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Minister discusses situation with regard to workplace agreements and automatic union fee payroll deductions

PETER CAVE: The Federal Government has now officially announced its decision to end uniform pay and conditions for Federal public servants. Last night, after a meeting with union officials, Industrial Relations Minister, Peter Reith, said that Public Service departments will now be free to negotiate agency agreements ending the powerful role that the public union currently occupies.

The changes will affect 130,000 Federal public servants. The Government will also end automatic payroll deduction arrangements for union dues, a move which will dramatically reduce the Public Sector Union's revenue stream. The union says the moves are destructive and will mean that people will end up receiving different pay for the same work within the Public Service.

Peter Reith joins us now in our Canberra studio, and he is speaking to our chief political correspondent, Fran Kelly.

FRAN KELLY: Peter Reith, it is true, isn't it, that the new arrangements could see public servants across departments, even possibly within departments, doing the same job for different pay. Why is that fair?

PETER REITH: Well, it's true in a sense, but the fact of the matter is that people may have come to arrangements which .. particularly certain agency where they have traded something for something else. So you are going to see some greater flexibility and that's to be welcomed. And I'll tell you who that's good for - it's good for the employees themselves. This system gives them a greater say in the way in which work is organised where they work, and it is good for the taxpayer because it means a more efficient delivery of service, and it's very good for the people who, on a daily basis, are looking for services from government. It's a win-win-win proposition all around.

FRAN KELLY: Well, the Union argues that the public sector is a different kettle of fish altogether to the private sector when you're talking about workplace agreements because pay rises within government departments have to come out of money that you, the Government, allots them. So there's no scope to really add to their coffers, save profits from one year to the next - things like that, make savings like there is in business. Where do these pay rises come from?

PETER REITH: Look, the unions always say that the public sector is entirely different. It's got to have a special, antiquated system, mired in red tape, especially for public servants. And whilst there are differences between the public and the private sectors, the fact is the public sector's got to live in the new world with the private sector.

And the fact is, Fran, that a lot of the service deliver agencies, for example, they are increasingly, in the future, going to be delivering services in competition with the private sector. And you've got to have a system which allows those public sector delivery agents to be more competitive with their private sector counterparts. Now, that's not something new; that hasn't happened overnight. That is a developing trend for public administration in this country. It is going to accelerate in the future and we want to make sure that the people working for the Government have an opportunity to be fully involved in that system and to secure a more efficient delivery and their jobs to go with it.

FRAN KELLY: But in a sense, don't public servants have to live a bit in the new world and a bit in the old world, because at the same time as their competing with the private sector, some of the service delivery agencies, governments like yours can come along at any budget and whip off a 2 per cent efficiency dividend from them. How is a department head going to organise what....

PETER REITH: Well, department heads just as, you know, either in the public or the private sector, and certainly in the public sector, the public has an entitlement to expect of us that we're looking for ways of doing things cheaper and getting better value for the taxpayers' dollar.

FRAN KELLY: But when you took the 2 per cent efficiency dividend last time....

PETER REITH: Fran, let me answer your question. I have a relatively small department for which I am responsible. It's got some service delivery but a fair bit of policy. The fact is that there are lots of things that can be done differently in my department and produce the productivity dollars which can assist this program of bargaining which we are proposing.

The fact is that for years the Labor Party left the Public Service stuck in a mire, stuck in a rut and gave them no opportunity - and we have got some excellent people in the Public Service - but gave them no opportunity to, by doing things better, improve both their circumstances and deliver a better deal for the taxpayer and for those receiving those services.

FRAN KELLY: And you're not afraid that some of the excellent people in the Public Service, or all of the excellent people, will all end up in the departments that have a bit more fat in their budgets, a bit more scope for making productivity gains; and some departments who don't have that scope, some of the smaller departments, will be left languishing?

PETER REITH: Well, we're not going to have people languishing. In fact what we have said to the unions is that we've basically got a policy position that we're putting in place for a number of agencies. And let's face it, some are going to be more advanced in their thinking and more capable of getting on with things than others. But we will attempt to sit down and come to a memorandum of understanding, if you like, which will see a framework of principles which apply to a wide range of agencies.

Now, that I think is very reasonable from the unions' point of view. We're not shutting them out of the process. We're giving them an opportunity to have a say, but we are also providing a reassurance to all members of the APS that we are going to provide a fair deal for everyone and give these opportunities, opened up by the reform process, to absolutely every employee within the APS.

FRAN KELLY: Well, just finally and briefly - the issue of payroll deductions. People already have to sign a bit of a paper to allow the union to make an automatic deduction. You're not asking people to write a special letter about their health insurance deduction, their mortgage deduction, but you are about their union dues. Why?

PETER REITH: Well, I do think there are differences between those two. But look, this again I think is a very reasonable position from us. We're simply saying: Look, we're not going to go back over the history of who's signed authorities, who hasn't, who joined because they wanted to or were forced to. But we do want to have a fresh authority to make sure that those people who work in the APS have applied to them the same principle that applies to everybody else in this country, and that is that if you want to be in a union, that's fine; if you don't want to be you don't have to be. And if you want these monies deducted from your pay, we as an incoming government, want to be satisfied that that's a genuine request and authority we have from those working in the APS. And I think, from the unions' point of view, I'd be surprised if they were surprised by that proposition.

FRAN KELLY: Peter Reith, thank you.

PETER CAVE: The Industrial Relations Minister was speaking there in Canberra to Fran Kelly.