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Wednesday, 18 September 1985
Page: 684

Senator CHANEY —My question is addressed to the Minister for Finance and follows his further recapitulation of the events of 1981. I ask: Is it a fact that in 1981 the metal trades agreement and the metal trades award flowed through the centralised wage fixing system, and when that very large agreement was entered into the centralised system guaranteed that it flowed through to the whole of the Australian work force and caused a general wages break-up?

Senator WALSH —Labour is highly organised in Australia. There is a long established principle of wage relativities and comparability.

Senator Chaney —Was it the centralised system or not?

Senator WALSH —No, it was not the centralised wage system. At that time the centralised wage system rubber-stamped what was happening in the market-place because the unions had been given the nod by the Opposition's present Leader, who was then the Treasurer, to go out there and screw as much out of employers as they possibly could, an exercise which was of course aided and abetted by the expectations of the so-called resources boom built up in 1980, again for cynical political reasons. Having drummed up the expectations of the cargo that was about to be delivered by the resources boom, the Treasurer and the Prime Minister in 1981 gave the nod to the unions to go out and exploit the economic conditions, which by the standards of the Fraser Government at that time were quite favourable. That is what they did and that is what produced the wages explosion of 1981 and 1982.

Senator Chaney —Through the centralised system? Do you agree or not?

Senator WALSH —Senator Chaney insists on saying that that was because of the centralised wages system. The centralised wages system had little to do with the spread and the flow-on that happened from that. Mainly it rubber-stamped what was already taking place. Leaving that aside, I hope that one day even Senator Chaney might understand that what touched off the wages explosion was the abandonment of a wages policy by the Fraser Government in mid-1981. When some unions, led in that case, I think Senator Chaney is correct in saying by the metal trades, received an enormous wage increase, the demands were then stimulated across the whole spectrum of the labour market. As I said, that ultimately produced a wages explosion which saw a 13 per cent wage growth in one year and a 14 per cent growth in another.