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Statement of accord by the Australian Labor Party and the Australian Council of Trade Unions regarding economic policy



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STATEMENT OF ACCORD

STATEMENT OF ACCORD BY THE AUSTRALIAN LABOR PARTY AND THE

AUSTRALIAN COUNCIL OF TRADE UNIONS REGARDING ECONOMIC POLICY

(1) INTRODUCTION - WHY INCOMES AND. PRICES POLICIES ARE

NECESSARY

The parties to this accord have discussed over . a 'lengthy period of time

the destructive nature of the current economic crisis and how it may best be

resolved.

These discussions have led to agreement that for reasons set out below,

such a resolution is not possible-unless a radical-new-policy approach-is adopted.

• The parties have also agreed . that no new policy approach, however .radical

and innovative will . be capable of meeting, in the short term, the parties' prime objective of full employment. Overseas and domestic factors continue to

produce the sobering conclusion that while an alternative . policy approach would

enable •a sustained recovery to occur and would reduce the plight of the

unemployed no rapid solutions are to be found for a return to full employment.

Continued application of policies such as set , out in this document would enable

attainment of currently unattainable objectives.

It is agreed that the fundamental feature of the prolonged and worsening

economic crisis both here and overseas is that, for the first time in our history,

we are experiencing simultaneously high levels of unemployment and inflation.

This occurrence was not foreseen by economists and has caused great difficulty

and uncertainty for governments in . all countries in determining an appropriate

economic policy.

That difficulty is exemplified by the fact that, with inflation being high

when unemployment is high, sustained economic recovery sufficient to restore

and maintain a situation even remotely resembling full employment is not

• e possible whilst reliance is placed-solely on conventional economic weapons of fiscal, monetary and exchange rate policy, however varied and applied.

This is because economic recover" will soon lead to increased inflation,

thus forcing the Government to adopt contractionary anti-inflation policies

which will truncate the recovery and prevent any restoration . of full, or even

near-full employment.

The nation is thus caught in an unemployment trap, which if past trends

continue, will grow worse as inflation tends to increase to even higher levels at

an y given level of unemployment.

It is agreed that this situation is one of paramount concern given the

prime importance placed by both, parties on the objective of full employment.

The continuance of widespread unemployment is abhorrent, and economic

policies which rely on unemployment to control inflation are completely

rejected.

In this regard, it is clear that the severity of unemployment, and the

recession has been considerably accentuated by the adoption of conservative

economic theories, both in Australia and overseas, to resolve the economic

dilemma.

Many countries, including Australia, adopted monetarist policies, on the

assumption that they would gradually bring inflation down to low levels, thus

breaking inflationary expectations, and enabling a non-inflationary expansion of

the economy to then occur.

In practice, monetarism proved disastrous, leading universally to spiralling

unemployment and interest rates, low or negative economic growth, stagnant or

declining living standards and continuing high inflation. In countries where the

inflation and interest rates have recently begun to fall the cost has b een further

rises in unemployment and fall in growth and confidence, thus reflecting

characteristics of a depressed economy . The Fraser Government's adoption of

monetarism has, despite the offsetting influence on economic activity of the

resources development in recent years produced similar results in Australia - -

we enter 1983 with official predictions of negative gro wth, double digit

unemplo y ment, double digit inflation and no sign of recovery o n the basis of the „

continuation of current policies .

Ira

Nevertheless, not bill OECD countries

took the monetarist path. . It is

- extremely significant that the countries which have managed to fare better in

this time of economic adversity, particularly by keeping unemployment to

relatively low levels,, have been notably those countries which have eschewed

monetarism and have instead placed substantial importance on developing

prices and incomes policies b y consultation .

it is with this experience in mind that both organisations have seen fit to

tr y to develop a mutually agreed policy on prices and. incomes in Australia for

implementation by a Labor Government. Such a policy offers by far the best

prospect of enabling Australia to experience prolonged higher rates of economic

and employment growth, and accompanying growth in living standards, without

incurring the circumscribing penalty of higher inflation, by providing for

resolution of conflicting income claims at lower levels of inflation than would

otherwise be the case. With inflation control being- achieved , in this way,

budgetary and monetary policies may be responsibly set to promote economic

and employment growth, thus enabling unemployment to be reduced and living

standards to rise .

The parties do not accept the conservative charge that Prices and

Incomes Policies will not work, since there are examples of their varying

success. It also ignores that we can and have learned from experience in other

countries where their operation was less successful and we can build upon that

experience .

The longer term advantages of a prices and incomes accord must be

distinguished from -the short sighted political expediency which the Fraser

Government has sought to impose in the form of a wages freeze. If the freeze

was full y implemented it would drastically reduce the purchasing power of

wages, thereb y greatl y reducing the living standards of the vast majority of the

- population, yet no such sacrifice is being required of non-wage income earners.

Furthermore, Government taxes and charges continue to rise and employers are

free to increase their prices .

