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Tuesday, 31 October 1967

Mr SNEDDEN (Bruce) (Minister for Immigration) - I move:

That the Bill be now read a second time.

This Bill is one of a triology of Bills which are inter-related. The others are the Stevedoring Industry Charge Bill and the Stevedoring Industry Charge Assessment Bill which are also to come before the House. It will be most convenient and helpful to honourable members, I feel, if I provide in this speech the background to the three Bills and give an explanation of them as I go along.

Legislation in relation to the stevedoring industry is no new thing. The last major measure before the House was the 1965 Bill. It was introduced in abnormal circumstances. It might truly be said that it was because of the 1965 legislation that I am now able to place before the House these three present measures - which are in quite different vein. Honourable members will recall that shortly after the passage of the 1965 legislation the then Prime Minister, at the request of the President of the Australian Council of Trade Unions, set up a National Stevedoring Industry Conference with the objective of achieving a long-term improvement in conditions in the stevedoring industry. Participants were the Australian Council of Trade Unions, the Association of Employers of Waterside Labour, the Australian Stevedoring Industry Authority, the Waterside Workers Federation and my Department. We appointed Mr Woodward, Q.C., as Chairman and his role was described as being to attempt to secure agreement over the widest area. It is a matter of common knowledge that the Conference met pretty consistently through 1966 and into 1967 and that in April of this year the Conference produced a report which has since been widely published. lt is perhaps an understatement to say that something of a transformation has come over the industry since the 1965 legislation. From a situation where the industry was bedevilled with stoppages and disputes and general disharmony, there has been, for 2 years, unparalleled tranquillity. From a situation where the monthly average of man hours lost by industrial disputes was 117,000-1 refer to the 15-year period from January 1950 to September 1965 inclusive - over the 2-year period from October 1965, losses have averaged, in round terms, 5,000 man hours per month.

Beyond the most sanguine hopes of many, the National Conference produced agreement in principle over the whole range of matters before it, an agreement which, when given effect to, involves a far-reaching reorganisation of the industry.

The central feature of the arrangements for the re-organisation of the industry is a scheme for permanent employment on weekly hiring, to be introduced in the first instance in six major ports, namely, Sydney, Melbourne, Brisbane, Adelaide, Fremantle, and Port Kembla. These ports employ three-quarters of the total registered waterside workers and account for over fourfifth of the total man hours worked by waterside workers. I would not wish to suggest that the scheme of permanent employment is on all fours with that to be found in industry at large. The stevedoring industry has unique features about it which make impossible arrangements on a par with those found in industry at large.

In the stevedoring industry, the labour force in the permanent ports will be employed on a system of weekly hire. Some of the men will be employed directly by individual employers - the operational employers. The balance of the men will be employed by a holding company, whose members will be the registered stevedoring industry employers, and which will allocate its employees to operational employers as required. A second feature is a pensions scheme, applicable to waterside workers in the permanent and the continuous ports. A third, and quite vital, feature is the arrangements to deal with those waterside workers who will in the next few years become surplus to requirements.

I should, at this point, pause to give honourable members a little of the background against which this quite major change in the organisation of the industry needs to be considered. In the first place, the organisational framework which came out of the National Conference, and to which we are now giving effect, is fundamentally of the making of the employers and the Waterside Workers Federation. We have taken the view that, even if some other framework had merit, there were preponderating advantages in giving effect to a scheme of which the two parties principally involved were joint sponsors. In the second place, the Conference met over a period during which it became increasingly clear that the industry was in the grip of major changes. I refer to the progressive extension of bulk loading facilities and of roll-on rolloff ships. More significantly, extensive plans for containerisation and the greater use of unit load ships began to take more concrete form. All of these add up inevitably to a considerable reduction, over the next few years, in the number of waterside workers who will be required.

