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Monday, 11 November 1985
Page: 1939


Senator HAMER(10.08) —I think everyone in the Australian community is recognising that this country is in serious economic trouble. We are not in the same sort of mess as New Zealand, which seems to have insoluble problems. Nevertheless, broadly speaking, we are in the sort of position New Zealand was in 10 years ago. The trouble is that the Hawke Government is not beginning to address-to use the favourite expression of the Prime Minister (Mr Hawke)-our fundamental economic problems. In fact, much of what the Hawke Labor Government is doing is making these economic problems worse.

Let us look at the stark reality of those problems. We are trading with the rest of the world at an annual loss of about $10,000m a year, and possibly more. At the moment this year's trade deficit looks like being about $12 billion. As a consequence of this trading loss our dollar has been falling sharply against the United States dollar and even more sharply against the currencies of our trading partners, because many of their currencies are appreciating against the US dollar. We have a net overseas debt of $52 billion and it is heading towards $100 billion in a few years' time. Our inflation rate is rising and is almost twice that of the average of our trading partners. Yet, faced with all these problems, we are granting ourselves pay rises we cannot afford and borrowing money overseas to support our current standard of living, which is very bad business in anyone's terms. We have just given ourselves a wage rise. For a country which is trading at a loss, as we are, that is insanity.

We are talking in terms of using our productivity improvement next year. It should be used to make ourselves more competitive on the world market. What are we going to do? We are going to grant a pay rise to union employed workers as a result of productivity improvement. Of course it is called superannuation, but it is deferred pay-an extra cost of employing labour. For a country such as ours which is trading at a loss to do this is stark, raving insanity. It is true that not all these problems are our fault. The terms of trade have turned against us. This can be seen in the sugar and wheat industries and mining products. World prices for practically all of our products have fallen. Yet surely what we must do is adjust to the real world and realise that we are competing in a highly competitive environment. The world does not owe us a living and will not give us one. We must earn it by our own efforts. We do not deserve a living if we try to borrow to preserve or increase a standard of living which is beyond what we are earning.

The Hawke Government has often been accused of rearranging the deck chairs on the Titanic. I do not think this is a good analogy, for our economy is not doomed. We are basically a very prosperous country. We have immense natural resources and a homogeneous population. We could be a highly vibrant and efficient unit if only we could get some of our serious defects straightened out. I do not think the analogy with the Titanic is a good one. I think the Hawke Government is more exactly like the Chamberlain Government in Britain in its handl- ing of the rise of nazism. It tried to appease it; it tried to pretend it was not a problem; it tried to pretend that it could talk it away. Honourable senators will remember that Chamberlain went to Munich and came back waving a piece of paper called the accord. He said: `This is peace in our time. I have solved all of our problems'. He had not, of course. What he had done was deflect the British people away from making proper preparations and taking the actions they should have taken in time to prevent the catastrophe that ultimately hit them. Waving a piece of paper and saying that it represents peace in our time is very much an appeasing way of trying to ignore the problems and pretending that they do not exist. That is the way this Government is tackling our problems.

What we must do in the short term is restrain our costs so that we can remain competitive, or improve our competitiveness, on international markets. In the long term we need to reorganise some structural aspects of our economy and institutions so that we will become more efficient. What do we need to do today? There is no doubt that our system of handling industrial relations and wage fixing is one of the worst-probably the worst-in the developed world. We have now had the system for 80 years. Surely we should have realised by now that it works very badly indeed.

I point out here, in answer to some sneering remarks made by Labor senators about the unacceptability of looking at overseas examples as to how we might solve our problems in these areas, that our present conciliation and arbitration system was imported from New Zealand-and look what has happened there. Eighty years ago we were, per capita, the richest country in the world. Today we are about fourteenth and still falling. This is very closely related to the gross defects of our system of wage fixing and of solving industrial disputes.

