David Bushby (Tasmania, Liberal Party) Share this | Hansard source

In any consideration of the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 I believe that regard must be had for how we arrived at where the national industrial relations law is today. The post-1983 approach by the Hawke government was based on an accord it had negotiated with the ACTU. The accord was designed to solve early 1980s economic problems and championed consensus between employers and employee organisations. Underlying the accord was the belief that the health of the economy could be restored by a centralised system of industrial relations regulation linking wage rises to inflation and administered by the Australian Industrial Relations Commission. Over the course of the 1980s it became apparent that this approach had failed miserably, leading to increasing unemployment, failure to achieve productivity gains, poor wage growth and contributing to the worst recession since the Depression, with over a million unemployed in 1990.

The concept of agreements negotiated between employers and employees outside the orbit of industrial relations tribunals gained favour throughout this period, particularly in business circles, and was adopted by the coalition as policy in the late 1980s and refined throughout the early 1990s. The coalition took clearly articulated policies advocating individual workplace agreements to the 1996 election under the Better Pay for Better Work banner. That year the Workplace Relations and Other Legislation Amendment Act 1996 was passed, following compromises with the Democrats and despite it being opposed by the then Labor opposition. One of its objectives was to ensure that the primary responsibility for determining matters affecting the relationship between employers and employees rests with the employer and the employee at the workplace level. It took the prescriptive award system and gave businesses and workers greater choice in negotiating working conditions. For the first time ever employees were able to have their own individual agreements—Australian workplace agreements. Since then, over 1,300,000 Australian workplace agreements have been entered into.

The legislation also introduced freedom of association laws, guaranteeing workers the right to voluntary union membership. Unfortunately, this was too late for me; I had no hope of getting back the fees that I was forced to pay to the BLF, the Federated Clerks Union and the Storemen and Packers Union whilst I was at uni—and for absolutely no benefit whatsoever. But workers voted with their feet, leaving barely 15 per cent of the Australian workforce deeming the benefits received worth the membership fee. The Howard government then went on to seek to build on the success of the 1996 changes. Over the ensuing 10 years, it repeatedly attempted to pass into legislation further IR changes—over 40 attempts, relating to a number of matters intended to make a fairer, more flexible system such as exemptions to unfair dismissal laws for small business.

Following the 2004 election, the people granted the coalition a majority in the Senate. Using the mandate given by this majority, it sought to build on the success of the previous IR reforms, with major changes which replaced the system designed a century earlier, introduced a national system replacing over 4,000 awards and 130 pieces of legislation in six different outdated systems around Australia; vastly improved cooperation, lowering the average of working days lost through industrial unrest from an average of 193 days per 1,000 in 1996 to 15 in 2006; being much fairer, with small business finally given the confidence to employ people following the removal of Labor’s job-destroying and anti-employment unfair dismissal laws; and delivered both more jobs and higher wages due to the increased productivity the more flexible laws introduced and enabled.

The results of the Howard government changes were rapidly very readily apparent. As at late last year, the following could be said: working families were clearly doing better under this system, whether they were on enterprise or individual contracts. Real wages increased by 21.5 per cent between 1996 and 2007. Three per cent of this rise occurred after the introduction of the new workplace relations system. More than 430,000 jobs were created in the 18 months following the introduction of that system—nearly 80 per cent of them full-time jobs.

A key benefit of the changes made to the IR system since 1996, particularly including the most recent changes, is the improvement they made to adding to the economy’s supply-side capacity. Shortly after their win last year, the government came up with the plan to rewrite history on the economy, in an attempt to try to win some of the economic moral high ground. The tool they have been using to do this is the fact that underlying inflation has exceeded three per cent in recent months. They have said that, because this figure is outside the target band agreed between the RBA and the Treasurer, the economy is in terrible shape. This is, of course, a total overdramatisation and nothing but an attempt to unnecessarily and cruelly scare the Australian population into believing we are facing disaster. The fact remains that the index for the target range for inflation is the headline rate of CPI, not the underlying rate, and that this remains within the target range of between two and three per cent, albeit trending towards the upper level of that band. As such, although action may be required to maintain the rate within that band, we do not currently face extraordinarily concerning levels of inflation—and certainly not in the sense that we have seen under Labor as recently as the 1980s, when it was well into double digits.

Be that as it may, the main criticism that has been levelled at us for failing to address this ‘inflation problem’ was that we failed to address supply constraints—particularly in respect of labour shortages. But, as confirmed by Treasury in the recent additional Senate estimates, the introduction of increased flexibility in the labour market is a key tool in addressing shortages in skilled labour. One of the primary reasons for the introduction of the new workplace changes was to deliver just that: increased flexibility that would allow more people to negotiate employment conditions that would suit them and allow them back into the workforce, while at the same time improving productivity through employers being able to hire employees on conditions that best suited their specific needs and thereby helping to alleviate the supply-side constraints in the economy.