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Andrews v Beazley: first strikes in Parliamentary IR debate


Launch of WorkChoices

Hon Kevin Andrews MP

Kevin Andrews

Minister for Employment and Workplace Relations
Minister Assisting the Prime Minister for the Public Service

02 November, 2005

Second Reading Speech, Workplace Relations Amendment (Work Choices) Bill 2005

Parliament House, Canberra

Today I am introducing the Workplace Relations Amendment (Work Choices) Bill – a bill that moves Australia towards a flexible, simple and fair system of workplace laws.

Australians have come a long way by improving the way they work. Because of this, we now have one of the strongest economies in the world.  We have created over 1.7 million new jobs.  Australia’s unemployment rate has been markedly reduced, reaching a 30 year low and interest rates are at historically low levels.

But we must not make the mistake of assuming that our future prosperity is assured and inevitable.  Now is not the time for self-congratulation or back-slapping.  Now is the time to secure the future prosperity of Australian individuals and families.

That is what Work Choices is all about – securing the future prosperity of Australian individuals and families.

Work Choices does this by accommodating the greater demand for choice and flexibility in our workplaces.  It continues a process of evolution, begun over a decade ago, towards a system that trusts Australian men and women to make their own decisions in the workplace and to do so in a way that best suits them. 

This is economic reform the Australian way – evolutionary and in a manner that advances prosperity and fairness together.  As the Prime Minister has said, these are big reforms, but they are fair reforms.

They rest on the simple proposition that the best guarantee of good jobs, high wages and a decent society is a strong and productive economy.  No system of industrial regulation can protect jobs and support high wages if our economy is not strong and productive.

That is the central lesson of a hundred years of industrial relations history in Australia.  It was the bitter lesson of Labor’s recession in the early 1990s.  Yet it is a lesson that the Labor Party refuses to learn.

The key to advancing prosperity and fairness together is higher productivity.  Australia’s economic strength and the living standards of our people depend, ultimately, on the productivity of our workplaces. 

When productivity is higher the whole economic pie is bigger. Individuals and families benefit from more jobs, better jobs and higher living standards.  Society as a whole has more resources to devote to services like health and education, as well as to a strong social safety net.

A central objective of this Bill is to encourage the further spread of workplace agreements in order to lift productivity and hence the living standards of working Australians. It is no coincidence that those industries with the most workplace flexibility also enjoy the highest productivity growth and the highest wages.

We need more choice and flexibility for both employees and employers, so we can work smarter, reward effort, and find the right balance between work and family life.

At the same time, we need to ensure that a fair and robust safety net of working conditions is protected by law.  Work Choices does this.  It also provides extra help for employees and employers to understand their rights and obligations under the new system.

Work Choices is not simply about raising the living standards of those Australians in jobs.  It is also about getting more Australians into jobs.

A good society is one where those who have the capability to work can work.  With a job comes dignity, skills, a steady income and the chance of a better job.

In the end, this is not an economic argument.  It is a moral argument.  Australia can and should be a country where those who are able to work can find work. 

In the last decade, we have made good progress in reducing unemployment to a thirty year low.  But we can and should do better.

Today too many Australians are not participating in the labour force.  Too many Australians still struggle to find work.  And too many Australian children are growing up in households where no parent is working. 

These fellow citizens deserve a brighter future.  Work Choices will give them a brighter future.

A nation of 20 million people, on the edge of the world’s most dynamic region, cannot afford to sleepwalk through the 21st century with a workplace relations system mired in the thinking of the 19th century.

Australia has more than 130 different pieces of employment-related legislation, more than 4000 awards and six different systems of workplace regulation.

This tangle of regulation creates enormous cost and complexity for employers and employees alike.

When the Commonwealth first proposed our workplace reforms, we requested that State governments refer their powers, in the same way that they have accepted the logic of national systems for taxation law, for corporate law and for financial institutions law.

Because the States have not done so, the Commonwealth will use the corporations power in the Constitution to move towards a national system.

This is the Government that intends to fix the problem and reform the system, notwithstanding opportunistic resistance of those opposite which is contrary to the best interests of the nation.

A unified, national system of workplace relations laws is an idea whose time has come.  And the time to turn this idea into law is now.

Let me turn to the key elements of the Bill. 

Single national system

We live in an integrated national economy and it makes no sense whatsoever to adopt anything other than a national approach to workplace relations.  By using a combination of constitutional heads of power, Work Choices will cover up to 85 per cent of employees across Australia. 

While employers and employees covered by Work Choices will not be subject to regulation by state employment laws, state laws will continue to cover such matters as occupational health and safety, workers compensation, trading hours and public holidays.

Transitional arrangements

These are substantial changes and so to provide an orderly change over there will be comprehensive transitional arrangements.
Current state agreements applying to employers entering the new system from the state systems will continue to apply as transitional agreements.  State awards applying to employers entering the new system will be preserved as transitional agreements for three years. 

Employers currently in the federal system who, for constitutional reasons, cannot be covered by Work Choices in the longer term, will have a transitional period of five years during which current agreements and awards can continue to operate. 

Unlike other states, Victoria has referred powers with respect to workplace relations to the Commonwealth.  Because of this, employees in Victoria subject to the terms of the referral will continue to be covered under Work Choices.

Other less significant transitional arrangements will be established in regulation along with necessary consequential amendments to Commonwealth legislation.  Following its passage the Act will be consecutively numbered for the first time in decades.

Australian Fair Pay Commission

Work Choices will move away from the adversarial and legalistic nature of the current wages setting process.  It will establish a new independent wage setting body – the Australian Fair Pay Commission – charged with promoting the economic prosperity of the people of Australia. 

The Fair Pay Commission will set and adjust minimum and award classification wages, minimum wages for juniors, trainees, apprentices and employees with disabilities, minimum wages for piece workers, as well as casual loadings.

Minimum and award classification wages will be protected at the level set after the increase from the 2005 Safety Net Review by the Australian Industrial Relations Commission (AIRC).  Minimum and award classification wages will not fall below this level.

The Fair Pay Commission will take a wider-ranging, proactive and consultative approach to this issue which will help all those affected to have a say.

The Australian Industrial Relations Commission

The role of the Australian Industrial Relations Commission will change to keep pace with the needs of the modern economy. 

The AIRC will focus on its key responsibility – dispute resolution. In addition, the AIRC will have a role to further simplify and rationalise awards, as well as regulating industrial action, right of entry, unfair dismissal and registered organisations.

The AIRC will retain its powers to resolve disputes arising under agreements but only where those functions are expressly conferred on it by the parties.

Under the new system the AIRC will no longer exercise compulsory powers of conciliation and arbitration, but instead will provide voluntary dispute resolution services with limited exceptions (such as terminating a bargaining period where industrial action is threatening life or causing damage to the economy or under new essential services provisions).

It will also retain its role in providing an initial conciliation service for termination claims. 

The Australian Fair Pay and Conditions Standard

For the first time at a federal level the Government will enshrine in law minimum conditions of employment: annual leave, personal leave (including sick leave and carer’s leave), parental leave (including maternity leave) and maximum ordinary hours of work.

These conditions, together with the minimum and award classification wages set by the Fair Pay Commission, will make up the Fair Pay and Conditions Standard.

All new agreements will be required to meet the Fair Pay and Conditions Standard throughout the life of the agreement. 

Award provisions dealing with annual leave, personal/carer’s leave and parental leave which are more generous than the equivalent provisions in the Fair Pay and Conditions Standard will continue to apply for existing and new employees covered by those awards. 

Workplace Agreements

This Government believes in encouraging the further spread of workplace agreements.

With Work Choices, there will be provision for collective agreements negotiated directly between employers and their employees and between employers and unions that represent employees in a workplace.  There will also be provision for collective agreements in which persons other than unions can be employee representatives. 

Work Choices will provide agreement making options where an employer is establishing or proposing to establish a new business in areas such as the economically important resources and construction sectors.  As well as existing greenfields agreements between employers and unions, Work Choices will introduce greenfields agreements that do not require the involvement of a union. 

AWAs will be available to employers and employees at all times and will exclude both collective agreements and awards.

Instead of the complex, time consuming and legalistic certification and approval processes Work Choices will introduce a streamlined, lodgement-only system for all agreements with the Office of the Employment Advocate (OEA).  All collective agreements and Australian Workplace Agreements (AWAs) will take effect from the date of lodgement.

The process for varying or terminating agreements made under Work Choices will be simplified and will be similar to that for lodging new agreements.  Agreements can be extended (up to a maximum of five years), varied or terminated by agreement. 

There will be an improved compliance regime with financial penalties for employers who fail to meet the rules for negotiation, lodgement or content of agreements.

The Government is committing an additional $ 141 million over 4 years to ensure appropriate compliance by employers and assistance to employees.

Protection of key award conditions in bargaining

To help in the process for making agreements Work Choices will protect certain matters currently dealt with in awards when new workplace agreements are negotiated.  These conditions will be deemed to be part of an agreement unless it specifically modifies or excludes them. 

These matters are public holidays, rest breaks (including meal breaks), incentive-based payments and bonuses, annual leave loadings, allowances, penalty rates and shift/overtime loadings.

To change or remove these conditions in a workplace agreement under Work Choices, the agreement must address these matters.  The agreement will need to identify the particular award conditions that are being changed or removed.  In this way these conditions will be protected, unless employers and employees agree to vary them.

Content of Agreements

All new agreements will need to meet the Fair Pay and Conditions Standard, include a nominal expiry date (up to a maximum of five years) and a dispute settling procedure. 

Certain matters such as restricting the use of independent contractors will be prohibited from being included in new agreements. The inclusion of prohibited content may attract financial penalties but will not render the agreement invalid.

Under Work Choices federal awards will not be abolished.  Employees not covered by a workplace agreement will continue to work under their federal awards.  However, awards will be simplified to ensure that they provide minimum safety net entitlements.  The legislation will set out matters that will no longer be allowable award matters and a number of other matters will be removed from awards because they will be protected by the Fair Pay and Conditions Standard. 

A Taskforce has been established to recommend ways of reducing the duplication and complexity of current federal awards.  The Taskforce’s recommendations will need to be consistent with the Government’s commitment that award classification wages and benefits will not be cut.

Under Work Choices, long service leave, superannuation, jury service and notice of termination will not be included in new awards because they are provided for in other existing legislation.  However these provisions in current awards will continue to apply to existing and new employees covered by these awards.

Transmission of business

Part and parcel of a modern economy is that businesses are bought and sold.  When this happens it is important the entitlements of employees are protected.  Where this does occur, and employees accept employment in the new business, the awards, collective agreements and AWAs that covered the employees of the old business will transfer to the new employer for a maximum of twelve months. 

However, if no employee accepts employment with the new employer, then the awards or agreements from the old employer will not transfer.

Employees who do transfer must be provided with information in writing about their terms and conditions of employment.  The new employer and employees will be able to negotiate agreements to override the transferred agreements and awards.

Reforming dismissal laws

Whatever their intended purpose, unfair dismissal laws have acted as a brake on job creation.  They have fostered a culture of complaint and litigation that has developed to the point where some firms will go to any lengths to avoid hiring extra staff.
Work Choices will take the unfair dismissal monkey off the back of Australia’s small and medium-sized businesses.

Businesses that employ up to and including 100 employees will be exempt from unfair dismissal laws.  For businesses with more than 100 employees, an employee must have been employed for six months before they can pursue an unfair dismissal claim.

In addition, no claims can be brought where the employment has been terminated because the employer genuinely no longer requires the job to be done. 

Just like today, only employees of businesses that are constitutional corporations will have access to the unfair dismissal laws.  And just like today, employees will continue to enjoy a range of protections against unlawful termination.

It will remain unlawful to dismiss an employee on the grounds of race, colour, sex, age, union membership, pregnancy, family responsibilities, refusing to agree to an Australian Workplace Agreement and a range of other grounds. 

The Government will provide financial assistance to eligible employees who have made an unlawful termination application to apply for up to $4,000 towards independent legal advice on the merits of their claim.

