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Townsville Chamber of Commerce Inc., 7 February 1997: edited version of speech

REITH: Ladies and gentlemen, it's a great pleasure to address this gathering today. I would like in particular to acknowledge my parliamentary colleagues. It's very good to see Mark Stoneman; we've been colleagues over the years and it's always good to see him. And it's always a pleasure to see Frank Tanti. I haven't known him as long as I have Mark, but Frank always evokes in me good thoughts about North Queensland, the Liberal Party and what you can do when you've got your back to the wall.

And of course I must acknowledge my Federal Parliamentary colleague, Peter Lindsay. I see a lot more of him than I do of most people in this room, in fact I hear a lot more from him as well. He must be one of the most persistent MP's in Canberra. He's certainly a very strong advocate for North Queensland. This is the second time I've been here in the last seven or eight months and it's not by any means my last time before the next election. So I thank Peter both for the work he's been doing as a local representative and as a very effective performer in Canberra. I appreciate the good working relationship I have with him and for his hospitality today.

I'm here at an interesting time in the development of industrial the relations system in Australia. This morning I've had the opportunity to meet with a number of people in the briefing session arranged by the Chamber and to visit some local businesses. The reason I enjoy opportunities such as this is that it's one thing to pass laws in Canberra, but it's another, more practical thing to actually get out and talk about the legislation to people who are actually running businesses. I enjoy being able to walk into a business and say "Well, if you want to do things in a different way, our changes will now let you do so".

There's nothing worse than an outsider coming into a business and telling the people there how to run it. In 1995 the OECD produced a survey of Australia which said that a big problem with the labour market in Australia was the capacity for third party intervention in employment relationships. I put the OECD's point in these simple terms: "Who best knows how to run a business? It's the people in the business." When you've got armchair trying to critics tell you how to run your business, the chances are they'll know less about it than you. For far too long, people in Australian businesses have been denied responsibility for actually managing the most critical part of their operation; that is how people cooperate at work to improve the business.

The role of unions in Australian industrial relations is a classic example of third party intervention. Of course, the industrial relations tribunals, State or Federal, have also had a principal role to play in setting the terms and conditions of employment. But as the OECD suggested, and what we have provided in our legislation, is a system in which people at work have responsibility for relations between employers and employees and in which they have the opportunity to set the terms and conditions of employment, ensuring that they actually suit the business.

That is in a nutshell, what we've done in this legislation. There's a lot of detail; I'll get to that in a moment. But the basic idea is that people at work ought to be more responsible for the terms and conditions of employment and if they are given that responsibility then they can ensure that the way in which they run that business best suits its needs. And ultimately, the performance of the Australian economy is not just some figure you read in the newspaper, it's the sum total of how well we are all running all those businesses out there that make up the economy.

This Government is unashamedly pro- business. It is unashamedly pro- small business. The reason for that is a very practical one; because small business provides so many jobs in our economy, they are the future of our economy. Small businesses can be the seed which grows and provides better business and more jobs. Ultimately they provide us with the wherewithal to enjoy the tremendous opportunities, the potential and the resources that we as Australians enjoy.

It is a bit of a trap to look at the foreign debt and to fall into pessimism about the future. We should rather say "Well there are some problems, but look at the tremendous opportunities we have. We have tremendous people, we have a stable democracy, (probably too stable for thirteen years, but that's another matter), a good political system, tremendous natural resources and if we simply get our act together then the sky's the limit in terms of what we can do".

Now if you accept the basic proposition that the people in a business ought to be responsible for managing that business you'll see logic to the changes that we have made.

One of the important things we've done is to make it much easier for people at work to enter into agreements.

One of the agreement forms available to you, starting in March this year, will be the Australian Workplace Agreement (AWA). It's user friendly. If you don't want the union involved in the agreement, if your employees don't want the union involved, then you don't have to have the union involved and there's no means by which they can wield a veto over any agreement entered into.

And if you don't want the Commission involved you don't have to, because AWAs are valid as long as they meet minimum standards and pass a "no disadvantage" test applied by the Office of the Employment Advocate. Compared to Labor's system it's as easy as falling off a log to enter into direct employment agreements.

The second change we've made is based on the principle that when people have obligations, whether under agreements or under awards, then they ought to meet them. This is a very important value in our society: all Australians should be treated equally before the law.

But the harsh truth of the matter is that in Australia, the whole jurisdiction of industrial relations has been treated differently to the rest of our commercial life. How often have you seen in recent years a story in a newspaper in which a union is up before the Industrial Relations Commission, the Commission gives a judgement against them and the union secretary gets up and says that it's the union's democratic right to ignore the Commission. This is commonplace in Australia and has been since 1969.

