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Hello, welcome again to Meet the Press.
For all the talk of economic growth, interest rates and inflation,
one aspect of the economy is out of fashion these days and that's wages.
Remember those wages explosions of days gone by,
when they grew by 14% in 1982 and an unbelievable 30% in 1974.
Thanks very much, Goff.
Of course, that all happened in a centralised wages system.
Now we have enterprise bargaining,
where the bosses and the workers sort out wage rates from workplace to workplace.
Now all pay rises are supposed to be responsible and affordable,
making wages breakouts a thing of the past.
Well, are they? We're about to find out.
In the past week, the pressure has come on again with a range of unions,
including the Transport Workers Union, demanding wage increases of up to 15%,
perhaps inevitable with a booming economy and rising interest rates.
In any case, the new system is about to be put to the ultimate test.
Here to discuss it today, first, George Campbell,
Vice President of the ACTU, and later on, Ian Spicer,
Chief Executive Officer of ACCI, and joining me in the studio,
Laura Tingle of the Australian and Ross Gittens of the Sydney Morning Herald.
First, George Campbell, good morning.
Morning, Brad.
The rhetoric of the past week has been pretty strong.
What is the mood among your members at the moment?
Well, I think there's a very strong mood amongst the workforce generally
because they feel that time is nigh ripe, if I can use that term,
for them to get some of the benefits that the companies have been getting
over the past three or four years in terms of significant increases in productivity
and significant increases in profits, particularly in our industry.
And I think what you are now seeing is what you said in your opening address,
that the economy is merging out of the recession.
The workforce generally has had one wage increase, the vast majority of them,
$20,000 over a four-year period,
and they believe it's now time that they got a bit of their share of the kick.
But what is that share?
It seems to range from about 4% to 15%. What is realistic?
Well, I think you have to separate out what are claims from what will be outcomes,
and you are seeing, I think, unions expressing their claims in different forms.
The transport workers have claimed 15%, the NUW has claimed 14%.
In metals we have said that ours is a minimum claim of 4%.
That's a big difference, but we will determine the actual outcomes
and negotiations at each individual enterprise.
Each of the industries are different, so they formulate their claims differently.
Your own union has been changing its rhetoric a bit about the last week.
It's talking less about the 4% and talking about the possibility of claims of up to 14%.
How much pressure are you under to actually match the rhetoric of some of the more militant unions?
We're not particularly concerned about matching people's rhetoric.
What we're concerned about is outcomes.
And there's been a bit of a myth about the claim and the metals, that it was for 4%.
It was never for 4%.
What we have always said is that we would not settle anywhere for less than a 4% outcome,
but we would determine the actual outcomes at the enterprise level.
That's what enterprise bargaining is all about.
And I said in this program, I think two or three months ago,
that you could see settlements of 8%, 10%, 12%, 14% depending upon the circumstances of the individual company.
And that largely depends on productivity bargaining, doesn't it?
Part of it depends on productivity bargaining, and part of it will depend on the companies themselves,
whether or not they're prepared to employ people,
whether they can guarantee security of employment,
whether there is an explosion in executive salaries in those companies,
what are the payouts of their shareholders.
There will be a range of factors taken into account, including the interest rates.
But if you get up to 14%, that's a wages explosion in anybody's language, isn't it?
But it's not a wages explosion in the term that you talked about in the introduction.
It is not a wages explosion across the board.
And settlements will be different company to company, and they will be different industry to industry.
But if you don't, can I also say, look, what you have to understand is we are talking about workers
who are earning between $20,000 and $30,000 a year.
I mean, Laura and Ross would pay more in tax than these people actually,
their gross earnings are, for 12 months.
So you are not talking about exorbitant money amounts when you talk about increases for these workers.
But if you're talking about maintaining job security as you are,
you've got to maintain productivity bargaining.
How legitimate is it in those circumstances to be bargaining for adjustments based on interest rate increases?
Now, what we have said is that we will take those into account in the overall settlements
because what we will not do, and a commitment I made to members of my union when I took over as National Secretary,
we would never again negotiate a wages outcome that meant a reduction in living standards.
