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Friday, 9 December 1983
Page: 3604


Senator CROWLEY —My question is addressed to the Minister representing the Minister for Employment and Industrial Relations. In the Australian of today, 9 December, there is a column by Senator Fred Chaney addressing the problem of unemployment that essentially says that the wages-employment nexus, where real wages are maintained at the cost of jobs, not only is a problem this Government is failing to address but also is a policy to which it is ideologically committed. He also makes claims about this Government's 'callous deceit' with regard to youth unemployment, claiming that youth unemployment is the extreme example of the wage-employment nexus-as wages rise many employers will put off those whose productivity is less compared to their wages.


The PRESIDENT —Order! Will the honourable senator ask her question.


Senator CROWLEY —Yes, Mr President. He also makes some ill-placed references to Mr Willis and his Department. In the light of the Opposition's seven-year record of mismanagement of the economy and ever-increasing unemployment--


Senator Boswell —Where is the question?


Senator CROWLEY —The honourable senator should not be impatient.


Senator Chaney —I take a point of order, Mr President. I was somewhat distracted by the fact that I was enjoying the extensive reference to my article but the length of the question and the references seem to go well beyond the norm.


The PRESIDENT —Order! I have already drawn the attention of the honourable senator to the length of the question. She is now in the course of asking her question.


Senator CROWLEY —Thank you, Mr President. In the light of the Opposition's seven -year record of mismanagement of the economy and ever-increasing unemployment, can the Minister put yet again to the Opposition this Government's position and record with regard to jobs, wages and unemployment, and can he refute Senator Chaney's clearly disgraceful imputations against Mr Willis?


Senator BUTTON —Mr President, I have read Senator Chaney's article in this morning's paper. The thing that sticks in my mind is that he accused this Government of disarming candour. First of all, let me say that we have tried to be candid and if it disarms people, including Senator Chaney, I suppose there is some merit in that. But the argument which the article deals with is of course a question which has been debated peripherally in the Senate from time to time and will continue to be debated. It goes to the heart of this Government's strategy and, of course, one would hope it would go to the heart of any alternative strategy that the Opposition might see fit to develop over the next few years in relation to these matters.

Senator Crowley's question, of course, goes to the matter of any confidence that the people of Australia might have in any alternative strategy that might be developed on the basis of experience. Certainly the experience of the last few years, when the Fraser Government was in power, does not suggest any great confidence. As I have said on a number of occasions in this place, the Labor Government is committed to the maintenance of the real value of wages over time. I just make the point that before the election we were committed to that and we have maintained our commitment to that in terms of the maintenance of the standard of living of the Australian people. Because the question is in issue I would like briefly to refer to the relevant passage in the prices and incomes accord which refers to:

The maintenance of real wages is agreed to be a key objective. It is recognised that in a period of economic crisis as is now applying that this will be an objective over time.

I ask the Opposition if it has any objective different from that in terms of the maintenance of the standard of living of the Australian people, because if it has, it ought to get out there and articulate it. That is something it has very carefully chosen not to do. The alternative to articulating that view is to refer to the wage freeze which was put in place by the previous Government and which was lifted, of course, a few months ago, because apart from--


Senator Chaney —It has worked, hasn't it?


Senator BUTTON —I have no worry about conceding that the wages pause had some beneficial effect in terms of inflation and employment. The measure of that effect of course is very difficult to assess, but the fact is that at a certain time the wages freeze had to end, and one of the reasons why it had to end is that the previous Government could not reach any agreement with the State governments about the duration of that wages pause. That is something which the Opposition glosses over because it cannot maintain a wage pause of that kind without the agreement of the State governments. That is a constitutional difficulty and reality in Australia which the previous Government was not facing up to at the time it went out of office.

I concede that the wage freeze had some beneficial effects, but of course it was a piece of ad hockery plucked out of the air in a time of sheer desperation by the previous Government in trying to deal with rapidly rising unemployment in this country and at the same time rapidly increasing inflation. I think it was the answer, was it not, to Michael Baume's suggestion about the need to be seen to be doing something? That was how the wages freeze arose. To suggest that as a serious basis for policy formulation is, of course, absurd.

I just make a couple of points: The Government is committed to the maintenance of real wages over time. Of course as each quarter passes by, as each consumer price index comes out, there is in fact a lead time under the present system of wage indexation before the effects of that CPI increase are implemented through the wages system. Of course we would all prefer a comfortable world in which there were no wage increases because that would have a beneficial effect on inflation, on profitability, on competitiveness and so on-


Senator Dame Margaret Guilfoyle —And jobs.


Senator BUTTON —And jobs; I concede that. That would be terrific, but of course there are a number of factors to be taken into account, including the position of low wage earners in this country. In spite of the worst prognoses of the Liberal Party in government and in opposition, locked in as it was to the wage freeze as a solution to the world's problems, I was able in an answer at Question Time yesterday to point to a considerable improvement in the unemployment figures. I do not want to go through those figures again, but there has been a considerable and significant drop in unemployment and a growth in employment.


Senator Walters —As a result of the wage pause.


Senator BUTTON —These people, this collection of Rip Van Winkles on the other side of the chamber, will be talking in 1988 about the wage pause as their greatest triumph. Not only has there been a substantial improvement in employment and a substantial drop in unemployment, but also the national account figures published yesterday were the best national account figures published in this country since 1978.


Senator Archer —As a result of the wage pause.


Senator BUTTON —The honourable senator said: 'As a result of the wage pause'. As I said, the wage pause will become one of those memorable 'it seemed like a good idea at the time' things. In spite of that, the other important--


Senator Gareth Evans —Order!


Senator BUTTON —I am sorry-I apologise to Senator Evans.


The PRESIDENT —Order! Will the Leader of the Government direct his answer through the Chair.


Senator BUTTON —Mr President, I apologise. I also must apologise to Senator Evans. However, the need to be seen to be doing something has the same flavour about it, and that was the origin of the so-called wage freeze. In spite of the worst prognostications of the Opposition, there has been an improvement in all the economic indicators--


Senator Chaney —No.


Senator BUTTON —Other than investment, which was discussed yesterday. There is nothing new about that, Senator Chaney. It has been a bad scene for 10 years. If the honourable senator wants to argue about that, that perhaps is the subject of another question. Some of the things which, quite apart from the indicators in the national accounts, have to be considered include, for example, the rise in consumer confidence in the community, and that is related to the standard of living.


Senator Chaney —It is government expenditure. It is government consumption that has gone up.


Senator BUTTON —I was talking about the rise in confidence amongst consumers. Mr President, Senator Chaney wants to have a debate about all those issues next week.


The PRESIDENT —It is not appropriate to do it at Question Time.


Senator BUTTON —I agree. I conclude on this note: It is extraordinary that Senator Chaney, raising serious issues as he did in his article in today's Australian under the heading 'The Trauma of Unemployment'--


Senator Chaney —Not my heading.


Senator BUTTON —It is not the honourable senator's heading? The article directs a whole lot of questions to debating points upon which this Opposition has no policy position at all. By way of interjection in the Senate today in the course of my answer to this question, the apparent policy position of the Opposition is that it would advocate a deliberate reduction in living standards amongst the Australian people and a return to the wage freeze. That is the best the Opposition can do.