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Monday, 7 November 2005
Page: 137

Mr BAIRD (9:40 PM) —It is particularly interesting to follow the member for Rankin, with his PhD in economics, and find out how much he belongs to the 1980s. It is particularly interesting to look at the Latham Diaries and what they said about Dr Emerson when he was shadow minister:

Emerson is launching our IR policy tomorrow. All week he has been at me, coming into my office with that hang-dog look on his face, trying to include pattern bargaining in the policy. He’s fallen out with (Bill) Ludwig and Hawke, and lost his power base in the party—if he wasn’t a shadow minister he’d probably lose his preselection for Rankin, it’s that bad. So he’s trying to re-establish himself by cultivating the ACTU as his power base. He’s an errand boy trying to write their demands into our policy document.

... Emmo regards himself as an economics guru, but there he was in my office wanting, to return the IR system to the 1980s.

That is true. There he was on his feet illustrating the point—it is back to the eighties. That is where he belongs—the eighties or the fifties or the forties—but not to contemporary Australia, with its need for deregulation. Union membership and his power base has fallen to 23 per cent of the work force. Our economy is now service based. The old manufacturing sector is declining. A new way of doing things is required. The Australian in its editorial ‘Reform race is still to run’ said:

Over time, they—

that is, the government—

will facilitate the dismantling of the unique Australian system of heavy-handed workplace regulation, see more people employed on individual contracts rather than prescriptive awards and require trade unions to genuinely represent the interests of individual workers rather than as a monopoly supplier of labour to particular industries.

That is true of the approach of this government on IR reforms. Toward the end of the editorial it says:

So rather than feeding end-of-world fantasies—

which we have certainly heard served up by the members opposite; the end of the world as we know it!—

the Howard Government’s latest workplace changes should be seen in the context of a gradual correction of a historical anomaly ...

Mr Price interjecting

Mr BAIRD(Quorum formed) I am very pleased to extend my comments on this and to say to the member for Chifley that we on this side of the House are concerned about individual rights. We are concerned about the rights of the workers of Australia to negotiate their own contracts—not to have them determined by Sussex Street or by the ACTU but for the individual worker to sit down with their employer and negotiate a contract that suits them.

Labor look after their union mates and do deals such as the Centenary House deal. They creamed $40 million off the top of that deal with that super rort. We are about reforming the IR system. Those who sit opposite presided over the industrial relations club for a long time. They had their IR lawyers and their trade union members, and they all came together and worked out a very nice deal with their arbitration people. The AIRC was just there for them to work as they wanted.

The member for Rankin claimed some economists support his view. What we can say is that the OECD, the premier economic organisation of the world; the International Monetary Fund, based in Washington; the Productivity Commission; the Reserve Bank of Australia; and the Business Council of Australia all agree that if we are to operate in global markets, among others, more deregulation and greater flexibility is essential to our future prosperity. This is what the economists and the OECD are saying we require if we are going to be a flexible economy and if we are going to relate to a world that has changed from the IR system that members opposite would like to perpetuate.

The fact is that, from the 1990s to the present day, we have seen a halving of those involved in trade unions right across the board in Australia. What does that say to us? It says that industrial relations have changed. Those opposite are very slow to adapt to these changes, whereas we on this side of the House recognise the changes and know that we must adapt if we are going to be competitive as a nation.

Several things have happened in terms of this. It is quite interesting that the previous government and the members opposite would like to say how they laid down the ground rules for the economic reforms and successes of this government. There is no doubt that we would support some of things that the member opposite did—for example, the floating of the dollar, the privatisation of the Commonwealth Bank and the privatisation of Australian Airlines and Qantas. The IR legislation that the previous Prime Minister, Paul Keating, introduced was the first stage in the IR reforms. Once the genie has been let out of the bottle it is very hard to change things, and Labor are trying to put the genie back in the bottle when the Australian economy has changed so much.

There were three major aspects to why the situation changed. The first was the tariff reductions, which started with none other than Gough Whitlam, who was not regarded as perhaps the most significant economic reformer of the country. But, with the introduction of his tariff reforms, he did begin a process which has continued today. With free trade agreements and with WTO reforms, we have seen very significant tariff reductions across the board so that the protection that existed in the days of the British Empire, when Australia lived off the sheep’s back and when manufacturing existed behind a very high tariff wall, changed.

The stiff winds of international competition began, and tariff reductions started that process whereby Australian manufacturers and service providers have to survive and compete in a global situation where they no longer have that tariff protection. When you have a different type of economy, you can no longer say to manufacturers: ‘This is what you must do. These are the rates that you must apply. This is the way you must treat your workers. This is the way the Industrial Relations Commission must act.’

The second part of this change was in the way that the unions acted in the lead-up to the 1980s. There were no problems: whatever you asked for and got away with continued. The metal unions continued to push the pace and demand and push for their workers, requiring very significant increases in their wages. The result, in terms of those requirements, was that they reached the stage where, in 1981, they pushed too far; there was a wage movement right across the board and we moved into a recessionary process. Of course, you know the comments that the then shadow Treasurer made about the situation. Paul Keating said that 100,000 jobs were affected as a result of the very poor decisions that were made by the unions at that time. That is true, because they did not recognise the total integration of the economy. You cannot push one sector that is moving ahead and demand that wages flow right through. It was Keating who said that there were 100,000 dead men in terms of employment because of the way the unions pushed at that time.