Such one sided ineouitable wages policies are completel y repudiated by

the parties to this statement as manifestly unfair; they promote industrial

confrontation and they provide no effective resolution of the fundamental

economic problem of achieving low unemplo y ment and-low inflation . -3-

In contrast to the Fraser Governments assertion

that a wage freeze will

make more funds available for employment, the reality is that a reduction in

demand, through severely reduced real incomes for most of the population, is

bound to accentuate economic recession and increase unemployment.

Additionall y , when the freeze is over the original problem of achieving non-inflationar y growth remains, and indeed, is made more difficult of achievement. by the inequitable distribution of income resulting from the freeze .

The process of defacto incomes policies placing the major economic

burden on low and middle income earners also takes place through Government

taxation and expenditure -policies. In both . respects the Fraser Government's

policies have considerably increased the inequity of that distribution.

In regard to both primary income distribution and seconda ry redistributive policies therefore the present government has amply demonstrated that it does

have a clear incomes policy and that it is a completely one-sided approach

designed to achieve a considerably less equitable distribution of income,

regardless of the industrial or economic consequences .

While a properly formulated and 'instituted prices and incomes accord will

overcome all the disadvantages of the simple notion of a wages freeze, the

parties to this accord appreciate that the policies embodied in this document do

not pretend to be a panacea for all the current economic problems .

It is also recognised that for policies based on incomes and prices to work,

within a framework of policy measures directed at alleviating unemployment

and redistributing income and wealth to the less well-off, that a greater

understanding of the . complexity of the economy by key participants -governments,.employers, and unions will..be required for the policy approach to

realize its full potential.

The parties to this accord are aware of the difficulties which abound in

finding solutions which meet the social and economic goals to which both are

committed. We state this difficulty not by way of apology but to indicate the

understanding we share of the difficult task ahead, and the consequential

i mportance . of the shared commitment to facing those difficulties through humane policies based on consensus.

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(2)

THE NATURE OF PRICES-INCOMES POLICIES

The attainment of the objectives set out in this document demands a

policy approach which involves the implementation of direct processes to

ensure a reconciliation of conflicting income claims at lower levels of

unemployment than currently prevail. To achieve this it is essential to develop

policies applying to prices and all incomes. ' The parties have reached

agreement that the objective of such an approach should be to protect the

living standards of Australians including wage and salary earners and non

income earning groups. Over time those standards should be increased to

reflect the distribution of improved output as measured by national

productivity. Additionally agreement has been reached on the objective of

effecting an .equitable distribution of real disposable income. It is recognized that maintenance of, or improvement in, living:., standards may be secured

through processes other than. by simple. money wage :increases.

Both parties acknowledge the importance attached to the goal of

maintaining and gradually improving the living standards of all Australians. The

achievement of this goal via an incomes and prices policy approach will require

a suppression of sectional priorities and demands given economic realities 'and

the priority placed by both parties on simultaneously reducing unemployment

and the inflation rate.

This document sets out the .details of policies which will be implemented

when a Labor Government is in office.

In concluding that such policies are required the parties are naturally

aware that all governments have at least de facto policies in respect of

incomes. Those policies often amount, as in the case of the LNCP Government,

to placing . the major economic .burden, of such policies on wage and salary • earners, the unemployed and social welfare recipients.

Government taxation and expenditure policies also markedly affect the

distribution of real disposable incomes. Traditionally LNCP Government's

policies have considerably increased the inequity of that distribution.

. Current and past policies of the ' Fraser Government are completely

repudiated by the parties to this statement as manifestly unfair; they promote -5-

industrial confrontation and they provide no effective resolution of the

fundamental economic problem of achieving low unemployment with Low

inflation.

In contrast to this approach, it is agreed that policies must be adopted

which are comprehensive and equitable and based on co-operation, not

confrontation. Accordingly, the policies detailed in this document have the

following characteristics:

They are agreed between the parties rather than imposed by the

Government;

They are comprehensive in that they cover prices, wages, non-wage

incomes, taxation and the "social . wage" that is, expenditure 'by...

governments that • affect the living standards of the people by

direct income transfers or provision of services;

They are concerned with the equitable redistribution of income as _ Y'

well as basic economic objectives.

Such policies provide the best chance of overcoming the appalling

economic situation into which reactionary conservative economic policies have

led the nation.

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(3)

ELEMENTS OF POLICIES FOR PRICES AND INCOMES

3otn organisations agree that such policies must remain flexible to some

degree but that there are various fundamental features of effective prices and

incomes policies that are essential to its acceptance and continued viability.

These features are:-

• The policies should aim to ensure that living standards of wage and

salary earners and non-income earning sectors of the population

requiring protection are maintained and through time increased

with movements . in national productivity.

• Government policy should be applied to prices and all income

groups, rather than, as has.often been the case, to wages alone.

• The policies should be designed to bring about an equitable and

clearly discernible: redistribution of income.

•

There must be continuous consultation and co-operation between

the parties involved.

Government policy at all levels should be accommodating and

supportive.