I do not suggest for a moment that it would be possible for us to totally change our system of industrial relations overnight. The present system is too much of a sacred cow. Today we need to recognise its defects and work towards overcoming them. What is wrong with our present system of wage fixing and of the prevention of industrial turmoil? There are almost too many defects to mention, but I will list some. Fundamental economic decisions are made by people without relevant training or responsibility. The system is infested by lawyers and legalisms. The decisions of the arbitration system are enforceable, effectively, on only one party. The unions generally ignore them with impunity. The right of the individual to work where he chooses, provided that he is qualified, whether or not he wishes to join a union is not recognised. We have not moved with the times in the direction of a flexible working week and have built up an elaborate system of penalty rates which destroys jobs, particularly in the hospitality industry. One of the obvious ways we can exploit the depreciation of our dollar is by encouraging tourism. Our industrial system and our penalty rates make this much more difficult to achieve than it should be.

We have committed a cruel fraud on the young, cynically used by adults to protect their jobs, by pushing up youth wages to levels where many of them are unemployable. We have not solved the problem of divided State and Federal industrial jurisdictions, despite our clear constitutional power to do so. Perhaps most important and damaging of all, our fixation with centralised wage fixing and the so-called comparative wage justice have led us to impose an uneconomic flow-on of wages to businesses that cannot afford to pay them and should not be obliged to pay them. The result: Destruction of businesses and unemployment.

All these defects, the result of 80 years of tinkering with a fundamentally unworkable system, cannot be cured overnight. Their cure does not and must not involve the destruction of the unions or even a head-on confrontation with them. Unions have a vital role in our society. Anyone who believes that workers without effective unions would not be exploited is living in a dream-world. One has only to look at black workers in South Africa or all workers in the Soviet Union to see what happens when there are no effective unions. But, like all organisations, unions must be prevented from abusing their power.

Still less do we want to emasculate the Australian Council of Trade Unions. In fact, we would like to see its powers increased, or rather, restored. One of the worst of the many socially damaging actions of Mr Hawke was the deal he did to get left wing support for his candidacy for the presidency of the ACTU. He agreed-and he kept his promise-to reduce the power of the ACTU to discipline its member unions. Much damage to the Australian economy has flowed from that action.

What do we as a nation need to see happen? We want to make it possible-no, easy-for individual enterprises and their employees to reach legally enforceable wage and conditions contracts. We want tribunals to be more flexible and to take account of the ability of businesses to pay and to get away from the rigidities of so-called comparative wage justice. We want them to be prepared to examine old and dying sacred cows, such as penalty rates and excessive youth wages, and to see whether the interests of the economy as a whole and the unemployed in particular would be improved by changes. Above all, we want them to be aware of the economic consequences of their actions. We live in a highly competitive world economy, and the best answers are not necessarily to preserve industrial harmony by splitting the difference between competing ambit claims.

All this will involve changes in our industrial relations systems, changes in personnel, in skills and in attitudes. It is up to the Opposition, I believe, in the years ahead, to make clear what is needed, what is essential, and the benefits which would flow to the whole community. The first thing we must do is to bring unions back under the rule of law. A century ago it was the employers who were acting ruthlessly and almost uncontrolled by law.

This gross unfairness has since been remedied and employers are very much ruled-perhaps too closely-by law. We need to make the unions responsible for the actions they take which damage firms or individuals-actions taken in definance of the law or decisions of the Australian Conciliation and Arbitration Commission. Why are they not responsible for their actions? Why should people suffer from this type of behaviour? We have an elaborate system for the resolution of industrial disputes, but the essential feature of such a system must be that the umpire's decision has to be accepted. It has to be accepted by the employers; why should it not be accepted by the employees? One can see the attitude of the Australian Labor Party in its attempt to put unions above or beyond the reach of the law by what it did when it set up the National Crime Authority. This authority was set up to deal with serious crimes such as theft, fraud, tax evasion, illegal gambling, illegal drug dealing, vice, extortion, violence, bribery and corruption-all serious offences, one would have thought. But the Hawke Labor Government specifically exempted any investigations by the National Crime Athority of such offences if they arose out of genuine industrial disputes. Such offences as theft, fraud, violence and bribery and corruption cannot be investigated by the National Crime Authority if a genuine industrial dispute is involved. This seems to me to be absolutely outrageous folly.

For another example of the desire of the Government and the Australian Council of Trade Unions to put unions above the reach of the law let us look at what happened when the ACTU was supporting illegal actions by the Australasian Meat Industry Employees Union in the Mudginberri dispute. A group of workers, who were not members of that meat workers union, had reached an agreement satisfactory both to management and to the employees concerned and which was sanctioned by the Arbitration Commission. The union is involved in illegal and very damaging standover tactics. The words of the President of the ACTU on this issue are illuminating. He said:

While the theory might be right that the rights of the individual are supreme, the reality is that we have to deal with representative groups.

