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Wednesday, 14 September 1983
Page: 728

Mr WILLIS (Minister for Employment and Industrial Relations)(10.39) — I move:

That the Bill be now read a second time.

The purpose of this Bill is to repeal the Salaries and Wages Pause Act 1982. The Act which took effect on 23 December 1982 suspended the powers of various authorities to make or vary awards or determinations in relation to the remuneration and conditions of employment of Commonwealth employees for 12 months. The Act also prevented the Remuneration Tribunal and the Academic Salaries Tribunal from holding inquiries or making determinations or reports. Further, it has maintained the level of remuneration paid to pharmacists for the dispensing of certain prescriptions and has influenced the income of members of the medical profession by maintaining the level of fees approved for payment of benefits from registered health insurance funds. This action was taken by the previous Government prior to its approach to the Australian Conciliation and Arbitration Commission for a general wages freeze in both the public and private sectors. Such moves resulted from the clear disarray in which they found themselves following the wages explosion of 1982. That wages explosion was due in large part to the policies of the previous Government, especially its successful efforts to undermine the centralised wage fixing system which had existed since 1975.

Following the destruction of wage indexation, the former Government found itself bereft of any workable wages policy. The encouragement of market-based negotiations on an industry basis clearly had disastrous results. Consequently, it returned to a highly centralised solution in the form of a wages freeze, which depended for its effectiveness on continued high levels of unemployment. After hearing submissions from the parties, led by the Federal Government, the Conciliation and Arbitration Commission decided on 23 December last year to introduce a wage pause for six months until June 1983 when it would review the situation. At that stage, it was decided by the Commission that its wages pause guidelines would remain in place pending determination of a national wage claim lodged by the Australian Council of Trade Unions. Submissions in the national wage case have now been completed and the Commission has reserved its decision.

The Government submitted strongly to the Commission in that case that now was an appropriate time to end the wages pause and to introduce a system of centralised wage fixing based on full, six-monthly cost of living adjustments. Such a system, the Government argued, is fully suited to the needs of our times and is clearly in the best longer term interests of Australia. It protects the real incomes of wage and salary earners and provides for real increases over time, thus satisfying the basic demands of the unions for an equitable wages policy.

It will also enable us to develop a new era in industrial relations, with an end to the bitterness which inevitably results from a decentralised, confrontationist approach. But, most importantly, it is a wages policy which, in conjunction with the board thrust of other Government policies, is conducive to a sustained economic recovery with greater job opportunities, reduced inflation, greater international competitiveness and improved business profitability.

The Government is of the strong belief that, although the economy is only now beginning to emerge from the deepest recession for 50 years, it is the appropriate time to break the wages freeze and establish such a new wage determination system. To attempt to extend the freeze any longer would be a grave mistake. As the economy recovers, during 1983 and beyond, the capacity and determination of an increasing segment of the work force to seek and obtain wage increases will inevitably increase. Sectional claims would become more and more common, with every prospect of a new wages explosion occurring. Thus any effort to extend the wages freeze during a period of economic recovery would, in all likelihood, catapult the economy right back to where we were before the wage freeze-with wages out of control and rising incompatibly with inflation reduction or sustained economic recovery. Now is the time, therefore, before economic recovery takes off, for a new system of wage determination to be introduced. Although such a system will involve a wage increase at this stage, it will be to the long term benefit of the nation as a whole if it introduces a national policy which is acceptable and adhered to by the unions.

As the decision of the Conciliation and Arbitration Commission in the national wage case is imminent, the Government has decided that the Salaries and Wages Pause Act should be repealed so that Commonwealth employees will once again be subject to decisions of appropriate arbitral tribunals. To do nothing could result in a situation where Commonwealth employees are unfairly treated vis-a- vis State government employees and the private sector. Repeal of the Act is necessary to ensure that the wage fixation principles determined by the national wage decision can be applied throughout Commonwealth employment without undue delay. Without prompt action, obvious anomalies and inequities will occur which could result in unnecessary industrial problems. Commonwealth employees will thus be treated on the same basis as other wage and salary earners who will be subject to the application of that decision. The Government's industrial relations co-ordination machinery will be used to ensure that Commonwealth employing authorities observe the spirit of the decision of tribunals in respect of employees not covered by awards or determinations. We will, of course, argue for a consistent application of the Commission's wage fixing principles before those other special tribunals whose powers are restored by the repeal of the Act .

To facilitate the hearing of the national wage case whilst the Act was in place , a regulation under section 10 (2) of the Act has been made to restore power to the Public Service Arbitrator and the Conciliation and Arbitration Commission in respect to two specific determinations so that the technical opportunity was created for claims covering Commonwealth employees to be referred to the national wage Full Bench. The Act also had the effect of keeping in operation regulations made under section 4 of the Health Insurance Act 1973 which would otherwise have automatically ceased to be in force after the period of 12 months and 15 sitting days of the House of Representatives. These regulations set out the professional services in respect of which Commonwealth medical benefits are payable and the appropriate fee for Commonwealth medical benefits purposes, in accordance with which such benefits are determined.

The present Bill, while repealing the Salaries and Wages Pause Act, would provide for the continued operation of these regulations for a maximum period of nine months from the date of commencement of the repeal Act. This would allow adequate time for any inquiry to be held to determine whether new fees for medical benefits purposes are necessary and for the preparation of new regulations prescribing any such fees. The Act also prohibited the Pharmaceutical Benefits Remuneration Tribunal from holding any inquiries for 12 months. That Tribunal is a body set up under the National Health Act to determine the manner in which the Commonwealth prices of pharmaceutical benefits are to be ascertained for the purpose of payments to pharmacists.

Section 98BA (4) of the National Health Act requires the Tribunal to issue a report of its findings within 12 months of the date of its last report. When the Salaries and Wages Pause Act came into force the Tribunal had commenced hearings for its fourth inquiry and this inquiry was forthwith suspended. The last determination made by the Tribunal was in June 1982 in respect of the third inquiry. With the repeal of the Act the prohibition of the Tribunal's operations will be lifted and it will be free to complete that fourth inquiry or commence a new inquiry. Section 4 (2) of this Bill provides that a mandatory requirement for the Tribunal to issue a report every 12 months will not apply in respect of the first report after the repeal of the Salaries and Wages Pause Act. The Bill will allow a further six months for the Tribunal to issue its next report. After this, the arrangements will revert to those that are provided for in section 98BA (4) of the National Health Act.

Finally, may I say that the Government is presenting this Bill of repeal now so that it will be possible, following passage, to seek royal assent as close as is practicable to the date of the national wage decision, which would then be permitted to apply equally to all in the public sector as well as those in the private sector. If, contrary to our expectations, the Commission decides not to award a wage rise at this time, Australian Government employees will, by passage of this Bill, be in no more advantageous position than employees in the private sector. I commend the Bill to the House.

Debate (on motion by Mr Macphee) adjourned.