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(4)

AGREED POLICY DETAILS

PRICES

A pricing authority will be established which will be given

legislative criteria by which it must assess the validity or

otherwise of price rises sought by corporations and the public

authorities within its jurisdiction. It is considered unnecessary to

attempt to regulate prices of all corporations if . the large.

corporations, which are generally the price-setters in their

industry, are subject to public surveillance.

• The legislative criteria will be designed to ensure that enterprises

do not earn profits beyond levels necessary for the maintenance

and the expansion of the enterprise, that real wages of employees

are protected, and that unnecessary cost increases are not

reflected in higher prices. In this regard- the amount by which

wages may increase beyond that warranted by increases in prices

and national productivity- will not normally be allowable as the

basis of a price rise.

• The pricing authority will operate in a less legalistic manner than

the former P.J.T. so that cost to the corporations concerned, and

the time involved in processing price rise applications, will be less

than those which previously applied.

• The Trade Practices Legislation will be strengthened to promote

more effective competition and to reduce the possibility of

excessive prices through stronger regulation of mergers,, more

effective outlawing of abuses of market power, tougher

• prosecutions against price agreements and additional protection for

consumers against unfair practices .

-8-

WAGES AND WORKING CONDITIONS

The principles of wage fixation should be such as to provide wage justice

to employees whilst seeking to ensure that wage increases do not give added

i moetus to inflation or unemployment. The maintenance of real wages is

agreed to be a key objective. It is recognised that in a period of economic

cr i sis as now appl y ing that this will be an objec tive over time.

Accordingly it is agreed:

A centralised system of. wage fixation is. desirable for both equity

and industrial relations reasons and will be advocated by both

parties.

To protect the purchasing power of wages-.and salarie s the adoption.

of a system of full cost - of living . adjustments w ill be strongly

supported in tripartite consultations and-before indus trial tribun als .

Where overaward payments exist the Government will support the

maintenance of those levels in real terms to ensure consistency

between paid rates and amounts paid -under minimum rates awards.

Wage and salary earners may share in increased national

productivity through either increased; _real incomes or reduced

hours of work, or an appropriate.combination of.both.

In formulating claims for improved.. wages and conditions at the

national level the.. unions will have regard- to government economic

policy and will consult with the .Government on the amount of such

claims.

Both parties recognize that if the essential conditions of the

centralized s y stem are met that there shall be no extra claims

except where special and extraordinary circumstances exist. The

no extra claims provision will apply to both award and overaward

payments.

-9-

Bargaining based upon achieving increased productivity via changes

in work practices or, procedures as a means of reducing hours at

negligible cost' increases, wi11 continue to be supported, provided

the standards created are not in excess, of community or emerging

standards, and, if possible, involve the standardization of hours

within the enterprise or industry.

NON-WAGE INCOMES

Non-wage incomes include dividends, capital gains, rent, -interest,

director's fees and incomes of unincorporated enterprises (doctors, lawyers,

shopkeepers, self-employed builders and tradesmen etc).

In the absence of comprehensive prices and incomes powers there will be

no federal power to directly control most of these incomes but a substantial

array of indirect measures is available, the use of which could considerably influence the level of 'these incomes and ensure that they receive consistent

treatment with other workers. These -mechanisms should ensure that incomes

of . these groups in general do not move out of line with movements in ,wages and

salaries.

Some such indirect measures are':

The establishment of an effective prices authority will

substantially influence the overall pricing structure of all

companies and other enterprises in the same field of business.

The effective application , of the existing capital gains tax to catch speculators and tax avoiders will directly reduce the after-tax

incomes of, such people, and by providing some disincentive to

speculative activity, will restrict the growth of such incomes pre-tax.

The Companies Act and other appropriate legislation will be

amended to prescribe that conditions of appointment of company

directors, including fees and other remuneration benefits, are

disclosed in companies' annual reports, are subject to shareholder

approval, and are taken into account by the pricing authority, along -10-

with senior managerial remuneration and benefit, when considering

company applications for price rises_

Proclamation of division 4 of the Financial Corporations Act would

considerably extend the power of the Federal Government to-regulate interest rates by bringing non bank financial corporations

into the sphere of interest rate regulation which currently applies

only to banks. `these regulatory powers would be used to prevent

excessive profitability by such institutions. Interest rates would

also be subjected to downward influences by the Labor

Government's rejection of the tight money policies.which are the

hallmark of the Fraser Government's monetarist strategy.

The establishment of a health insurance scheme incorporating

measures to remove the ability of doctors to exploit patients

through overservicing, use of unduly costly procedures and .non-adherence to scheduled fees.

Seeking the co-operation of State Governments. The States have

unlimited constitutional power to control prices (except where they

are controlled by the Federal Government), and their assistance

will be sought in regulating prices charged by. important sections of

the non-corporate area.

If such indirect measures are proved to be inadequate and if there is

agreement with the Trade Union Movement, such constitutional changes which

are necessary to effect a balanced and universal system of restraint on non-wage incomes will be sought.

TAXATION AND GOVERNMENT EXPENDITURE

On taking office the Government will substantially restructure the

income tax scale to ease the tax burden on low, and middle income

earners.

