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Minister discusses the Industrial Relations Commission decision to grant a $10 a week pay rise for low-paid workers, saying it is a fair decision

MONICA ATTARD: Well, today's decision by the IRC represents a substantial victory for the Government which argued the rise should be limited to $8 a week. Industrial Relations Minister, Peter Reith, has told reporters today the result is fair for workers and it shows how out of touch the ACTU is with economic management. We've been joined now by Mr Reith and, to speak with him, here's Jim Gale.

JIM GALE: Mr Reith, if you were earning 350 bucks a week, would you be so convinced today's decision was fair?

PETER REITH: Well, I think people will see it's a fair decision because, as the Commission says, it has retained the purchasing value of people's wages and I think if you are on 350 bucks a week, you'd also want to make sure that you can continue to have the job, and that's why the Commission also focused on the levels of employment and unemployment.

JIM GALE: The Faircloughs didn't sound too ecstatic, did they?

PETER REITH: No. Look, I mean, $10 is $10 a week. The point is that it's $2 more than what you were getting under the previous Labor Party administration and it's also in the context of changes generally to the workplace which we believe, over time, is going to give people, not only if you're unemployed the chance of a job, but if you're in a job the chance of a more direct relationship with your employer which, over time, is going to see higher pay.

JIM GALE: Would you and your family live comfortably if you were earning $360 a week?

PETER REITH: No. I've got four sons and they've all got sort of long hands into my pockets, I must say, but no, look, it's a....

JIM GALE: I mean, what do you reckon you need to live on?

PETER REITH: Well, all I would say is that obviously if you're on $350 or $360 a week, it is a struggle for people to make ends meet, and we are very conscious of that and that is the reason that we've been keen to make some changes to try and improve the system so that right across the board and, in particular, for the low-paid that they have a chance of a system that will deliver more, both in jobs and in real wages in the future, and that's why this is a very fair decision. The fact is it does retain the purchasing value of people's pay and it also is economically responsible, which I think everybody should welcome.

JIM GALE: Well, the Commission itself concedes that, if anything, it's going to make the imbalance in pay even worse.

PETER REITH: Well, the Commission has addressed that issue. One of the interesting things they said was that, when we moved to an enterprise bargaining system, it was recognised that you'd get a greater diversity of pay outcomes. Now, as the Commission says, that was accepted by everybody, and what is interesting is that the ACTU that nominally went along with this and the ALP that nominally was promoting it in the early '90s is now saying, 'Oh, it's not a system we want.' The fact of the matter is, as they themselves have recognised in the past, this is the only way to go in the future to give people a better chance of a job and higher pay. I mean, if you want to go back to the past, you can go back to Labor's 13 years of administration with a fairly centralised system, whilst we were moving away from it, where we had the worst recession for 60 years, and basically all through Labor's time, we had declines in real wages. I mean, it is amazing. Jennie George is complaining today about people who are on $350 a week. Well, the fact is that when she and Paul Keating and Bob Hawke were running the show, those people were the people who were worst affected by the policy which she now wants to pursue.

JIM GALE: So it's quite clear, isn't it - the whole emphasis of government policy and, indeed, the whole point of this decision, is indeed to drive people who are dependent on the Commission, to drive them further away from the sorts of outcomes that can be reached by enterprise deals? That's the whole point. Is that what you're explaining to us?

PETER REITH: No, what we're trying to encourage is for people, in a cooperative way at work, to be able to sit down and come to arrangements which suit both the business and what the business is trying to do and the needs of the people who work in the business.

JIM GALE: With respect....

PETER REITH: And that is the common sense of enterprise bargaining and that is you get deals which suit both the people who are managing the business as well as the people who work in the business. And, well, I say....

JIM GALE: With the best will in the world, someone on 350 bucks a week - a cleaner or someone working .. a textile worker - I mean, with 9 per cent unemployment, they're really in a strong position to bargain an enterprise deal? Is that the suggestion?

PETER REITH: Well, Jim, the fact of the matter is that right across industry, there are....

JIM GALE: I mean, these aren't people in a strong position to bargain, are they?

PETER REITH: Well, some of these people are not in a strong position to bargain and that's why you've got to have a safety net, and that's why in our legislation....

JIM GALE: But a safety net that is weaker and weaker every year.

PETER REITH: Well, it's not weaker. The fact is that....

JIM GALE: Well, the Commission has just said so.

PETER REITH: Well, no, I don't .. no, in terms of the decision that the Commission has handed down for low-paid workers, this is a good decision. In fact, I would say this is a better decision than what people got last time; in fact, it's $2 more, it's 20 per cent more than what was handed down last time. And the reason that we've maintained this important role for the Commission is we think it is important that you have a safety net that looks after people who are low-paid, but, beyond that, you've got to have a practical system that's going to encourage people to sit down and come to deals which is to their benefit and to the company's benefit, and that is the only way which, over time, you're going to give people the chance of a job, hanging on to the job that they've got, and, over time, to get a wage increase.

JIM GALE: Is the great benefit of today's decision that we can at last get rid of this silly notion that, in the Australian wages system, we should have any regard for what people need to live on? Is that the great advantage of this?

PETER REITH: Well, that is an incredible thing for you to say, Jim. I mean, if you actually read the decision, as I have this afternoon, you will see that the Commission relies upon those sections of the Act where the Commission is required to take into account the needs of the low-paid, and the Commission certainly gave considerable weight and consideration to that. But, I mean, it's not a situation where you say, 'Oh, somebody has this particular need and therefore we can just hand out any increase which we think matches it,' without any regard to the consequences of making that decision. I mean, some of the commentary that we've had tonight is, 'Oh, you know, the Commission has sort of held back because it had to take into account economic considerations.' Now, common sense would tell you that it's not only the responsibility of the Commission to look at the economic circumstances, but sensible to do so because you wouldn't want to take a decision which seemingly gives somebody a wage increase but costs somebody else their job.

JIM GALE: Okay, Mr Reith....

PETER REITH: So this is a good balanced decision that's fair and it also complements the momentum for reform which the Government's got under way under the Workplace Relations Act.

JIM GALE: Okay, Mr Reith, thanks very much.

MONICA ATTARD: And Jim Gale was speaking there to Peter Reith, the Federal Industrial Relations Minister, who was speaking to PM from our Canberra studios.