No Ticket, No Start---No More!
The Evolution of the Opposition's IR Policy
Peter K Reith, MP
Thank you for the invitation to address this conference
on the evolution of the opposition's industrial relations
I am not the first member for Flinders to take an
interest in industrial relations. One of my predecessors,
S.M. Bruce, had a spectacular involvement in industrial
relations and one of the myths about industrial relations
in this country is that proposals for reform are inherently
unpopular with the electorate. That is a very convenient
argument for those who want to retain the status quo
and is constantly used by politicians who propose constitutional
change the substance of which is known to be electoral
When I ran the 'no' case for the referendum last year
for months and months the government said the people
would vote for their proposals because they were sensible
and when they were rejected in the most convincing
defeat of any proposals in the history of the federation
the government said, 'well people always vote no.'
In fact, in Australia people do not always vote 'no'
for constitutional change and in the history of referendums
in Australia, if you include state sponsored referendums,
it is clear that the electorate is a lot more capable
of analysing proposals than some politicians would
ever like to admit.
Stanley Melbourne Bruce did not lose office because
of his proposal to abolish the Arbitration Commission.
It is not for me to give you my version of political
history of the 1920s and 1930s but there is no doubt
that Stanley Melbourne Bruce's Maritime Industries
Bill of 1929 was not a decisive factor in the election
which led to the establishment of the Scullin Ministry
in October 1929. It is a myth to say that major reform
of industrial relations is politically impossible.
The one thing that can be learnt from Stanley Melbourne
Bruce is that industrial relations in this country
was a mess even back as far as 1929. The other interest
I share with Stanley Melbourne Bruce is that he and
I have both had the distinction of losing the seat
of Flinders and the great pleasure of winning it back
The topic for my remarks today may have suggested
an opportunity to recount recent his tory. That would
be a useful exercise but as an opposition politician
looking to government I want to turn your minds to
the evolution of our policy upon our attaining government.
In recent years the climate for change has itself
changed, The H R Nlcholls Society has played an important
role in that process, around Australia people are calling
out for change. At Castlemaine in Victoria the employer
and the 500 employees at a smallgoods factory called
Castle Bacon sat down and entered into a voluntary
agreement to improve the efficiency of that business.
The union representative came up from Melbourne and
said that you can't do deals without the union's endorsement
and you can't do deals unless they are exactly the
same as Don Smallgoods---another comparable producer.
The 'them and us' attitude was alive and well but the
difference in this case was that the 'them' was the
union representative from Melbourne and the 'us' were
the employers and the employees with a stake and a
sense of commitment to the business in Castlemaine.
They rejected the meat workers' view of industrial
relations which declares the bankruptcy of employers
as industrial success. These unions have done a lot,
at a high price, to encourage the falling union membership
in Australia, which is another factor encouraging change.
Our major banks have been experiencing some competition
in their product market and they have also been buying
banks overseas which has given them some wider perspectives
about how to run better industrial relations. Changes
in the product market are a near-certain prod for changes
in the labour market.
Since the war the percentage of women in the workplace
has grown considerably. Many of them want to work
part-time, one reason they look for work is to try
and offset the decline in living standards that has
been a hallmark of this federal government. They're
demanding a system where they can enter into arrangements
with employers that suit them so that their children
do not become latch-key children. There are other
areas of change. Dyed in the wool trade unionists have
been speaking out. Laurie Short says that secret ballots
before strikes are a good idea, Charlie Fitzgibbon
says that our policy of co-operation at the workplace
is practical, and Joe Thompson says that we need more
co-operation at work. Laurie Carmichael says that he
has learnt from the experiences of 1981. The second
tier agreements were reasonable first, although sometimes
faltering, steps to encourage people to manage their
own affairs without the meddling interference of third
parties. The business community wants change and the
OECD has been saying for years that it's about time
that Australia faced up to the necessities of change
in our labour market. Lastly the floating of the dollar
by the federal Labor government has some inevitable
consequences and reform in the labour market is clearly
high on that list.
