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Tuesday, 20 September 1983
Page: 990


Mr CADMAN(4.35) —The National Economic Summit Conference considered three particular scenarios: Projections of the Australian employment environment , the inflation environment and the wage earning environment for the next four years. The three different proposals considered by that Conference included an examination of what would be a suitable level of wages growth for the forthcoming four years. One prospect was for a 10 per cent increase over the four years. According to economists that 10 per cent increase would produce an average unemployment rate of 8.7 per cent and an annual inflation rate of 3.6 per cent. Delegates to the Economic Summit were told that a 20 per cent increase in wages over a four-year period would produce a 9.7 per cent average unemployment rate and an annual inflation rate of about 3.6 per cent. The third consideration of the Summit was a prospect of growth in wages of 57.9 per cent over the four-year period which would produce an average unemployment rate of 13 .2 per cent and an annual inflation rate of 14 per cent. I think the consideration of those three factors by the Economic Summit clearly indicates the concern that was present in that forum to deal with factors of inflation and unemployment. A close consideration will also indicate that a low growth in wages produces lower unemployment and lower inflation. Those were the matters being considered by the Conference.

An examination of significant reports indicates that Australian industry and Australian employers are most concerned about labour shedding and the prospects for employment in their various industries. Australia is seeing the development of a new elite-an employed elite, a separation of the haves and the have nots, those who have jobs and those who do not have jobs. The new elite, those with jobs, seem to feel that, if their standard of living increases, they, as an increasingly smaller percentage of the community, become more elite. There seems to be a lack of concern for the have nots-those without jobs. At the best summary from surveys that are available to me the outlook is gloomy. The Government must accept that fact.

If one refers to the survey conducted by the Metal Trades Industry Association of Australia and the Commonwealth Bank, one sees that, in the companies surveyed , total employment declined by 17 per cent in the year ending May 1983. There were projections of further declines during the rest of the year until December. Total sales of the companies that were surveyed by the Metal Trades Industry Association and the Commonwealth Bank indicated that those sales were down by 6. 8 per cent and that the outlook for exports was very gloomy.

Despite some comments by Ministers who want to talk up factors within the economy, the industries that are involved in employing people are projecting gloomy futures. A survey conducted in August by the Australian Chamber of Commerce and the National Australia Bank indicates:

Respondents are anticipating some build-up in both labour and overhead cost pressures during the September quarter; the former expectation no doubt reflecting the possibility of a national wage adjustment late in the quarter.

No doubt this reflects also the process affecting the competitiveness of Australian industry-the capacity to earn and the capacity to employ. A survey was conducted also by the Australian Industries Development Association which endorses completely the two previous surveys about which I have spoken. In fact, the gloomy comments by AIDA would lead one to believe that the current Government is not dealing with realism but in fact prefers assurances given at national conferences, assurances which the parties that made them cannot be made to keep and which are not binding on the union movement. If one compares the hourly earning rates in the manufacturing industries in trying to assess the increase in hourly rates in Australia compared with other countries, only France under Mitterrand comes anywhere near the Australian increase in the last 12 months.


Mr Goodluck —A socialist government.


Mr CADMAN —A socialist government and a government that is failing badly to meet the demands and the challenges of Australia's declining economy. Countries such as Canada, the United States of America, Japan, Germany and the United Kingdom have hourly increases in wages that are half those of Australia. Wages in Australia have increased by 13.9 per cent-a big increase in real wages. Government members are not justified in saying that people must maintain their standard of living. On average, Australian people have more than maintained their living standards if we look at the cost of living and the average cost of their wages and salary increases. There has been a real increase in wages over the last four or five years. One has only to refer to tables produced by the Australian Bureau of Statistics on the real average of ordinary earnings for full time adult males to see that for half years, full years or quarter years- whatever assessment one wants to use-over the last two years there has been a real increase in wages and salaries of 4 per cent to 5 per cent per half year on average. Those are massive increases.

