Stephen Smith (Perth, Australian Labor Party, Shadow Minister for Industry, Infrastructure and Industrial Relations) Share this | Hansard source

I wish to speak on the matter of public importance, which is:

The Government’s extreme industrial relations changes, which will threaten the working and living conditions of Australian workers and their families well into the future.

At their heart, the government’s proposals are nothing more and nothing less than an attack upon the wages, conditions and entitlements of Australian employees and Australian workers. This is nothing more and nothing less than an attempt to move part of the total factor income of the economy from the wages section of the economy to the profit section of the economy. It is not rocket science; it is a straightforward public policy effort to move part of the economy from the wages section of the economy to the profit section of the economy. To do that takes the government 1,800 pages of legislation, explanatory memorandum, regulations and supplementary materials—a complicated, complex, dog’s breakfast.

No wonder the government’s soul mates, the HR Nicholls Society, stand up and say this is redolent of a Soviet style command and control economy. When Peter Reith was the Minister for Industrial Relations he used to walk around with Alsatians and balaclavas. When we thought of the current Minister for Workplace Relations, we used to think not of Alsatians and balaclavas but of opera glasses and poodles. Now we think only of Commissar Andrews, intricately involved in every detailed agreement in every workplace in the country. Why is that? Becuase the government here is not driven by good public policy or what might be good for the economy. It is driven here by politics and ideology.

The government seeks to justify its attack upon the wages and conditions and the entitlements and living standards of Australian working families by saying, ‘This is absolutely essential for our economy.’ I recall the last election campaign in 2004 where the economy was front and centre the significant issue of that campaign. Did we hear one word about these proposals during that election campaign? No. On the contrary, at the launch of the Liberal Party’s industrial relations policy in Brisbane on 28 September 2004, the Prime Minister was asked two questions. The first question was: are you proposing to introduce a single national system of industrial relations—something that the Prime Minister now says is one of the hallmarks of these changes. He said no. He was also asked whether he was proposing to reduce the so-called 20 allowable matters into a smaller group of allowable matters. He said, ‘No, they were working quite well, thanks very much.’

Another hallmark of these changes is the reduction of the 20 allowable matters to the government’s so-called five minimum standards, leaving adrift and at risk things like penalty rates, overtime, leave loadings and casual loadings. We heard nothing about these proposals in the run-up to the last election. On the contrary, the government said it was not proposing to pursue anything like this. We only heard about these proposals when the government woke up and discovered that it had all the power under the sun, that it had total control the Senate. What did it do then? It scrubbed off the old Acme Jobsback. The last time we heard the now Prime Minister, Mr Howard, saying that reforms, changes or proposals of this nature were absolutely essential to our economy was in October 1992. When you remind yourself of the Jobsback proposal, launched by the then the Liberal Party spokesperson for industrial relations, now the Prime Minister, and compare it to the so-called Work Choices changes, they are redolent of that 1992 Jobsback proposal.

This has nothing to do with the future of our economy and everything to do with the Liberal Party’s, the National Party’s and the Prime Minister’s ideological and political view. That ideological and political view is that somehow, as the Prime Minister said on the day that this legislation passed through the parliament last year, the adoption of these proposals would magically lead to an increase in employment, a reduction in unemployment, would make us more internationally competitive and would somehow magically increase or improve our international competitiveness.

Let us start with international competitiveness. We know that central to these proposals is an attack upon wages and an attack upon conditions and entitlements by the removal of things like penalty rates, overtime and shift allowances—part of the very important income for many working Australians. By removing those and removing the no disadvantage test, they are at risk. We also know the attack upon wages starts with the minimum wage. During question time, the Prime Minister said: ‘No, no, I’m not going to give a guarantee that no-one will be worse off. My guarantee is my record.’

The government’s record on the minimum wage is as follows: if the Industrial Relations Commission had agreed to the government’s submissions on the minimum wage since it came to office, those on the minimum wage would be $50 a week or $2,600 a year worse off. That is a reduction in real terms of about 1.7 per cent. That is the government’s public policy objective here: to drive down wages, starting with the driving down of the minimum wage by a reduction in real terms. That is the legislative prescription of the so-called Fair Pay Commission, which will become a low and unfair pay commission by removing the legislative requirement that the minimum wage be fair and by removing the legislative requirement that the minimum wage must have some cognisance of prevailing living standards. The government’s public policy view is that, if you reduce the minimum wage, somehow you will magically increase employment—particularly at the lower end of the scale.

If we have a cleaner on the minimum wage, about $25,000, then the government’s economic thesis and political and ideological view is that if you reduce that wage by $2,600—from $25,000 to $22,000 or $23,000—magically three things will occur: (1) we will become more internationally competitive, (2) we will somehow magically have two cleaners, and (3) somehow the cleaner will become more productive. You whack the cleaner’s wage by $2,600 and expect them to be more productive and more internationally competitive, and we will have two cleaners, not one, cleaning the same area of space. It is an economic nonsense driven by an ideological view that what we really want to do is to move part of the economy from wages to profit.

Let us deal with the question of international competitiveness. The government has this view that, if you drive wages down, we will become more internationally competitive. We saw the minister for industry, Mr Macfarlane, saying a few months ago, ‘Wouldn’t it be terrific if we could have New Zealand wages tomorrow.’ Ask someone in Western Sydney how they could live in Sydney on the back of New Zealand wages. But if you think you could be internationally competitive by having New Zealand wages tomorrow, the logical extension of that is that somehow Australians could have Indian, Indonesian and Chinese wages down the track. It is a nonsense. The only way we can continue to be prosperous and internationally competitive is by investing in the skills and education of our workforce, investing in infrastructure, investing in innovation, investing in research and development and turning ourselves back into a great trading nation. Those are the only things that will see us being internationally competitive.

When it comes to the illusory economic benefits we know a number of things. We know the Prime Minister has asserted certain things. There is no basis for any of those assertions. We know that the Treasury analysis indicated that there were no economic benefits to be gained from this—indeed, that there may even be a reduction in productivity in the short term. It is little wonder that last night we saw Commissar Andrews as the commissar of the command and control state designated by the HR Nicholls Society. Some of us remember that the articles of association of the HR Nicholls Society were drafted by the now Treasurer, Mr Costello, so they are the soul mates of the Liberal Party. Nick Minchin, the Leader of the Government in the Senate, the minister for finance, turns up to his soul mates at the HR Nicholls Society and says: ‘Please, we crave and beg forgiveness for not going as far as you would want us to, but we have a secret plan—we will go further. Comrades, we are sorry we haven’t gone as far as you would like but, don’t worry, next time we will. We’ll completely knock off the commission, we’ll completely take away the minimum wage.’ It was no surprise that last night Commissar Andrews said on Lateline:

... this reform is probably going to take three to five or six years to have the economic effect.

It is a five-year Soviet economic plan! He went on to say the reform will:

... take a period of three to five or six years to have its impact economically.

These proposals are nothing more nor nothing less than an attack upon the living standards of Australian working families—an attack upon their wages and an attack upon their conditions and entitlements like penalty rates and overtime. The government’s justification for that is that somehow this will magically improve our economy. There is no sensible economic basis for that to occur. On day two of the government’s changes we see the responsible minister saying that you will not see the economic benefit of these things for five or six years—not just after the 2007 election but after the 2010 election. We will make this issue the defining issue of the next election campaign and those opposite will suffer as a consequence.

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