises

irrespective of their productivity performance or capacity to pay.

Award restructuring has in fact been used to cement into place even more rigid relativities between industries. For example, by creating a nexus between carpenters in the building industry and fitters in the metal industry.

The Government's policy of encouraging union amalgamations will do nothing to change the occupational basis of most unions, nor will it lead to a significant reduction in the number of unions in most enterprises.

What can be done to accelerate the pace of chance and bring about genuine reform;

Introduce legislation permitting employers and employees who wish to, to enter into voluntary agreements at an enterprise level to reflect the circumstances of that enterprise.

Submit to the Industrial Relations Commission that pay rises awarded to industries and enterprises that remain within its jurisdiction reflect their varying economic circumstances.


Introduce legislation providing a workplace-based mechanism for rationalising union structure. This would enable the development of enterprise-based bargaining units. This could take the form for example of

enterprise unions, or arrangements whereby a single union has coverage of all employees at a particular workplace.

The Opposition moved amendments to the Government's Industrial Relations Bill 1988:

. to make the development of single-enterprise bargaining units an object of the Act

. to provide for employees to conduct a secret ballot on the issue of which union structure would best represent their interests

. to enable the registration of enterprise unions, and

. to delete the requirement that small unions amalgamate or face deregistration.

Note that Labor voted to defeat these practical changes. So much for Mr Keating's rhetoric.


The situation now:

Australia's major airlines are at least 7 or 10 per cent more costly than airlines in the United States. Numerous studies have documented inefficiencies in telecommunications and postal services - areas dominated

by government business enterprises. The Government itself has acknowledged the need for change but its actions have been limited to "corporatisation" of government enterprises. But inherent inefficiencies and lack of competitiveness remain.

What can be done to accelerate the pace of change and ensure genuine reform:

The Opposition has a clearly enunciated privatisation program which is primarily designed at encouraging competition and more efficient services to consumers.

In our first year of government we will sell QANTAS, the Pipeline Authority, the remaining 70 per cent of the AIDC and Medibank Private. In subsequent years we will sell Australian Airlines, OTC (49 per cent), AUSSAT Australian National Line and the Commonwealth Bank.


We will privatise only where there are clear consumer and/or taxpayer benefits and all proceeds will be used to retire Commonwealth Government debt.

Moreover, the quality and availability of services to remote areas will be maintained.

Contracting Out

The situation now;

It is conservatively estimated that contracting out of government services saves twenty per cent of costs. Australia-wide, total savings could total at least $2.5 billion annually, with the bulk of these savings at

State government level. This is not just theory. The Greiner Government in NSW has achieved large savings by contracting out cleaning of State schools and hospitals for example.

Despite this huge potential for reductions in public sector outlays - and therefore reductions in taxes and charges - without reduction in service, Labor Government's have an aversion to contracting out largely because it upsets their trade union constituency.

What can be done to accelerate the pace of change and ensure genuine reform:

A Liberal and National Party Government will introduce contracting out of a range of services at the federal level, saving more than $100 million in the first year. Annual savings will increase over time. We will also

encourage the States to undertake similar reforms.

The way we are going in Australia, future historians will comb the records to determine when the Lucky Country's luck ran out.

But we can act to change Australia's direction, to reverse our decline.

I have indicated some of the practical things we can do.

If we don't act, historians will determine that our luck ran out through a gradual process of failing to take necessary decisions.

For the sake of the wool industry and for the sake of all us you should demand action now.