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Tuesday, 15 August 1989
Page: 37


Senator LEWIS(4.52) —The Senate is debating a matter of public importance in these terms:

The need for the Government to adopt a new approach to industrial relations which is enterprise-based, to encourage Australians to work together more productively to reduce our foreign debt and to stop the slide in living standards.

The Australian Labor Party has now been in government for 6 1/2 years-during 6 1/2 years of world prosperity. There is now no world recession or nationwide drought, as was the case during the last years of the Fraser Government; there is world prosperity. During this period, in recent years in particular, Australia has had high commodity prices, high volumes of sales of our basic commodities, and very much increased tourism. Under this Government there has been a substantial fall in the value of the Australian dollar. All of these opportunities have been wasted because it is now clear that this Government's policies have failed miserably. Since this Government came into office our foreign debt has increased from $23 billion to about $104 billion, an increase of about 400 per cent, a figure which is growing every year by a massive rate-at the rate of $17.75 billion or thereabouts this year, and at an estimated $20 billion next year, because that is the level of the current account deficit.

As my colleagues Senator Chaney and Senator Stone have well and truly pointed out, there is now vast concern in the community about these failed policies, the fall in living standards under this Government, and the level of foreign investment in Australia. Under this Government foreign investment in Australia, particularly in land, has become a cheap investment. Japanese people can now buy Australian land cheaply. Similarly, people from the United Kingdom and the United States and foreign companies operating in Australia now find that it is cheap to buy valuable Australian assets because of the great deficit which this country faces every year. Each year we need to make up this current account deficit. As I say, it is currently $17.75 billion or thereabouts and next year it is estimated to be about $20 billion. We have to borrow that amount of money from overseas or sell assets to people overseas to make up the deficit. This is now causing much concern in the Australian community.

What is wrong? The simple answer is that we are not producing enough goods of the kind that people in Australia and overseas want to buy. We are simply not producing enough. We cannot expect to get much more from our commodities being sold overseas; we cannot expect to get much more from our tourist dollar-although we are hoping to get a little more, undoubtedly. Clearly we have to make up the shortfall in our manufacturing industries. Companies have gone offshore rather than continue to produce in Australia. I quote in this regard the Hon. Joe Thompson, a former secretary of the Vehicle Builders Union. I am not quoting an employer; I am quoting a former secretary of a trade union. In a recent IPA Review article Joe Thompson said:

. . . over the past 20 years, substantial sections of our manufacturing industry have ceased operating here and moved offshore . . . Much of this has been caused by what can only be termed the sabotage of our manufacturing industry by those unions which have exploited the present industrial relations system for short-term advantage.

He went on to say:

Without a doubt, we have the most self-destructive system in the free world . . .

What has happened in Australia is that, as a result of the system introduced to suit the conditions of last century, Australian productivity improvement has been consistently below the average for major industrialised countries. We are simply not keeping pace. Since 1985 under this Government productivity has edged up at a miserable 0.4 per cent a year as the output per unit of labour. We are now at a stage where a Minister as senior as the Minister for Industry, Technology and Commerce (Senator Button) is prepared to concede that the Government has got it wrong. That takes us back to what the Prime Minister (Mr Hawke) said in 1987-that micro-economic reform would be-and I quote

The key element of the Government's third term agenda . . .

What has happened to that micro-economic reform? The Government started off by changing government business enterprises in a small way but then ran into a brick wall as it tried to push some minor changes to micro-economic reform through Caucus, which simply refused to endorse them, as did the Cabinet. Of course, the last straw so far as the Minister for Finance (Senator Walsh) was concerned was the Government's failure to make a decision on the third runway at Mascot. At that time Senator Walsh said to his colleagues, `If you can't make that decision, how are you ever going to face up to some of the really tough decisions which have to be made to get this country right?'. According to the Sydney Morning Herald of 10 August, it was on again in Federal Cabinet last week when there were angry clashes between the Treasurer (Mr Keating) and his colleagues over micro-economic reform. It was reported that at one stage:

. . . the Treasurer let fly with a stream of invectives about the reluctance of his Cabinet colleagues to embrace micro reform.


