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Wednesday, 21 August 1985
Page: 54

Senator SIDDONS(10.27) —by leave-I move:

That the Bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

Leave granted.

The speech read as follows-

Along with unemployment, the major problem facing Australia today is our inability to live within our means internationally. Over the last 5 years we have run balance of payments deficits, and now 30% of our exports go to servicing debt payments on money we have borrowed to balance our trade deficit.

The best and quickest way to overcome this problem is to concentrate on making our industries internationally competitive. There is no reason why Australian industry cannot be as efficient as the best of Japanese industry. If the Japanese can apply management techniques to develop industries as efficient as any in the world, why cannot Australia?

It has long been popular to consider the Japanese as a race apart. But the Japanese are human beings like us, with the same human emotions. We should adapt the same management techniques that have proven to be so successful in Japan and then seek to improve on them. In the economic war Australia has not yet sought to fundamentally assess the competition, let alone to beat it.

It can be done. Our aim should be no less than to make the best of our industries the most efficient in the world, and make the world our potential market. We would then solve our unemployment problem and our balance of trade problem with one blow.

In the early 80s American industrialists started to wake up that they were being out gunned by the Japanese. It is surprising they did not wake up earlier.

They used to blame low wages in Japan, but by the early 80s Japanese wages were generally higher than in America and they are generally higher than Australian wages today.

Starting from a pile of rubble after the War and with a reputation for producing shoddy imitations, by 1980 Japan had developed an industrial machine that was the envy of the world. In 1980 the Japanese produced more cars than the American auto industry. By that time Chrysler had gone broke, General Motors and Ford were losing money, and the only thing that saved the American car makers was Japan's willingness to impose voluntary export restrictions.

In 1980, 90% of the world's motor cycles came from Japan, 55% of all steel consumed in America by American industry was produced in Japan. American steel companies were losing money, and again were only saved by voluntary import restrictions.

The Japanese led the world in the production of cameras, machine tools and watches, and were challenging for world leadership in computers, typewriters, sewing machines, industrial robots, micro-processors-the list goes on almost forever.

What is the secret of Japanese success? They have a different approach to the management of their companies. They have embraced wholeheartedly for many years now the principle of participatory management. They have developed organisational structures that provide for the total involvement of all employees, and an ability to take notice of the individual.

In 1982, with the backing of the then Shadow Minister for Industrial Relations, Mr Bob Hawke, and the tacit acquiescence of the ACTU, I succeeded in getting an Industrial Democracy Bill passed by the Senate. It was the first time the Australian Parliament had ever debated industrial democracy. If it hadn't been for the double dissolution I think this Bill would have passed the Lower House, because both Mr Fraser and Mr Macphee were prepared to support it.

As a practising industrialist and one who has led for some 30 years an industry that has attempted to embrace principles of employee participation, I now introduce a re-vamped Industrial Democracy Bill which takes account of continuing and up-to-the-minute experience in this area.

The Bill contains five criteria which define what is meant by industrial democracy. An enterprise that can convince a 7-member Industrial Democracy Board that it has substantially complied with at least 4 of the 5 criteria will be eligible to apply for a Government incentive in the form of an 8% reduction in company tax. The five criteria are:

1. At least 8 per cent employee share holding to give employees a stake in the enterprise in which they work.

2. A cellular organisation with autonomous working groups based on performance centres throughout the enterprise. This is important because such groups have the ability to meet change quickly, and to engender innovation.

3. A profit sharing scheme to reward people for their efforts and to ensure open communication on such things as sales performance and profits.

4. A consultative council to discuss small internal problems before they become major matters requiring the attention of trade unions, and

5. Small group activity. This is a very important provision of the Bill and requires that an enterprise establish small groups of about 10 people throughout the entire organisation. These groups are to be led by carefully selected and trained group leaders and are required to discuss, during working hours, such things as quality, efficiency, innovation and new equipment and to make recommendations on these to management.

The question may well be asked-if industrial democracy is so good for business, then why does it not adopt it anyway, without Government assistance?

The first answer is that most Australians, including Australian executives have only a very hazy idea about what is meant by industrial democracy. It means different things to different people, and like motherhood is generally perceived to be a good thing. Australians have talked about industrial democracy for many years, but very few companies have applied even its rudimentary principles. This is because there is an ingrained conservatism in Australian management along the lines that workers are there to do what they're told, and amongst workers that they are not employed to tell the boss how to do his job. It needs a Government initiative to break down these ingrained attitudes in Australia.

Once the change of attitude gets under way, and people see that companies applying the principles set out in this Bill are successful, and once the Industrial Democracy Board starts disseminating through our tertiary institutions information on how to successfully apply the principles, then industrial democracy in Australia will become self-perpetuating and the Government, if it wishes, could progressively withdraw from the scene,

This Bill requires the Government to make $20m available each year for the first five years, and then to reassess the situation.

If Australia is to overcome its critical balance of trade problem, it must turn to the manufacturing sector to improve its export performance. Our industries can be, and should be, as efficient as any in the world. If the Government co-operates, we can do it,

Debate (on motion by Senator Gietzelt) adjourned.