In the context of a fully operational prices and incomes. policy, the

Government, in conjunction with the trade union movement, will

annually review the tax ' scale so that the tax burden will not rise -11-

automatically with inflation.

It is agreed that in the context of

concerted government action in respect of job creation less than

full tax indexation may apply .

The government will adopt tough new measures to smash the tax

avoidance industry, including:

use of retrospective legislation against blatant tax

avoidance schemes;

provision of adequate resources to the taxation office and

insistence on their rigorous application against tax

avoidance and evasion;

application of full penalties by the tax office against serious

breaches of the tax law through tax avoidance or evasion;

• amendment of provisions • regarding tax avoidance by

• transnational corporations through transfer pricing by

• substantially * increasing penalties for such activity and

• establishing a code of conduct- for TNC's operating in

Australia, including a requirement to make available to the

Tax Office all relevant information in relation to their

• pricing policies;

• closing off other avoidance schemes which have been either

tolerated by the Fraser Government or ineffectively

• legislated against;

deregistration of tax agents promoting. tax avoidance

schemes; •

• the effective application of the. existing capital gains tax to

speculators and tax avoiders.

Taxation of companies will be reformed to ensure that companies

pay their fair share of tax on income earned in Australia and

overseas by such measures as eliminating corporate tax loopholes,

abolishing the investment allowance as an across-the-board

• concession, and introducing a resource rent tax on the super profits

of mining companies.

• The Government will endeavour to reduce the relative incidence of

indirect taxation because of its regressive and inflationary nature.

-12-

In the event that economic or social circumstances at some future

date necessitate, in the view of the Government, a general rise in

taxation, the Government will discuss this matter with the unions

before seeking to give effect to it.

It is agreed that redistribution of resources via improvements in

community or welfare . services may be financed, where

appropriate, through the imposition of specific. levies.

The government will aim to eliminate poverty by ensuring .wage

justice for low wage, earners, reducing tax on low income earners,

raising social security benefits and making other. improvements to

the social wage.

Urgently required improvements in the social . wage will be

achieved through expanded government expenditure on essential

services and the social infrastructure as indicated in. Labor Party

policy. It is acknowledged that the extent to which such

expenditure will be able to be increased will depend . considerably

on the government's success in achieving a non-inflationary

expansion of the economy,. which in turn will be substantially

influenced by the extent to which this prices and incomes policy is

successfully implemented.

-13-

SUPPORTIVE POLICIES

The parties recognise that the development and implement ation of a

successful prices and incomes policy requires supportive p oli c ies in other areas

of mutual interest. Both parties have developed policies in these areas.

Although each party is not wedded to every particular policy p r e sc ription of the

other, agreement has been reached with respect to the thrus t o f those policies

and with respect to the priorities for implementation .

A number of policy areas have been the subject of consulta tion resulting

in agreement as set out below. These areas are :-

(a) Industrial Relations Legislation

(b) Industrial Development and. Technological Change

(c) Immigration

(d) Social Security

(e) Occupational Health and Safety

(f) Education

Health

(h) ' Australian Government Employment

-14-

(a)

Industrial Relations Policy

OBJECTIVE

The ALP and the ACTU agree that the objective of policy on industrial

relations should be to improve industrial relations in Australia t o the benefit of workers, emplo y ers and the public in general.

To realise this objective in the short term it is agreed that a newly

elected ALP Government should undertake a number of specific measures as a matter of priority.

SPECIFIC MEASURES

The ALP and the ACTU agree on the following pr iority. areas:-• The G

overnment will endeavour to create a -better industrial relations

climate b y

itself adopting and encouraging other e

mployers to ado t a

• ' rational and less conf

rontationist approach to industrial relations. The

Government will encourage the settlement of disputes between employers and unions b y conciliation and without recourse to legislative or common law penal sanctions.

The Government will establish, in c on sultation with the ACTU and e m p lo y ers, an In uir y into the C onciliation and Arbitration Act and Regulations to conduct a total review of federal industrial legislation toi mprove that legislation. Within the review, priorityconsideration should be given to reform t he laws relati n g to the internal affairs of unions toensure the continued effective, efficient and democratic operation ofunions.The Government will Support the es tablishment of rights for employees,through their unions to be notifie d and consulted by P► ,,,,i,,,,e.ed introduction of technolo s about the change. The Governme nt will also-15-

support the establishment of fair redundancy protection f

or workers

including a requirement on employers to consult with unions in redundancy

situations.

The restrictive laws inhibiting the amalgamation of u nions should be

reformed.

The Industrial Relations Bureau should be abolished and a n independent

Arbitration Inspectorate re-established.

The Government will, in co-operation w ith the unions representing its own

employees, take steps to bring about a be tt er industrial relations

environment in the public sector. As a first step, an AL P Government

will confer with the Union Movement on a program for action guided by

ALP and ACTU policies on Australian Government employment matters.

The government will con§ult fully with employers, and the trade union

movement through the ACTU before the introduction o f new industrial

legislation.