In short, the industry being faced with vast changes as a consequence of new technology, considerable adjustments in the labour arrangements had to be made if the industry was to accommodate itself to these changes. It is a matter of the greatest importance, and indeed satisfaction, that all concerned in the industry, and in the Conference, faced the situation realistically and were prepared to work out arrangements that would cope with the clearly emerging problems. This is the more noteworthy because this industry has had an inbuilt series of practices, generally directed to protecting the work force. And it is normally not a habit of men to cast aside habits and attitudes built up over a long period, however, much may be the logical justification for so doing. If we lived in a perfect world a better scheme might have been developed. But when account is taken of the considerations to which I have referred, I believe that the greatest credit is due to all who participated in the Conference and, particularly, Mr Woodward, the Chairman, for the outcome that was unanimously arrived at. If I may interpose at this point, I would like to say that over the years I have known Mr Woodward at the Victorian

Bar, at which he enjoys the utmost respect of his colleagues and, if I may add, my own friendship. More than that, not merely did the tone of the Conference discussions augur well for the future. There has been no diminution, in the period succeeding the publication of the Conference report, in the enthusiasm of the principal parties for the scheme worked out. As it is, there is every reason for hoping that what is planned will work out in such a way as to produce not merely an industry free from the industrial disputation that used to plague it, not merely an industry which will be far more efficient than has been the case, but an industry in which unit costs and total costs will in future be less than otherwise would have been the case.

This matter of the costs of stevedoring is of the greatest importance to our community. It is for this reason that the Government has been concerned that the changes being made will not add new costs without at the same time bringing compensating advantages. It is quite impossible to determine, at this present juncture, precisely how the scales of costs and benefits will finally tip. Tip, they will, in the right direction, but not immediately. The Government would not have given the conclusions of the Conference its general blessing if it had not considered that what was proposed offered the prospect of a much better, and a much more efficient, stevedoring industry. Some of the items agreed on in the National Conference will add to costs in the short term. We cannot introduce a pensions scheme - even a contributory pensions scheme - which does not add to labour costs. We cannot set up a fund from which benefits will be paid in due course to those who become redundant without meantime adding to labour costs. As the labour force is progressively reduced on an orderly basis - something that has been made possible by the agreement come to - in a matter of 4 or 5 years the total number of men employed in stevedoring operations must be fewer and the total labour costs in the industry cannot but be decidedly less than they are now. As well, in the scales must be weighed the advantages of less time lost in industrial disputes, of better throughput, of more efficient means of using the labour force, and so on, which should be the product of the new arrangements. Here is a typical case of the old adage that Rome was not built in a day. We cannot expect - and the Government does not expect - that there will be an immediate reduction in total costs, but what we confidently expect is that, putting aside changes in wages and the value of money, costs in the industry in 4 or 5 years time will be less than they are today and would be but for the arrangements which are now being introduced.

Remembering the character of the changes implicit in the new arrangements, and that we really do not know in detail what will be the precise impact of the technological changes now confronting this industry, we would be incautious to presume that we could, here and now, make fundamental changes in the structure of the existing Stevedoring Industry Act. Indeed, the time factor would not have permitted it, even had this been the proper course to take. Moreover, the parties to the Conference accepted, and so does the Government, that fundamental changes in the legislative structure should not be made before the new arrangements have been subjected to a trial over a period of 2 years or so and until it had been shown that the new arrangements were working satisfactorily. But, meantime, we have to face the fact that the proposed arrangements cannot be implemented under the legislation as it now stands. To meet this problem, we are adopting what, though an unusual course, is the only course open to us. We are doing this with the full knowledge of the parties concerned.

The main purpose of the Stevedoring Industry (Temporary Provisions) Bill now before the House is to enable the new arrangements to be implemented per medium of regulations which the Bill authorises. The necessary provision appears in clause 8. The clause provides that regulations made under it will prevail over the Stevedoring Industry Act or regulations made under that Act. This is an unusual provision but it is not novel. Members of the Opposition who have been in this Parliament long enough will remember that in 1945 a similar provision was included in the Re-establishment and Employment Act introduced by the Labor Government of the day. I point to, and would emphasise, two things about the regulation making power.

In the first place, it is not an unlimited power; it is not open ended. Clause 8 sets out the subjects upon which regulations may be made. It is not a case of the regulation making power being at large. The regulations can be made only within the framework of clause 8. By and large, the regulations will have to relate to matters arising from changes in the organisation of the industry consequent upon the introduction of the new permanency arrangements or of the pensions scheme. The major object of regulations will be the arrangement to apply in permanent ports. Clause 6 of the Bill authorises the Minister for Labour and National Service (Mr Bury) to declare ports to be permanent ports where the permanency arrangements agreed to at the Conference are operating. But, because of the pensions scheme, some adjustments of the present legislation will be needed in relation to the ports described in the Stevedoring Industry Act as continuous ports, Some consequential adjustments of the long service leave scheme, which applies to all waterside workers, will be needed also.