The third aspect was the OECD changes, the demographic changes; and, finally and most importantly, there was the whole question of globalisation in that a company in Wodonga has to compete with a company in Kiev; a company in Atlanta, Georgia has to compete with a company in Birmingham, UK; and a company in Pretoria, South Africa has to compete with a company in Bratislava in Slovakia. The internationalisation of the world has meant that companies have to compete, and they can no longer exist in the union-dominated, highly structured, red tape fixated organisations that we have had in the past. They need to relate to the flexibility of a new environment. That is why we require these changes today.

There are several aspects to the changes we have made. Most important is unfair dismissal. I am sure that members of this House have been subject to small business people telling them about restrictions that are placed on them in terms of the unfair dismissal requirements. I am sure they have been told of the requirement that businesses pay out people, even though they have been ineffective employees or even though they may have been rorting the company, and that it is easier for them to pay off the employees than to go through the whole process of going to court. The result has been a reduction in employment in a lot of the small businesses because they did not want to wear that cost. So we are going to change that requirement.

We are also going to ensure that there is no expensive duplication across seven states and that the national IR system will be folded into one. We are going to continue the microeconomic reform that we have achieved in the almost 10 years of our government in power. It is about ensuring the real increases in wages that we have achieved—and this is not imaginary. I had a union member on the phone the other day saying, ‘You don’t believe this,’ in terms of what our government have achieved. He was referring to the great increases in salaries, the 1.7 million new jobs that have been achieved under our government, the lowest unemployment in almost 30 years, the real wage growth of 14.9 per cent compared with 1.2 per cent in 13 years of Labor, and the lowest levels of industrial disputes since records were first kept in 1913. This has all been achieved under our government. But we heard Dr Emerson saying that it was not true that since we came into government all these things have happened. The reality is that I heard one of the frontbenchers opposite say that it really should be about the real wage increase of the members, not anything else. What are they about at the bottom line? If we are not about increasing the average income and the average standard of living of the people of Australia, what are we about? Our government have achieved it in spades—14.9 per cent compared with just a few per cent under the opposition. So these are some of the achievements we have had.

The fact that we have only 23 per cent of the work force belonging to unions is a significant indicator that the world has changed. It is a different environment. People are going into the service sector and looking for a different environment and a different way of going about their day-to-day lives. In an article in the Australian, Alan Wood said that a great majority of Australians will be better off under more flexible labour market arrangements, because they will allow employers and employees to come to a mutually beneficial arrangement. He said:

The function of the labour market is to match the demand for and supply of labour at a price that gets as many people in a job as possible.

Ensuring people have an adequate income is a function of government welfare policy.

This is what this bill is about: providing the necessary flexibility. The current workplace relations system is burdened by restrictions of 30 years of stagnating inertia caused by blatant obstructionism. Industrial relations is still in the hands of third parties and so-called experts, rather than actual businesses or employees. Industrial processes, rules, regulations and requirements are complex and costly. Work Choices will replace a rigid and outdated system that was designed over 100 years ago. Fairness does not relate to complexity. In fact, fairness is impeded by complexity. The old system was designed to deal with the issues of the 1890s rather than contemporary life.

As an overview of the government’s policy: the bill addresses a number of longstanding policy commitments which have been blocked in the Senate since 1996 and builds on the reforms introduced by the government in 1996. It simplifies the complexity. Australia has over 130 different pieces of industrial legislation—over 4,000 awards. Six different workplace relations systems operating across the country just does not make sense. There is too much red tape, too much complexity and too much confusion. It is bad for business, costs jobs and is holding Australia back. It is for these reasons that Work Choices will move Australia forward as we move towards one, simpler, national workplace relations system. Up to 85 per cent of all Australians will be covered by the new Work Choices system and, by a simple referral of powers by the states, it would amount to 100 per cent.

The new legislation will establish an independent body called the Australian Fair Pay Commission, which will promote the economic prosperity of the people of Australia, take a consultative approach with all the stakeholders and be independent of government, have on its board people with experience of business, community organisations, workplace relations and economics and set and adjust minimum award classification wages as well as wages for juniors, trainees, employees with disabilities and pieceworkers, and casual loadings.

Minimum award classification wages will be locked in and cannot fall below the level set after the inclusion of the increase from the AIRC’s 2005 Safety Net Review. Of course, it shows the nonsense of those members opposite who talk about the erosion of standards. The legislation will enhance compliance with the Workplace Relations Act, increase the number of inspectors from 90 to 200 and enshrine in law minimum conditions of employment, including annual leave, personal carers leave, parental leave and maximum ordinary hours of work. It will place a greater emphasis on direct bargaining and introduce a simpler agreement-making process, set a minimum safety net of the standards right across the board and protect certain award conditions relating to holidays and rest breaks. I commend the bill to the House. (Time expired)