Industrial Action

The Government recognises the need to carefully balance the legal immunity given to industrial action in bargaining for workplace agreements against the needs of the community.

The Government will protect the right to lawful industrial action when negotiating a new collective workplace agreement.  However, Work Choices will make a number of improvements to the remedies for unprotected industrial action. 

These include requiring the Australian Industrial Relations Commission to provide a remedy for unprotected industrial action within 48 hours and removing impediments to access to common law tort remedies for unprotected industrial action.
A secret ballot will be required before protected industrial action can be taken.  This will ensure that protected action is not taken unless the employees involved genuinely wish to take this serious step. Work Choices will also make it clear that industrial action is prohibited during the life of an agreement. 

New provisions will be introduced similar to those in state essential services legislation. These new provisions will allow a declaration to be issued by the Minister for Employment and Workplace Relations where protected industrial action threatens life, personal safety, health or welfare of the population or is likely to cause significant damage to the economy. 

Finally, under Work Choices third parties directly affected by protected action will be able to seek a suspension of the bargaining period. 

Freedom of association

Just as we have done since 1996 this Government will ensure all Australians have the right to join – or not to join – a trade union.

Freedom of association laws will be strengthened to ensure that employees and employers can choose whether or not to join a union or an employer association free from direct or indirect pressure.

Work Choices will cover the field so that right of entry can only be exercised under the new legislation and the circumstances under which it can be exercised will be clarified and the remedies for abuse strengthened.

The right of entry provisions will still allow a union permit holder entry for OHS purposes under state legislation where the union official has a federal right of entry permit and has complied with all requirements of the relevant state OHS legislation.

Registered organisations

Unions and employer organisations provide important services to their members.  There will continue to be a legitimate role for unions and employer organisations in the national system.

State registered organisations will be able to apply to the Industrial Registrar for transitional status as a registered federal organisation provided they meet certain minimum requirements.  They will then have three years to meet the full requirements of the Workplace Relations Act.  The ‘conveniently belong’ rule will not apply to the registration of state registered organisations that are transferred into the federal system.

Improved protection

Work Choices will put in place strong and practical measures to ensure all parties abide by the awards, collective agreements, AWAs as well as the Fair Pay and Conditions Standard, state awards and agreements that are to be brought into the new system 

The Office of Workplace Services (OWS) will have increased powers. This includes the power to enforce compliance with the WR Act, awards and agreements, the freedom of association provisions and the rules for agreement making.

The compliance regimes applying to unprotected industrial action, abuse of right of entry laws and contraventions of freedom of association provisions will also be strengthened.

When negotiating individual agreements, young people will be protected by the requirement that an appropriate adult sign the agreement.  As well, when setting wages for juniors, the Fair Pay Commission will be obliged by legislation to take into account the need to secure their competitiveness in the labour market.

Work Choices will also increase opportunities for school-based and part-time apprenticeships and traineeships by implementing the Government’s commitment to remove industrial relations barriers by filling current gaps in award coverage for part-time and school-based apprenticeships and traineeships.

Work and family issues

This Government has delivered a decade of rising living standards for Australian families.  With Work Choices we will build on this record.

This Bill provides both protection and flexibility to help Australians meet their work and family responsibilities.

Work Choices will protect Australian families by making it unlawful for a workplace agreement to have pay and conditions that are less generous than the Fair Pay and Conditions Standard of up to 52 weeks of unpaid parental leave at the time of the birth or adoption of a child.

The terms of the Australian Fair Pay and Conditions Standard will be protected by law.

Award reliant employees will not lose current entitlements to family-friendly working arrangements and will continue to receive any penalty rates, loadings for overtime or shiftwork, allowances, incentive-based payments and bonuses that they are currently entitled to under their award. 

It will remain unlawful for an employer to terminate an employee’s employment on certain grounds, including marital status, family responsibilities or pregnancy, or because of absence of work during maternity or other parental leave, regardless of the size of the business they work for. 

Nothing is more important to family security than a strong Australian economy.
These are reforms which will strengthen our economy and will secure better opportunities for all Australians into the future. 


The reforms I have outlined are comprehensive and necessary.  They are big but fair changes. 

We should never take strong economic growth and prosperity for granted.  To secure our future prosperity into the new century, we must work smarter and seize this opportunity to create a new wave of productivity growth.

For a long time, Australia tried to make do with an industrial relations system born of the bitter disputes of the 1890s.  This was a system founded on conflict and an ‘us’ and ‘them’

mentality.  It was a system shot through with pessimism about the capacity of Australian men and women to shape their working lives.

The Liberal and National Parties believe in the capacity of Australians to exercise choice and to work together.  We believe that cooperation, not conflict, is the path to prosperity and fairness. 

That is why, with Work Choices we are moving to give more Australians the chance of a job.

We are moving to guarantee in law a fair and balanced safety net of conditions for Australian working men and women.

And we are moving to what any modern, competitive nation needs in the 21st century – a single set of workplace relations laws.

With Work Choices, Australia is on the move towards a better workplace relations system that allows Australia’s employers and employees the freedom and the choice to sit down and work out the arrangements that best suit them.

This Bill makes the necessary changes to move away from an outdated and inefficient system that no longer meets the needs of a modern Australian economy.

Work Choices moves to a system that gives employers and employees a tangible stake in what happens at their workplaces.  Because at the end of the day a fair society relies on a strong economy with productive workplaces. 

For it is a strong economy which enables employers to pay their workers more; it is a strong economy which reduces unemployment; and it is a strong economy that delivers, just as it has done over the last decade, more jobs and higher wages for all Australians.

Work Choices is founded on the principle that the best arrangements are those developed by employees and employers at the workplace.

This Government recognises that the time to turn this idea into law and move to a better system is now.


Hon Kim Beazley MP

Leader of the Opposition

3rd November 2005

Second Reading Speech, Workplace Relations Amendment (Work Choices) Bill 2005

Parliament House, Canberra

This Bill is evidence of a Government growing more extreme, more out of touch and more arrogant by the day.

It is the product of an extreme, outdated ideology. An ideology that has nothing to do with the challenges Australia faces in the first quarter of the 21st century - nothing to do with the nation's economic needs.

And everything to do with the prejudices that one politician formed in the last quarter of the last century.

It's the most savage attack on the values of Australian society and the security of working families that I've seen in 25 years in this Parliament.

Mr Speaker, the Australian public is getting to understand just how un-Australian this Bill is.

They know it threatens aspects of the Australian way of life that they've held sacred for generations - fair minimum wages for all workers… decent working hours so families can organise to spend time together… penalty rates and shift loading…

So much of this is now at risk. So many of these provisions will now be eroded by this Bill… this nest of termites that will now eat away at the foundations of living standards and security of working families.

Month by month, year by year - for workers who don't have strong bargaining power, this will erode their rights and entitlements.

Mr Speaker, Australians don't want this law.

They don't want to wind the clock back to a 19th century model of industrial relations, where the employers enjoyed unchallenged power over employees, enforced through individual contracts.

Every published opinion poll points in the same direction - two in three Australians oppose this proposal.

That's why the Prime Minister has been so desperate with this legislation.

It's why he's rushed this legislation into parliament, 1252 pages of legislation and legal explanation.

And only after we twisted his arm did we get even 24 hours to make our way through the complex maze of this Bill.

It's why he's had to pull Andrew Robb on to the job, because his minister has done such an unconvincing sales pitch.

It's why he's had to pull in Ted Horton and the Liberal Party advertising agency Dewey Horton who run their nasty election campaign ads.

It's why he's had to pull in eleven big city law firms to write the Bill for him.

It's why he's had to steal $55 million of taxpayers' money - more than the entire spending on the federal election campaign by both parties last year - to fund Liberal Party ads, to try to change people's minds about this disgusting law.

But the problem for the Prime Minister is this.

No matter how much he tries to ram his ads down the throats of Australian families, he's up against something that's bigger than anything he's tried to do in nine long years in office.

Because this isn't some technical argument about federalism and states' rights.

It's not an academic debate about labour market institutions and productivity growth.

It's not a textbook debate about backwards bending labour supply curves.

This is about basic values, and the lives of Australian families.

It's about the kind of Australia we want our kids to grow up in.

It's about how mums and dads manage the difficult balance between work and family life.

It's about whether we put families first.

Whether we say that what we value most in our society is family and relationships…

a fair go for everyone…

Whether we still believe that being Australian means respecting and valuing every person in the country - no matter if you're a kitchen hand, a nurse, a mechanic or a customer service representative.

Let's make this clear. John Howard picked this fight.

And he's not just fighting unions or the Labor Party.

He's fighting against a basic value that Australians don't want to lose - the right to a fair go. The belief that you deserve decent standards and decent protections, even if you can't afford a big city law firm to protect you in a court.

And the real danger for John Howard in this law isn't that Australians don't know enough about this legislation, and need to be told more.

The real danger for him is that Australians already know enough about what he's trying to do in this Bill - they know exactly what it is all about. And that's why they don't trust it.

And frankly, the more they find out about it, the more detail they get, the more the tide will move against him.

But the Prime Minister assumes if he just shouts louder and louder and longer and longer that he'll win the argument.

Like a child who doesn't want to face the truth, but who just blocks his ears and raises his voice to fever pitch.

And hasn't it been a fever pitch for the last month? There's barely a place you can turn on TV, on radio, on Australian web sites or in the papers, without being bombarded with John Howard's disgraceful and misleading advertising campaign.

The real character of what's in this Bill is shown up by the arrogance and deception that's characterised these changes from day one.

If you want to know what's behind these changes, just look at the tricks they've used to introduce it with this ad campaign.

Never in Australian history have we seen such a partisan abuse of public funds.

In other democratic nations, you couldn't get away with this abuse. In other nations, governments have fallen and leaders have been forced to resign for abuses of office smaller than this.

These ads don't provide information - they provide disinformation - as every independent commentator has been saying for months.

Because Australians will not accept what this Bill tries to do to their way of life.

You can imagine what it must have been like in the Liberal Party strategy room when they first got the polling results back in June, and decided to run this campaign.

Imagine the atmosphere, Mr Speaker.

Mark Textor plonks down the slab of polling results showing that 70 per cent of the Australian community believe these changes are bad news. He says to Mr Howard,

"You're in trouble. You just cannot sell this law to Australian workers. They're not going to buy it. They don't trust your motives.

"They don't want to lose their holidays. They don't want to lose the independent umpire. They don't want to lose their penalty pay."

"If you're going to win this debate," Ted Horton says, "We're going to have to turn the message inside out. Don't tell them what we're taking away - just tell them what we're letting them keep. And bombard them day and night til those poll numbers shift."

Well Mr Speaker, we can guess exactly what the Prime Minister said in response -

"Whatever it takes, whatever we have to spend, it's not Liberal Party money anyway - it comes from the taxpayers so we can take as much as we like. And to hell with it, they can't vote us out now."

And Mr Speaker, we can see exactly the strategy they came up with.

They won't tell us what the legislation really does.

They won't tell us that it takes fairness out of the national wage case.

They won't tell us that it takes rights against unfair dismissal away from almost 4 million Australians.

They won't tell us it allows employers to dismiss workers with no compensation simply by bringing in the lawyers and restructuring the business.

They won't tell us that it smashes the award system and destroys the 'no disadvantage test', the foundation of a fair system of enterprise agreements.

Instead of telling people what the legislation really does do…

The ads tell us what the legislation doesn't do.

It's like an arsonist who burns down your house but as it all goes up in flames just says, "oh well, you've still got the garden shed - protected by law!"

The whole aim of the ad campaign to sell this Bill has been to create the false impression that the laws give stronger legal protection than people have now.

That's exactly the message they convey.

This is not an information campaign.

It's a political advertising campaign, conducted for the partisan political purposes of the Liberal Party.

It's precisely what that great English writer George Orwell was writing of almost 60 years ago in his landmark essay on Politics and the English Language -

"political language has to consist largely of euphemism, question-begging and sheer cloudy vagueness… designed to make lies sound truthful…"

Making lies sound truthful. Just take a couple of examples.

Under the Award system, Australians have twenty pay and conditions standards that are protected under law.

