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Thursday, 8 March 1973
Page: 362

Mr LYNCH (Flinders) - This matter of public importance brought forward by the Opposition concerns a critical issue in the Australian community and one which properly calls for debate in this national Parliament. The context of the issue concerns the Government's policy relating to the allocation of Commonwealth Government contracts, the reported new labour code in the process of preparation by the Minister for Labour (Mr Clyde Cameron), the new procedures adopted by the Minister for Works (Senator Cavanagh) and, in particular, the directive issued by the Minister for Works to the permanent head of his Department. I seek leave of the House to incorporate this directive in Hansard.

Mr SPEAKER -Order! Is leave granted? There being no objection, leave is granted. (The document read as follows) -


After notifying the Prime Minister, I now. direct that in future, employment and letting of contracts, the following conditions apply.

1.   In accordance with Government policy in future recruitment of employees-preference must be given to financial members ' of bona fide Trade Unions.

2.   In allocating contracts consideration shall be given to -

(a)   the degree of day labour employed by the contractor as against 1he degree of subcontract workers employed. 0)) the policy of the contractor to employ

Union labour as against non-Union labour.

(c)   the relationship of the contractor with the Trade Union Movement

(d)   the quota of apprentices the contractor by established awards is entitled to employ and the number employed.- -

3.   I further seek to have written into all contracts -

(a)   that all sub-contractors shall be approved by the Director.

(b)   that the Commonwealth retain for a stipulated period sufficient moneys to meet the commitment of any legal claims by workmen for wages, long service leave, etc.

(c)   all contractors and sub-contractors before approved, to produce evidence that all employees he will employ on the project are covered by workmen's 'compensation.

(d)   all contractors must make provisions that will permit Trade Union officials to interview employees at such times that do not interfere with performance of work.

(e)   all contractors or sub-contractors, upon request by a representative of a bona fide Trade Union, to supply the- names of all workmen employed on the project together with their classification.

Yours sincerely, (SenatorJ. L. CAVANAGH)

Mr LYNCH - The proposals contained in this directive make it abundantly clear that the Government is seeking to destroy the long established practice that contracts should be awarded only on the basis of quality, performance and price, and that in future consideration will be given to the industrial policies of the contractor and his relationship with the trade union movement

The Opposition is totally opposed to these proposals for a number of fundamental reasons. The proposals are open to serious abuse and corruption. They are contrary to the public interest since they disregard the principle that the Government should undertake programs at the least cost to the taxpayer. They are a blatant method of seeking to circumvent established procedures laid down by law for obtaining unproved wages and conditions for employees and they are in fact a further attempt to institute policies of compulsory unionism. The proposals are a vehicle for the transfer of public funds to the trade union movement and thence, of course, to the Australian Labor Party. They are totally inconsistent with the terms of the policy speech of the Prime Minister (Mr Whitlam), which stated that the Government's first aim in industrial policy would be to reduce interference and intervention in industrial matters. Finally, they constitute an unwarranted attempt to force the Government's will on individual contractors. This of course is the technique of the socialist monolith, using the bludgeon of the State, to enforce its will upon the Australian community. There is absolutely no reference to these proposals in the Prime Minister's policy speech, a document which is becoming increasingly irrelevant as the real thrust of the Labor machine emerges. The real policy document is that developed at the 1971 Launceston Conference. Last week in this House the Prime Minister stated that his Government was bound by that document, but it requires a close examination of the Australian Labor Party industrial relations platform to uncover a passing reference, hi clause 6 (f), to the new concept which the Government is now seeking to pursue. To claim that every obscure clause in this platform is part of the Government's mandate is not only tenuous in the extreme but also contemptuous of the good and common sense of the Australian electorate.

We say that the Government's new proposals lend themselves to serious abuse, and by their very nature they are imprecise and vague. One of the major considerations in the allocation of Government contracts will be the relationship of the contractor with the trade union movement. This is a very curious criterion which I believe has no precedent with the exception of the principles which govern the practices of Tammany Hall - the concept of the open drawer' for favours sought and awarded. Presumably, contracting firms are now to be rated on some scale of approval. The longstanding practice has been to consider tenders for Government contracts on the basis of their commercial merit; that is to say, contracts have been awarded on the basis of quality of work, price and performance. Ministers and officials have been able to take decisions on a well-developed set of objective criteria which left minimal room for subjective judgment or partisan approach. It was a system which was fair and equitable to the tendering and decisionmaking authorities. But in the policy now proposed by the Labor administration the Minister for Works has stated that his DirectorGeneral will no longer operate in his former capacity in the approval of contracts. The Minister clearly indicated that he will personally assess tenders for Commonwealth contracts. In answer to a question on 6th March he said this:

Whereas previously the Director-General of Works had full power in letting contracts, now the approval of contracts will be taken over by myself acting within my ministerial responsibility -

He went on to add: and, I hope, with the advice of my Department.