To say, however, that we are on the right track in
some areas can be misleading. In some areas we are
not on the track at all and even if we were on the
right track as Mark Twain once said, you can be on
the right track but if you are lying down you'll still
get run over by the next train. In Australia the next
train is next month's balance of payments figures or
the next set of rising inflation figures.
An example of getting off the track is the current
award restructuring plan of the ACTU. It's Bill Kelty's
plan that, according to newspaper reports, he has been
planning since 1970.
The working out of this latest grand plan from Bill
Kelty has been a classic case study in the workings
of the Accord. The myth making machine has been on
double and triple time as Mr Kelty has wound it faster
and faster to meet the steadily deteriorating economic
Let me start by saying that award restructuring is
a first class idea and in fact it is our idea and has
been coalition policy for some years. If it was done
properly it could be a useful mechanism for reflecting
some worthwhile changes. If done wrongly it will be
a retrograde step. It is the Government's only policy
for labour market reform and nobody in the labor movement
has made any secret of the fact that it originated
with the ACTU and has been accepted by the government,
virtually without any questioning.
Even if award restructuring were properly undertaken,
and there is no way known that it will be under this
government, but assuming that it were properly undertaken,
it is only one of a long list of areas that are calling
out for some action. Any plan to address Australia's
basic problems must include opening up areas such
as coastal shipping and the waterfront to competitive
pressures and the privatisation of government business
enterprises. The government has never had the stomach
to stand up and be counted on those issues and when
they faced the consequences of their double-talk before
Christmas in regard to OTC they sacked the long serving
dedicated Mr George Maltby to try and disguise their
To undertake award restructuring properly the first
thing you should do is look at awards on the basis
of the needs of individual enterprises. You would involve
employees and employers at the workplace in the process
so that the results were not only relevant but would
give you the added bonus of attracting commitment
to the process of change. The people who know what
they are talking about because they run the business
would then ask themselves the simple question---'when
looking at the way in which we work in our business
how can we change the way we work to make our business
more efficient and more productive?' When you ask the
right question it is a lot easier to get the right
answer. In some companies the time that you start work,
the time that you finish work, weekend work, shift
work, the length of time of production shifts, penalty
rate, public holidays and any other issue about working
time arrangements will be an important matter for discussion.
In some companies that might be the only area in which
you can make the business more efficient. In other
enterprises it might be that a change in staffing arrangements
will make considerable differences. You might change
the ratio of permanent employees to casual employees.
On the waterfront the inability to have a casual component
in the workforce is one of the worst restrictive work
arrangements in the industry. You might hire more independent
contractors. In other businesses it might be sensible
to cut down the number of unions so that for the business
there is only one union to represent the interests
of employees instead of having a whole lot of unions.
In other businesses the smart thing to do might be
to introduce remuneration packages which give people
the incentive that they don't have today. I am politician,
my job is not to try to tell business how to run its
business. My job is to try and change the system so
that the people in business have the freedom to run
their businesses much more profitably and much more
productively than they have in the past.
Bill Kelty and the trade union movement have different
views. In addition to wanting to put a tax on family
homes, they also want to control the workplaces of
every enterprise in the country. The fact is that
the Kelty plan for award structuring is not about productivity
at all. The last thing that people like Bill Kelty
and Simon Crean want is a return to the second tier
arrangement where people obtained increases as a result
of agreeing to do things better. If they were fair
dinkum then they would want to talk about working
time arrangements and staffing arrangements and remuneration
and award coverage as a means to find the dollars to
sustain the massive wage increases that they want everybody
to have. But unfortunately that is not their objective.
Their objective and strategy is more subtle than that
and is not to be underestimated.
For all the clever presentation of Mr Kelty and Mr
Crean the fact is that their plan has a sting in the
tail. It means more power for the ACTU.
In particular, the plan is premised on a highly centralised
approach to wage fixing. On page four of the Kelty
Plan Mr Kelty states:
'the capacity to restructure all awards will depend
on the capacity to develop an integrated structure
amongst the key minimum rates awards.'
