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Tuesday, 29 August 1989
Page: 462

Senator MacGIBBON —Is the Minister for Industry, Technology and Commerce aware of the Industries Assistance Commission's draft report on travel and tourism and its reference to labour market problems within that sector? The report found:

The ability of the airlines to offer increased remuneration to attract scarce skills (such as pilots) is restricted by the Government's overall approach to wages.

. . .

If higher wages could be offered, workers would be encouraged to remain in or to join the industry, and the costs of overtime, delays, and lost markets could be substantially reduced.

. . .

Wage rigidity makes it more difficult-and costly-for the air transport industry to respond to the increase in tourist demand.

Does the Minister concur with the Government's foremost advisory body on industry policy and accept that the rigid wage system imposed on the aviation industry is inappropriate and costly to the nation?

Senator BUTTON —I have not seen the draft report, but the answer to the last part of the question is that no, I do not agree with that. I agree if the IAC is saying that rigidity in the labour market is a problem across a range of Australian industries. I do not dissent from the view that over time greater flexibility needs to be established in labour markets and in the wages system. I agree with that. But Senator MacGibbon used the question to refer to the particular passage which referred to airline pilots. One of the problems faced by Australian airlines is not the number of pilots they are able to attract, but the productivity of the pilots whom they currently employ. That is a very big problem.

Senator Stone —Then talk about that.

Senator BUTTON —If I were Senator Stone, I would not buy into this. His party's position on this is a dreadful mess. Senator Lewis will raise a matter of public importance on this question. Perhaps he will explain to us how the policies which have been enunciated by spokesmen such as Senator Chaney and Mr Peacock in the last week can possibly be brought together as one voice. They have totally divergent views. I inform Senator Stone that those views ignore the issue of productivity. The Opposition has backed itself into a corner on this issue in relation to the stoppage and not the question of productivity. To respond to Senator MacGibbon, people more expert than I have said that the Australian airlines could operate with significantly fewer pilots than they now have if they operated to international standards of productivity. I think that is probably correct.

Senator MacGIBBON —Mr President, I ask a supplementary question. If the Minister does not accept that the rigidities of the present wage system are operating against the interests of the airlines in this country, can he explain why Qantas Airways Ltd can no longer service the aircraft of other airlines and is now sending its own aircraft out of Australia to be serviced.

Senator BUTTON —I said that there needed to be more flexibility in the labour market and in respect of wages. To draw any other conclusion from what I said is drawing a very long bow.