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Grand Hyatt on Collins, Melbourne, 20 July 2000: address to the Property Council of Australia: transcript.

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Address to the Property Council of Australia e&oe.....................................................................................................................................

I am delighted to be here.  Well, John Coombs, wouldn’t be the one to say that I’d fixed up the shipyards, Peter, but he might describe me as provocative.  And I am very pleased to say that the productivity numbers that came out for the waterfront the other day were the best ever recorded which is a step in the right direction.

Thank you for that comprehensive introduction.  You could take me all the way back to the commencement of my political career.  I was elected to the Federal Parliament and before I could take my seat Malcolm cried on the TV that night and I lost it only three months later.  There were two others in the Federal Parliament, elected to the Federal Parliament and not sworn in but the reason I am unique is that they died before they had a chance to get back.  So when I say I am pleased to be here with the Property Council I really mean it.  

Let me start with just a few comments about the building industry.  This won’t surprise you.  It’s a pretty important industry and I think the state of Victoria therefore the building industry is something for which we are all concerned.  And I am glad you say that…or make the point that I am a Victorian in the Federal Cabinet.  We have got some very strong representation from Victoria in the Federal Parliament and in the Federal Cabinet.  In Queensland they say you can always tell a Victorian but you can’t tell them much. 

It is important that Victoria gets a fair go.  Whether it’s road funding or whether it is the examination of big projects such as any proposal for rail links between Melbourne and Sydney.  And as I sit there, I sit there as a member of the Cabinet and we look at the national interest but it’s also important that people understand the needs for Victoria and are able to put a point of view.

I also, as a Victorian, have been concerned at developments in the building industry.  When I look at the building industry today I am aware of the strong stance and interest in general reform issues that the Property Council has taken and I appreciate that and not just in respect of workplace reforms but other reform issues.  Tax, for example, has been a big part of the reform agenda in recent years and the Property Council has taken a strong, if I may say so, sensible approach to those important issues. 

But when I look at the building industry in Victoria I’d have to say there is some reason for disappointment at the state of affairs in the building industry.  In your industry you don’t control your cost structure, the unions do.  In this industry you don’t control the time of completion of your projects, the trade unions do.  You don’t control who you employ, the trade unions do.  You don’t control when you will work and when you will close, the trade unions do.  You don’t control who comes onto your site, the trade unions do.  You don’t control the price of your product or your tenders, the fact is the trade unions do.  You don’t control your profit margins, the trade unions do.  You don’t control where and how you train your employees, the unions do. 


The events in Victoria earlier this year in the building industry dispute and the conclusion of that building industry dispute was not in the long-term interests of the building industry in Victoria.  And if it’s not in the long-term interests of the building industry it’s certainly not in the long-term interests of Victoria.  We all have an interest as Victorian residents in a strong economy in which costs are maintained within reasonable bounds, where behaviour is sensible and where the best that Victoria has to offer in terms of workmanship quality and the like is, in fact, given a chance to produce quality products at a reasonable price.

The MBAV, I’d have to say, showed remarkable resilience in the recent building industry dispute.  They took a stronger stand than they had in the past.  And also the Property Council at the start of the dispute was not hesitant in standing up and saying that the building industry ought to restructure the way in which it manages its employees.  And I pay tribute to the Property Council because early in the dispute the Property Council made it clear that in the event of industrial action there’d be a, sort of, reasonable approach taken to liquidate damages if certain things happened.  And that did actually give the employers, the MBAV, I think a bit of a fillip in trying to restructure the general approach.

The fact is though that in the end the opportunity for significant reform was not taken.  In fact, in the end the Property Council was at the press conference with the unions and declared that the result was not a bad result.  Now, the fact is it wasn’t a good result and you yourselves in the Property Council made it very clear you didn’t think such a result would be a good outcome when you supported reform at the start of the campaign.

And I don’t mind telling you I was disappointed.  I was disappointed because right at that very moment the employers had had a good win before the Commission.  In fact, it was a very significant win.  They actually had a bit of leverage, just for once they finally had a bit of leverage and that leverage was given away.  It was not a good outcome for the building industry.  But I don’t look back.  I only say these things because I say to the Property Council and to the building industry, to the construction industry generally and to investors, we have got to look forward and we ought to take what happened back in, sort of, February/March this year and say to ourselves never will it happen again.  And that every body in Victoria has a real interest in seeing significant reform trying to see this industry build on the strengths that we all know it has.

And I can assure you, you are not the first ones to go through a situation where it’s difficult times, where you haven’t been able to make the progress you’d like.  But there are lots of industries who face similar situations but who have stuck to their guns and eventually seen significant reform.  Obviously I think of Chris Corrigan and the results that he got.  But you

don’t have to make that comparison.  The MUA is a special group all unto themselves. 

