Wayne Swan (Lilley, Australian Labor Party, Shadow Treasurer) Share this | Hansard source

The economic case for the Howard government’s extreme industrial relations legislation changes is unravelling, and everyone in the chamber knows it. Neither the Prime Minister nor the Treasurer has the guts to defend it. The Prime Minister will not debate the Leader of the Opposition and the Treasurer will not come into this parliament and defend his case, because in terms of hard-edged economics the OECD has stripped away any case that could be made by this government for greater employment effects and greater wages effects from this extreme industrial relations package.

Since the introduction of the government’s industrial relations laws, the worst fears of Australian workers have been realised. Barely a week passes without fresh examples of unscrupulous employers sacking their employees unfairly, cutting their wages, or eroding their working conditions. We can debate the detail, but whether they are $40 a week worse off, $60 a week worse off or $90 a week worse off, the fact is that out there under the government’s extreme Work Choices policy the rights of millions of Australian workers are being eroded and their living standards are taking a hit. For many Australian workers there is no choice in Work Choices—except the choice between lower wages or no job. In recent weeks the horror stories have grown from a trickle to a stream. Soon, the inevitable logic of competition will ensure that this stream builds into a flood. Good employers are going to be forced to follow the lead of unscrupulous employers because of the inevitable need to compete. What is now clear is that lost in this flood will be the hopes and dreams and financial security of countless middle Australian families.

So what is the purpose of all this pain? Where is the gain? Why, as mortgages are getting bigger and credit card repayments are getting more unavoidable, is the Howard government cutting wages and attacking job security? According to this Prime Minister, the answer is fairly simple. For 30 years this Prime Minister has been standing in this chamber defending the one idea he believes in above all else, and that one idea is very simple. It is that radical labour market deregulation will lift employment and increase wages. This is the single creaky pole of economic logic propping up the new industrial relations changes. Every section of the act, every TV ad, every fire and brimstone defence in this chamber is leaning on that single creaky pole of the Prime Minister’s belief. That one idea is propping up the wholesale assault on the wages and working conditions of middle Australian families. It is an idea with a dark history, an idea with strong roots in the dark mills of 19th century England and the workhouses of the Industrial Revolution. It is an idea that has sent men down dangerous mines and locked women and children in sweatshops. It is also an idea that dominates the thinking of the Prime Minister. But everyone on this side of the House knows it is an idea whose time is well and truly up. Its time is up because the fundamental assertion that unchecked competition in the labour market will mean more jobs and better wages has been assassinated by a silver bullet of reality from the OECD.

This silver bullet was fired by the OECD in their 2006 Employment Outlook. One thing we know about this Prime Minister is that he has the courage of his prejudices. Every one of those dark prejudices is challenged in this OECD report. That wall of dogma that has dominated his thinking for the last 30 years is fundamentally challenged. What is the first prejudice that this Prime Minister has? He has a prejudice against the minimum wage. There has never been a minimum wage increase that this Prime Minister has welcomed. We know that if the Prime Minister had his way the minimum wage would be $50 less than it is at the moment, because John Howard has also always believed in reducing the minimum wage. He has argued that that will lead to a reduction in unemployment. What does the OECD have to say about that? This is the silver bullet that cuts away that wall of prejudice that underpins all of the legislation that is attacking the living conditions of the Australian people and ultimately putting at risk our prosperity, because underlying this legislation there is no hard-headed economics nor is there any social justice. What the OECD does fairly and squarely is rip away the Prime Minister’s economic prejudice. This is what the OECD concluded:

No significant direct impact of the level of the minimum wage on unemployment is identified ...

No. 1 prejudice washed down the drain! But do we get any acknowledgement of that from either the Prime Minister or the Treasurer? On the very day last week that this report was being published by the OECD, the Treasurer had the hide to come into this parliament and claim that a 1994 report from the OECD justified their attack on the minimum wage and wages of Australian workers. Fair dinkum, you would have thought he might have been just a tad embarrassed. On the very day that that embargoed report was upstairs, he was down here saying the opposite, knowing full well what was in the OECD report. On the minimum wage, the OECD went on to say:

The minimum wage could encourage higher participation, by helping to make work pay for the low skilled.

Isn’t that an arrow against not only their extreme industrial relations policies but their outrageous attack on many welfare recipients of this community whom they will not assist into the labour market to lift participation levels? They have consistently refused to provide the capacity-building programs and the incentive that is required to lift participation. We have a Treasurer who comes into this House and claims he is concerned about intergenerational challenges but he then puts in place a taxation system and a welfare system that actually stop or inhibit people from participating in the labour market whilst at the same time radically reducing their capacity to feed their families. This report blows the whistle on that approach across the board and strips bare the rhetoric from this government in defending these extreme policies.

In the Treasurer’s budget speech there was no mention of participation, and we know why: because this government has in place a raft of policies that the OECD now tell us we do require if we are going to maintain our prosperity by lifting our participation rate. Although the OECD do not quite say that in those words, the OECD have acknowledged that there is a link between fairness in society and good economic outcomes. We do not have to have a race to the bottom. We should not be taking our country down the food chain by cutting wages to compete with India and China. We should be taking our country up the food chain by investing in skills and lifting productivity so that we can compete with India and China. That is the way ahead for this country and that is why this agenda of that minister over there is so bankrupt, because it is not only unfair but is putting at risk the future prosperity of this country.

The second prejudice that this Prime Minister has been attached to for the last 30 years is his prejudice against unions, collective bargaining and collective agreements. This Prime Minister gets high on the thought that he can do something nasty to unions. The very thought that Australian workers might want to come together and be stronger as a result—through cooperating and bargaining in their workplace—goes to the heart of this government’s mean-spirited and narrow approach not only to economics but also to society. So look at what happens when that silver bullet hits prejudice No. 2. What does the OECD say? The OECD conclude that coordinated wage bargaining at the enterprise level is ‘found to significantly reduce unemployment’. Well it might, because we certainly know that has been the impact when we have had that in this country—something the government deny continuously and lie about in this House day after day and week after week.

See this speech in context