All right, we have to take a break at this point. We'll be right back with George Campbell.
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Welcome back to Meet the Press. Our guest is George Campbell, a Senior Vice President of the ACTU. Ross.
Mr Campbell, you talk about these wage rises ranging up to 14%.
Is that responsible and is that consistent with the Accords commitment to keep the inflation rate down
to the level of our trading partners, which is 2 or 3%?
Well, I think I can't have to say you're talking about a presumption of wage rises of 14%.
You have to separate outcomes from claims.
You said you were going to get outcomes.
But it is consistent. It is consistent with our commitment in keeping our inflation rate down to that of our trading partners.
We have delivered on the Accord. If you look at the experience of the past three years,
you take the average of the inflation rate of our 15 major trading partners who account for 80%
of the goods and services that are imported and exported out of this country.
They average 93, 3.55%. We average 1.8%. 1994, they average 3.55%. We average 2.1%.
In 1905, consensus economics predicts that they will average about 3.5 and that we will average about 3.7.
So you have to say that we have met the Accord claim.
You have, but that's the past. We're talking about the future.
And you're saying we've held back our wage demands in the past, but now we're going to go for it.
But that is not true. You can't have a system of enterprise bargaining
which gives you predictability in aggregate wage outcomes.
I mean the two things are incompatible.
But the ACTU, you've made a commitment to ensure that wages rise by an amount
that will leave our inflation rate no higher than our trading partners.
But we're not into predicting the future and we will meet that commitment.
We have met that commitment over the past three years and we will continue to meet that commitment.
But George, how do you do that? How do you do that in a system where basically you are enterprise bargaining
and it's much harder to work out that overall outcome?
Well, if you look at the service being done by the Department of Industrial Relations
on the 2.5,000 agreements that are currently registered in the Commission,
there are wage increases in those agreements which range from 4.5% up to 14.5%,
15%, but the average outcome per worker covered by those agreements is 3.4%.
We're now seeing a system of pattern bargaining being introduced
where basically people make a claim to a range of employers for exactly the same amount
and the unions are saying that that's enterprise bargaining. Isn't that a farce?
But it is enterprise bargaining in the sense that the outcomes are negotiated at each individual enterprise.
We are not seeking.
I mean, we haven't sought in the metal industry, for example, to go to Burt Evans
and ask for a 10% wage increase across the board.
What we have said in the metal industry is we will not settle with any individual employer
for an outcome that is less than 4%, which in effect relates to and reflects the safety net.
What we have said is that that is the minimum we would settle for in any enterprise,
but the actual outcome will be determined by the enterprise
and it will be determined by its profitability, it will be determined by its productivity,
it will be determined by a range of factors.
But under enterprise bargaining, isn't the claim supposed to be sorted out at workplace level too?
But in fact it will be.
But you're sending out a form letter, the union is sending out a form letter to all these enterprises
saying this is the claim.
No, we have not. We have said we want to negotiate with you. We will not settle for less than 4%.
But you don't have the manpower to negotiate employer by employer.
There are thousands of employers out there just for your union.
You don't have thousands of people who work for the union who can get out there and do it.
In fact a lot of your members are going to end up relying on the safety net
just because you're not well enough organised to do enterprise bargaining actually at most of the enterprises.
Well I don't know how you make that claim.
I don't know if you're making that claim for the trade union movement generally or for the metal workers,
but I can assure you we have done extremely well in the past couple of years with our resources.
This union has a long history of enterprise bargaining and in fact we drove it in the 60s and 70s
and we have got very significant successes out of it in the current round.
Of course, of course there will be delays in terms of getting to all of them.
You don't have the resources to spread yourself across every workshop at the same time
and to get the outcomes at the same time.
And that in itself will ensure that the actual inflationary impact of the wage negotiations will not be as great
as would appear on the surface if the claim was met across the board.
So the employers are overreacting on this. There's no need to panic.
There's no need to panic at all.