But I think of the coal industry where they have dealt with an intractable union, the CFMEU, but for the interests of the country as a whole we genuinely needed reform and there have been a number of reformists in that industry and they have finally seen genuine progress.  And I believe we can make real progress in the building industry and, in fact, in the construction industry and I can think of some areas where some progress has been made.  It’s not an entirely bleak picture.  But more needs to be done and I would hope that the experience of recent times steals people to say next time around we are not going to be there when the white flag goes up, we are going to be standing there for real reform that would be in the interests of the industry long-term. 

The fact of the matter is, there are people who will say: oh well it’s all very well standing up for reform but there’s a cost associated with getting it.  The fact of the matter is the industry pays a very high cost today, it pays it every day of the week.  And even those critics who question the concept of enterprise bargaining, even though virtually throughout the Australian economy it’s accepted as the way to go, but even those critics of enterprise bargaining could hardly stand up today and say: oh, we’d be worse off if we had enterprise bargaining.  Quite frankly, you couldn’t be much worse off than where you are today and that ought to steal people’s resolve for further reform in the future.

Ladies and gentlemen, when you look at Australia’s circumstances the fact is that there’s a lot of people been through the reform process and there are a lot of runs on the board.  And today, for example, in Canberra they released the latest Bureau of Statistics figures on long-term unemployment.  For long-term unemployment they are the best since 1991.  For very long-term unemployment, which is people unemployed for more than two years, they are the best figures since early 1992.

If you look at the productivity numbers, the productivity numbers in Australia are the best we’ve had probably in 30 years.  The Productivity Commission did a report on this and they had a headline to their report which said: The New Economy?  Well, I think as every day goes by, every month goes by and the numbers continue to roll in you can take out the question mark.  The fact is we have proved we can run this economy much further, much smarter and to the advantage of everybody if we are prepared to make a few sensible decisions to reform the way in which the economy is managed.  And I applaud the Property Council’s general support for reform and more reform in the future is going to produce more dividends.

I look at the tax debate.  The tax debate has reached a, sort of, critical stage although I suppose I was hardly surprised that it did.  For heaven’s sakes, we are one of the last countries in the modern world to adopt a value added tax or a consumption tax or a GST.

What a hopeless position Kim Beazley now finds himself in.  You know, they won an election in 1993, the Labor Party, and they thought they were terribly clever, they opposed something they once themselves supported back in ’85.  Then they thought they could repeat the exercise in 1998 and they lost the election.  And you know that was the first time that Della Bosca told the truth.  We call him Della - well he is one of my friends as from now.

In March 1990 he went down to Kim Beazley and said, listen mate, you lost the election, you know, you ran the negative scare campaign, you lost the election, running against the GST

when your policy is to keep is not such a bright policy.  Kim didn’t listen and now we find Della out there in the Bulletin again simply speaking the truth. 

The fact is, it’s gone pretty well.  And why should we be surprised at that when you look at the Australian economy by and large the people running our companies know what they are doing.  And was the 1st of July going to be the end of the world as we know it?  Of course it wasn’t because Australian companies are just as capable of, you know, managing that issue as they can manage other issues and do so in a very competitive way.

The Labor Party sadly is in fact going backwards.  They are going backwards because ultimately they are having trouble seeing the national interest and in a sense, they are lazy because they are not able to produce for themselves an alternate policy. 

It was very interesting yesterday that Kim Beazley was attacking me because I make the point that Kim Beazley’s policy position is largely dictated by the trade union movement.  And his response was to say well what’s wrong with being in a trade union.  There’s nothing wrong with being in a trade union, there’s nothing wrong with being a trade union member and it’s good that there are trade union members who go down and run Little Ath’s as he said yesterday.  But the fact of the matter is, you don’t have to be a trade union member, certainly not yet anyway, to be supportive of Little Ath’s.  In fact, there are more people who probably go to Little Ath’s than there are members of the trade union movement in Australia generally. 

In fact, I can tell you more people go to church than are members of the trade union.  There are more people who go to public libraries than go to trade union meetings and there are more members of the NRMA, the motoring organisation in NSW, than there are affiliates to the ACTU. 

There’s nothing wrong with being a trade union member.  The problem is, is that they are no greater an organisation than many other organisations in Australian society.  And the point is, if you want to be a national leader by all means take into account the views of the ACTU but they shouldn’t be able to completely dictate and dominate your policy position.

And so it is that when Kim Beazley goes to his National Conference he will find dictating to him policy by 60 per cent of the delegates who just happen to be trade union members.  Well, let me just give you a couple of, sort of, policy prescriptions that Kim Beazley is proposing but which are clearly not in the national interest.  One of his policy proposals is to abandon, in fact to abolish, the Trade Practices Act provisions against secondary boycotts.  This is no small proposal, this is no minor technical amendment he is putting forward.  This will wreak a very significant cost on the Australian community if we take away the current remedies for people who are subject to secondary boycott actions. 

