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Transcript of Doorstop interview: Sydney: 18 August 1999

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18 August 1999




The Government will legislate virtually as soon as possible to ensure that the Oakdale employees are fully paid their entitlements. The Government intends to use the existing long service leave fund, broaden that fund to ensure that these entitlements are paid and, further, we are continuing to develop our national approach in respect of employee entitlements. We will in the days ahead put out a statement looking at the two principal options which we’ve had under active consideration now for some time. We are thinking obviously about a safety net approach. Oakdale is a one-off situation inasmuch as there is a fund which has been put in place and supported by the industry, and is therefore appropriate for the coal industry. But we are mindful of the necessity to get on and take a national approach.

This has not been done before in Australia. Whilst internationally other have established schemes which provide basic entitlements, that has not been the policy direction taken by Australia to date. My view is that there is a need for a national approach. In the United Kingdom, which provides some benchmark, they have a national approach, and in the United Kingdom they have a safety net element to the provision of entitlements for employees of companies which have gone insolvent.


Is this a humiliating backflip for you?


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My position all along has been that we should develop a national scheme and we’ve been working very hard behind the scenes on that score. There have been some claims about what I’ve said or not said, but if you go back to what I said, for example, when I met the Oakdale employees, I said that it was our intention to deal with Oakdale sooner rather than later, and

so we have simply progressed that. I appreciate from their point of view they would have - liked everything done weeks ago, but it was wrong for it to be said after that meeting that the Government had rejected their claims. The fact is that we hadn’t, and we told them that at the time.


Mr Reith, the industry calls this bad policy. What’s your reaction to that?


Well, I appreciate that some in the coal industry, amongst the employers, are not happy to see the long service leave fund used for this purpose. I had said to the industry that, appreciating that Oakdale was a one-off situation, then they ought to pass the hat around the industry. And

I did say to the industry only days ago that the Government would contribute if they were prepared to pass the hat around. They held their own discussions and, for one reason or another, that didn’t happen.


They weren’t prepared to subsidise (inaudible) coal miners.


Well, it depends on your view about what is a fair deal for people working in that industry. The Government’s view is that a fair deal is that people who leave the industry under these circumstances should be able to receive their entitlements. That’s hardly a surprising view in

the coal industry, inasmuch as the industry has supported that basic principle, that there should be fair treatment of people in these situations. Now, sure, it’s a matter of debate within the industry itself as to how you achieve that, but I don’t think anybody really denies the basic proposition that employers have responsibilities to employees. And when the Australian economy is bounding along, going pretty well, I think a lot of Australians are saying to themselves, well, if things are good economically for the top end of town, surely we can have a system which is fair for those who are doing the hard yakka in the coal mines.


Doesn’t this raise the danger of a precedent? If you can dip into this fund for Oakdale, why not others? And why not for other entitlements too?


In respect of the coal industry, this is a fund which has been put together by the coal industry, and Oakdale is in the coal industry. Sure, it means widening access to that fund mainly for a

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broader purpose. In this case much of which is outstanding is for redundancies, I think about two-thirds of the amount outstanding.


Isn’t it a major political backdown for you to accept the CFMEU’s proposal on this issue, given that you have a longstanding and trenchant opposition to the use of industry-style schemes of this nature, never mind (inaudible)?


It is true that we had a report from Peter McLaughlin looking at the long service leave fund. That is true. But this Government is no different from the previous Government in looking at the future of the long service leave fund. In 1992 Ralph Willis said that this is a fund that should be returned to industry. We got that report. We’ve not acted on that report, and I don’t think there’s much doubt about it - one of the reasons that we’ve not acted is that we’ve been coming to grips with the broader issue of providing some safety net protection for employees. I think our critics find it difficult to understand, or to concede might be a better way of putting it, that this Government is genuinely interested in ensuring that the safety net provisions are reasonable for employees. The fact is that Labor had 13 years to do something about this and never actually confronted the issue. They never even recognised that it was an issue that needed to be dealt with. It is a big thing for our side of politics to, you know, confront this issue, but we have been working behind the scenes now for some time to look at a national scheme. It is not a simple matter and you’re kidding people if you think it’s just an easy matter that can be easily fixed. It’s not. It is a complex matter and I’ve said, and I’ve

said that in respect of the long service leave and, more generally, about the details of putting a scheme in place. But we’ve never really had any doubt that we needed to find a better way of doing things. We’ve been discussing this within government now for some period of time.


Isn’t that essentially what Janice Crosio from Labor was trying to get up in Parliament for the past two years?


Her bill only highlights the complexities of the issue. For example her legislation, if it were enacted, would not have provided for the redundancy of people at Oakdale, and given that the redundancy was $4 million out of the $6 million, roughly, it was a pretty inadequate response when the Labor Party would tell you otherwise. We have furthermore been responding to this

issue, going back for quite a while, inasmuch as we’ve been advocating changes to the corporations law. Two of those have gone through the Ministerial Council. We’ve initiated a third proposal which we think is a reasonable one, which we’ve now foreshadowed, so you need to look at this as not just arising out of the circumstances with Oakdale. Admittedly

Oakdale has kicked the issue along but this Government, for example - on the Cobar issue we worked very hard behind the scenes to chase the money trail to ensure a better outcome for the Cobar employees. These have been one-off situations but we’ve been mindful that we need to have a national scheme.

