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Tuesday, 7 May 1985
Page: 1743


Mr SHACK(3.42) —There can be no more serious matter for a nation than the dominance of a government-any government-by sectional interests. It results in weak government, corrupt government, government for the benefit of the few instead of the whole; that is, all the people. This Government is guilty of weakness, vacillation and proneness to influence. It is guilty of that moral shortcoming for governments-dependence on, and dominance by, a special interest group. It has been derelict in its responsibility to the Australian community. It is refusing to champion and implement economic policy in the best interest of all Australians-employed and unemployed, unionists and non-unionists alike. This Government is run by the leadership clique of the Australian Council of Trade Unions. The puppeteers of this play are the ACTU leadership who have their own aims, separate from the aims of what is best for the country and even for their own membership.

Attention is riveted in Australia at the moment on those three vital instruments of economic management: Monetary policy, budgetary policy and wages policy. Therein lies our economic future and, therefore, the future of our country. The Government's monetary policy, or lack of it, has been widely condemned. Next week we will have the opportunity to examine the Government's budgetary gymnastics.

This afternoon I want to focus on the Government's wages policy. The members of the Government are the only ones left who believe that an effective wages policy is operating now. The market has passed judgment by selling Australian dollars hand over fist. No trader wants to be caught with the currency of a doubtful economy. Who would have thought we would have seen this day? It is rubbish to argue that the economic fundamentals are sound. The market disagrees; we disagree. The fundamentals are not sound and the statistics are beginning to confirm the market's judgment. In March there was a 0.5 per cent hike in unemployment. The Government has not made any significant dent in unemployment. It is now only 1.2 per cent better than when this Government took office.

This Government is torn between two totally conflicting policy thrusts. It has achieved significant deregulation of the financial system, which we roundly applaud, but it is now trying to reconcile that with an approach to the labour market which makes the Government's wages policy totally incredible. The business community has remained unmoved after the pep talk of the Prime Minister (Mr Hawke) last month because it understands that conflict. It knows the benefits which can flow from deregulation and which can be frustrated when other sectors of the economy remain regulated to the hilt. It will take more than warm words from the Prime Minister. It requires a change of policy and the devising of a consistent set of policies for the financial system, the labour market, and indeed every economic sphere. Until this fundamental conflict between financial policy and labour market policy is resolved, we cannot expect the money market or any other sector of business to show confidence in the Government's handling of the economy. This confidence is vital for genuine economic recovery and generating genuine new jobs in a revitalised private sector.

What of the much-vaunted prices and incomes accord? The more the Government points to the accord, the less credible its wages policy appears. When the Government wakes up to the community's lack of confidence and justifiable scepticism about the accord, hopefully this Government will cease mouthing the virtues and get on with the job of designing an effective wages policy which corresponds with economic reality and does not require a fiddle here or a fiddle there or a policy contortion over this wage claim or that dispute in order to hold together the appearance of the accord. The accord is now like tissue paper bound over a wire frame. The economic winds are blowing through it and this Government and its Ministers are seeking desperately to stick it back together; yet they cannot do so.

I now turn to discounting. It is absurd for the Government to say that it might use increased revenues from the decline of the dollar to compensate business for the devaluation's potentially damaging effect on wages under our present wage fixation system. This reflects the absolute absurdity of the present system. Why does the Government not directly address and resolve the wages devaluation question, instead of coming up with elaborate and unwieldy attempts to patch up the problem-a fiddle here and a fiddle there?

The need for discounting highlights the deep structural flaws within the accord. If the Government's wages policy is profoundly flawed, it is also deeply corrupt, for under the accord anything goes. Public servants wanted a pay rise over and above consumer price index-based wage increases and outside the wage fixation guidelines. Despite the accord, the Government supports a pay rise for public servants. The Government, despite the accord, tolerates regular outbursts of militant union action in the building and maritime industries. Despite the accord and its much-touted mutual responsibilities, the Government allows Queensland to be blockaded. Once again today in this chamber we heard the absolute non-answer by the Minister for Employment and Industrial Relations (Mr Willis) and an explanation of his response on how to handle this problem: Sit on your hands and do nothing. If all this can be fitted in under the umbrella of the accord, what else could be in the future? No wonder our Australian dollar has plummeted. No wonder the international and domestic business communities have grave doubts about Australia's economy. They understand the state of the fundamentals and they are reacting accordingly.

