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Thursday, 15 November 1973
Page: 1848

Senator WRIGHT (Tasmania) -I suggest that both motions be debated together.

The PRESIDENT - And that they be voted on together or separately?

Senator WRIGHT -That they be voted on together, too.

The PRESIDENT -Is there any objection?

Senator Douglas McClelland (NEW SOUTH WALES) - I understand that the proposal is that the 2 motions be debated concurrently but that they be voted upon separately. If my understanding is correct, there is no objection.

The PRESIDENT - As there is no objection, the course set out by the Minister will be followed.

Senator WRIGHT -I move:

That the Senate disapproves the following Determinations made under the Public Service Arbitration Act 1 920- 1 972- No. 657 of 1973- Administrative and Clerical Officers' Association, Commonwealth Public Service.

That the Senate disapproves the following Determinations made under the Public Service Arbitration Act 1 920- 1 972-

No. 656 of 1973- Administrative and Clerical Officers' Association, Commonwealth Public Service

Nos 658 and 659 of 1973-Federated Clerks' Union of Australia

The determinations, it will be recalled, are in the form of Public Service Arbitrator's determinations increasing the salaries of officers of the Second Division of the Public Service by 16 per cent and the salaries of officers of the Third Division by 12 per cent, at a time of roaring inflation.

I make it quite clear that in my view there is no question, in this debate, of the sanctity of an arbitrator's determination. The first reason is that the Public Service Arbitrator in these determinations is simply formally giving his imprimatur or approval to decisions arrived at by the Public Service Board. Secondly, I suggest that this is a case in which the Parliament has a direct responsibility. This is not a case in which, under the Constitution, we are required to relegate the decision to an arbitration tribunal. It is a case in which the Parliament has the direct responsibility. It is pertinent to note that the Parliament has complete power and authority to deal with the salaries of its servants- in this case, officers of the Second and Third Divisions. It is legitimate to comment that no want of power can be urged for the abstinence of the Parliament from interfering with these decisions. We know that we are about to face referenda in which the Government will claim that it is necessary for it to have increased power to deal effectively with other incomes, but the Government cannot avail itself of that excuse in this case. My proposition is that if a huge increase is sanctioned in this instance it makes a mockery of any claim that the Government's impotence is due to want to constitutional power. The total amount involved in these 2 determinations, according to my information, is $56m for a full year. So far, I have made a brief prefatory statement to my main submission.

My chief and most important submission is this: Great injustice is done as between different levels of officers if a flat percentage rate of increase is applied to salaries. Consider the case of an officer who has a salary of $20,000. If the increase is 10 per cent, his salary is increased by $2,000. Another officer has a salary of $5,000 and if it is increased by 10 per cent all he gets is $500. One officer gets $2,000, the other gets $500. This is not a process of fixing a differential between the officers at the base level to mark the differential in skill and responsibility; it is an adjustment by reason of a shift in the cost of living over a period. To apply 1 per cent to all levels of officers works quite inequitably, I suggest, against the lower levels of salary.

I am amazed that this percentage increase system has gained acceptance for so long. The reason why I take a stand today is that in this first year of Opposition, when I am quite free to move in this matter, it is time to register my complete objection to it as a matter of equity as between different levels of officers. Instead of a flat percentage a tapered percentage should be applied so that if the lower officer on $5,000 a year is to get an increase of $500 then the officer on $20,000 a year would be well paid by way of increase with not more than $1,000, probably some figure of about $800, to mark the different scale of living and expense to which he would be subjected.

Secondly, I object to this increase because it is quite excessive in a time of roaring inflation. As I pointed out, in the case of Second Division officers it is an increase of 16 per cent. There are grades of officers on salaries from $22,000 to $26,000, and an increase of $4,000 to an individual officer is completely unjustified. The scale of the increase sets a lead to other competing interests in the community, is in competition with the demands of other sections of employment in the community and aggravates inflation in a most significant way. I have indicated that it represents an increase of no less than $62m in aggregate in 1 year in the cost of operating the Commonwealth Public Service. It is inequitable in another degree when related to the affairs of other people in the community, particularly primary producers. It is shown by the figures that I have before me that by this increase the salaries of some officers will go from $22,582 to $26,225- that is to say an increase of almost $4,000. In July 1965 such an officer was on $13,124. That means to say that over the period of 8 years from July 1965 to May 1973 there has been an increase in salary of 100 per cent.

Consider the contrast. During that period the incomes of primary producers, taking the average over the whole area of primary production, up to last year decreased by 33- 1 /3 per cent and 40 per cent of farmers were living on less than half of the increment voted under this Determination. That is to say 40 per cent of them since the early 1960s have been enjoying a net income of not more than $2,000. All these figures have been put before us by the Bureau of Agricultural

Economics and they are indisputable. Although Senator Wriedt, the Minister for Primary Industry, in his newfound interest in primary production, is prophesying a great increase in the aggregate of primary producers' incomes for this year and next, this year's income has been achieved and that for next year is still to be harvested. Farmer Wriedt will find that various misfortunes may beset a harvest before the money from it actually gets into the bank accounts. Although there has been great improvement in meat, wool, wheat and sugar there has been no improvement whatever in dairying, fruit growing and small farming. It is on behalf of the small farmer that I speak and compare these bloated costs to which I am objecting in this Determination.

Lastly, the reason for my trying to disallow these determinations is that these huge increases are self-defeating. They are self-defeating to the individual because he goes into a higher income tax bracket and his income tax is quite severe. The higher he goes in that bracket the greater will be the relative imposition of increased income tax on him as against his lower level brother. So when that officer gets to $30,000 and the lower level officer gets to something like $7,000, the proportion of the salary taken in income tax from the higher paid officer is obviously much greater. If you project that on for 10 years and pre-suppose that you maintain something of the same relativity of rates of income tax as you have today, then you will have an immeasurable gap between the 2 levels that is self-defeating to the higher bracket and a complete illusion. Of course, it is self-defeating because of its impact on inflation, and everybody who becomes the victim of inflation has any value either in his assets or his income just draining out by reason of covered inflation.

For those 3 reasons I ask the Senate to disallow these Determinations. I suggest that what was wanted at the time these Determinations came into force was a voluntary reduction by Ministers of the Crown, say of $4,000 a year; a voluntary reduction by members from their new increases, say of $1,000 a year; and a conjoint operation giving a lead to a reduction rather than an ill-conceived increase such as we have in these Determinations.

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