-16-

(b)

Industry Development Policy

At a time of high and growing unemplo y ment, an industr y development policy is absolutel y essential if the basic problems confronting Australian

industry are to be faced. It is accepted by both the ACTU and the ALP that

Australian industries are undergoing continuous change, due to .a number of

domestic and international factors. The process of change is extremely

difficult in both economic and .social terms. This difficulty is compounded by

the inappropriateness of general economic management policies and the ad

hocery and uncertainty of specific policies. The integration of industry development into the prices and ..incomes. approach to economic management is

seen as an integral factor in maximising the viability over time of the prices

and incomes policies. This is particularly highlighted by the priority accorded to full employment and hence the link between the demands of a changing T. T industry structure and the most appropriate means by which we can work

towards achieving the objective of full employment.

The ACTU and ALP have agreed on the importance of implementing a

comprehensive industry development policy which. reflects a number of key characteristics including those .:summarised below:

• the paramount objective , of economic policy is the attainment of full

employment. Industry development policy should. be integrated with macro economic polic y to achieve this goal

• it is agreed that the current economic stituation and future trends

demonstrate the hopelessness of policies which seek to attain full

employment by use of market forces alone. Interventionist policies

which are closely monitored and comprehensive in nature are

necessary to bring about the .growth which is required on a sustained

basis if unemployment is to fall on a continuous path

• fundamental to the interventionist policies required is a planning

mechanism. This process will embrace consultative mechanisms of a

widespread nature which will playa co-ordinated and ongoing role in

-17-

assisting the success of the transition of the economy into a planned

framework

• both parties are committed to a diversified manufacturing sector (both

regionally and industrially) as a means of achieving basic economic

objectives. This will minimise the adverse effects of , fluctuations in

the values and volumes of our mineral, energy and rural production

• industry policy must be based on an understanding of the need to

develop a viable manufacturing sector which will generate greater '

links with other sectors of industry

• emphasis of industry policy must be to integrate all sectors both

private and .' public. Policies- must address themselves to areas for

growth potential not simply to . sustaining declining or weakened

industries

an important thrust of industr y policy will be to concentrate increased

manufacturing activity on the 'producer goods' manufacturing area

which includes not only 'ca pi tal gpods' but also 'intermediate goods'

used in the production of a wide range of goods

• consultation is a key factor in bringing about change in industry. This

consultation will be extended to industry, company and workplace

level

there is no economic sense in reducing protection levels in the midst

of high unemployment

in assessing our international: competitiveness increased a tt ention will

be placed on a range of. issues including

i mproved transport po li cy

• i mproved adminis tr ation of export market development

• joint ventures

• increased attention-to'orderly marketing schemes

-18-

recognition of the difficulties involved in generating sufficient

•

production to absorb all unemployment and labour force entrants.

Improvements must be made to our capital base

• there is a need for the regulation of and increasing availability of

finance necessary for investment purposes

• employment training and retraining policies are part of essential

labour resource planning which in turn will be integrated into the

national economic planning processes

• as distinct from the chaotic ad hoc and very damaging reliance upon

• pure market forces adopted by the Fraser Government for Industry

policy, the ALP and the trade unions will work to have long-term

objectives established with clear priorities, specific targets and

flexible adjustments for change

it is agreed that adequate co-ordination of the ministries covering

economic planning, indust ry and trade will. occur, so.as to effectively

_ pursue those objectives, priorities, targets and adjustments .

Arising out of these statements agreement . has been reached on a more

detailed understanding of key issues which are reflected in the ACTU's

Economic Policy and in a range. of ALP policies including 'Industr y Policy,

'Emplo y ment Policy', 'Foreign Investment', 'Sport and Recreation', 'Small

Business' and 'Tourism'.

Below we refer to basic priorities of industry policy for 1983, recognising

the detailed elements of policy are consistent with the thrust of policy.

Planning Processes

Both the ALP and the ACTU support as a priority the institution of a

planning structure which will determine the way in which the national .economy

will generate growth on a sustained basis. Afundamental feature of this

planning process is the need for

-19-

a national economic planning mechanism in whic

h the prices and

incomes structure has a defined role

• industr y level sectoral councils will be full y i ntegrated into the

national economic planning structure with a refo rmed Australian

Manufacturing Council

appropriat e tripa rt ite consultation at specific indu stry levels will be

introduced and developed over time

• corporate consultation on a tripartite basis will su pplement the other

machinery to ensure total consistency in the planning process

the planning mechanisms will reflect the priority dec ided upon through

widespread consultation .

Protection

The ACTU and the ALP recognise that Australia n industry is subject to

change and that the pace of that change may accel erate in the future. y

Consistent with the shared understanding that change m ust occur if growth is to

ensue, it is agreed that industry policy-must be applied in a manner which will

facilitate change while minimising.. the hardship associated with such change.