I mean the employers have had a dream run for the past five or six years
and I think they've got this stage and they believe that any wage claim by a worker is outrageous.
All right well I'm afraid we're out of time with George Campbell,
but thank you very much for your contribution. We'll be back in a moment with Ian Spicer.
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Welcome back. We're joined now in Melbourne by Ian Spicer. Good morning Ian.
Good morning.
As these wage claims come in, is there a degree of panic within employer organisations about them?
I don't think there's a degree of panic at this stage.
There is a degree of concern about the expectations which are perhaps building in the community
and amongst the trade union movement and we need to express concern about that.
We need also to indicate the impact of any major wage increase on things like private sector investment.
But now that you've got enterprise bargaining and that's what you wanted,
then the chances of a wage explosion are minimal aren't they?
Well I think you can have some debate as to whether we've got enterprise bargaining or not.
I think what we've got at the moment is a bit of both and it's probably going to make the whole system very difficult to work.
We've still got an underpinning of the award system which really means that you haven't got the flexibility to bargain
to the extent that we would wish and if you haven't got that flexibility Barry,
you don't have the opportunity to get the real improvements within business
that can provide the sort of wage increases that we all want to see.
So I think the preconditions are there given all the nuances of the wages system for a wages breakout.
Well I think when you see some trade unions like the transport workers and others
not just putting across the board claims on industry
but also saying that they're going to engage in industry wide strikes.
Now that really raises the question as to whether those unions are committed to enterprise bargaining,
have really adjusted to a new system but are simply just going to say
well we're going to use our muscle and use whatever means are available
particularly under the new legislation to force wage increases out of employers
without getting the real productivity gains that are essential to making those wage rises real wage rises.
Surely Mr Spicer it raises the question as to whether or not that union could stage a national strike
across its industry and wouldn't it be better and more useful if you were pointing out
that of course they couldn't do such a thing, they're just not able to pull that off
and even if they were able to get all their members out for a day or something
it wouldn't make any difference. Aren't you just helping to beat this thing up?
Well I think we're certainly not helping to beat it up.
I think we are concerned about the consequences I indicated earlier.
It is very difficult at this stage to separate the reality from some of the huff and puff
that might be going on. There are some union elections in the wings,
there are some other issues that are concerned for the union movement
and are therefore trying to push these issues along a bit.
But I think it's absolutely responsible of us to say to the community out there
that if we do get a wages break out, if we get a wages break out
then there are going to be some substantial consequences that are going to flow
and those are going to be in employment and in private sector investment
and both of those factors could quite easily threaten the continued recovery.
But it does take two to tango. I mean the way we're talking here
it's like only unions are responsible for a wages break out.
How confident are you that employers now facing enterprise bargaining
for the first time, whatever sort it might be, that they're going to actually be able to resist
and negotiate on an enterprise by enterprise level?
Well as I was saying Laura before that what we have in the industrial relations system
at the moment is really not genuine enterprise negotiations.
Many of those agreements that George talked about earlier are simply add-on agreements to awards.
In other words that they are agreements really about over award payments
and not looking at the way in which we undertake our work,
the way in which we build flexibility and efficiency within enterprises.
I want employees in Australia to get better wage increases and real wage increases
but that will come from efficient enterprises and I agree that takes both parties,
that takes unions and employees and employers sitting down around the table
negotiating not just about wages and conditions of employment
but negotiating about how work is performed.
Well they can demonstrate at this point that productivity is up in very many cases,
profits are up so what is a fair increase in the current climate?
Well that's, I mean you can't have, again if we're trying to move towards an enterprise agreement
you can't just pull a figure out of the air as George is saying
and say well it's not going to be less than 4% or as the transport workers are saying it's got to be 15.
It will vary from enterprise to enterprise and it will if it is negotiated genuinely
and if we can get away from this restriction of the awards being imposed as a floor
then perhaps we can get a variety of outcomes which are very good
and put real money in the pockets of workers.
Alright we have to take another break, we'll be right back with Ian Spicer.