He accepts that the unions will need to endorse changed
relativities, but, and this is the crux, he also says
the union movement must adopt:
By tightening the relativities between key minimum
rate awards the ACTU plan would actually make certain
that Australia was locked into a vicious cycle of extremely
centralised wage fixing followed by wage blow-outs.
The Kelty plan for award restructuring therefore not
only provides the prospect of becoming the vehicle
for substantial wage rises in 1989-90---it could also
provide the basis for future wage break-outs.
What we need to do is jettison the concept that all
remuneration can be efficiently set by a central body.
Australia cannot afford a system where, if employee
'A' receives an extra $10 per week because he is a
good worker then every other similar employee must
also receive $10 whatever the economic circumstances
facing the firm that he or she works for.
The Kelty plan involves widespread use of supplementary
payments. This payment system overrides the operation
of the market and introduces even greater rigidities.
Instead of tightening our system, instead of making
it more rigid and even more centralised we must develop
a greater flexibility. We must work to produce a framework
for evolutionary change which will promote productivity
throughout our economy.
Mr Chairman, I highlight my concerns about award restructuring
just to dispel any sense of inevitability or complacency
about change. Yes, there are changes, but there is
no guarantee that this country will make the best
of its opportunities. We must intensify our efforts
and we must not let up on our criticisms of the Accord.
It deserves to be discredited. It is about time that
Australians realised that we have as high a level
of disputation now as when Malcolm Fraser left office
and at times under Hawke it has been worse than Fraser.
Our industrial disputation record is considerably
worse than our international competitors. Margaret
Thatcher's United Kingdom has a record two and a half
times better than ours. I think we also ought to continue
to remind Australian workers that Labor deliberately
runs a low wage policy. This government congratulates
itself on keeping people's wages down. It's a policy
that really will end up with people living in grass
huts as was effectively suggested by Paul Keating when
the recent CPI figures, and in particular the housing
component, didn't fit in with his idea of what they
should be. The Accord has been a spectacular flop
and we must make sure that people understand what a
cruel hoax it has been.
In the five months that I have had the job of Shadow
Minister for Industrial Relations I have come to the
conclusion that there is a lot of common ground about
the need for change and of course the coalition parties
and John Howard in particular, have played a leading
role in preparing the way. I think it is one thing
to know what to do and to have the right vision of
a better industrial relations system 5 years or 10
years down the track but it is another issue to effectively
implement that policy.
So our policy has passed the first test---it's now
accepted as a comprehensive document which contains
practical and comprehensive reform. The job now is
one of implementation. One approach could be to liken
an implementation strategy to the entry and exit of
tankers into the safe harbour of Western Port Bay in
my electorate. With a full cargo they start slowing
down many kilometres out and it takes them a long
distance to finally come to a full stop. It doesn't
take long to unload and reload the cargo but, after
some assistance with the tugs and a push in the right
direction, it takes a similar distance before the tankers
get up a full head of steam to head off in the right
direction. The critical factor is momentum.
I was recently speaking to a prominent British banker
who took the view that industrial relations changes
in the UK have taken a long time to filter through
to the shop floor. It takes a long time to build up
that entrepreneurial spirit and that sense of co-operation
and enthusiasm for the future of an enterprise. It
seems to me that we need to get off to a strong start
but at the same time realise that we need to build
a momentum for change. We're in this for the long haul.
Some of the attitudes that must change are deeply entrenched.
We will stick by all our policy commitments including
our commitment to consult with interested parties
throughout the process. At the same time we will have
a mandate for change and we want to make solid progress.
Our implementation strategy will have a number of
components; including legislation, administration,
business and employee activities. Involvement in reform
must be widespread.
High on our list of legislative priorities must be
to address the inequalities of the bargaining position
between employers and trade unions. For years Australia
has had a system where employers are required to comply
with decisions of this Industrial Relations Commission
but trade unions could 'go into the field' to win better
deals. No conservative government has yet comprehensively
tackled the institutional and legal framework which
bolsters union power, we will do so. In particular,
return to work orders which are frequently ignored
by unions under current arrangements will be enforceable
in the ordinary courts of law. This reform has been
essential for 20 years this coming May, 1989, which
will be the anniversary of Clarrie O'Shea's release.