Reflecting this view the parties agree:

that neither current economic conditions, expec ted future trends, nor

balance of payments constraints justify' reduction in protection in the

foreseeable future

that changes to protection in the future will be determined within the

planning mechanisms in which unions and busi ness will play key roles

where protection is reviewed increased emphasis must be placed on

the need for business to account for or justify th e distribution of the

gains resulting from the maintenance of, or an increase in the levels of

protection. In particular employment targets mu st be specified

-20-

•

the growing incidenc e of so phisticated, non-visible non-tariff barriers used by our trade competitors and the benefits which flow from such non-visible methods are noted

as a matter of priority the Temporary Assistance Authority's procedures and dumping investigatio ns will be streamlined so that swift action can be taken by government to offset the adverse effects of temporary losses of competitiven ess

Adjusting to change

The parties concur on the necessity for change to occur in Australian industr y if growth is to be maximised in the longer term. The adjustment to change and the attainment of the objective of full employment will be more easiiv attainable if policies facilitating change are integrated with general economic policies via the planning mechanism.

Of rarticular relevance in the short term are the following initiatives:-the alarming state of the labour market means that the generation of jobs and the provision of funds for employment is of fundamental importance

economic policy will assist industry development via the generation of

lobs by both direct and indirect channels. To this end:

industry sectors such as housing will be provided with funds to stimulate output

_ job creation prograrns, whicn are equitably administered will be introd uced

• a ccess to finance f or industry will be improveed b y increasing the availabi l of funds in tCovernment industry finance institutions

The activities and role of the

IAC will be reviewed. This will include

the need for the IAC to ensure that the social effects of

unemployment are included in all terms of reference

• A comprehensive policy oar trainin and retraining will be introduced

as part of a social safety net essential to reduce the negative effects of ^ chant _

M TM. ,_ a djustment process and the planning mechanism will be assisted by

the revelation of full and comprehensive information by transnational

companies. The virtual unfettered actions of transnational companies

will be regulated via a r of initiatives including

evaluation of uidelin of tl e Foreign Ia^vestrr^errt Review Board

• the adopti on of an international code of conduct for transnational

corporations similar to those ads ted b the ILO and OECD

_ lob_ protection and consultation procedures as outlined in this agreement on Industrial a iorys i3lat legislation

elimination of the substantial tax _incen tives no w available to

Australian industries to relocate in low tax countries

_ a complete crackdown c tra^^fer pricir by

full utilization old ouble taxation reements to en su re that

adequate information is available to the Tax Office

- increased re sour ce s to enable the tax office toad uatei deal

with this prthJem

- substantia l ^ increased penalti es for ga in in tax avoidance

th h trarsf r , icin .

.. 22_

\C)

Mi gration

The ALP and the ACTU are in to tal a ree ment on the objectives of

migration polic y and upon the priorities that should b e reflected in the

i m lam entation of p olic y upon the ALP assumin office.

Objectives

The foilowi &g eral policy guidelines a re end orsed by the ACTU and the ALP.

The need fora careful as t of the nurr^bers of people coming to

\ustralia in order to balance the economic, social and humanitarian

factors.

T Immigration is not a substitute for labour r^ rce planning and

employment policies®

Agreement on Priorities

It is agreed that then .to r t or^o is environment and

the state of the labour market and social fade rs t. tae priority action

r wired to reflec.;t t his balance are:

that family reunion and ref int are of the highest priority in

determining; m graCion criter ia

undertaking a review irn ate Government of the

skilled labour intake, the E mployment hdt ination Scheme and the Working Holiday Vises me.

di3-

a

Social Security

OBJECTIVE

The ALP and ACTU agree that social security expenditures comprise a

vital component of the social wage, one which now or in the future is likely to

affect the living standards of all trade unionists. The objectives of social

security policy are to:

maintain real standards, and improve them to the maximum f e asible

extent;

extend provisions to redress gaps and anomalies in coverage;

• to foster social equity by striving, to improve the relative position of • the most disadvantaged, and;

• redress anomalies in the av ailability of occupational welfare such as superannuation benefits.

SPECIFIC MEASURES

The ALP and the ACTU agree on the following priority areas:

a major effect to restore the position of unemployment beneficiaries, who

have been savagely discriminated against by the Fraser Government's

policy of punishing its victims;

extension and development of the automatic indexa ti on provisions, to encompass payments not now subject to indexation and to speed up the

flow through from movements in the consumer price index;

restoration of the relative value of pensions and benefits in line with

movements in community incomes, with the specific objective of

restoring the basic rate of 25% of average male earne rs;

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urgent action to restore the positi on of low income working families,

:hrou h improvements in child care. extension of family income

sup plement t o more realistic income levels and addition of a rent subsidy;

anti

rati onalisation of existing health and welfare services, particularly for the

aged, as well as development of new institutional models attuned to

regional needs.