After this Bill is passed, they'll have just five.

But the Prime Minister hopes that by just talking about the five and how they're "protected by law" we won't notice what's happening to the other fifteen entitlements that can now be removed at the stroke of a pen - rights like holiday leave, redundancy pay and penalty rates.

Take another example - employees' rights to protection from unfair dismissal.

The ads tell us that employees' rights against unlawful dismissal are "protected by law" - hoping to confuse people about the difference between unlawful and unfair dismissal rights.

An honest information campaign would tell people about the difference between the two sets of rights, and tell them that for 99 per cent of workplaces, the Government wants to abolish unfair dismissal rights.

Instead, there's no mention of what's being taken away, just the misleading impression that nothing is changing.

Take another example - the examples the Government cites to show the benefits of enterprise agreements.

The ads suggest that to enjoy the flexibility of these agreements, we need to change the bargaining laws.

But the fact is, the flexibility to improve work practices and getting higher pay is already in the system. It's been there in part since 1991, and in full since 1994. It's what has underpinned the growth in real wages for 15 years.

The Bill doesn't make it any easier to increase pay. It just makes it easier to cut take-home pay, because employers don't need to compensate workers for taking away entitlements like penalty rates, holiday pay, and shift loading.

This is the breathtaking arrogance of this Prime Minister.

Taking millions upon millions of dollars out of the pockets of working Australians, to bombard them with a campaign:

  • that tricks trick them about the rights they've already got,
  • that tricks them about what they stand to gain and
  • that tricks them about what they now going to lose.

It's typical of the mealy mouthed, tricky, lawyerly deceit that's characterised John Howard's prime ministership for nine long years.

It is deception from beginning to end.

Because they know that they cannot let Australians know the truth about this Billl.

But on this side of the House, we will fight to let them know.

As leader of the Labor Party, let me say how proud I am to be able to take the lead in this House in defending the rights of working families against the attacks in this Bill.

Let me say how much I look forward to the contributions of my colleagues as we dissect these 1252 pages and expose this Bill for what it really represents - the greatest backward step, the most systematic attack on the Australian way of life and Australian values, that we've seen in a century in the parliament of the Commonwealth of Australia.

But Mr Speaker, let me go straight to the Government's deceitful rationale for this Bill.

The Minister says it's about higher productivity.

Of course this Government has never offered anything more than assertion - this Government has never demonstrated any understanding or interest in the serious international economic debate about what drives productivity in a country like Australia.

If it was interested in understanding productivity, it would quickly learn that its own policies - closing the doors of TAFE colleges to young Australians, squeezing the universities, giving no priority to research and development and innovation - are the clear explanation for the slump in productivity growth in recent years.

Let's not forget, Australia is the only country in the developed world in the past decade that has actually cut its public investment in education and training.

The reality is if we don't invest in the skills of our workforce, the only way we can compete is by cutting pay and fostering a competitive auction for low-skilled, low-wage, temporary jobs.

That's the road the Liberal Party wants to take us down - as if we could compete as a low wage country against nations like China and India.

They've already started - with the regulations gazetted by the Immigration Minister this week, that set up a system of foreign apprentices in Australia.

A system that gives employers the incentive to bring in apprentices from overseas, because they know they'll have absolute control over those workers. If they don't do what they told, they lose their apprenticeship, and they have to leave the country.

How do young Australians compete with the low wages and poor conditions of overseas apprentices?

But this is the bleak world that John Howard's industrial and migration laws are creating.

It is a profoundly pessimistic view of Australians and the future, but it's all you've got left if you don't believe in investing in our people.

Labor's view is different. We believe Australia's future prosperity will come from competing on the basis of our creativity and skills, not by cutting minimum wages.

That's why we need a genuine productivity agenda - which allows businesses and employees to share the gains in terms of both pay rises and profit rises.

Let's not forget, it was the Australian Labor Party that delivered the golden era of productivity growth in the 1990s.

But it's the Liberal Party whose narrow, anti-worker, anti-skills ideology has delivered the productivity slump of recent years.

What this country needs is not these 1252 pages of extreme changes to our industrial laws. What we need is a positive vision for raising productivity, not a negative vision for cutting pay.

First - above all else - our labour market policies need to focus on helping people to work smarter.

That means recognising Australian workers as the greatest asset in our nation.

It means investing in the know-how of Australian workers.

It means rejecting short-sighted policies of cutting back the national investment in skills and education.

It means giving every Australian school student the choice of a first-rate, specialist trades or technology high school.

It means training Australian workers, instead of relying so heavily on importing 180,000 skilled workers from overseas.

It means no longer turning Australians away from TAFE colleges, as the Howard Government has done to 270,000 Australians.

It also means fostering better management practices. Fostering innovation, like our competitors have been doing. It means national leadership to deal with our crumbling infrastructure.

There's a genuine agenda for productivity growth - Improved skills outcomes, better human resources management practices, a new approach to innovation, national leadership on infrastructure and competition policy.

But instead we get this attack on the living standards of Australians, from a government that has ideas to raise productivity, just tricky ideas to cut pay.

Mr Speaker, as our eyes glaze over with the mind-numbing complexity of these 1252 pages of new legislation, we might well ask why we're in this House debating it today.

If it's not about productivity, what's it for?

The Prime Minister let the cat out of the bag some months back at the Liberal Party Federal Council meeting as he fought off rising internal opposition to this plan.

As he said in his own words - industrial relations is just an article of faith for him.

It's not a matter of reason, it's a product of brittle, extreme ideology.

It's because John Howard has been obsessed with industrial relations laws for almost 30 years.

And now, with unchecked power in this parliament, John Howard can impose his ideological version of Australia on this nation.

And so Australian families now face the erosion of their work and pay conditions, all because of one man's ideological obsession with an outdated view of Australian workers.

Australian workplaces have changed since Treasurer John Howard messed up his economic policies and oversaw a wage breakout of 14 per cent back in 1982. But John Howard hasn't moved with the times.

What this Bill shows is a plan to take us backwards into a 19th century world - even with the same arguments and language of the 1890s, the "freedom to contract", the language used to justify employers having unrestrained power over their employees.

More than a hundred years ago Australia abandoned that approach. Indeed it was Alfred Deakin who as Attorney-General introduced the Conciliation and Arbitration Bill.

With that Bill, Deakin called forth a new era that recognised the rights of workers:

Social justice is a lofty aim. We have trusted for centuries to the various tribunals erected for the administration of civil justice, and I hope that we shall begin from this day forth to trust to these courts for industrial justice.

Well there's no interest in justice in the Liberal Party now.

Just a nasty right-wing hand-me-down ideology to Americanise our workplaces.

This Bill is like a nest of termites that in the months and years ahead will slowly eat away at the foundations of living standards of Australian families.

It undermines family life by proposing to give employers the power to change employees' work hours without reasonable notice.

It attacks living standards by removing the 'no disadvantage test' from collective and individual agreements.

It abolishes annual wage increases made by the Industrial Relations Commission for workers under Awards with the simple aim of reducing the Minimum Wage in real terms.

It delays the next National Wage Case by a period of six months, so that at least 1.7 million workers under Awards will not receive a wage increase for a period of 18 months or longer.

It destroys the legacy of the hard work of generations of Australian workers.

It undermines the principles of fairness that underpinned the Australian industrial relations system for the past hundred years.

It takes away the independent umpire who currently can ensure fair wages and conditions and resolve disputes.

It distorts the workplace bargaining relationship in favour of employers and against employees.

It denies Australian employees the choice to bargain collectively with their employer for decent wages and conditions.

It denies individuals the right to reject individual contracts which cut pay and conditions and undermine collective bargaining and union representation.

It allows individual contracts to undermine the rights of Australian workers under collective agreements and Awards, by eliminating penalty rates, shift loadings, overtime and holiday pay and other Award conditions.

It takes away any protection from unfair dismissal from almost 4 million workers.

It proposes to fine union representatives up to $33,000 if they negotiate to include health and safety, training and other clauses in agreements.

The dishonesty and deception is becoming clear.

First, they say they want to simplify workplace laws. But they've added twelve hundred and fifty two pages of complex law and legal explanation.

Kevin Andrews couldn't even get his own department to write the law. They had to hire not one, two, three or four, but eleven law firms to write it for them. At enormous cost to taxpayers.

Second, they say the law will provide for fair wage decisions by the new Fair Pay Commission.

But the Bill doesn't even allow the Fair Pay Commission to take fairness into account when it makes its pay decisions.

Right now, the Industrial Relations Commission makes wage decisions based on fairness - that's explicitly in section 88B of the current law.

But under the new law, the Fair Pay Commission is not even allowed to take fairness into account in making its wage decisions (s7J) They have explicitly cut fairness out of the wage decisions for struggling Australian families.

Third, they say the Bill aims to get rid of unions having a say in working conditions.

But the Bill gives the Liberal Party minister control over every wage agreement in Australia.

The Bill prohibits any workplace agreement from including what the minister decides is "prohibited content".

The minister can decide to prohibit anything he likes.

Already, they've decided that they'll slap a $33,000 fine on a union official who asks an employer to include a provision in an agreement that protects workers from unfair dismissal…

A $33,000 fine for asking for union involvement in dispute resolution.

A $33,000 fine for asking for a commitment to collective bargaining.

So what comes next? What else will the Liberal Party prohibit? What other bans will they slap on Australian workers in this extreme, micro-management of Australian workplaces.

And it's an offence to try to negotiate anything the minister prohibits. So with one stroke of a pen, a Liberal Party minister can interfere in every single enterprise agreement signed in Australia.

Fourth, it appears the Bill will allow an employer to require employees to sign an Australian Workplace Agreement - or lose their job.

Section 104 of the Bill says specifically that it's not "duress" for an employer to require an employee to sign an AWA.

That seems to say, despite what the explanatory memorandum says, and despite all the Government's claims, that an employer in fact can demand you sign the contract or you lose the job.

We need urgent clarification of this. Because we know that AWA can remove basic pay conditions that families rely on to survive from week to week - like overtime, penalty rates, and holidays.

Mr Speaker, the Prime Minister tells us he's the workers' best friend.

Well with friends like this Prime Minister ... who needs enemies?

And here in this House yesterday, as he slapped the Minister on the back, and congratulated him on his attack on working Australians, we saw his mask drop.

We saw the end of his pretence to friendship with working families.

This Prime Minister has exchanged hypocrisy for vice.

In the Government's extreme changes, that we debate today, we see Australian politics stripped bare.

Australian politics is reduced to its historic essentials in this debate.

This is how Australian politics began.

Two opposing political forces - with two opposing political ideas.

On one side, my Party - this fighting Labor Party - a parliamentary vanguard at the head of a mass movement of millions.

United to fight for mateship and the fair go at work.

And opposite us - this lousy coalition - this rotten Tory mob.

Determined to tear this country apart - to set family against family and friend against friend.

In 25 years in public life I have never seen a greater threat to Australian living standards than the Government's extreme plan.

Today one man's tired old dream becomes a living nightmare for all Australians.

This fight will go on until next election.

And my Party will go to that election on a platform to dismantle the system they put up, the injustices that are contained in it, and putting in place a balanced and fair Industrial Relations Act.

The Labor Party will fight to the end for the rights of working Australians. We will fight for fair go for every Australian. We will fight for the rights of working families. We will fight for decent work laws.

We will fight for:

  • A strong safety net of minimum award wages and conditions;

  • An independent umpire to ensure fair wages and conditions, and to settle disputes;

  • The right for employees to bargain collectively for decent wages and conditions;

  • The right for workers to reject individual contracts which cut pay and conditions, and undermine collective bargaining and union representation;

  • Proper rights for Australian workers unfairly dismissed;

  • And the right to join a union and to be represented by a union

Our Party was created by working people and has been built on their determination, their dreams and their unshakeable belief in a fair go for everyone. We will never walk away from the right of every Australian to a fair go.

Mr Speaker, this is a rotten law. It doesn't give Australia work choices - it gives us false choices.

It brings disgrace to this government. It will undermine the rights, freedoms, living standards and security of Australian workers in the months and years ahead.