In other words, all power to the unions; the rights of the individuals do not count. If we wish to get a more fair and balanced industrial relations and wage fixing system we must get rid of that attitude. Unions and their supporters must recognise that they, like every other group in the community, are responsible and answerable to the law. When we have that we can develop a sensible and balanced system of industrial relations. That is one of our great problems-the fact that our system of wage fixing and industrial dispute solving has not worked despite 80 years of tinkering with an unworkable system.

That is not the only problem we have as a nation. Another very unusual feature is the extent of the involvement of the Government in business, particularly in the key areas of the national infrastructure of communications and transport. Governments or government institutions are basically not good at business. Public servants are generally not entrepreneurial. The business cannot go bankrupt. These institutions tend to be regarded by their workers as sheltered workshops from which they can force concessions beyond the ability of the business to pay, knowing that in the end it will be supported by the government. There are many strikes going on in Victoria now. The transport industry is a perfect example. The transport system is being used as a sort of sheltered workshop, a place where people are guaranteed employment whether or not it is economic or necessary. They still think that they have a right to employment.

We must look at all the business organisations run by the government and examine each of them on its merits to see whether or not it can be more efficiently run by private enterprise. Not all of them can be. In a country such as Australia, some structural businesses must be run by government because there is no other way they can be operated. Many of the businesses, for historical reasons, have been run by the government. What applied 100 years ago may no longer be appropriate. We must look at them seriously and ruthlessly to see whether that is the best way of running them and, if not, what alternative arrangements can be made.

One of the most illuminating remarks which is constantly made about the so-called privatisation issue is that it would lead to a great deal of shedding of labour. That is a very illuminating judgment of the extent of overmanning and feather-bedding that goes on in government businesses at the moment. Certainly if we shed or transfer to private enterprise any part of the government's activities there will be surplus labour, a shedding of labour.


Senator Tate —How do you know?


Senator HAMER —Because every organisation we look at is grossly overmanned. Look at the Victorian railways. When the suggestion was made of bringing an XPT train to Victoria-after a lot of trouble it is being manned by two people from New South Wales-the Victorian railways unions insisted on it being manned by three people, knowing of course that the third person would be totally surplus to requirements, just to provide jobs. If we could get the Victorian railways, just one example of a government enterprise, run efficiently there would be a substantial shedding of labour and a substantial drop in costs. If it ran more efficiently it would benefit the whole community.


Senator Zakharov —Do you think the people who staff the stations are excess as well?


Senator HAMER —No. Very few people man stations late at night. I think they should be manned. The best way to man them is not to have a ticket collector sitting there. One of the most useful proposals, and a good example of privatisation, is to sell off the stations, make them shopping centres, and man them at night by people who have an incentive to get people to travel by train. This is the sort of lateral thinking that we must use. We cannot go on and on with the old and inefficient way, with the Victorian railways losing hundreds of millions of dollars a year. This country cannot afford it.

In the key areas of communications and transport we have a very inefficient system run by a Public Service which is not suitable for running those sorts of enterprises. We could transfer parts of these activities, not necessarily all of them. An example I gave was in the rail system. Perhaps we should look at leasing or selling off the stations to people who wish to run shopping centres. That would be one way in which we could get money back and run the stations much more efficiently than they are run now. We do not have to sell the whole system. But there will be surplus employees because of the amount of feather-bedding and unnecessary labour in all these government enterprises. The people who will be displaced in the transfer to private enterprise must be fairly compensated. There will not, overall, be a net loss of jobs.

One of the things hindering the economic development of this country is the very inefficient infrastructure we have in the communications and transport sectors. If we can improve their efficiency-I believe we can greatly improve them-the whole economy of this country will run much more efficiently. The result of such an improvement in our economy will of course be the creation of new jobs in many areas, and that is the way in which I think we must go. It will not be a blanket approach of privatising everything. We must get away from accepting that certain industries historically, and almost accidentally, have been run by the government. We must look at each of them and say: `Is that an efficient way to do it? If not, how can we run it better in the interests of the consumer and the whole community?' That is the way we must go.

Debate interrupted.