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In respect of Cobar, a fair slice of the entitlements has in fact now been paid. I haven’t had a report on any outstanding moneys but there’s no doubt that the actions taken by the Government provided a pretty full response to the situation at Cobar. There might be a few cents in the dollar —10 cents was reported this morning - but I thought the efforts that the Government took up on behalf of the Cobar employees did produce a pretty good result. In terms of the future, obviously we are looking at a national scheme and we would take a safety net approach we think is probably the way to go. I think there are strong reasons for doing that and that would mirror, for example, in the UK where they have a cap on your entitlements. Given the possibilities of funding there, I think that has some sense to it.


Would it be insurance? Would it be insurance that companies have to pay?


Insurance is one of the options. A scheme which also provides some role and responsibility on the States is also a consideration. The States have responsibility for the entitlements of employees inasmuch as for many employees those entitlements arise as a result of State law, and so we think the State Governments have a responsibility. In New South Wales that’s

already been in part acknowledged by the offer that New South Wales made in respect of the Oakdale employees.


The Daily Telegraph is claiming victory today. Isn’t this (inaudible) by the Daily Telegraph?


I’m quite happy to say that the Daily Telegraph ran a pretty strong campaign, and good on them. I don’t have any problems about saying that. The fact is that we actually think there was a case here of justice. They were prepared to take it up and run it big time. Good on them. But it’s also got to be said that the Government has been working on this issue now for some time. We have publicly recognised that and for those of you who are saying that the Government rejected Oakdale and then did a backflip - 1 mean, we put out a press release when we spoke to these guys and we made it quite clear that we were working towards the

development of a national scheme. I said it in the Parliament earlier and we’ve been working towards that end. We’ve also made absolutely no bones about the fact that it is a complex issue and there are lot of things to be taken into consideration. So you’d be wrong to say that

we acted in a knee-jerk reaction to this. That is simply not the case and anybody who’s prepared to read what I’ve been saying on this would, I think, in fairness have to

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acknowledge that. But at the same time, where there’s a problem and these issues become a matter of public debate, then this Government is prepared to listen. I think that’s a credit to the Government, that we’re prepared to hear the case. When Labor was in, if you accept the ACTU’s sort of figures of 17,000 or 20,000 employees being dudded every year, not one of them ever got a cent and no Labor Minister was ever prepared to say yes, there’s a problem here and we should look at it. If Margaret Thatcher was prepared to do something and support such a scheme back in the 1970s, it does say a lot about the Labor Party that they were never actually prepared to say yes, here’s a problem and we should look at it. When the ACTU raised this issue with the Government in the last years of the last Labor Government, that was the first time it was even raised at an official level with a Labor Government. They were not even prepared to say that it was desirable. There were what, seven Accords or eight Accords and, with one exception, it was never even mentioned as an issue. And yet there

were probably 200,000 people who missed out in the time that Labor was in. I think we have taken a responsible attitude. I understand it from the point of view of the Oakdale guys. Some of them - Tony Maher was saying, oh, you know, it should have all happened yesterday, but the fact is that we do have a broader responsibility and we’ve been working to ensure that we’ve got a reasonable package in it.


Why weren’t you prepared to accept the package some weeks ago, Minister?


Well, for the very simple reason that we’ve been holding discussions about it. We wanted to not only look at the ramifications in respect of the existing fund, but we also wanted to have a bit of an eye as to where we were going in the future. That is the reason.


Mr Kelty’s resignation. What’s your reaction?


It is an opportunity for the ACTU to turn over a new leaf, to take a new approach. I think they’ve got some fundamental problems and I think they need some major re-thinking about how they’re going to tackle the issues confronting the labour movement in Australia. The

trade union movement in Australia has been far too tied to the ALP and vice versa. I think they need to reassess that strategy. They’ve been far too confrontationalist in the past. We have demonstrated that, with a better system in place, Australia can enjoy lower disputes and higher productivity as a result. It shouldn’t be forgotten that whilst Mr Kelty worked hard for

benefits for some workers in some situations, the ACTU must also share responsibility for many of the failures when Labor was in office. The policy failures included the worst recession since the Great Depression and, as we have demonstrated, a better system can mean higher real wages for employees. For the 13 years that Labor was in office and making policy decisions with Bill Kelty sitting at the Cabinet table, the real wages of many workers actually fell. So there are two sides of any assessment of his contribution, but rather than

focus on the past I think the ACTU needs to focus on a strategy that will really deal with the

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issues that are pretty obviously a major problem for them. It’s no good announcing they’re going to have a recruitment drive. They’ve announced so many recruitment drives I’ve lost count. They need to go back to tintacks and work out exactly where they’re going, and part of that will be to admit where they’ve gone wrong.


What do you think of Mr Combet as a replacement?


He is reported already as rejecting the idea of a service model for unions in the future. I think the rank and file basically want better services out of the trade union movement. They want some real value for the subscriptions that they’re paying, and I don’t think in the future the

labour movement can deny the demands of the rank and file for getting a better service than they have been getting. Until they face that I think they’re going to go on losing members. That’s his challenge. Mr Kelty’s going. I think Jennie George is obviously going to be looking at her future. If the two of them went at least they’d have a clean sweep and maybe they might start thinking afresh.




He’s been committed to his cause. I don’t have any adverse comments to make on a personal basis but it would be hypocritical of me to say that I’ve supported the policy direction that they’ve taken.


Bert Evans said he was a great Australian.


I think if you look at the record, in the ALP and in the labour movement during the 1980s, they boasted about the fact that they were able to reduce real wages. Personally I think for workers, to boast that you’ve been reducing real wages and that this was good for the economy, is not the outcome we’re looking for. We’re trying to increase people’s wages and we think that’s a much better outcome for workers.


For further information contact Ian Hanke: 0419 484 095

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