No one can really say that the capacity of people to pay their way has declined , if one looks at the facts. It might be polemic or politic for leaders of the unions to say that there has been a decline, but that is not factual. One has only to look at the comments of and prospects for industries which are major employers to see that a declining proportion of Australian people are getting more and more wages to the disadvantage of their fellows. Those who have lost employment or been sacked or retrenched by Australian industry are the sufferers of a rather selfish attitude created for political reasons by union leaders who must ensure the continuation of their salaries-salaries which, by the way, are met by members of their unions who are employed. At the moment that process is expanding and continuing. To see that one has only to look at the decisions granted in the oil industry and the pending decisions in the building industry and the food preservation industry. Now the shop assistants are claiming an additional increase outside indexation.

It seems to me that this year will finish with full indexation for the whole working period for the whole of the Australian community, but some select areas will have increases far above indexation. Those moves are in the pipeline. It is indisputable that many unions and many sections of the Australian community will have a very large increase in real wages. I refer the House to last Friday's Australian Financial Review which reported a case being heard in Victoria before Commissioner Graham Walker in which chemical workers in the petroleum industry are seeking a $40 a week wage claim with a further flow-on to the Electrical Trades Union of $14.80 a week to $19.90 a week following a building industry decision which has not even yet been finalised. So the electrical trades are presupposing a decision in the building industry, as is the Federated Storemen and Packers Union. A large number of unions are queuing for these additional payments outside indexation. The prospect of this creating further unemployment is frightening. The increase in real wages in Australia in the full year will be very substantial.

To appreciate this one has only to read of specific examples of the difficulties facing employees in various companies and to look at company histories. I now present to the House the history of two companies. Company A is a major manufacturer in the area of high technology and capital equipment. The erosion of the company's competitive position, even in respect of existing business, has had an adverse effect. For instance, the change to the metal trades award at the end of 1981 forced the company to revise upwards a tender for a significant United States contract. The nexus between wage and on-cost factors and volume losses is thus quite definite. The initial bid was estimated to be competitive and within the negotiating parameters of the United States customer but the revised tender was unacceptable, even as a basis for negotiation. That company informed its employees that this stage had been reached:

. . . unless we can slow down or stop this continued rise in our costs over those of our competitors, we will find it difficult to avoid further serious reductions in our activities.

Of course, that would involve a reduction in staff. Company B is a major mineral producer. The company's view is that, in the face of the adverse trends in its international markets, the wages freeze from the middle of last year was a major factor in keeping returns from its mining operation at near break-even point and thereby preventing mine closures and the retrenchment of its labour force. The company remains vulnerable to a change in wage rates. A 4 per cent increase in wages, for instance, would effectively wipe out the company's 1981-82 profits and the company would then be forced to start retrenchments. I could run through the histories of four or five additional large employers, many of which have laid off thousands of employees basically because they have not been able to maintain their competitive status in the Australian community.

I think there needs to be a great deal of rethinking in the wages area. For the Government to move early to undo the wages freeze and to back-write all the benefits of that wages freeze so that there will have been a four day wage freeze in this nation will mean that the first-half rise for the calendar year 1983 will be granted three months late. In January there will be an immediate granting of indexation which will provide for the calendar year complete indexation plus additional margins for those industries now active with claims. I believe that this process has not been tackled by the Government. It is taking the soft option and not treating the unions properly by having them understand the damage that can be done by small militant groups who are not bound by the accord or by the Summit, nor consider themselves bound by it. They say that the leaders of their unions have done a deal in an environment to which they were not party and, therefore, they will not co-operate in those decisions nor refrain from seeking additional claims for their members.

If this nation is to recover from the current economic crisis we must be competitive and we must not have an elite work force that is a gradually decreasing proportion of those employed. We must be able as a nation to say that we can moderate claims to realistic levels and not the exceptional levels that we have seen over the last two or three years. This is the only way in which there will be hope for employment and prospects for the nation to compete and expand. The Government is on the wrong track on this issue. It is starting to go exactly the wrong direction and the ramifications will be most serious in every way.