There is already widespread support for effective
and binding compliance measures. Once those measures
are in place you will see many more employers looking
to take up the opportunities provided by other parts
of our policy.
Also high on the agenda for implementation should
be policies to promote a greater sense of commitment
and participation at work. It is fundamental to our
policy to encourage a common purpose and mutual interest
between employee and employer. The evidence is clear
that enterprises which foster good relations with their
employees consistently perform better than enterprises
with a poor industrial relations record.
More and more Australian businesses are realising
that their workforces are potentially their greatest
asset to the benefit of the enterprise and employees
We must encourage all forms of employee participation---ranging from employee consultation through to financial
incentives, profit-sharing and employee share ownership.
As increased competitive pressures compel employers
to look for new ways to increase productivity, employee
participation and incentive schemes will flourish.
The task of the next Liberal and National party government
will be to ensure that their introduction is facilitated,
our policy to return responsibility for industrial
relations to the workplace will provide a framework
conducive to all forms of employee participation while
more specific initiatives may be required to encourage
particular schemes. This process of change will take
time so the sooner we start the better.
Another area which could be dealt with early in our
first term would be changes in the legislation affecting
the Industrial Relations Commission to require a greater
focus on individual enterprises. We want the resources
and experience of the commission to be harnessed to
develop a more flexible approach. We want it to be
responsive to individual enterprises whilst at the
same time taking into account the impact of its decisions
on the national economy. In other words we want the
commission to reflect economic realities at the national,
industry and enterprise levels. We will put our submissions
in the most forceful and persuasive way and we look
to the commission for development of some of the better
decisions it has made in recent years. That is not
to say that reform is possible from totally within
the system but rather so great is the need for reform
that every instrument must play a role---including
Of course, implementation is not just a matter of
legislative action in Canberra. There are a range of
administrative options which will be available to the
new government. In the building industry I think we
need to develop an implementation policy which includes
a code of conduct for government contracts for Commonwealth
building projects. Under Labor the Commonwealth has
set precedents of the worst possible kind which have
been allowed to flow throughout the building industry.
We ought to have building contracts setting the pace
for good industrial relations not the worst.
The business community will have a key role the implementation
of our policy. Some employers are already making changes
or have made changes which will prepare them well to
compete effectively and productively in the labour
market in the new environment which will develop after
we are elected. They must be encouraged to continue
their plans and the thousands of other business enterprises
around the country must start to gear up for that change,
again in this area there are changes under way. I
understand the BCA Industrial Relations survey is stimulating
a lot of practical re-examination of industrial relations
practices. But more must be done.
Lastly in our implementation strategy there is similarly
a critical role for employees, whether unionised or
not, to take the opportunities provided by our policy
and make the most of them to do something practical
to sustain a real improvement in their living standards.
We can do a lot to encourage them. I'm not in favour
of phoney bills of rights that take power from elected
parliaments and purport to give people rights they
already have. But I am in favour of restoring rights.
A charter of workers' rights would be both politically
popular as well as long overdue. We need to be setting
standards and such a charter could lead the way. Existing
industrial laws are designed to give rights to unions
whereas we want to give employees more freedom. Under
Labor the privileges are for unions at the expense
of union members.
Mr Chairman, the H R Nicholls Society has done a lot
to promote understanding of the need for change. Whilst
that work must continue my submission to you is that
an even greater challenge is to effectively implement
In my view there is enough common ground on the necessary
reforms to say that it's time to turn our attention
to implementation. I want to see in the months ahead
the emergence of common ground on implementation both
as to strategy and timing.
Labor's epitaph will be 'they never tackled the labour
market'. There is a groundswell of opinion that our
reform policies must be adopted and then implemented.
We now need to build support for an implementation
strategy. We will build this support by inviting debate
on implementation and in that way encouraging a commitment
to it. For that reason the propositions I have raised
today are neither fixed nor exclusive. They are intended
to promote discussion. I invite you to continue your
vital contribution to the debate and I look forward
to hearing the views of your members.