Senator Archer —Not the Treasurer!


Senator LEWIS —The Treasurer used a stream of invective about his Cabinet colleagues. Of course, the Treasurer is the person who in May last year said:

The last great challenge is reform of the labour market . . .

He said that as if all of the other reforms had been completed. Further, what has this Government done about labour market reform? Until now, it has done nothing. Tonight we will hear some more rhetoric about micro-economic reform, no doubt, but how can one believe Mr Keating any longer? This Government's policies are simply to squeeze demand with high interest rates whereas our policies are to increase productivity. The Government will not solve the problems of this nation by its rhetoric. What needs to be done is to increase production. When we get into government-as soon as this Government is prepared to call an election-we propose to attack the basics: to attack inflation, to attack interest rates, to attack micro-economic reform and, in particular, to attack labour market reform, which is the subject of this debate today.

According to a recent publication in the United Kingdom industrial disputation in Australia is 24 times higher than in Japan, about 50 times higher than in West Germany, about 2 1/2 times higher than the United Kingdom, and twice as high as the United States. This was referred to recently in an editorial in the Australian Financial Review dated Friday, 30 June 1989. Dealing with the report of the Japan External Trade Organisation, which had severely mauled Australian manufacturing industry, the editorial stated:

The painful truth is that Australia's current account agony-

that is referring to massive deficit every year-

is not so much a matter of excess demand, as of inadequate production and sluggish productivity improvement . . . The JETRO report rightly rounded on the inflexibility, lack of loyalty, rigid award system and diversity of unions in the labour force. And the current round of ``restructuring'' already appears to equate more to cautious reorganisation, than to the revolution in attitudes and work practices that is truly required.

That is why our industrial relations policy is aimed at trying to improve the strength and quality of the relationship between employer and employee. Our policy does not attack employees. Our policy is designed to provide good industrial relations at the enterprise level. We want enterprise based organisations on behalf of employees dealing with employers and coming up with agreement binding on both parties, agreements which are enforceable in the courts and which will produce greater productivity to the mutual benefit of the company and its employees. We are not talking about cutting wages. We are talking about increasing wages by increasing productivity.

In 1987, when Mr Willis was Minister for Industrial Relations, he described the current system as moribund. That was over two years ago, yet still this Government has done nothing to change the system described by the Minister as moribund. The Government has not done anything to change the system because it is simply unable to do so. Its Caucus committee will not allow it to do anything about changing the system. We will change the system. Our central objective will be to improve efficiency in the Australian workplace. That is essential because our fundamental national problem is that we consume more than we produce. Becoming better producers is the only alternative to reducing our living standards. High inflation and high interest rates are just symptoms of our basic production problems. We will improve productivity by enabling employers and employees to negotiate pay and conditions at the enterprise level. Those employers and employees who choose to stay under the award system may continue to do so, but we will ensure that there are effective penalties for those who defy the orders of the Industrial Relations Commission. We will encourage employee share ownership and profit sharing. We will reduce the number of unions in each workplace. It is my ambition that we end up with, at the most, one union in each workplace-certainly one negotiating group of people, representing the employees in the workplace, entering into an agreement with the employer. We will ensure that there is genuine voluntary unionism.

These are the fundamental reforms which need to be effected in the industrial relations market. Until such time as these reforms are effected Australia will continue to go down the drain at the rate it is going down the drain at the present moment. Australia will continue to be in a situation where every year it needs to borrow from foreigners to maintain some form of living standards, or where we need to sell our basic asset-our land-to foreigners in order to make up the deficit which continues to grow under this Government. This Government's policies have been shown to have been a total failure. Nowhere else in the world is a country going down the drain at the rate at which this country is going down the drain. At a time when there is no world recession, no Australian drought, this Government should have turned the country around so that it was more productive and able to pay its way in the world. As soon as the Liberal and National parties get into government we will take the basic steps-attack on the basics-to produce that sort of result.