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Welcome back, we're talking in Melbourne with Ian Spicer, Ross.
Mr Spicer does it surprise you that the workers are getting a bit restive
when they see their bosses, executives getting such huge pay rises
and having many of them having been getting those pay rises right through the recession.
The company profits have gone down and their wages have gone up.
How long does the business community think that it can get away with this double standard
which says I can afford a big pay rise but of course with you guys terribly sorry the kiddies bear?
Well Ross I mean that's a question I guess which is thrown up frequently
and there's a great deal of publicity in recent times about wage or salary increases
for the very large employers, the top 100, 150 companies
and certainly there have been some substantial increases in there
but we're talking about 100 to 150 companies.
I've got 300,000 businesses out there that I represent
and I can tell you that very few of those managers, very few of those proprietors
have really had substantial increases in their company returns
or indeed their personal returns in recent years.
Now we see a lot of publicity about the high flyers, that's fine,
a lot of those companies have in fact turned losses into profits and improved profits
but the overwhelming proportion of businesses in this country have struggled along with everybody else
and we now don't want to blow it by simply building up our cost structures
and killing the opportunity for those small and medium sized firms
which are really the growth areas in terms of employment being pushed to one side.
But we risk blowing it when workers see the boss arriving with a new Mercedes.
Well as I say I think that's a very small proportion of the businesses within this country
that have that sort of ability and have that sort of publicity given to it.
The overwhelming majority of businesses and tens of thousands of businesses that I represent
probably have their employers bringing home less money than some of their better paid employees.
That's the reality and whilst there might be a lot of publicity and a lot of headlines
about a small number of people in this country, we've got to get it in a balance.
Mr Spicer, will employer groups be campaigning as hard and as openly against the Government
at the next election as you did at the last?
Well I mean we're quite a distance away from the election.
I don't know what our Council is going to decide in the lead up to that issue.
I think our concern at the moment is to try and encourage the Government to recognise
that there are some very real and important areas of change that they've got to take on board now
and to get those things, particularly in the industrial relations arena, to get those areas of change now.
We'll be campaigning very forcefully for those change processes from now until whenever the next election is.
What occurs at the next election, we will decide at that stage.
You think though that you might be in a better position to encourage the Government
if you hadn't made a tactical error at the last election and run so hard against Paul Keating and the Government?
Well there are a couple of assumptions there.
You say A, it was a tactical error and you say that we ran against the Government.
What we did in the lead up to the last election was to publicise the policies of our organisation
and I don't believe that there's anything wrong in doing that.
It is important for the community at large to understand what the policies of the business community is
when they are being asked to make perhaps the most important decision in casting a ballot.
Do you think now that we've actually seen the Federal Government's industrial relations reforms
that your members will be possibly more militant if you like in the lead up to the next election than they were last time?
I mean people are very angry. You want a change in the Act don't you?
We certainly want a change in the Act.
The Minister, Laurie Brereton, has indicated that there will be a review of the legislation in the next several months.
Here we'll be processing that review through the National Labour Consolidative Council.
We'll be working very hard in that process to try and get the Government and indeed the ACTU
to understand the importance of change to the Industrial Relations Reform Act
and that's I think the thing which will concentrate our efforts from here into the next six months.
Mr Picer, if it's so bad now, why weren't the employer groups saying a lot more about it before this Act was actually passed?
I mean really there was a surprising silence.
Well Ross I don't think that's quite right. There was a great deal of concern.
I personally convened many, many meetings of employer organisations right throughout this country
that continued to express concern about the direction of the Industrial Relations Reform Bill
and the fact that the Act was more about building up and preserving the privileged position of trade unions
than really putting into effect something which was going to encourage enterprise negotiations.
What we decided in terms of tactics was that we would not go into a major publicity campaign
at the time just prior to the passage of the legislation
because we thought we had a greater opportunity to get changes in negotiations with the various political parties.
Alright, we're right out of time. Thank you, Ian Spicer, for your time this morning
and thanks too to Laura Tingle and Ross Gittin. See you next week on Meet the Press.