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Speech to the Committee of Economic Development of Australia



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/ SPEECH BY THE HON.. A . A . STREET HP, MINISTER FOR EMPLOYMENT AND ‘ ........ '■

' ^ ^ ;Y;::lMSTRIAL:-REiATIONS TO THE COMMITTEE OF ECONOMIC DEVELOPMENT OF AUSTRALIA ON FRIDAY 1 8 AUGUST 1 9 7 8 .

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I t is a pleasure to be with you today and le t me apologise, a t the outset for^aoy;.Inconvenience caused by try lateness.

In-fact* .I have j u s t come from a conference in Sydney concerning the. .'-v .......... ·. - ■ w

. djspute.;b^.;the·export-of liv e sheep.

You know in a way, I have tried, to follow the philosophy of A ristotle, Han should tend his flock and not involve himself in the a ffa irs of men.-. but this, dispute makes i t very d iffic u lt to tend th a t flock without . involving himself in the affa irs himself. . . ·

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i'r-* :-v··^··?·. '}£ Λ *"· * Ah":: a f f a ir kind I would lik e to. discuss, is the Budget and-in p artic u lar i t s reference to Industrial Relations and Manpower ■ ‘r-:

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i&;,vJh£.H»st; common-..expertetice is th at when a Budget is brought down many Lpeople will be disappointed, others dismayed and a few pleased, v C l e a r l y » > i t is because we a ll have differen t in te re sts which simply cannot, bie,. fu lly met». However, the desire' we a ll "share fo r sustained

imprY)yeiiient.in our economy can be realised by a responsible Budget challenges our nation now faces. This Budget lieets,tho^e: challenges and, as a consequence some hard decisions____ ··.- - · . ·-· Ί\: :· · . · . : ■ .·· ·. ··â– .·: ·.·

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is;now:.a matter fo r the. record th at through th is Government's economic pollcy the ra te of inflation has been dramatically reduced. He- have done a lo t in a short time to reduce the difference between l^ S - r o u r · in flatio n rate^ahd those of,our.:major trading partners. ;

Even w ith th is, success, i t i s-not su ffic ie n t to maintain the status quo. I t must be. realised th at more can and must, be done. In general, oyr m ajor-trading partners have also managed to reduce th e ir in flatio n . r a te s .,·.For instance, the average increase in the CPI for OECD countries :. to May was.7»8ίέ compared with Australias increase of 7.9'L i t is .

clear th a t we must continue to fight against in flatio n to improve the competitiveness' of our industries in the world market.

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In continuing to reduce in flatio n , the Governnient is continuing its . integrated strateg y on raising the level of economic a c tiv ity and as . a.consequence creating more job opportunities» subject to the ■ constraints inherent in the economy. iVe w ill not reso rt to short · ~ : sighted policies which may achieve some marginal improvement in these

. Vateas where those.policies conflict with our overall strategy to ; r promote sustained economic recovery. . , .

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—— A responsible economic policy must have as one of its major p rio ritie s ;;i: · .r ;..iv ' ■ * sd Budget; d e f i e i t . ■ ·.This has meant taking some d if f i c u l t decisions "V ::' · .but dedi sions" which had. to be taken to ensure th a t our hard won ------

gains are b u ilt on and not fritte re d awav. ..

' 5 I t j s . i n th is sense th a t-th e Budget follows a blueprint for the

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■Within the lim its of responsible economic policy the Government has managed to do a great deal. For instance, in the area o f my d irect 1S ‘i ^ t ' - a t e d b , a Budget

' allocation of some $240 m illion for the operation of the CES and

r the associated manpower-programmes. This represents an Increase of .apprpxinately 44S over la s t yeark expenditure. ■ ; .

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: The; Government has a continuing conmitment to help job seekers and : employers through upgrading the CES into a modern and e ffic ie n t -.i. · '-“· · "V -*.· ··. . ■*, ’ * ' *·.· '

{manpower service. The CES is in a unique position to improve the matching of. people with j obs and the major funds i t w ill receive th is v year enhance i t s a b ility to do the job.

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. ATsoFvacancies are being fille d faste r and an energetic programme . -—o f seeking new vacancieTwi 11 be extended. In addition the Government is providing $125,000 over the next 12 months for p ilo t projects in new or relocated CES offices designed to 'h elp in achieving these

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To ..achieve the best possible resu lt i t is essential to have the ; support of Industry. Job seekers will benefit d irectly and industry wil l a lso benefit by f illin g vacancies fa ste r with people most suited to th e ir needs. The best way to achieve th is is through the v.CES.;;Z'

The CES plays a central role in the adm inistration of the Government's manpower . programmes,. The allocation to these programmes has been increased by 44£ to

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Va.record. $179 m illion.

.· ' ’ ■ ·" : Ϊ here;, are 1 two important features, of these progranmes. F ir s t, the Government is helping to provide people ’with s k ills they need to enhance th e ir prospects ' oi^t8iy|^;and -satisfying employment, . ' . .. - V

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Secondly,..the Government has efiiphasiscd the need to make our industries more competitive and an important element in th is is to increase the s k ills of our:·: . . . ■: ( . · ' . . . . . . . · , . . workforce^ % - · ' . T" :\.· ... · V ■ ■ ■ . . . . .