But this betrayal of working families won't be forgotten by the men and women of this country. And they will have their chance to set them right on their belief that they can get away with anything and will never get voted out.

Because after nine long years, with this extreme legislation that we are debating today -

We see the beginning of the end of the Howard Government.

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re: Andrews v Beazley: first strikes in Parliamentary IR debate

When will Mr Andrews get it into his head that it's not ANY job that helps his fellow Australians improve their circumstances, but a DECENT job, with wages and conditions that make like bearable.

I'm fed up with the mantra of job, job, job. It's life, life, life I need, which I can only get with ENOUGH money for my family combined with REAL conditions that make life liveable.

Sorry Mr Andrews, your plan is a Claytons.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Of course having a job will improve the circumstances of Australians. Just look at the Chinese. They don't bother with trivial matters of conditions. They have nearly full employment & just look at how strong their economy is.

As for the skills shortage in this country, we can import Chinese workers (there's plenty of them) who would be happy to work for $5 per hour & a mat in the corner to sleep on. Throw in a few bowls of rice each day & they will be queing up

Surely people must be able to see the benefits of the IR legislation. Just make sure you have provisions written into your AWA for a comfy mat & your prefered flavour of rice. The more expensive flavours (Basmati etc) could be traded for your unproductive holidays & sick leave. The greatest benefit will be the ability to avoid paying income tax by keeping your annual salary under $5500 tax free threshold. It's a win, win, win situation. (Unless the Taxation dept fines you for tax evasion by signing an AWA.)

Now, where's my AWA and where do I sign?

re: Andrews v Beazley: first strikes in Parliamentary IR debate

I think Mr. Beazley is right that IR will become the Coalition's achilles heel. They have spent $50 million dollars trying to convince people that it will be great. The people I have been talking to are incensed by the legislation.
When Mr. Hendy is barracking for IR legislation you do not need to be Einstein to understand who will benefit.

Andrews can argue till the cows come home about how employees can readily negotiate with their employer saying it's an equal situation that an employee can argue from. In the real world, not fairy land, the employers have the upper hand as they can hire and fire. This is especially true if the employee has a hefty mortgage.

The Family Court reforms have had unfortunate and unforeseen consequences since being enacted by Mr. Whitlam; the reforms still need sorting out. Likewise, the IR legislation will have all sorts of effects when work hours change; schools, sporting clubs, social clubs and most importantly families. I think Mr. Beazley used a great analogy when he spoke about termites having a continuing impact in the future.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

See State plans court challenge on IR by Jane Nelson, November 02, 2005:

QUEENSLAND is prepared to launch a High Court challenge against the Federal Government's new workplace relations laws. It says the legislation will neither simplify nor combine industrial relations into one system. Premier Peter Beattie said today the State Government was seeking legal advice but expected to launch a High Court challenge once the final legislation was available. Queensland last mounted a High Court challenge against the Federal Government in 1994 – in an unsuccessful education union case.

"This is a very heavy attack on the social fabric of Australian society," Mr Beattie said, referring to the 687-page Bill introduced into federal Parliament today.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

BTW David Eastwood, I recommend reading The World is Flat by T.Friedman, which talks about how technological innovations and circumstances have allowed India and China to become part of the huge pie called globalisation.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

David Eastwood, productivity isn't a bad thing. The government however has not made its case for how this legislation will increase productivity - where is the cost-benefit analysis? Talking about productivity, isn't that also dependent on skills and innovation - and hasn't this government made education more difficult to obtain and slashed R&D?

BTW, in future it will be cheaper to outsource IT jobs to China (a growing concern for India).

re: Andrews v Beazley: first strikes in Parliamentary IR debate

I heard most of Beazley's speech and about 5 minutes of Andrews' (that was all I could stomach) on the ABC today. Beazo was passionate and convincing; Andrews was slimy and mealy mouthed. I hope more of Australia was listening than just me.

I have a feeling that Beazley's last line is prescient. This will cost Howard Government (if he hangs around till the next election, that is).

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Productivity, Productivity, is the goal according to the Government's rhetoric.

Definition: Output / Input. In commercial terms that's revenues divided by costs. So, increasing labour productivity is about getting more output per employee. That means we all have to work harder, or get less money for what we do now. It's important to get that straight.

Is that a bad thing? Of course, we'd all like to work less for more money if we had the chance. But, is it realistic for us to expect that our wages and conditions are sacrosanct? Of course the tacit assumption behind much of the anti-reform argument is that they are. What was won can't be given up.

We're the lucky country. Our wages and standards of living have always gone up, so why shouldn't they continue to? Same for house prices. Shame they're not going up any more.

I recently commissioned a market anlysis study from two organisations in a very complex area of new technology. The two quotes came back, the two approaches outlined were broadly similar. The two teams of people proposed to me to do the work were impressive, but one was better qualified (they all had PhDs!) and had more practically experienced people than the other, and, was prepared to put more of them on the case to do more detailed analysis and data collection. One of the quotes was more than twice the price of other.

The bigger, more qualified and experienced team was less than half the cost of the smaller, less qualified, less experienced team. Why? Simple: it was based in India. Already there are signs that Australia will struggle to compete - even in so-called knowledge based areas like these, let alone lower skilled domains.

Fact of the matter is that Globalisation is here and is likely to put many formerly comfortable, developed nations like us in difficult positions as they lose competitiveness.

Sooner or later we will need to bite the bullet and accept that the future isn't just an extension of the past. The sooner, the better.

Margo: Hi David. Have you read William Bridges' work? I read 'Managing Transitions' when thinking about the ALP after 2001, then 'Job Shift' and 'You and Co' when it started to dawn on me that Fairfax had withdrawn their support for Webdiary. I recommend them to everyone used to having a regular job and worried that they're gunna lose it. Then there's downshifting. I'm working my way through that one too and that's exciting, in a weird way (except for building myself up to giving up smoking). What 'products' do I really need. It's also empowering to consider every purchase on the basis of how it helps or hurts others, and the environment.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Margo Thanks - thought provoking - must read!

It's difficult to fathom responses to the Government's agendas in this case because of the complexity of the dynamics at play.

The argument I'm making about globalisation is very real, but so is the realpolitiking behind both Andrews and Beazley's speeches.

Beazley's rhetoric is empty - crap about "fair go" and "the Australian way". It's all about fear, and he's stoking it up. Good old tub-thumping F-U-D, and delivered surprisingly effectively given Beazley's style.

Andrews' rhetoric is all about making change palatable and spinning short term pain as long term gain, and fear: fear that we'll all be destitute if we don't hold productivity up. It's all too complex, all too new, and way scary. No-one likes to be scaremongered.

I find it depressing that important issues are being argued so badly, and with so much short term vested interest in play, but I guess I'm being naive.

Margo: Maybe that's why you're a Webdiarist! So, who in the Webdiary community will take on mounting a solid case for and a solid case against? I'd love Webdiary to host a thoughtful merits debate with shades of gray and the potential to develop the outline of a constructive alternative. Any takers?

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Remember Patricks and the rotteweiler controversy on the Melbourne wharves? This employer is still in business and under the new laws he will have even more power. He was very good friends with Howard and Reith. He even got tax deductions for training the dogs and handlers in Dubai. Will we see more of this type of action. It's one way of getting all your staff onto AWAs.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Russell, years ago there was a clothing manufacturer in Sydney who, on being asked why he looked after the bottom end of the clothing market. His reply: "I have always looked after the battlers and boy have they looked after me". Stands to reason doesn't it, give the workers good money and they buy the products. No money, no workers to buy products, ergo, no business.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

As we used to say in the Psychology Corps, David Eastwood, "Don't mate me, mate." Otherwise I am (and it doesn't happen often) completely at a loss. What was it your gran wanted to know?

re: Andrews v Beazley: first strikes in Parliamentary IR debate

What Australia needs is not labour productivity, but employer productivity. Both parties do agree that the purpose of the bill is to drive labour costs down. The difference is that the capitalists further argue that this driving down of wages is necessary – for Australia to be competitive, which will result in higher long term employment (it’s funny, Howard arguning that no-one will be worse off and that labour costs will come down at the same time).

In reality, some of the savings may go to improved profits to shareholders, but a significant amount will also go into the pockets of senior managers. What gets my goat is that these senior managers are not earning their salary. Instead of coming up with real innovation, they are living off driving wages down, and selling off Australia’s capital resources.

Employees are blamed when they under-perform. We should first start by checking on the boss. The boss’s job is to coach, mentor, motivate, train. Most bosses don’t even have a clue how to do this. So why are they being paid big bucks? We are promoting a culture where everything is about money – pay people more and we can get better people, they will work harder. In reality, people who work the best are the ones who enjoy their job – actually look forward to going to work in the mornings. They are loyal to their firm, and are less likely to commit fraud. Those who come for the money will get what they want from the firm, and vanish at the first opportunity. The new boss is paid big bucks to perform. He slashes jobs and wages. Hey presto, profits rise, he is a miracle worker. He moves on to a better offer. In the meantime, reality hits the organisation, and it slumps.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

If it is not going to be an offence for bosses to demand a work place agreement as a condition of getting the job, then surely if an unemployed person is being offered a job with an unfair workplace agreement, then this should be a defence against losing Centrelink benefits for not taking the job.

As Mr Andrews is so convinced in the argument for AWA's, will he extend it to include members of Parliament? After all, there is no reason why all MPs should be paid the same or receive the same entitlements. Surely, the electorate a politician aspires to represent should be allowed to offer a workplace agreement, which the aspiring pollie can refuse and not stand as a candidate?

The ruling class once again ride roughshod over the minions. It will soon turn back to 18th century coal mines of England - work a day past your twenty-first birthday and the mine owners own you for life, try to flee and you will be whipped and chained up to stop you causing trouble again.

So much for Howard saying he will govern for all Australians.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Tha ACT Government is also pointing to the hypocrisy that lies behind these laws - the fact that in Howard Government land it is apparently fine for the powerful and the relatively wealthy - ie businessmen and women, doctors, and lawyers - to bargain collectively; just not the hapless individual worker.

In the Canberra Times this morning:

Berry seeks to freeze out Canberra Business Council

ACT Legislative Assembly Speaker Wayne Berry is seeking to freeze the Canberra Business Council out of all further negotiations with the ACT Government because of its support for the Federal Government's new industrial relations laws.

He cut short a meeting with council members on Wednesday, telling them they were not welcome to make representations to his office.

"And I will be commencing a discussion within the Labor Party about only negotiating with individual businesses about legislative changes they might want, instead of collective bargaining with business unions."

He accused the business council of trying to have it both ways, by supporting laws to weaken collective bargaining for workers while wanting to lobby government as a collective business group.

"It's about time that this union for businesses gained a fuller understanding of what it feels like to be isolated as an individual worker. You can't ... support the isolation of workers and then expect to collectively bargain for your business constituents."

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Following the recent introduction of the new IR legislation the most common response I have encountered from numerous members of the workforce is that we have no control over this situation and should accept it as a fait accompli.

I beg to differ. Globalisation and the machinations of the marketplace work equally for both employer and employee.

If I were to purchase a product for $10,000 I would rightfully expect a high degree of quality and performance. However, if I only expended $1,000 on the same product I would equally expect a lesser degree of quality and performance.

This rule holds true if I possess $1million or $1.

Make no mistake, employers are purchasing a product that you are selling. YOUR LABOUR. If the price they are willing to pay (a fair and reasonable monetary remuneration, together with compensation for public holidays, penalty rates and annual leave loadings etc), they receive in return high quality and performance. Anything less and they do not DESERVE the workers full devotion.

It saddens and disappoints me that the general public do not realise the power that they possess. Always remember, governments do not tell us what to do, we tell them what to do. They are our representatives, put there by us to act in our best interests.

The reprehensible John Howard states that his word is his guarantee. This is an amazing statement coming from an unmitigated liar, con-man and scoundrel. This despicable individual is nothing more than a shill for big business and their massive profit margins.