FURTHER POLICY DEVELOPMENT

T he ALP and ACTU recognise the inherent limits to improvements in the

existing welfare system, and the nee d to develop new alternatives less subject

t o the vagaries of the annual budget process and conservative cost-cutting. An

:_mmediate priority will be considerat io n of the Possible role for a national

superannuatio n scheme; more fundrnental change may need to involve the

c=reation of a sp ecific fund into which workers could contribute for their own

aers ona.l and famil y security.

e' %

Dccupational Health and Safety

3BJECTIVE

The ACTU and ALP are in agreement that there should be improvements

in the quality of the working environment in Australia, and that employers and

uni ons should be directly involved in setting standards to guide such

i mprovements. The two parties are in complete agreement as to how these

i mprovements may be achieved. ACTU and ALP policy on occupational health

and safet y is predicated on the principles that the work environment needs to

be adapted and designed to suit the needs of people working in it; that

employers have a basic responsibility to provide a healthy, safe and stress-free

.work environment; that workers have a right to know what hazards they are

exposed to; and that peak councils of unions and employers at a national level,

and unions and union-appointed workers' health and safety representatives

rr-,eeting with management in health and safety committee at local level, have

the ri ght to set standards of health and safety in the workplace.

SPECIFIC FACTORS

The basic means by which these principles are to be realised are

Involvement of employers and unions in setting health and safety

standards at the national level, through the est ab lishment of a tripartite

National Occupational Health and Safety Commission (NOHSC)

resp onsible to the Minister for Employment and Industrial Relations;

Enforcement of standards and regulations at national level within the

Territories and in the sphere of Commonwealth government employment,

throug h the establishment of a National Occupational Health and Safety

Office (NOHSO) to implement the decisons of the Commission;

• 26-

Involvement of workers and unions in monitoring and control of nazards at

yvorkplace level through the appointment of workers' health and safety

delegates;

L icensing of new chemicals at national level, according to principles and

criteria to be developed by the Tripartite Commission, through the

establishment of an Environmental Contaminants Authorit y (ECA)

responsible to the Minister for Environment;

Provision of hazard information, commissioning of research, and training

of health and safety professionals, through the establishment of a

National Institute of Environmental and Occupational Health (NIEOHI

-esponsible to the Minister of Health.

The new bodies to be established will be Federal in character, and direct

Mate n vrlv ement in their operation is seen as being essential to their success.

;r two parties agree that priorit y should be given b y an incoming Labor

government to establishing a framework through which unions and union-appointep health and safet y representatives in places of Commonwealth govern-ment employment may be involved in jointly monitoring and controlling

workplace hazards with rnanagement. This framework will include the setting

up of joint union-management health and safety committees in places of

Commonwealth government employment, n which workers health and safety

representatives will have the rights:

to inspect the workplace at any reasonable time;

to receive health and safety information from the employer and the

Oft ice;

to represent workers in safety disputes or internal inquiries after

accidents:

to accompany inspectors on inspections of the workplace and receive a

copy of any report that they may make;

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to prevent a continuation of work under unsafe or unhealth

y conditions

pending the arbitration of an Inspector;

o oe consulted on all changes in the workplace which affect health and

safety;

to initiate prosecutions in respect of breaches of regulations where the

Office fails to act:

for the workers' health and safet y representatives to paid time off to

carr y out their duties, and to participate in relevant training programmes

provided by their union and/or TUTA or other appropriate courses

approved by the union; and

ro require that management establish a health and safety commi tt ee.

7

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(,fl

Education

O BJ ECTIV E

The ALP and the ACTU agree that the prices and incomes accord should

e mbrace the area of educational opportunities. The agreed objective in this

area is that educational opportunities and the real level of funding w ill be

maintained and where feasible expanded.

SPE CIFI C FACTO RS

Reflecting this objective, the ALP and the ACTU note the ALP P rog ram

contained in the Education Plan announced in Novernkiter 1982, and agrees to a

number of specific commitments whc:are consistent with the policies of both

organ isat ions.

These specific factors are:-

Fiscal priorities

inc reasing retention rates at school level

initiation of a new program to assist non achieving student s in primary

schools

• remedying deficiencies in capital (buildings) equipment and recurrent

funding levels

raising participation rates in tertiary education

developing programs to cope with technological change

raising Australia's educational research effort

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•

maintaining the primary obligation of governments to provide and

maintain government schools systems of the 'highest standard open to all children

funding non-government schools on a "needs" basis

• equal opportunity in all areas of education and training, with particular emphasis on

the provision of vocational training and retraining for young people and older workers who are disadvantaged in the labour market

the establishment of an adult migrant Education service on a

permanent basis

an early report and r ecom me ndations to be sought from the TAFE Council on policy . and its i mplementation concerning equal opportunity for women, rural people and aboriginals

developing a youth policy which includes a commitment to work or

training or education for all Australian youth .

Non-fiscal priorities agreed upon include

maintenance of independent advisory bodies for schools and tertiary

education

funding to be tr iennially based and retrospectively cost supplemented

opposition to the payment of tuition fees in government established institutions.

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F uture policy development

The parties agree that an ALP Government should continue to develop

policy in areas such as: Youth Policy; Migrant and Multicultural

Education; Aboriginal Education; The level of TAPE Funding; A

restructured Schools Commission; The issue of accountability for the use of funds where public funds are involved

Consistent with the thrust of the prices and incomes accord it is agreed

that ongoing discussions will be held by the parties on the implementation

of Labor's three year education program.