The second point about the regulation making power, and indeed about the whole Bill, is that its operation is limited. It will cease to have effect on 1st July 1970, and then any regulations that exist will cease to have effect unless some other provision is meantime made to deal with the matter. The date of 1st July 1970 has been fixed to allow the 2-year trial period that I have already mentioned. While it is expected that Sydney, and also Melbourne, will become permanent ports before the close of 1967, it will be well into the first 6 months of next year before the other four ports I named become permanent ports. Given that things work out as we hope, the intention of the Government is to bring down before 1st July 1970 legislation amending the Stevedoring Industry Act to make such changes as are necessary. Doubtless, in some instances, the amendments will be in keeping with the regulations that have been made meantime under this temporary provisions Bill.

The only other point calling for mention in relation to the temporary provisions Bill concerns clause 7, which authorises the Australian Stevedoring Industry Authority, subject to the direction of the Minister, to make certain payments to the holding com pany. These payments will be made from funds deriving from the charge imposed under the Stevedoring Industry Charge Act, to which I will come in a moment. Attendance money will be a thing of the past under the permanent arrangements. However, and particularly while the labour strength is running down, there will be occasions when work will not be available to men under weekly hiring for a shift or part of a shift. The men concerned will not lose by this, because they will be on a weekly wage. As to the employer side, it is proposed that, where in current circumstances attendance money would have been paid, the employers concerned will be reimbursed for shifts when there is no work for their men. We have accepted also that the most sensible way of financing employers contributions to the pensions fund and providing a fund from which payments may be made when redundancy occurs, is to use the charge and so spread the obligation over all work done in the ports concerned.

Since I have raised the matter of the stevedoring industry charge, it is convenient to say a little more about it. The charge is provided for in the Stevedoring Industry Charge Bill which also is before the House. From the proceeds of the charge, the Authority will go on financing its own operations and administration. Its functions will, to all intents and purposes, be unchanged as to other than permanent ports. In the permanent ports, the Authority will have some functions and it will make the payments to the holding company that I have referred to. In the continuous ports, the Authority will have its normal responsibilities, and will make some payments to the holding company. This leads me to a further point: Payments under the long service leave scheme will continue to be financed from the charge. The Authority will continue to administer the long service leave scheme. However, we have a bit of a problem with this scheme, in that to date the basis of financing it through the charge has been to provide no more funds than are necessary to meet the payments on account of long service leave taken on a year to year cash basis. Looking to the future and remembering the reductions in the work force ahead, the number of leave takings will be rather higher than in the past. Not only must funds for this purpose be provided; it would be quite unjust to make the industry as constituted at the time carry the burden of the leave payments that have to be made as they fall due. So it is proposed to convert the present financing arrangements from a cash outgoing basis to a basis where a fund will be built up to enable sufficient money to be available to pay all long service leave as and when it becomes due.

If honourable members turn to the Charge Bill they will notice that, in place of the common charge on a man hour basis that has been operative to date, for the future there are to be three separate rates of charge. In respect of what are described as class A waterside workers the rate of charge will be on a man week basis and be a sum not exceeding $17.55. In respect of what are called class B waterside workers the rate of charge will continue on the man hour basis and not exceed 80c. In respect of the remainder of the waterside workers - those described as class C waterside workers - the charge will not exceed 55c on a man hour basis. The Government has fixed the maxima rates on the best information it can assemble. Within the maxima it should be able to finance the expenditures that have 10 be met over the next 4 to 5 years. It will help my explanation if I say that class A waterside workers will be those employed on weeky hiring in permanent and continuous ports; class B waterside workers will be the other regular waterside workers in continuous ports; and class C waterside workers win be those employed in ports which are neither permanent nor continuous and irregulars in all ports. In respect of class A waterside workers the charge for the future will be levied on a man week basis. Since they will be on weekly hiring it is sensible, for accounting and other practical reasons, to levy the charge on a man week basis. Incidentally the sum that a charge of $17.55 would produce equals the sum that a 50c per man hour charge would produce. Also to be noticed is that the Charge Bill gives power to make regulations to fix the actual rates from time to time, under the ceiling rates I mentioned a moment ago. The Government has no wish to have the charge at a higher rate than is necessary or for a moment longer than necessary.