The workers acting together can defeat this savage and unwarranted assault on our wages and conditions. Stand up for your hard earned rights. Always remember, if you don't stand for something, you will fall for anything.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

I wish the various government people would stop claiming that this legislation has anything to do with the 21st century. And that goes for the Business Council advertisements as well. This legislation is classic early to middle 19th century probably from the coal fields of Belgium or sweatshop England.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

As Michael Costello has said in an excellent article in The Australian, this is a declaration of class warfare, by the most ideology-driven PM in our history. In a sense this is Australia's Thatcherite revolution, which will have much the same results. Oddly it may mark Howard's closing stage of his regime, and the anger and rage that will swell when many ordinary workers realise that they have been robbed will put an end to that old lie about Howard's Battlers. Actually for nine years the hostile Senate shielded many really dumb Australians from knowing just how bad the Liberals could be in given real power! The hurt to come will be worthwhile if some dopey Australians see the need to drive this government from power. Hopefully Dumbo Bush and his crazy economic policies will push up interest rates, which will be another slap for the make-believe millionaries in their suburban McMansions. And just for good measure the collapse of the US position in Iraq will reveal how stupid Howard's foreign policies have been... roll on 2006!

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Michael, precisely. An increasing number of countries are expressing unease about the globalisation because they have worked out that if you destroy the "bottom feeders" you destroy the rest of the food-chain above it.

Howard and Andrews and most of Aussie major businesses haven't worked that out yet. How long will it take do you think? One year or two?

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Margo, when you say "mount a solid case" - where one stands depends on where one sits.

There are lots of solid cases either side. Each represents particular vested interests. Churches, employers, unions, business groups all have their own axe to grind, and most of these will be very cynical, unrepresentative and short termist.

Playing solomon would be impossible, but it would be great to encapsulate the big arguments from all points in language my grandmother would understand. I suggest Malcolm B Duncan! (Sorry mate...)

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Michael, of course I can be replaced, that's the whole point of the example I gave.

As to "buying my products", the whole point of the study I commissioned is to find global opportunities for an innovative Australian technology. Any half smart business operator knows that the Australian market is irrelevant. As an exercise, have a look at this. The white bits are where the action is, that's not here.

The point you make about exporting jobs is a very good one - the example I quoted of "knowledge work" going offshore throws a spanner in the works of a lot of conventional globalist thinking. I don't have an immediate answer, but one point I will make, and it's a well proven one: Our wages will not fall to Indian rates, their wages will rise to ours. In doing so, their living standards will also rise towards ours. That's a good thing - most of them live in poverty now. This is what the "trade not aid" concept Geldof, Bono et al rave on about means. Past examples of this: Singapore, Japan, Korea. Coming examples: Mexico, Latam, South Africa.

When I was a kid in the 60s "Made in Japan" meant cheap and nasty. It doesn't now. A factory worker in Japan is more expensive than one here, and much of the manufacturing has moved to Korea and China. There's any amount of data around to support this point. Living standards in Japan have soared and poverty has all but disappeared. I call this a good thing.

I imagine, and it's too late at night to think deeply, that over time the productivity differential between developed and developing nations will disappear, and pressures to move jobs offshore will too. That's a long way off, and in the short term there will be no shortage of painful dislocation.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Howard's demise, but I suspect Australia's loss of the Ashes might have laid claim to that moment first.

One thing is clear, though: Howard has made the deep strategic error of giving Labor a clear reason for existing. A party unsure for many years about what it stands for has been let off the hook by a Prime Minister who stands very firmly for something - something most people strongly dislike.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Sean, thanks for the reference. Of course productivity's a good thing - I'm an economic rationalist!

It's dead simple. Labour productivity increases because labour costs go down in real terms over time. The Government's using the "P" word as a euphemism for slowing down real wage growth relative to output growth. The other factor that drives productivity - how capital resources are utilised, is untouched by these proposals, but I don't see that as surprising. It's called "IR reform", it's all about labour, not capital.

Arguments about more flexibility and efficiency in labour usage are really about real wage costs, that's a smoke screen. Arguments about skills ditto - it's another way of saying "more bang for the employment buck".

As to China and India - there's nothing particularly innovative about their technology, yet. It's totally about labour costs, and in China's case, sheer size and political power. Even as I type this I'm watching a National Geographic documentary on Indian call centre outsourcing - and it's totally about how in India highly skilled resources are fabulously cheap.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

"Bite the bullet", David Eastwood? Then how, once we all have, and every job is outscourced to India for "half the price", are you going to get Aussies to buy your products, pay their mortgages and utility bills or pay for anything once we have all been reduced to Indian style wages under globalisation, and maintain your standard of living? Or do you hope to operate in a vacuum, sealed off from the effects? How will the government find the money to waste on boring adverts about this new 'future that isn't the past' once the tax base of workers has been decimated followed by a plunging corporate tax base?

We all lose under this phoney globalisation scam-which is not inevitable if we don't allow it .

I wouldn't be wishing for it "the sooner the better" if I were you. You may get your wish. What makes you so special that someone in the third world cannot replace you and order that new study for that new complex technology? Don't ever delude yourself that you can't be replaced. You ,I, Kevin Andrews and John Howard can all be replaced in the blink of an eye.

Margo: That Howard image of running faster and faster towards an ever-receding finshing line in relation to the economy and competitiveness haunts me. The more I think about it the more I believe that the current paradigm makes no sense.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

"…the fact that in Howard Government land it is apparently fine for the powerful and the relatively wealthy - ie businessmen and women, doctors, and lawyers - to bargain collectively; just not the hapless individual worker."

Oh dear Sue Bushell, I believe you may have a nail on its head. Don't repeat that in coming weeks, you may be accused of inciting "hatred" or "contempt" of the government.

Jokes aside, that is perfectly correct. What is not understood here is that employers use a basic template with minor changes to the document to "create" an AWA. The government's own website has such an template for the "Food Processing Industry". Employers currently using AWAs simply create their document and present said document to prospective employees. The only change from one to the next are the personal details of the recipient. Nothing more.

You can expect to see the above illustration for the Food industry replicated not only by the government but more importantly, industry groups. For example, the Australian Industry Group is likely to produce templates for the various industry areas it represents (including mine: Labour Hire) and make same available to members. Does anyone really then think that individual employers are going to then sit and draft their own?

Whole sections of industry will then present these (those that take the AWA option up) to employees or prospective employees. The only changes? Those specific to the company and the recipient.

When this is done by a union (by way of an EBA) it is called "collective bargaining". When it is done by way of a union and across an industry (vehicle manufacturing, freight forwarding, plastic packaging manufacturing) it is called "pattern bargaining".

So, collective bargaining will not cease at all. Only one side of the "negotiation" though will be allowed to avail itself of it.

It's called hypocrisy.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

David Eastwood: "Our wages will not fall to Indian standards, their wages will rise to ours".

So what we get David is a race to the top (not the bottom) - but as you suggest there will be dislocations. Such that individuals in less skilled roles will lose out unless new skills are acquired - increasingly difficult with increased barriers to education.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Brian McKinlay: "As Michael Costello has said in an excellent article in The Australian, this is a declaration of class warfare, by the most ideology-driven PM in our history."


"In a sense this is Australia's Thatcherite revolution, which will have much the same results."

No. Having lived through both, Howard is far more extreme than Thatcher ever was. The UK as deformed by Thatcher was a bucolic paradise compared to what Howard is trying to create in Australia.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

One of the greatest problems facing society is the desire for all to pay the cheapest price for goods and services. This applies to individuals, companies and governments. Two very apt quotes made by John Ruskin, a 19th Century English author and economist, are as follows:

"It is unwise to pay too much, but it is worse to pay too little. When you pay too much you lose a little money. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do. The common law of business balance prohibits paying too little and getting a lot. It cannot be done! So if you deal with the lowest bidder, it is wise to add something for the risk you run. And if you do that, you will have enough to pay for something better."


"There is hardly anything in this world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man's lawful prey"

It is only when people are prepared to pay a little extra for quality that we will actually save money. For example buying foreign goods may save $20 each week on our grocery bill, but we then pay $30 extra in taxes to support the unemployed due to the closure of their employer. The foreign car may be cheaper and comparable quality to an Australian built car, but the money saved is then spent on industry support or unemployment and retraining schemes for the workers when their factory closes (Holden and Mitsubishi are good examples of this).

In our pursuit of affluence and status, we are cutting our own throats and so called competition is actually destroying competition and choice.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Jay, you believe that productivity gains will chiefly go to senior management. That's an often cited view, but misguided. Look at the wage bill of any major corporation, and you'll see that the senior managers get a pretty small slice of the pie. I did the exercise on a big 4 bank a while ago, and despit earning salaries often described as "obscene" senior and upper middle management made up less that 5% of the overall wage bill.

In terms of increasing productivity, there are only two drivers" "Labour" (people) and "Capital" (Capital equipment and other fixed assets). Of course both need to be tackled - but there are constraints on the fixed asset side. Could a bank get more out of its branches by opening them 24 hours a day? No, there would be no-one to serve.

Could a manufacturing business get more out of its factories by running them 24 hours per day? Possibly - if it could sell all the stuff it made. How? Make it cheap enough to reach export markets. How? Reduce labour costs, the fixed asset costs are "sunk" - they have already been spent so they can't be reduced further.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Malcolm, she wants to understand the guts of the new IR proposals in 25 words or so with no political or other vested interest spin. She's 96 and struggles to wrap her mind around all this spin stuff.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Sean, thanks. Yes I do believe it's a race to somewhere other than the bottom, but maybe not the top. I'm a closet Malthusian and I'm sceptical the world can afford to live at the standards the west does now unless it can find a way to use a lot more renewable energy and grow and use food more efficiently.

What I've long believed is that governments that embrace globalisation and some of the so-called "rationalist" economics that go with it have a duty to address the "whole picture", and they rarely do.

What do I mean? There's virtually nothing in our current Social Welfare policy philosophy that explicitly addresses the inevitable dislocation globalisation will cause.

And look now, we have a major new IR package that will certainly create incremental short & medium term dislocation, for longer term benefit. Fine, but where's the accompanying Social Security package designed to ease the incremental "dislocation burden" it will cause?

Margo: The Welfare to Work package is stalled, I'm told, and the Govt now claims there's no necessary connection between the two. Webdiary is following the W to W debate, and we've now combined its archive with the IR one. I remember reading a while ago that Fred Hilmer, architect of the competition policy revolution, said there was always supposed to be a second big report on handling dislocation and putting in place transition arrangements for communities tossed on the scrap heap post the big bang. Keating never got around to that one, and therein lies part of the momentum for what would become the Hanson phenomenon as many country towns and maufacturing towns (think Ipswich and Maryborough in Queensland, for example) were left to die all by themselves.

To me, the notion of a "fair go" being gratuitously bandied around by various commentators, politicians and punters could much better manifest itself in calls for beefing up welfare to deal with the implications of the new IR policy framework.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Apart from the issues of rights and equity that lie at the heart of this obnoxous piece of legislation, there is a basic contradiction in all the spin and hype coming from Howard and his big business backers-and it's this.

To the extent that lowering wages encourages employers to hire an additional employee, then absent increased demand, these measures will actually lower productivity. Productivity is not increased by increasing the number of people in employment simply by making it cheaper to employ them. Productivity is increased by increasing the amount and quality of goods and services produced using the same or less numbers of employees for each unit produced. Or by producing much more than they currently do with the increased number of employees they may employ.

If there are additional employees employed whose marginal productivity is the same or lower than those already in employemnt, there will be a net decrease in productivity.

If there are not additional employees employed as a result of these changes, but rather a substitute of new and cheaper employees for those already in work there will BE NO INCREASE IN PRODUCTIVITY, but there will be an increase in the surplus produced which goes to the employer for either investment or transfer to investors (capital) by way of increased dividends. If the increased surplus goes to investment in capital goods, (new technology and the like) then the demand for additional employment will be actually decreased, as new technology is able to produce the same or more using fewer people!

To the extent that competition for jobs at the lower end of the skill scale increases, then all that will happen is that those whose whose productivity is higher, (because they have more expreience and therefore more skills than those who are new hires) will lose their jobs in favour of those who are cheaper, but whose marginal productivity is less. This decrease may be imperceptible to each individual employer, especially if they are able to increase the length of the working day, but across the whole of the economy the effects will be marked.

