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Friday, 18 September 1987
Page: 344

Mr COURTICE —I refer the Minister for Industrial Relations to the national wage decision earlier this year which established new wage fixation principles and ask: Can the Minister advise the House what developments have occurred regarding implementation of the second tier increases provided for in those principles?

Mr WILLIS —I thank the honourable member for Hinkler for his maiden question and wish him a long stay in this House. The matter raised by the honourable member is indeed quite important. As he said, the wage principles established by the Commission in March this year provided for two avenues of wage increase. The first tier wage increase is a general wage increase and the second tier wage increase is one that can be obtained through various principles but on an award by award or enterprise by enterprise basis. In the proceeds of establishing that two-tier system the Commission established a new restructuring and efficiency principle which provided for second tier increases to be obtained by measures to improve efficiency such changes as to restrictive work and management practices, changing patterns of work and, also, increasing the flexibility of the work force through a reduction of demarcation barriers and advanced multi-skilling providing for training and retraining.

The Government very much welcomed the implementation of this principle by the Commission because it was one which we strongly supported and which we believed gave impetus to our drive for the removal of restrictive work and management practices and an increase in productivity in the nation. For the first time in our history we now have a wage system substantially based on productivity improvement. Although it is six months since that national wage decision, only a small proportion of wage and salary earners have obtained a second tier increase-about 460,000 or 8 per cent of wage and salary earners have obtained that second tier increase. That proportion is low because the system requires substantial negotiations to be undertaken before the offsets required under the restructuring and efficiency principle can be obtained.

The major industries where the second tier increases have so far been obtained are: metals, chemicals, food processing, vehicles, building, timber and also some areas of Australian Government employment-Telecom Australia, Australia Post and the Commonwealth Bank. In those three areas of Australian Government employment there has been a 100 per cent trade-off. In other words, there is no cost to the Government as a result of those increases because they have been more than offset by the trade-offs obtained. The procedures used in the trade-offs obtained are variable, but in general they have been very pleasing. For instance, in the metals industry over 460 enterprise agreements have been ratified so far by the Commission. Hundreds more are being considered. Also there have been a number of significant changes to the metal industry award.

Across all industries in which second tier increases so far have been given, the major changes are: the elimination of some allowances or practices; increases in the spread of hours in which people can be employed; reductions in the Christmas close down; increases in flexibility in rostered days off; actions to reduce job demarcation; provision for multi-skilling; the removal of training restrictions, for example, the provision of adult apprenticeships; reduction in manning; removal of one in, all in overtime arrangements; payment of wages by electronic funds transfer, instead of in cash; restructuring awards to provide for the more flexible use of the work force; the establishment of dispute settling procedures and removal of restrictions on part time employment. Those are the more important of the changes that have been made. It is by no means an exhaustive list.

I think honourable members can see from that list that very dramatic changes are taking place in our work places today, and that because of the action initiated by the Government last year in respect of restrictive work and management practices and because of the enormous impetus that that has received from the wage fixing system, we now have in place an enormous amount of activity to make our work places more productive and efficient. We are now able to remove productivity-inhibiting practices which have applied for a long time. That will mean a significant boost to national productivity. The Opposition has been implying this week that the system is failing because there is not a big productivity increase scheduled for 1987-88, but what it must realise is that this system will be phased in through the course of 1987-88. The real impact will be felt in 1988-89; we will see the full impact of this system when a full year of productivity improvements then applies. There will be a large boost to national productivity in that financial year.