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Interview with Senator Chaney on ABC Pru Goward Program

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Attached transcript of comments by Senator Chaney on 2CN today dealing with the Coalition's approach to wages and, in particular, its application to the pilots' dispute.


K e i t h K e s s e l l MICAH

Canberra .... — "l , , ‘ 1 1 *"

2 October 1989

Phone: (062) 77 3170

Excerpt from Interview with Senator Chaney on ABC Pru Coward Program, 2 October 1989

Pru Goward:

I guess the first thing that strikes us this morning is the Business Review Weekly poll of business executives where only 21 per cent of those executives thought the Coalition would run the best wages policy. Now that's really your area. What is the message that's not getting through?

Senator Chaney:

Well I think the message is that big businessmen like the predictability, if you like, of the Accord and are tending to ignore what are the clear disadvantages of the Accord. What's happened in four of Labor's six years is that Australian wage and salary earners have got reduced real wages and if your look at this year's Budget papers it looks

as though we are going to have the same again.

Pru Coward:

Well, business people would like that.

Senator Chaney:

They would, but you see as a permanent part of economic policy it's really a third world policy isn't it? If Australia is going to go on having declining real wages there is not really much future for it. And what we say is

that you need an industrial relations system which is going to encourage a bit of productivity growth because that's what has been absent in Australia, that's going to enable Australians to look forward to better times instead of worse times. Now, it may be satisfactory, it may be predictable and the profit share, the big profit share that companies are enjoying might make it very satisfying for big business.

It's an impossible future for Australia and we say that you've got to break out of the pattern of the Accord to change it. We've always been, unfortunately, a bit behind in the polls with that particular argument.

Pru Coward:

Because business people won't take the risks?

Senator Chaney:

I think what you will find is that the best of business is in fact already pursuing our policy as much as they can within the existing....

Pru Coward:

Sir Peter Abeles is. That's good for you, isn't it?

Senator Chaney:

That's a classic example of where the strait-jacket of the Accord has caused what should have been a minor dispute to be a major one which is doing enormous damage to Australians.

Pru Coward:

Is Sir Peter Abeles following Liberal policy?

Senator Chaneys

No, Sir Peter Abeles is not because, you see, Liberal policy says that it is the employees who are entitled to decide whether they speak individually or through some agent, whether it's a trade union or anything else. So whilst Sir

Peter Abeles in offering private contracts is certainly doing something that we approve of and while Sir Peter Abeles in chasing productivity improvement flexibility is doing something we approve of, we would have to say that our

policy says that whether you are a metal worker or a shop assistant or an airline pilot, if you are going into a wage negotiation you are entitled to nominate who speaks for you. That's not the employer's job.

Pru Goward:

So the difference is that Sir Peter Abeles has denied them the right of nomination?

Senator Chaney:

Well, we believe in freedom of association. I must say I find it very hard to credit the fact that the Prime Minister can approve of contract negotiations which are based on people being shown into a room and denied legal advice. That doesn't make sense in any context but to suggest it makes sense in the context of an employment contract is very

strange because what Labor people raise with me about our industrial relations policy is that it might be used by strong, ruthless employers to oppress the weak. And they say "what about a young school leaver who goes to a place? He or she can't be expected to negotiate an employment

contract." Now our policy makes it quite clear that that person is entitled to have representation, to have an agent, to have a trade union, whatever they think is required to protect their interest. And to have the Prime Minister

saying that the primary or acting out the line, that the primary objective of this dispute is to crush the Federation


of Air Pilots and to prevent the pilots from having anyone speak for them, I find quite extraordinary and at a complete conflict with what I understood the principles of freedom of association to be.

In other words, the Liberal party doesn't believe in oppressive industrial conduct from either side, Pru. We don't believe in strong trade unions like the Pilots Federation holding a gun to the employer's head but we also don't believe in employers holding guns to employees' heads either.

Pru Goward:

But isn't that an inevitable consequence of giving people the right of association and in some industries they are going to be able to hold guns at peoples' heads?

Senator Chaneys

Well, that's why you have to have a framework.

Pru Gowards

How do you stop that without laws?

Senator Chaneys

Other countries manage to do it without the sort of destructive outcomes that we are seeing in Australia at the moment. Indeed the Australian industrial relations record, in world terms, is appalling. We have much more strikes

than most other countries. So we have to change that culture. The way we say you do it is to have binding sets of rules in both the centralised wage-fixing system and in the external system. Our voluntary agreements are no-strike agreements with legal remedies. Our centralised system gives the Arbitration Commission real authority to enforce

its awards. It's a more disciplined system on both sides of the equation.

Pru Goward:

It's a very complicated system, isn't it?

Senator Chaney:

No, it isn't, because if you go back to what you are really aiming to do, what is it? You are trying to get to a situation where Australian employers and employees work together in a productive way. You want to encourage people at the enterprise level, at the workplace level, to co-operate and work together. Now the present system is very destructive of that because it keeps using outside

agents - big trade unions, arbitration commissions,


employers' organisations, to try and regulate what should be done by the parties themselves at work. Our policy says ideally you work together face to face. If you need the intervention of outsiders then that intervention is available.

Pru Cowardi

Do you think there is now a real chance of a breakthrough with the pilots this week, even so?

Senator Chaney:

I think there has been room for a breakthrough for the better part of a month. It's more than a month since we called for constructive negotiations on non-surrender terms....

Pru Coward:

But now the IRC is back in charge?

Senator Chaney:

Well yes, but you see what everybody also agrees is that this decision is not one which should be arbitrated. It should be dealt with by agreement because the great problem with an arbitration is that you are likely to wind up with

the worst of all possible worlds. You won't have the productivity improvements that are possible, you won't have the wage rises that are possible if you have got a decent productivity round. So there's your problem.

Pru Goward:

Now, is that what you think is going to happen this week?

Senator Chaney:

If there is an arbitration without the parties being intimately involved in working out the best way of doing things, we will not get the best outcome for the airlines, the pilots or for Australia.

Pru Coward:

Getting back to the problems with executives and your policies, are you really saying it's that they like the present system, it's lazy, it's easy for them and they don't have to actually look for productivity increases. They don't have to think too hard about it.



Senator Chaneys

Well for a lot of Australian industry, that has been true. It's a sort of cost-plus operation. You don't care if your wages go up as long as the wages of all your competitors go up and so that's been an element. And the airlines are a

classic case of that. A classic cost-plus operation. Ansett and TAA put up the salaries, so they put up the fares. And they do it together and it's all very cosy. Very bad for consumers, very few Australians can afford to

fly and it's a disaster in terms of our general economic management. Now that's what we have got to get away from.

Pru Coward:

Well the school holidays are changing that aren't they?

Senator Chaney:

Well, I hope that people are getting fed up. But look at American airlines after deregulation. I think the proportion of Americans who can fly has nearly doubled under deregulation. That's the benefit to consumers that we want.