I have a quote here from John Coombs who said, he said this last year, he said:  “we used to boast that we could stop the country in 15 minutes on the phone.  You just have to phone the delegates and they’d walk off the job.  The fact is that we can no longer do what we did.”

Well, I can remember most of you would probably remember, in the past in Australia when we had a waterfront dispute the whole place was paralysed.  You close the porch for an island continent like Australia you close the whole place down.  And as John Coombs said, we used to be able to do so in 15 minutes by hitting the phones.  The reasons they are not able to do so today is because of the secondary boycott provisions of the Trade Practices

Act.  The reason that the trade union movement is not by law allowed today to run a foreign policy in respect of Fiji, Indonesia or anywhere else which has been again common place by the maritime unions is because of the strength of the secondary boycott provisions to the Trade Practices Act. 

It is an absolute recipe for industrial mayhem to say to the trade union movement, you will be able to strike on an industry wide basis regardless of the circumstances of a business and do so free from the threat of penalties under the Trade Practices Act.  And yet that is today the Labor Party’s policy which I say to you would be an absolutely regressive policy here in the State of Victoria given the militancy of the trade union movement.

We have already seen an example here in the State of Victoria in the building industry of the penalty you pay for complacency, in fact, a sort of subtle green light from a State Labor government in respect of the building industry unions.

Why did we see the strength of the campaign here in Victoria?  Because we had a change in the State Government from Kennett to Bracks and Bracks basically has turned a blind eye.  And why do we now see here in the State of Victoria the unions running a muck and attempting to or threatening to, they’ve issued a thousand bargaining notices which is the pre-cursor to industrial action, why do we see that in the manufacturing industry, why is it here in Victoria and not elsewhere?  Well, it’s pretty obvious and that is that the industrial climate and the political climate in Victoria is very conducive to the very sort of campaign which they are proposing to run.  And it seems absolute madness that as Australia has finally secured in 1997 after the passage of our reforms the lowest level of industrial action since 1913.

You might remember Bill Kelty said if you vote for the Coalition it’ll be the whole sympathy World War III, I think was what he told a thousand shop stewards before the 1996 election.  Instead of World War III we have got the lowest level of industrial action since prior to World War I when figures were first kept.  And why is that?  Because we require people to observe the law, to meet the contractual obligations that they have entered into.  To therefore remove those obligations and to say we will not have any penalties against industry wide strikes and sympathy and secondary boycott action is, of course, just a recipe for much higher levels of industrial action. 

And it won’t be the union hierarchy that suffers as a result of higher levels of industrial action, it’ll be the rank and file who are forced to take industrial action against their will and it’ll be living standards generally in the State of Victoria as productivity plummets following higher such levels.

In fact, these policy prescriptions are the policy prescriptions now put forward by Kim Beazley.  A right to take industrial action across an industry, the end of the Trade Practices Act boycott provisions, the individual agreements which in a modern society most people would take as absolutely par for the course, reasonable and their right to have such an arrangement.  They are to be banned by Labor and a series of other changes which will take the Australian workplace relations system back to the 1970s instead of forward to a modern system are consistent with the demands of industry.

So, ladies and gentlemen, whilst the building industry and circumstances there, I suppose, have for the moment been settled the fact of the matter is that we do need to have and need

to encourage a climate of higher productivity, better performance, lower costs and therefore a good deal for investors and as a result lower costs for the users of the product which so many of you in this room are responsible.

The Government is committed to a system which encourages that.  We see that many of the issues, workplace relations issues, that are relevant in your industry are relevant right across the Australian economy.  And when we get to the next election whilst tax will be an issue for the Labor Party I think workplace relations will also be an issue as to whether or not Australia goes backwards or whether we continue to go forward.

You won’t always get a completely straight statement of facts as to some of these issues and in closing I just note that poor old Lindsay Tanner has had rather a bad day with his GST survey which shows you, they put out this survey but he only put out half the figures.  He put out the figures for showing prices were going up, he forgot to put out survey results which showed some of the prices coming down.  And when he was asked about that he said, oh look, my job is to highlight the bad news, not to give you the good news.  And he’s the Shadow Minister for Consumer Affairs.


Well, in the end, there needs to be a reasonable balance, informed balance for the public at large in the area of workplace relations.  The bottom line is productivity has been better but it’s been better as a result of a better system which encourages improved employee relations.  And it’s certainly better for employees as we have seen significant improvements in wages and therefore living standards across the economy.

These will be significant issues.  I look forward to the Property Council’s involvement in the great reform debate ahead.  Thank you.



For further information contact:

Ian Hanke 0419 484 095