Much of the crisis of confidence can be pinned directly on this weakness-a rubbery and ineffective wages policy with all the burden and uncertainty borne by employers. Many wins over the Government have been chalked up by the ACTU and some unions. Let me look at the productivity case expected in the future. The debacle over the forthcoming ACTU productivity case has reinforced perceptions of Government confusion and proneness to ACTU influence. The Press has summed it up. I quote from the Sydney Morning Herald of 12 April: 'Wages: Hawke Bows to the ACTU'. It might have gone on to say 'Hawke Bows and Scrapes'. From the Australian of the same day: 'Hawke and the Accord: Fading Together?'. Fading fast, very fast indeed.

If there was any doubt at all left in people's minds about who is in control of Government policy making-the Government or the ACTU-it has been dispelled over the course of the last week. In relation to tax reform, there have been headlines day after day after day about what Simon says, what Bill says, what half the ACTU and assorted Trades Hall councils have to say and how the Government is hanging on their every word. What has happened to government? What has happened to leadership? I read in the paper today that all 27 members of the Executive of the ACTU are to be invited to the tax summit. They have already been party to some of the background paperwork preceding the summit. Where will they sit, all 27 of them? Both Ministers and ACTU representatives cannot sit on the front bench. The Minister for Employment and Industrial Relations will have to sit behind. He can lean over the back of the chair and say: 'Excuse me, Mr Crean; excuse me, will you tell me what is going on?' That is the reality we face. Government members are back seat boys and some one else is pulling the string.

For the sake of us all I ask: What has happened to policy making by governments in the best interests of all Australians? Where has it gone? We can forget about that. This Government cannot even blow its nose without consulting the ACTU, without asking its permission first: 'May we do this? Will it be all right?'. Is it any wonder that economists are concerned about wages policy? With the Government locked into a relationship of utter dependency and subservience to the ACTU, it is extremely unlikely that the Government could revise its wages policy in the manner necessary to improve this country's economic prospects.

Revision of wages policy is vital; it is vitally necessary for the Government to revise its policy. I quote the opinion of one very respected economic forecaster, Syntec, which said in its April bulletin:

Unless there is more direct action to hold wage costs, the Hawke Government's reliance on the accord as the basis for policy will, within 18 months, turn out to have been a strategy for economic disaster.

This subservient relationship the Government has with the ACTU Executive is not a special relationship which has benefits for the Australian community; it is a subservient relationship which will lead to economic disaster and impose upon the Australian community horrendous economic costs. Under the present arrangements the fact is that a reasonable scenario for us all to expect, given this subservience, is that in the next full year we will see a full wage indexation increase of up to 4 per cent in September and a further increase of up to 4 per cent in March 1986. On top of this there could well be a continuation of the current wages drift, independent of award wage increases. Contrast this most likely scenario for Australia with that for Japan, where the spring wage offensive appears likely to result in an annual wage increase of only 4 per cent.

This Government must break its dependence on the ACTU and its subservience to sectional interests. It must do so because it needs a sound wages policy, one which protects the opportunities which have been presented to us by devaluation rather than negating them. We can use devaluation to good effect-to very good effect. It could be the springboard for a new era of economic growth and prosperity in Australia and could provide the break necessary to get our economy back on to an internationally competitive footing. That is the opportunity, that is the chance we have within our grasp. If only the Government would break out from underneath the control which this ACTU leadership exerts over it. The Prime Minister and his Government must not squander that chance. They must not allow full indexation-based wage fixing to kill their positive potential; they must not allow union influence to sway them away from the task of government to govern for everyone.

Now is the time for the Government to replace its vacillation and dependency with one simple, undervalued commodity in the Australian political scene today-that is, leadership. The Government was elected to govern; it should exercise its leadership for the benefit of all the people. With respect to wages policy and economic policy in general, it should exercise leadership. If this Government truly has a special relationship with the trade union movement, let us see evidence of it now.

The Government's task next Tuesday is not only to announce the $1 billion expenditure cuts but also to take an essential complementary step, to revise the Government's present wages policy, which is pathetically cosy, corrupt and completely compromised. I challenge the Minister for Employment and Industrial Relations and the Government to deal firmly with the ACTU to achieve the wages policy revisions that are necessary to stir up economic revitalisation in Australia; namely, the discounting of the next national wage case rise for the devaluation of the dollar-or, preferably, the abandonment of wage indexation altogether-and the indefinite postponement of the ACTU productivity case. Australia's economic future is hanging in the balance. This is not merely of concern to business men and women; more and more Australians, unionists and non-unionists, understand the consequences of an ailing economy in human terms-high unemployment, declining standards of living and the prospect of another inflationary spiral. The Government must act now. It must begin to govern. It has the opportunity, the ball is at its feet. The Government must exert its leadership, pick the ball up and run with it.