In Melbourne in 1969 there was a bloke called Clarrie O'Shea. Clarrie O'Shea was a branch Secretary of the Australian Tramways and Omnibus Employees Association union. He ignored a Commission order, went to jail, somebody kindly agreed to pay his fine, he got out of jail and basically the system has been biased in favour of unions ever since. And it has been a hell of a lot worse since 1993 when Laurie Brereton introduced his legislation to pay back the unions.

If you enter into an agreement you should stick to it. And if you don't stick to it there should be penalties that apply. And they should apply whether you are an employer or an employee. That is the system we have introduced.

We have also re- introduced sections 45D and E of the Trade Practices Act. Since Clarrie O'Shea's time, these provisions have been the only effective sanctions against unlawful industrial action. This is why people know about them and why there was such a strong demand for us to re- introduce them.

But the new system also provides that if you go before the Commission and the Commission issues an order against industrial action and that order is ignored you can go straight down to the Federal Court and obtain and an injunction.

I learnt very early in my ministerial career the problems of the so called system of compliance under the previous legislation. Certain industrial action was underway and in my simplicity I asked my senior departmental staff why wasn't an order being sought from the Commission to end it? Their answer - no disrespect to them - was that the Commission - no disrespect to it - had not been asked because it was known that it would be reluctant to make such an order because if it did it would be ignored and therefore the Commission's credibility would be damaged.

All that finished on the 31st of December.

Now, if you've got a direction from the Commission that somebody should go back to work or that they desist from industrial action you can go straight down to a real judge who will give you a real injunction. And if the offending party don't do what they are told, they are going to cop it like anybody else, whether they are employer or employee. And if economic damage flowing from a failure to comply with the injunction results, then you can go and seek damages. And that can ultimately include the sequestration of union funds. That is a fair system, but it is very different to that with which we've been saddled in recent years.

So the new system provides that people can enter into genuine agreements without the unions and without the Commission and it provides that people stick by their agreements and meet their responsibilities under the award. We're keeping the award system but we are going to simplify it. And then we buttress those changes with some others.

For example, we have changed the law to ensure genuine freedom of association. The law now is that if you want to be in a union you have a protected right to be so. But if you don't want to be in a union, you don't have to be. And the new law imposes severe penalties on people who would deny any Australian the basic right to make a choice about union

membership. From a practical point of view, the new law means that if you are in a union and you want to leave, you only have to give two weeks' notice. You can tell the employer that at the end of a two week period to stop deducting union dues from your pay and that is the end of the matter.

We've also abolished Labor's unfair dismissal law. Only my predecessor, Laurie Brereton, could have invented a problem and then devise a solution worse than the original problem. But he did, and Bob Carr - who is not exactly a card carrying member of the Liberal Party - said that from the employer's point of view things had got so bad that if they could avoid giving somebody a job they would.

You'd have to have some sympathy with employers facing an unfair dismissal claim whose solicitor might say "Well, their case has no merit whatsoever, but I advise you for commercial reasons to cough up five grand to get rid of them". That was what was going on under the Labor Party: blackmail, pure and simple. In contrast our laws say to all employers "you still have got to treat your employees fairly, but the system is balanced, it understands and appreciates the interests of both sides".

This system is based on the principle of a fair go all round. It is going to work because similar systems have operated satisfactorily at the state level in the past. Laurie Brereton's law knocked out the state schemes because he wanted a universal Federal scheme. Well, we are resurrecting the state schemes. We now have a system which is much more balanced.

There's a fee for people who are lodging an application for unfair dismissal and there will be costs against people who proceed with frivolous claims. All applicants will be given advice on the nature and the prospects of their claims soon after lodging their application so that we avoid the undue legal expenses of the old system.

I want to finish with another aspect of the legislation, the important issue of training. The level of youth unemployment is a major problem and one of the keys to young people getting jobs in the future is to have access to adequate training.

We've made it much easier for employers to train young people through Australian Workplace Agreements. Through training AWAs, remuneration will be based on the number of hours actually worked. This is a much more flexible system than the existing one, which doesn't give employers the opportunity to tailor the circumstances of a traineeship to their particular business and the needs of the individual. We have got to get more people into training and into apprenticeships and the new Act will help make this happen.

I was delighted to accept the Chamber's invitation to be with you today. One of my motives was, of course, to encourage the Chamber's ongoing programme of providing services to members by way of eduction, information and the like about the new legislation. The Townsville Chamber is very keen to continue that role.

There are a lot of opportunities in this legislation. There are a lot of opportunities for business, which I encourage you to take up. This country has got a great future and that future is going to be in the hands of business people like yourselves.


Nick Hordern, 03 9650 0177; 0419 423 756.