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(

Health

OBJECTIVE

The ALP and the ACTU are in agreement on the need for a simple,

universal and equitably funded national health scheme. The two parties are in

complete agreement as to how these improvements may be achieved.

SPECIFIC FACTORS

The major elements of this program will be:-

Health Insurance Program

A single public insurance fund to provide all medical cover and

cover for basic public hospital accommodation and public hospital

service coverage.

Access to public hospitals without means test.

Access to community health services without means test.

Free pharmaceuticals for the unemployed.

Concessional pharmaceuticals for those with chronic illnesses

requiring regular medicine.

Such a program to be funded by:

an equitable levy of 1% on taxable income, with exemptions

for pensioners on health benefit cards, the unemplo y ed and low

income earners, and;

a more equitable and efficient arrangement of the subsidies

already in the system.

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Provision for those who wish

to take additional cover for p rivate

t reat men t in a eubl ic hospital or accommodation in a private

hosp ital, or who wish to take out ancillar y health covers, to do so through the private health insurance funds

The ALP an d the ACT1_! reco g nise that such a polic will significantly reduce the cost of health cover for the great bulk of wage earners; and will contribute to the anti- in flation ary policies of a Labor Government b y reducin

the CPI by two percenta g e points.

Expansion of Community Health Centres

Provision of a guaranteed minimum proportion of the Block Health

Grants to States for Community Health, to allow the development of integrated health services, health promotion programs and co ntraceptiv e services and advice. These services will be allocated to areas of greatest need; and

An imme diate addition o f $20 millio n to restore Communit y Health funding to the real level of funding in 1975

Care of the Aged i'ro r am

Phase in a C o mmunity Care Program with annual budget increments of $35 m ill ion, to m or e than double in three years the Common-wealth contri but ion to supporting the elderly at home This funding to be used for provision of horne nursing, para medical services Sus^ as chiropod y and p h^siot he.rapy, home help, home aids, home m a in-tenance and d-^liver«: d meals.

Develop aged care facilities in Communit y Health Centres through a $10 million specific p u lse grant, in addition to funds already allocated for C om munity Health. This funding to be used in Dart to develop dental an d o tometrica.l services for the aged.

.

_ Encou rage the growth of the hostel se ctor as a gr eater proportion of

the residential provisio n for the aged.

Enco ura a appropriate specialisati o n in the nurs ing home sector

includin s crate nursin homes for ma jor ethnic communities; and

Foster re uired re ional services in articular nursin homes, such

Fos q

as rehabiliution services and provision of respite beds.

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n

(h) Australian Governmen t E_mplovment

In relation t o it s ow n emplo y ees, an ALP L..v ernmen: willgive priority to

the restoration of good industrial relations in consultation with the ACTL and

representatives of the industrial organisations concerned. To this end. as a first 11 step an early meeting will be he ld to determine a program of action for

implementation based on ALP and ACTU policy .

'vatters in relation to which a commitment to take action in accord with polic y is understood include :

A legislative program to restore rights to arbitration and protections

withdrawn by the Fraser Governm ent

'\ction to ensure staffing levels and resources are allocated rationall y and are sufficient to meet workloads

_ ^' fiction to ensure ap propr iate workplace and union consultation on mat:er s

affecting employees

The Australian Government employment sector will not be a pacesetter in

establishing wage rates and cost related conditions beyond conditi ons

comparable in other public sector employment and in the private sector.

However, the Government will ensure comparability of such conditions with tree relevant state public sectors and the private sector fully consulting the

industrial organisations concerned for their advice and guidance.

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MECHANICS OF IMPLEMENTATION

There shall be continuous consultatior between the Government and the

trade union movement in respect of these prices and incomes policies.

a Specificaliv, the Government will:

• As part of its policy to establish detailed economic planning establish

an Economic Planning Advisory Council on which the Trade Unions and

employers will be represented. This body will advise the Government

on planning procedures, prospective, economic developments, and

appropriate policies to achieve the Government's objective. Union

membership of this Council will ensure a constant two-way flow of

opinions and information, as well as providing awareness to both

parties of the views of other key groups in the community.

Establish a representative tripartite body which will have

responsibility for advising on the prices and incomes policy and for

. monitoring and discussing problems associated with the

i mplementation of the policy and shall work in conjunction with the

Economic Planning Advisory Council.

• Improve the current information base. The parties believe that

relevant economic and industrial relations information should be

accurate, up to date and available. Companies and public enterprises

will be encouraged to make available to their employees and the

relevant unions substantial details of their financial position, their

assessment of future profitability and their investment and

employment. plans. The Government for its part will give a higher

priority to the collection and publication of relevant statistical data

and will seek to ensure that it is both reliable and current.

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0

0

CONCLUSION

The totality of the task before the parties has been spelt out in detail in

the first section of this document. Understanding the perspective in which the

role of policies based on prices and incomes are placed, it nevertheless remains

the strong view of the parties that both the unemployment rate and the

inflation rate can be attacked by this new approach. While the pace of

economic and social reform will be gradual, it will also be demonstrable in its

continual application that over time economic and social aims can be and will

be realized.

fl

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