In the absence of any mandated updating of the skills and capacities of the employees coming onto the labour market as a result of the welfare to work changes, we can confidently expect productivity to actually fall.

Since Australian employers refuse to accept that they have any responsbility to train and develop their existing workforces (let alone a newer and cheaper one) they will 'waste' the flood of cheaper and more tractable labour in an orgy of cost cutting, as each employer is forced to follow the lowest payer in each industry to remain competitive.

Trade unions actually improve productivity by forcing employers in industries to 'spread' productivty gains across the industry. In the absence of this discipline, employers will simpply substitute labour for investment in new technology, upgrading of skills and development of new techniques. To the extent that they still do those things, there is no mechanism to ensure that the virtuous cycle of investment on people and technology will be spread acrooss the industry.

This scheme is a recipe for a low wage, low skill, economy, where deference and fear are the driving forces at each enterprise. You only have to compare New Zealand's productivity in the 1990s with Australia's in the same period to understand the point.

Before people start to natter about skill shortages, and a 'workers market' understand that employers are already poised to import new skilled labour (trained snd developed by third world countries who can scarcly afford to lose their own skilled workers) as a substitute for their inaction over the last decade on the issue of skilled apprenticeships.

Understand that the bulk of the 'new apprenticeships' introduced by this tawdry government have gone to their mates in retail and fast food, not in areas of high cost training. That task is now being outsourced to the school system, so that the states and parents, can undertake the task that once used to be performed by business in this country.

Is there anything at all that business in this country feels that they should actually pay for? Their political representatives are actually saying that the working poor should be supported not with the wages they earn, but by the welfare system. That means every body who is a PAYE taxpayer, will be requird to subsidise the wages bill of every business in the country.

I don't know about you, but I believe in mutual obligation. When will Australian employers acknowledge that they have an obligation to the general community to actually pay people a wage they can live on, and also an obligation to train their own employees?

The biggest welfare bludgers in this country are the BCA, ACCI and AiG.

Margo: Hi Jane. I heard from someone on the inside a while ago that the Government's National Training Authority, or whatever the body is called that subsidises trainee wages for business, is a giant crock. Anyone care to investigate for Webdiary? I don't know if Fairfax gets the subsidy, but I do know that the company now favours taking on not genuine trainees but qualified journos from regional or country areas. That way they don't actually train them but use them from day one to do the work of qualified trained journos at lower pay.

I was shocked to hear in Question Time yesterday that the Government will now IMPORT apprentices from overseas. Even in these boom times there are many young Australians in the underclass. How about insisting that employers spend the money they want to spend to do this (or is it our money again) to financially help unemployed youth in the cities move to the country where there are shortages or give them subsidies to train at TAFE in exchange for a three year stint for the employer concerned?

Mr BURKE (3.04 p.m.)—My question is to the Minister for Citizenship and Multicultural Affairs, representing the Minister for Immigration and Multicultural and Indigenous Affairs. I refer to the minister’s answer of Tuesday where the minister referred to the new visa for imported apprentices. Does the minister understand, despite his answer, that new apprentices from overseas are not skilled migrants but are coming here to take up these places to acquire skills? Minister, isn’t it true that if an imported apprentice refuses an AWA they will miss out on the job, the apprenticeship and the visa? Given the abolition of the no disadvantage test, how will our young Australians compete for apprenticeships, given imported apprentices will accept any wages to get the visa? You are driving wages down—and you know it.

The SPEAKER—Order! In calling the minister, he will ignore the last part of that question.

Mr JOHN COBB—Despite the government’s best efforts at encouraging higher participation by apprentices—and that includes lifting the living away from home allowance, giving an allowance for tool kits and other inducements—country Australia is where the highest shortage of skill levels and apprenticeships exist. There are many instances of employers and contractors who have had to put contracts on hold and put on hold their expansion ideas. The government has put together this visa with a great deal of consideration.

This visa will not—I repeat: will not—disadvantage any young Australian wishing to become an apprentice. This visa will not disadvantage any young Australian wishing to become an apprentice in country Australia. Employers are bound and have to make every attempt—in fact, they have to prove that they are unable to get an apprentice locally. That means also that local bodies, like councils, have to agree that they are unable to access an apprentice locally before they are able to get an apprentice from overseas to fill the position.

Mr Burke—That’s wrong, you’re misleading the parliament.

The SPEAKER—Order! The member for Watson has asked his question.

Mr JOHN COBB—It would be a wonderful thing if apprenticeship vacancies in country Australia were side by side with people wanting to fill those positions. But the reality is that, with Australia’s record low unemployment, it is simply not the position. I must repeat that no employer will be able to disadvantage any young Australian or Australian permanent resident who wishes to have an apprenticeship in country Australia. This government sees no reason why the prosperity of country Australia should be disadvantaged because the union movement runs the Labor Party.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Sorry Grant, I don't buy that. What you're overlooking (excellent quote by the way) is that our preferences are individual. What is a worthwhile "little extra" for quality for me might be an intolerable burden for someone scraping to make ends meet. You're overlooking market segmentation and, in a sense the individual's right to choose.

As a great exercise, go to a supermarket of the same brand as yours in a very different part of town and do your weekly shippong there. Chances are you'll find that lots of what you usually buy isn't there. I've often been frustrated trying to shop in a "foreign" store.

Retailers are adept at altering their product mix to suit what sells in each store's catchment area. Broadly, looking at staples like toilet roll, baked beans etc the cheaply positioned own label brands sell more in the poorer areas, the more expensive brands in the more affluent areas, even though we all buy the same stuff at the top level.

Back in cold war East Germany everyone had a choice of one brand of toilet paper, and it was shocking stuff. The state had determined, in a Germanically efficient manner, that the citizens only needed on ebrand of toilet paper and that it would be more economically efficient to produce on that basis. The resulting monopoly made the senior managers of the Toilet Paper producer very rich, as they were able to frig the accounts so that the state only saw a small proportion of their overall revenues,while the rest went into their pockets.

Needless to say, East German toilet paper was more expensive, dead scratchy and less effective that the western version. It's not lamented, say my sources.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Margo, good point! Fred does get credit for something...

I've probably clumsily understated what I'm alluding to. It's more than welfare. Way more, and your Hanson reference is spot on. It's about:

1) Understanding and acceptance. Governments have a duty to help us understand the implications of globalisation, accept that they are positive in the long term.

2) Expectations. Those threatened need to accept that the short term disclocations are understood buy the community at large, and that they will be supported by the community. They need to know they will get a fair go.

3) Adopting an holistic approach. It's not just welfare dollars, it's about communities, self respect, education, training, resettlement, immigration (yes!), population policy, reginal and town planning etc etc etc. I never saw Hilmer's report, but I'd be surprised if it didn't push this line.

Margo: David, I don't think there ever was a Hilmer report part 2 - there was meant to be, but it never happened. Thanks, Paul K.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Margo, I work in a related part of the sector and can confirm that the process for attracting apprentices from overseas is underway. Curiously, I don't see any lack of local kids wanting apprenticeships, so much as a shortage of employers to take them on.

Maybe this is just being seen to be doing something about skills shortages?

Margo: Hi Karen. Care to write a piece on what's going on in this area and how it can be reformed for the benefit of our kids?

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Ian McIntyre: "Remember Patricks and the rotteweiler controversy on the Melbourne wharves."

This was only a controversy to the unions. The rest of Australia agreed with it.

Margo: That's not correct, Alan. The opinion polls were very evenly split at first - see here, then swung the union's way, from memory. Here's the ACTU's perspective at the time.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

It was not just Patricks involved in the Waterfront debacle.

In 1995, WA Transport Minister, Eric Charlton gave control of part of the North Wharf at Fremantle to Len Buckeridge of the Buckeridge Group of Companies (BGC).

After he lost to the MUA, he had the cheek to demand and receive compensation.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

"their wages will rise to ours."

It's a nice idea David but do you seriously think that will happen in our lifetime? And if that's ever acheived I suggest Australia would be about as relevant to Asia as Fiji is to the World.

The Patricks' debacle was another giant con foisted upon us with the covert support of Howard. That the much maligned wharfies got even 50% support from the public was a miracle, given the long history of real corruption on the wharves. Even my fiercly socialist grandfather both admired the strength of the wharf unions and railed against the endless hassles he encountered getting imported goods past them. Given their unpopularity this was a reason that the dreadful Reith and Howard judged could be the first real attempt to destroy unionism. Many of the same arguments were used then, as are being used now. It's just always ideology with the Howard government that is utterly vacuous when it comes to new ideas for a new century. Big business is never wrong. Except with Patricks - the same hopeless management with borrowings equal to 110% of it's capital.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Michael, yes I believe it will very easily happen in our lifetime. It took about 25 years in Japan, Hong Kong and Singapore. Won't happen overnight, but...

re: Andrews v Beazley: first strikes in Parliamentary IR debate

David - you have supported my statement in a roundabout way. I live in Ayr Nth Qld. One each Coles & Woolies. Next nearest like stores (any stores)are 100km's away (Townsville). Everybody rushed to do their shopping in these stores when they first opened because of oh so cheap prices & lots of variety compared to the local & independent grocers/butchers/etc.

Since most of these have now closed their doors, Colesworths have much limited range of products. Mostly own brands & a few overpriced name brand products. eg $2.30 500g savings brand frozen peas, $4.10 birdseye peas. In many rural(poorer) areas the own brand products are the major sellers (I refuse to buy them, will always stick to known brands).

It is well known most of the Colesworth's own brands are made from mostly cheap imported products usually not even packaged in Australia. Just like Wal-mart in the USA where the majority of products are foreign made & imported therefore cheaper, many local businesses are forced to close.

Once that is achieved by people saving a few dollars each week on groceries, now fresh produce etc prices go up. Now you have to buy the cheaper own brand products to be able to afford the necessary items needed, which in turn leads to the known brands starting to import or move operations offshore (Heinz to NZ). Jobs are lost in manufacturing & we are now paying even more in taxes to support the unemployed as well as ridiculous prices for any fresh or local products.

Sorry if this seems to be straying off the topic of this thread (I don't quite have the language skills of many others in Webdiary)but my point is, because of people's desire to get everything for the cheapest price possible, we now have the business community & gov't saying we need to drive down wages & conditions for business to be able cut costs to compete.

Because people were scared about their interest rates increasing we now have one of the most draconian Gov'ts in Aust history, the effects of which will be suffered for a great deal many more years after they are voted from office. We are headed for the recession we DIDN'T need to have!!! (Wow my brain hurts from trying to put this into coherant words)

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Margo Paying more for products you think are more worthy is fair enough. You are placing a dollar value to your principles. Fair enough.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Grant, your words sound perfectly coherent to me. I guess my point is that we all want things as cheap as possible all the time, regardless. Why woudn't we?

We all want different things, but if I can buy the next Madonna CD for $15, why would I pay $30 for it? That's $15 lost that I could have spent on whatever I want, or need. Could be food, luxury items, petrol or indeed a donation to charity or a meal for a homeless person - whatever I want. Any rational consumer will always want the option to have a few more bucks in their pocket to spend on whatever they want.

Margo: I don't agree with that, David. A rational consumer could well pay more for organic food, to protect their health and help the environment. Same for buying food from companies which source their food and other products from local co-operatives in the third world. It depends on what one sees as ones self interest and the emphasis one places on one's duties as a citizen of the planet. Another case - a rational consumer could patronise the independent petrol retailer or grocer or community newspaper to foster community-based businesses and/or stop big business cornering the market then increasing their prices after forcing their smaller competitors out of business. Or paying out for a rain water tank or solar panel to do their bit to conserve water and reduce the nation's reliance on coal-fired power. Are ethical investors and ethical consumers irrational?

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Margo You're quite right - I overlooked the cases you mention which indeed are excellent examples of how a consumer might go for something other than the lowest price.

I guess implicit in my reasoning is that we select what we buy based on our values and then look for the best price. If that means selecting an independent petrol retailer, for the reasons you articulated, then shopping around for the cheapest independent retailer is what may well come next.