Perhaps it is fortuitous that the Minister has removed the decision-making responsibility from the Director-General in view of the impossibility of making an objective assessment, given the Government's new criteria. It would have placed senior public servants in an invidious position. Just how susceptible to the pressure of certain unions or how partial or ruthless the Minister will be is yet to be determined. However, he is already on record as having said that firms with a 'bad union record' will have very little chance of getting a Department of Works contract whilst he is the Minister.

The Opposition completely rejects the proposition that a Minister with political bias, political favours to repay and political debts to collect should arbitrate on a vague and highly political set of criteria as to which firms will be the recipients of more than $300m worth of public money. This we believe to be an intolerable situation. The Government has established a procedure whereby firms, by virtue of donations or financial inducement to the trade unions involved, will be able to escalate their credit rating. Unions in their turn will have the capacity to threaten firms with poor credit ratings in return for special conditions. We believe the Government will be forced by powerful unions to award contracts to those firms which for various reasons, are approved by particular unions. The opportunities for unprincipled pressure, graft and corruption are virtually unlimited. The main beneficiaries of the new scheme will be those unions which are able to exert the most pressure and which are the most unscrupulous. Firms which express public disapproval of unions or the Government or which in the public interest of this country are prepared to stand up to trade unions in circumstances in which they believe the claims of those unions are unjustifiable can expect to have a very poor relationship with the trade union movement and consequently limited opportunity to gain contractual work from the Government no matter how well merited their tender is in commercial terms.

The Opposition believes the community has a right to be protected from this blatant misuse of authority. To quote from an editorial in the Melbourne 'Age': 'The concept is as absurd as it is dangerous'. The system of tendering should have only one purpose: To ensure that goods are provided as satisfactorily and cheaply as possible. The opinion reflected by this newspaper is consistent with those expressed by the Australian Press as a whole and consistent with the wide range of representations received by the Opposition from all sections of the Australian electorate.

On the question of cost the public interest is very much involved, to the extent that the community expects the Government to have regard to the cost of its capital works and to use taxpayers' money in the most economical manner. In view of the Government's substantial financial commitments, its obvious difficulty in meeting the cost of its election proposals and the inflationary pressures which it has generated, it is inconceivable that it should now initiate procedures which by their very nature will entail wastage of public funds. The level of the funds involved should of course not be under-estimated. The Department of Works alone has an annual expenditure of more than $300m, but this pales into insignificance when the totality of the Government's purchase of goods and services is considered. It would be quite erroneous to assume that the new labor code being prepared by the Minister for Labour will apply only to contracts let by the Departments of Works and Supply. The new system is a blatant attempt to circumvent the established procedures laid down by law for obtaining improvements in wages and working conditions. The Government is now intent on using tenders as an instrument for enforcing what it cannot or is not prepared to seek by legislation, and for achieving by the back door method industrial concessions which ought more properly to be the subject of examination by established conciliation and arbitration machinery in this country. The simple fact is that most of the proposals which the Government is seeking to advance can be achieved by the process of conciliation and arbitration, but we know that in terms of the whole philosophy of the Government's approach to industrial relations that that process will go by default. The Government is seeking, as an agent of the trade union movement, to advantage the trade unions in a most unscrupulous manner, demonstrably inconsistent with any reasonable concept of the public interest. If the Government is not prepared to examine trade union proposals in a responsible manner then it is vital that we ensure the continued maintenance of an arbitral system which enables unwarranted trade union demands to be effectively and impartially challenged. The Opposition strongly opposes the Government's clear intention to support the trade union movement by the unbridled use of public funds. This we believe is a basic abrogation of the Government's probity and integrity as the sovereign and elected representative of the Australian people.

The Government's contempt for established arbitral bodies must be seen in the light of recent attempts by the Minister for Labour to coerce and bludgeon the Public Service Board. In his public declamation of the Board the Minister is seeking to convert that body - with its long-established history of independence - to a rubber stamp for union demands and to force the Board to become the pacesetter for wages and conditions throughout the community; this, in spite of a very clear interpretation of intention in the Act that the Public Service should not be used for purposes of political patronage by whatever government happens to be in power. We now have a concerted operation on 2 fronts, both in the public and private sectors of the community, to advantage the trade unions. The dual move is being pursued on a basis of circumvention and abuse of Government authority to provide the trade union movement with a monopoly of interest in a situation where no other groups can appeal or seek redress.

The Government, in concurrence with its other aims, is seeking, through its approach, and application to advance the concept not of preference to trade unionists but, in fact, of compulsory unionism in this country. This, the Opposition parties completely reject. Every individual has a right to obtain and retain employment irrespective of whether he is a member of a trade union and a right to determine whether he will become or remain a member of a particular union. By effectively seeking to assign pre-conditions of union membership in the letting of Government contracts the Government is effectively denying these rights.

We condemn the Government for the opportunities which its new procedures provide for abuse and corruption; for the total disregard it has for the community interest and of the concept that programs should be undertaken at the least cost to the taxpayer; for its complicity in forcing the introduction of compulsory unionism, and for its absolute divergence from the principle in the Prime Minister's policy speech that the Government would stand aside from interference in industry generally. This is the most blatant attempt in Australia's history to interfere in the industrial affairs of private contractors in Australia.

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