Now I outline the reasons for the differential charges for the future. To date, the one uniform charge has been 48c. If, at each port, the charge had been fixed at the rate required to cover all expenditure at or referable to the port, the range of rates would have been from 30c to 2 1 3c. In short the bigger ports have been subsidising the administration of the Stevedoring Industry Act in the other ports. Plainly, for the future, the Government could not continue with a uniform charge. In the first place in respect of class A waterside workers the employers will be carrying, from their own pockets, a fair slab of costs that have to date been borne by the Authority from the charge; for example, the costs of annual and sick leave and public holiday payments and of labour allocation. In round terms these costs might be put down at 20c. lt would be equally unfair to load on to the employment of waterside workers at ports, where the pension and redundancy arrangements will not apply, the amounts needed to finance those arrangements. To finance the employers' contributions to the pension scheme and the redundancy fund will require the equivalent of a 15c charge per man hour for the first 5 years, reducing thereafter to approximately 7c. To build up the fund to meet commitments for long service leave will require 7c additional to the provision currently made. The conclusion the Government has come to is that the major ports should continue to contribute something to the costs of administration of the Act in the remaining ports. Looked at another way the maximum rate of charge at the smaller ports is only 7c higher than at present; that is, the amount needed to finance the long service leave fund. At the continuous ports the maximum rate of 80c will be 32c higher; 22c of this represents the pension, redundancy and long service leave items. The balance of 10c represents a further contribution towards the cost of administering the Stevedoring Industry Act in those ports. In fixing the 80c rate the Government had in mind also the importance of providing an incentive to employers to extend the permanency arrangements to further ports. In terms of cents per man hour the maximum rate for class A waterside workers at permanent ports is 10c less than that for class B waterside workers at continuous ports, when allowance is made for the functions employers will be performing in respect of class A waterside workers instead of the Authority.

I must not pass from this subject without reminding the House that in 4 or 5 years, when the pensions and long service leave funds have been built up, the industry can look forward to the charge operating at the permanent and continuous ports being reduced by some 14c and at the smaller ports by some 7c.

I wish to make one last point: At the present time the charge is not levied on any waterside workers employed on weekly hiring. The Government introduced this exemption in 1961, because then the employers concerned were only to a very minor degree using the services of the Authority and were not receiving any payments from it in respect of their weekly hired employees. For the future the situation will, as I have explained, be very different as regards weekly based employees in the permanent and continuous ports. So the Government is cancelling the exemption in respect of weekly hired employees in those ports. This is dealt with in the Stevedoring Industry Charge Assessment Bill. The present exemption will continue in respect of weekly hired employees in the other ports because the reasons that justified the introduction of the exemption continue to operate. Mr Speaker, for years permament employment in the stevedoring industry has been advocated by many. Perhaps some have attributed to the idea of direct employer-employee relationships in this industry something of a touch of magic, which the circumstances do not justify. But I do not think anyone would contest the point of view that direct relationships should lead to an improvement in not merely the human, but also the industrial relations of this industry. While plans are well advanced to change over to permanent employment in six ports, the Government is hoping that the plans work out with such success as to lead to other ports becoming permanent ports. lust what comes out of the new arrangements will depend heavily on how the Waterside Workers' Federation and the managements of the individual operational companies and the holding company discharge their responsibilities. Over the years many criti cal things have been said about the management side of this industry. The customary response has been that, because of the presence of the Authority and the general character of the legislation, management has been unable to function as employers normally do. From now, on, at least in the permanent ports, this will not be the case. Technological development is forcing vast changes on this industry. Those changes must be matched by management that will not merely cope with technological problems but direct itself assiduously to making this industry a highly efficient industry in every respect. The stevedoring industry is critical in our Australian economy. It is critical because so many of our costs stem from transport and because the profitability of many of our markets and potential markets depends heavily upon the level of transport costs.

On the Federation front, I discern a new attitude. I would not for a moment imagine it was universally held, but there is plainly abroad, at long last, the realisation that the interests of the Federation's members can be advanced best by putting co-operation to the forefront in the resolving of the industry's problems. It is my earnest hope that this will be the guiding principle for the future. If the employers and the Federation both bring to their responsibilities a conviction that their respective interests in the industry are matched by obligations to the community at large, we will be well on the way to a stevedoring industry which is both efficient and notable for sensible human and industrial relations.

Debate (on motion by Mr Webb) adjourned.

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