I'm all for this style of consumer activism, but I am also deeply sceptical of it as the degree of transparency that exists in many of these "ethical" situations is low, and one can never be sure whether one's intent is actually being met, or whether you're just lining the pockets of some entrepreneur or multinational in disguise.

Classical rationalist economics would say the most effective way to achieve social goals is not to buy products at a premium that support these goals, it's better to buy on pure economics and then give the money save to the cause in question - cuts out a whole raft of middlemen.

What often happens in the "support the third world" example is that an enterprising middleman buys the produce extremely cheap, sells it to us extremely expensively - and we feel good about that as we're "supporting the third world", and then they pocket a large margin along the way and get very rich. The right answer here is to remove trade barriers and subsidies and let the big players source the mainstream stuff they sell from the third world. A lot more people would get pulled out of poverty much faster that way. Sure, the multinationals will pocket a big margin too - but competition usually pushes that back to today's levels before too long. We could argue too that the benefit to the third world is worth it in any case.

I don't believe ethical investors and consumers are irrational at all, but I fear that much of their goodwill is currently being turned into profits for opportunists, and relatively little of it is hitting its intended target.

Margo: Well that won't happen with Webdiary, David, you can count on that. All revenue and outgoings will be completely transparent to all Webdiarists through the regular publication of our bank statements. People can comment on or query them through the comments box, and if a Webdiarist accountant - John Carson? - would like to volunteer, he or she can check them out any time.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Just to add my two cents' worth about the cheaper products - it's much more complicated than the supposed holy grail of being the cheapest, it's more about what you value. For example I still refuse to buy the cheap milk from interstate becuse of what happened to the milk farmers and local milkos. I have consciously thought - that could have been me having the rug pulled out from under me by supposedly sound economic principles. Well, I have principles.

Margo: Hi Mardi. And was the economic reasoning for all that sound? See Pull the udder one.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

The cat is (almost) out of the bag. The government's own Treasury report apparently details that all is not well within Howard's workplace Utopia. If the report is saying what it's reported as saying, then the government's claims that unemployment will fall and wages will rise is nothing but lies. Stands to reason - Howard and lies are common bedfellows.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

David, in a previous post in this thread you mentioned the two drivers affecting productivity, namely capital and labour. Given that capital costs are less flexible I'm interested to know which strategies you consider to be the most effective for reducing labour costs.

In the same post you dismissed arguments about the disproportional distribution of wages, citing a breakdown of the wage bill of a bank, as being inconsequential to the issue of productivity. In financial terms your argument is attractive, the mathematical logic is undeniable, however I think you underestimate the impact that absolute increases in the wages of senior management, however relatively insignificant, can have on the culture of an organisation.

In the same way that huge increases applied to the few yield small changes in proportion, small increases (like worker demotivation factor because the boss is getting way too much while I'm here doing all the work) applied to the many yield huge changes.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

You are right, David Eastwood, in a well run pyramid scheme the shavings from the bottom reaps much more than enough for those at the top. Nor am I advocating a culture of envy. Senior managers work long hours, and they are generally hired on merit. They genuinely do not enjoy inflicting pain, unless they have their executioner mask on, and do so believing they are making the hard decisions, while in fact it is the easy ones.

Some people think that being a good manager is easy. It is not. It requires skills that are not being taught. Some think that senior managers have a lot of power, the manager simply signs off a policy or law, and it automatically becomes good, right, and starts working the way he envisions it (and it usually is a he, women are usually more attuned to their environment). They believe in the simple models economists create. Unfortunately a lot of these people are managers and politicians, and they do have a lot of power over people’s lives.

Elsewhere in this discussion are claims that we need to import apprentices because we have a shortage of applicants. Does that mean that Australia has no unemployment? Or is the real issues more complex and the hiring of overseas applicants is an easy solution which give the added benefit of lowering employment conditions.

I lived through the industrial reforms in New Zealand (started by Labour), and saw those who preached that the country had to go through the pain being the ones who felt it the least. And reforms are necessary. Consolidating state legislation makes sense. Firms sometimes need down-sizing, and restructuring. However, good firms simply stop hiring staff, and with turnover typically at 20%, it can be achieved reasonably quickly. However, often the real purposes of restructuring are partly to look busy and partly to get rid of non-performing staff. Non-performers can be fired under existing rules. It takes about as long as a re-structuring, but it requires the managers to be able to prove that they are genuinely managing their staff.

We claim we live in a democracy. If so, why do we establish cultures and laws where money rules?

re: Andrews v Beazley: first strikes in Parliamentary IR debate

I had been promising to put up a piece on the extent of the Corporations power under the Commonwealth Constitution for some time now - and now I finally see my way clear to do it.

Firstly, section 51 of the Commonwealth of Australia Constitution Act provides:

The Parliament shall, subject to this Constitution, have power to make laws for the peace, order and good government of the Commonwealth with respect to:

(xx) foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth;

(xxxvii) matters referred to the Parliament of the Commonwealth by the Parliament or the Parliaments of any State or States, but so that the law shall extend only to the States by whose Parliaments the matter is referred, or which afterwards adopt the law;..."

I have referred to the "referrals" power incidentally at this point (as a consequence of an idea I had after reading one of Malcolm's posts) and shall return to it at a later point. Now to the issue of the extent of the corporations power (and the legislative power of the States, by extension)

When interpreting the Constitution, a theory originally developed that the Commonwealth had legislative competence for each of the heads of power - but the Commonwealth was to be strictly kept to the specifics of the head of power - and the States held "reserve powers" with respect to the particular s 51 head of power. The theory being that in a federal system of government, this is how the legislative power should be shared between the Commonwealth and the States.

This was known as the "reserve powers doctrine" of Constitutional interpretation which gained favour, but was quickly abolished by the High Court in Amalgamated Society of Engineers v Adelaide Steamship Co Ltd ("the Engineers' case") (1920) 28 CLR 129.

Prior to the Engineers' case, a test of the validity of legislation which relied on the corporations power was whether in fact the legislation was a law with respect to either financial, trading or foreign corporations - and if it was, the law was considered valid. The lead decision on the corporations power was Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330, where the High Court by a 4-1 majority, applied the "reserved powers" theory and said that the Commonwealth could legislate only with regard to the legal capacity of foreign, trading or financial corporations but couldn't regulate the activities of those companies. Sir Isaac Isaacs was the only judge to take the contrary position and said that the Commonwealth could regulate the conduct of corporations and the conditions upon which they conducted business. He had some reservations to this approach and said that the Commonwealth, acting under s 51(xx) could not regulate the formation, the internal affairs, the liquidation of the company, or set the wages paid by corporations to their employees, or the qualifications required by company directors.

It wasn't until the Federal Parliament, passed predecessor legislation to the current Trade Practices Act - that Sir Isaac Isaacs position was eventually vindicated. The Parliament was attempting to broadly legislate with respect to the trading activities of trading corporations by making use of the corporations power. The prevailing constitutional theory was that in Huddart Parker and so the issue of the validity of the legislation proceeded to the High Court.

The High Court decided in Strickland v Rocla Concrete Pipes (1971) 124 CLR 468, by a 5-2 majority that the Parliament could legislate to control the anti-competitive conduct of the corporations listed in s 51(xx), but that portions of the legislation then enacted by the Federal Parliament went beyond the legislative head of power and was invalid. The other important ruling, by 7-0 majority was that the decision of the Court in Huddart Parker was wrongly decided and should be overruled (giving Isaacs J's dissenting opinion some credence).

The only criticism that can be made of the decision in Strickland is that the Court declined to define the scope of the corporations power - and this, to an extent was left to later decisions.

Decisions subsequent to Strickland sought to identify whether the behaviour of a corporation brought it within the definitions of trading, financial or foreign corporation within s 51(xx).

It wasn't two decisions of the High Court in Actors & Announcers Equity Association of Australia v Fontana Films Pty Ltd (1982) 150 CLR 169 and Commonwealth v Tasmania ("the Tasmanian Dams case") (1983) 158 CLR 1 that the Court started to look at what the outer reaches of the corporations power actually was.

Fontana Films was a decision of the Court, examining the validity of section 45D of the Trade Practices Act 1974, which prevents employees from engaging in strikes in support of people presently engaged in industrial action. Gibbs CJ took the view that the laws were valid under the incidental power (s 51(xxxix)) and made the following observations (with emphasis added):

"The words of par. (xx) suggest that the nature of the corporation to which the laws relate must be significant as an element in the nature or character of the laws, if they are to be valid: cf. per Walsh J. in Strickland v. Rocla Concrete Pipes Ltd. (1971) 124 CLR, at p 519 . In other words, in the case of trading and financial corporations, laws which relate to their trading and financial activities will be within the power. This does not mean that a law under s. 51 (xx) may apply only to the foreign activities of a foreign corporation, for ex hypothesi the law will be one for the peace, order and good government of the Commonwealth. It means that the fact that the corporation is a foreign corporation should be significant in the way in which the law relates to it. For present purposes, however, it is enough that it is established by Strickland v. Rocla Concrete Pipes Ltd. that a law which governs the trading activities of trading corporations formed within the limits of the Commonwealth is within the scope of s. 51 (xx): see especially at pp. 490, 508, 525. Of course, the law in the present case does not regulate or govern the activities of trading corporations; it regulates the conduct of others. But the conduct to which the law is directed is conduct designed to cause, and likely to cause, substantial loss or damage to the business of a trading corporation formed within the limits of the Commonwealth. I can see no reason in principle why such a law should necessarily fall outside the scope of s. 51 (xx). A law may be one with respect to a trading corporation, although it casts obligations upon a person other than a trading corporation. An example is provided by s. 5 of the Crimes Act 1914 (Cth), as amended, considered in Reg. v. Australian Industrial Court; Ex parte C.L.M. Holdings Pty. Ltd. (1977) 136 CLR 235, at pp 246-247 . A law will fall within the power if the conduct to which it is directed is so relevant to the subject of the power that a law rendering such conduct unlawful can be described as a law with respect to that subject.

Stephen J discussed the process of characterising a law to determine whether it is within the corporations power, or any other source of legislative power and made the following extracted comments:

What I have said touches upon one of the major difficulties involved in the process of characterization. An accurate description of any at all complex law will necessarily be relatively detailed if it is to encompass the several elements which together go to make up the impugned law. However, constitutional grants of power such as those in s. 51 are customarily expressed quite differently - succinctly and in terms of wide generality. Thus, when an accurate, and hence relatively detailed, description of a law is sought to be matched against one or other of the tersely expressed grants of legislative power contained in s. 51 of the Constitution, it will not infrequently be found that different parts of the description of the law fall within different paragraphs of s. 51; still other parts may be found to fall within none of those enumerated grants of power, because they concern elements of the law which are the subject only of State legislative power.

To recognize that a law may possess a number of quite disparate characters is, then, to accept reality. Few laws will involve only one element. Even the simplest form of law will commonly contain two elements when it forbids, regulates or mandates particular conduct on the part of a particular class of person. The conduct and the class will form distinct elements and if each happens to bear a relationship to different grants of legislative power the law may often be equally appropriately described by reference to either. If a law also includes reference to another class of persons, those affected by the conduct in question, a third element will thereby be introduced. Many laws will, because of the relatively complex concepts to which they give effect, involve still further elements. These elements may, of course, all bear one and the same character. However, where they do not, any search for a single character by which to describe the law is likely to prove fruitless.

Were constitutional dogma to require such a search to be pursued, the difficulty in choosing between competing elements might readily lead different minds, perhaps influenced by quite subjective considerations, to varying conclusions as to the dominant character of a law. But to accept as constitutionally permissible the fact that a law may bear several characters, each as valid as the other because each is reasonably capable of fairly describing the law as a whole, disposes of the need to rely upon what may prove to be quite subjective reasons for selecting one particular description only. With the disappearance of subjective criteria, the process of characterization then becomes less uncertain and more a matter of logic than of idiosyncratic assertion.