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This assistance can make a significant improvement in job opportunities. I t is important not to forget th at 3 out of every 4 Australians owes his employment . to the p riv ate sector - i t is obvious therefore th a t i t is to th is sector we

"must look for real progress to be made fo r productive employment. - ··.'

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• The p rinciple manpower prograniiies for the development of s k ills in Industry is HEAT,' As an indication of the importance the Government places on th is programme, .the allo catio n td HEAT in th is y ear's budget has been increased to $122 m illion.

./ Emphasis w ill be maintained on the highly successful and practical on-the-job training assistance. This is the most co st-effectiv e and successful way o f " providing people with s k ills they need tp_obtain·.;secure employment, -.f4·- " „ r "::yrV:V ' . .. " - - - - . . >

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The Special Youth Employment Training Programme w ill be continued with some .

m odifications. The period of subsidy will be reduced from 6 months to 4 months and the maximum subsidy payable per week to employers from $57 to $45, . .

As a r e s u lt, SYETP w ill change In two important ways. F ir s t, the new ra te of subsidy^rnti" the.reduced pericd/funding will be made more consistent to the .level of training provided under the programne. Secondly, to try and ensure .as far:as. possible th a t all-th o se e lig ib le for assistance-w ill have a more - .equitable opportunity of getting a job. .

>,support;to.over $46 m illion. As a re s u lt, employers of some 63,000 apprentices : -.aW expected to be assisted th is year. , ■

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Fptt:people heeding help with relocation and travel . in order to find suitable * · ' λ .' ' '*·'·, ‘ -■·-. ^ ' employment, we have increased funding of the Relocation end Fares Assistance ■ V - · - · ■ . · ' : ■ ■ ■ ' · . · _ ' · ■

Schemes·, to nearly $1,3 m illion. .

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. To get best re su lts from these programmes we need the co-operation of people in - ' industry - both management and employees.. . - - ' . - ■ · · · . . . ' " . ' . '■ v ··.· 'ί,Μΐ'·- ’ ' ■ __ " . .... . ■ ____ .. ■ . . ' . ■ · ···· : · · · ■ rj'7■ ·;','development of useable s k ills for industry through the assistance these■ ;Τ:.νρι^'9>β^πς5 'provide-tielps companies to invest and expand. This gets economic;·.. - . . recovery ro llin g and consequently more job opportunities will be created. Howgreat e x ^ ;W:keBping „,ge in c re ,». _ to a minimum. Both management and employees must recognise that wage agreementsj;__ _ which may appear to have some benefits in the short term, will over' the -longer .- period, lower efficiency and productivty. This must inevitably re su lt in lo st ' \ i-vK V v ·â–  ’··· · · ' · -*. . · · · · ·······â– ··-*·· i_·. - - · . · . · ■ ", . jobs. ■ ·. ’ - ·i t is c h a ra c te ristic of our times that machines continue to replace people.> . - ·: .· . . · . . · ' However ...the pace of th is change has been escalated by the d irect increase inIf the price of labour continues to increase at real'wages over recent years, a fa s te r ra te than the price of the capital equipment of replacing it* the pbvxpus consequence is lost, jobs,· “ -·-· £··"·. · ·Anysj$5£l§?ialn money wages a t th is time would have two very damaging e ffe c ts.I t would be a d 1 reet-. s t imulus to a resurgenee-of in flatio n and i t would make i t y-ψ^:. - m ore^difficult for employers: to take on extra people a t the higher price.Furthermore, i f wages are permitted to increase more rapidly than productivity,i t is clear that, our efforts; to raise the level o f economic a c tiv ity will be----undermined. This brings me back to my theme. The re s u lt would be th a t peoplewithout, jobs would find i t harder to get work and those with jobs would find ........ . ·â–  . ... · ; · .... ’ ' .ityharder to keep them. . . : - ■ .■ 'tS: Λ :;·.Î¥: : ·- -S^Pv-;·.. One of the major benefits to be gained from reducing in flatio n and keeping wage increases to a minimum is the encouragement th is provides to both domestic and.....foreign investment through increased economic s ta b ility . Share values have5 „ -: ' already r!sen;.dramatically; on Australian Stock Exchanges over the la s t few days.

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The development of a sound economic framework which> provides sta b ility and encourages investment also requires a responsible attitude to industrial rela tio n s. ' . . . .

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Thp Covernment has consistently emphasised to both employers and unions the need to use negotiation and conciliation as the proper and most effective ’ ■ '· means for resolving disputes. At the same time we have established the industrial 1 egislative"Tramewor k in""which individuals’ can he protected and obligations met.

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The reinforcement of these.two principles has“resulted in a dramatic improvement in the climate of industrial relations. This Government has worked harder than, any other to reduce industrial disputation in tirrs-country and the fa c t thfrt- we.h,ave .reduced i t to the lowest level for 10 years from what viere record levels bhly a few years ago - speaks for its e lf . ___

Our approach to industria l relations and our range of manpower programmes are making a positive contribution to our economic recovery. The Government’s determination to estab lish a.sound foundation for economic reovevy is the basis for th is Budget.;

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I t .is not a Budget: fo r next week or next month - if T s a Budget th at recognises th,at s t i l l have problems and that these problems can only be overcome- by taking the actions now, th a t provids~for future economic s ta b ility . iH fcS i'y

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