Once it is recognized that a law may possess several distinct characters, it follows that the fact that only some elements in the description of a law fall within one or more of the grants of power in s. 51 or elsewhere in the Constitution will be in no way fatal to its validity. So long as the remaining elements, which do not fall within any such grant of power, are not of such significance that the law cannot fairly be described as one with respect to one or more of such grants of power then, however else it may also be described, the law will be valid. If a law enacted by the federal legislature can be fairly described both as a law with respect to a grant of power to it and as a law with respect to a matter or matters left to the States, that will suffice to support its validity as a law of the Commonwealth...

It follows that in testing validity the task is not to single out one predominant character of a law which, because it can be said to prevail over all others, leads to the attaching to the law of one description only as truly apt. It will be enough if the law fairly answers the description of a law
"with respect to" one given subject matter appearing in s. 51, regardless of whether it may equally be described as a law with respect to other subject matters. This will be so whether or not those other subject matters appear in the enumeration of heads of legislative power in s. 51...

The centrality of that connexion is emphasized, rather than diminished, by the fact that the prohibition which the law imposes is not addressed to corporations but rather to those who act with a purpose of harming them. That the law takes this form is dictated by its aim of protecting corporations from a particular harm; in such a prohibitory law the focus will necessarily be upon the acts of those who intend harm. A law forbidding certain acts of third parties for the reason that they were both intended, and also likely, to harm aliens would surely be as central to the grant of power with respect to aliens as a law which required aliens to do or refrain from particular conduct: the intended object of another's conduct is no less central, no less significant, in bestowing a character upon a law than is the actor to whom that law directly speaks.

Mason J commented (emphasis added):

I should not wish it to be thought from what I have said that the corporations power is confined in its application to trading corporations to laws that deal with their trading activities. The subject of the power is corporations - of the kind described; the power is not expressed as one with respect to the activities of corporations, let alone activities of a particular kind or kinds. A constitutional grant of legislative power should be construed liberally and not in any narrow or pedantic fashion...

Nowhere in the Constitution is there to be found a secure footing for an implication that the power is to be read down so that it relates to "the trading activities of trading corporations" and, I would suppose, correspondingly to the financial activities of financial corporations and perhaps to the foreign aspects of foreign corporations. Even if it be thought that it was concern as to the trading activities of trading corporations and financial activities of financial corporations that led to the singling out in s. 51(xx) of these domestic corporations from other domestic corporations it would be mere speculation to say that it was intended to confine the legislative power so given to these activities. The competing hypothesis, which conforms to the accepted approach to the construction of a legislative power in the Constitution is that it was intended to confer comprehensive power with respect to the subject matter so as to ensure that all conceivable matters of national concern would be comprehended. The power should, therefore, in accordance with that approach, be construed as a plenary power with respect to the subjects mentioned free from the unexpressed qualifications which have been suggested.

Brennan J applied the Court's previous decision in Strickland concluding that a law protecting the business of a trading corporation was within the corporations power, but commented:

A law which, discriminating between one or more of the corporations in para (xx) and the public at large, protects both the trading and non-trading business of trading corporations, wears the appearance of a law with respect to those corporations. It is of the nature of the power that it is a power to make law with respect to corporate persons, not with respect to functions, activities or relationships. The subject matter of activities, or relationships which the law affects may be relevant to the question whether the law is truly to be described as a law with respect to corporations mentioned in para (xx), but the validity of the law cannot be determined as though the power were expressed as a power to make laws with respect to the trading or some other activity of or relationship with corporations mentioned in para (xx).

The remaining members of the Court agreed with the separate judgments of Gibbs CJ and Mason J.

The Tasmanian Dams case, involved the validity of the World Heritage Property Conservation Act 1983 (Cth) - particularly in so far as it purported to legislate using s 51(xx) to prohibit corporations from undertaking certain activities within heritage listed areas. In this case, the area in issue was the proposed Gordon below Franklin Dam in south west Tasmania.

Predictably, Gibbs CJ adhered to his previous view in Fontana Films and determined that the Hydro Electricity Commission was not a trading corporation, because its activities, together with the purpose of its formation was in discharging a public function of importance to Tasmania. The trading function of the Commission, although important did not reflect the character of the corporation and by extension, the Commonwealth legislation did not apply to it. In any event, the relevant provisions could not be truly characterised as a law with respect to corporations.

Mason J cast the issue of legislative validity firstly, in terms of the scope of the corporations power and secondly, whether the law is in truth a law with respect to the corporations power, so defined. His Honour held that the Hydro Electric Commission was a trading corporation and the law was within the terms of the corporations power. In doing so, he commented (with emphasis added):

The true principle is that the character of the law is to be ascertained from its legal operation, that is by reference to the rights, duties, obligations, powers and privileges which it creates. This is not to deny the validity of a law which exhibits in its practical operation a "substantial connection" with a relevant head of power... The requirement that there should be a substantial connection between the exercise of the power and its subject matter does not mean that the connection must be "close". It means only that the connection must not be "so insubstantial, tenuous or distant" that it cannot be regarded as a law with respect to the head of power...

Brennan J decided that the relevant legislation was a law with respect to trading corporations but declined a view on the extent of the corporations power. Deane J preferred the broad view that the corporations power was not restricted to the trading activities of trading corporations - but that it was a general power to make laws with respect to trading corporations. Murphy J substantially agreed with the reasons of Mason J. Both Wilson and Dawson JJ took a view similar to that of Gibbs CJ.

So what does it all mean? And does it really matter?

In Fontana Films, the Court divides itself into three camps on the extent of the corporations power and its legislative use. Gibbs CJ and Wilson J preferred a narrow approach to regulating the specific activities of the types of corporation listed in s 51(xx). Mason, Murphy and Aickin JJ suggest that s 51(xx) is a broad grant of legislative power with respect to the types of named corporations which should be construed liberally and without implication. Stephen and Brennan JJ took a limited view that s 51(xx) authorised legislation governing the trading activities of trading corporations - but declined to address the issue further.

In the Tasmanian Dams Case, the Court split into two main groups. Gibbs CJ, Wilson and Dawson JJ took the limited view (largely postulated by Gibbs CJ in Fontana Films). Mason, Murphy and Deane JJ took the broader view put up by Mason J in Fontana Films. Brennan J's decision managed to resolve the dispute before the Court (in terms of the corporations power), without pushing the matter beyond the narrow view of the corporations power outlined by Gibbs CJ in Fontana Films.

Is it really relevant today, particularly regarding the debate over the industrial relations legislation?

The short answer to that question is "Yes, but"...

It all depends on one caveat - and that related to the constitutionality of the entire Commonwealth legislative scheme relating to company law in Australia. The problem commenced with a decision of the High Court in Re Wakim; Ex parte McNally.

The issue, to put it in simple terms, was this - the Commonwealth Parliament can validly confer federal jurisdiction upon State courts under the Constitution, however, it is impossible for the State Parliaments to legislate and confer State jurisdiction upon Federal Courts.

This was the presumption upon which the Corporations Act in the form it had taken to date had rested and to that point, had functioned effectively. This was the potential doomsday nightmare scenario for corporate law in Australia.

Remedial legislation was passed by all Parliaments to attempt to fix things, however, there were still potential problems envisioned. The conclusion arrived at to remedy the situation was for the States to refer their legislative powers to the Commonwealth to enable the Corporations Act to not suffer the fate of constitutional challenges regarding its validity. The States all passed referring legislation in the form of a uniform Corporations (Commonwealth Powers) Act 2001 (the Territories don't need to by virtue of s 122 of the Commonwealth Constitution).

So what does it all mean?

The Commonwealth have not made a wholesale reference of legislative power with respect to corporations to the Commonwealth - on a fair reading of the uniform legislation, its only a limited reference to support the validity of the Corporations Act in its present form.

The corporations power s 51(xx) in the constitution is to be applied to the Workplace Relations (Work Choices) Bill 2005 - with its attendant problems, and the position in Fontana Films and Tasmanian Dams (ie. can the Commonwealth legislate only for trading activities, or can it legislate for all purposes for trading, financial and foreign corporations?) is the issue which will squarely arise for the decision of the High Court in yet another bun fight to come.

Flow on consequences for the IR reforms might be:

  1. The States should never make a wholesale reference of legislative power regarding corporations to the Commonwealth - and in the event that they do, then the wholesale referral of power may be able to be revoked.
  2. In the event that businesses are structured in such a way that assets are held by one company, employees are employed by another and the business of the company is conducted by a third, it may be possible that the IR reforms do not apply to the "employee company" if that company cannot be described as a trading, financial or foreign company.

Just a few more thoughts and a bit more grist for the mill in this debate.

Margo: Many thanks, Andrew. Good on you for taking the time to set this hard legal stuff out for Webdiarists.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

Brock Turner, thanks. I'm not sure if you're trying to set me up to say something hideous about workers, but if you are, here it comes: There are only two ways to reduce labour costs. 1) Use less people and 2) Pay the people you use less for the work they do. Both options hurt workers in the short term (and benefit them in the longer term IMHO).

In our economy, and most Western economies option 1 has always been the main thrust of managerial effort, usually through automation, and sometimes via nasty IR battles about working conditions. Option 2 is now becoming more realistic through outsourcing offshore, and perhaps also via the evolvcing IR climate at home that is replacing rigid award based wage structures wth new, more adaptive agreements. I say perhaps, because our unemployment is at historic lows, which givers workers overall a fair bit of bargaining power at present. Given that it really is unclear that the proposed reforms will drive down wages in the short term - though next time we have a recession that may change.

The motivation effect you describe is certainly there in middle management levels in large corporates I've worked in, despite them often being in on the joke. But, in my experience (I've had may operational management jobs over the years) the shop floor doesn't give a rats arse. All they want is a pay packet in return for doing a job they don't have to think too much about, and that's their right. We're not all careerists. Why should anything else be expected of anyone, and why should they care about how much their bosses make?

My brother graduated from University with a double major in English and Politics. After Uni He got a menial job in the pay office of a public service organisation, because that's all he was qiualified to do and he wasn't ambitious. After a few years he got fed up with doing work that exercised neither mind nor body. He's been a postman for the last 15 years, and he's very happy about that.

re: Andrews v Beazley: first strikes in Parliamentary IR debate

In answer to Jay Somasundaram's question, why do we create a society where economics and money rules? I think the answer to that can be found in a famous case in America (and as I am not a legal type I cannot give chapter and verse on it) whereupon the Supreme Court decided that corporations were to be classed as individuals and to have all the rights and benefits accorded to them that are given to every individual in society. So the transmogrification began and, of course, the political parties which represented capital in society thus pushed this ideological barrow very hard and continue to do so to this day; culminating in the sort of IR laws we are about to have foisted on us courtesy of our own capitalist party. Suffice to say, they also like pushing the line that each and every worker ought to become a micro capitalist corporation, notwithstanding that it will surely create a dog eat dog world ultimately. However, that's the sort of social Darwinism that they ascribe to wholeheartedly, and that's their right I suppose in a democracy, and whilst I still can, I don't have to like it because I happen to think that not everyone is capable at all times of being grist for the mill and so should not be cast onto a social scrapheap for being so, or made to become part of a working underclass rather than being afforded the time to achieve at their own pace with the gentle encouragement of carrots, rather than being beaten with sticks, and made to suffer deprivation. Of course, malingerers should not be tolerated, but experience has taught me that some people are too fragile and break too easily.

Finally, for the edification of all, and especially because The Australian probably won't print my rebuttal to their onerous weekend editorial, I'll leave you with my latest Letter to the Editor:

'In contrast to what you claimed in your editorial on the weekend, it is you who have put the O into oxymoron.

You say that the itinerant society that the new IR laws will create will be better for one and all, skilled and unskilled labour. That if you leave your job on a Friday, because the boss won't give you what your inflated opinion of yourself thinks that you are worth, then on Monday you will be able to walk around the corner and find a factory, with a shingle out the front, advertising a vacancy, for a job paying what you think you are worth.

What a dream, what a fallacy you are attempting to push onto the Australian people. So, who is it that you work for again, Kublai Khan? And is this Xanadu? Or, as I believe it will become, in reality, neo-Dickensian Australia.

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