Industry training and award structuring is an essential part of the process of change. Laurie Carmichael, Assistant Secretary, ACTU.

Mr. Chairman, Friends,


The first question to ask about the issues that are raised in the White Paper is whether enough is being done. Now, in order to estimate the cost factor, a great deal is being expended on proving that we are doing much more than we imagined. Now what is the measure by which we judge whether enough is being done by way of change? I am going to revert to a measure which is well known to all economists and well known to all businesses, and that is, the market.


If enough is being done, then why do we have such a balance of payments crisis that we’ve got. And if enough is being done, then why aren’t we get out of it at a much more rapid rate than we are instead of stagnating. Now enough is simply not being done and that is the reality. Furthermore, the measure is not going to get more palatable, it is going to get less palatable to us.


The world at the present time, has its eyes fixed upon the year 1992. That is the year in which the European community achieves a much greater degree of integration and Europe as an entity, goes into the world market in a far more highly geared fashion than anything we have ever seen in history.


It is not only Europe, therefore, that’s focussing upon the year of 1992. Every nation that wants to be competitive and is out to carve a slice of the world action for itself, has to focus upon that year as well. So Japan is doing just that, so is Korea, so is Taiwan. We are focussing on whether or not we are spending something. We are not even using the right measuring stick at all.


From a trade union point of view, it is not my function to start arguing that it’s our task to enter into some kind of economic warfare with fellow workers or other countries. We would only wish there was some way of giving to each country, an appropriate slice of the world action that met the social needs of the peoples of all countries but so far history hasn’t yet bequeathed us a body that will apportion our needs. Whether we like it or not, we have to carve out the slice of the world action for ourselves and so far we must say that we are still thinking in terms of an era that’s gone.


That is, we are still thinking in terms of being competitive largely within a domestic market when the world market is now the predominant market.


This past 20 years has seen a change take place from where there was always world trade, to a position where world trade, the work market is quite predominant. Whether we like it or not, we are compelled to focus upon that world market and more and more each day every aspect of our own domestic, economic life gets integrated into that world market.


It is from that point of view that we measure whether or not we are investing sufficiently in new technology, whether we are investing sufficiently in skills, whether we are making sufficient changes in management and work organisation, whether we are adjusting to meet the new historical circumstances with regard to industrial relations.


For some years, the ACTU has been arguing (and here I am not trying to exaggerate with number of years) that it is necessary to look upon skills as an investment in the same way as you look upon machinery, equipment, plant and the like.


And it is necessary to recognise that fundamental changes have to be brought about. Some reference has already been made, in the discussion this morning, about the difficulties of changing union attitudes, or worker’s attitudes. It seems strange to me, that employer organisations are very quick to say that the principal negotiations ought to be at enterprise level between the employer and their employees without the intervention of unions; but when it comes to dealing with the problems it is unions that are to blame.


The simple facts are that our current form of work organisation, the current definition of employment in narrow categories of skill, the lack of career pathing in industry, all originated from management. It originated from Frederick Winslow Taylor’s so called “Scientific Management System” which was taken on board by management all around the world in the early part of this century. And it is that, which we reflect from the workforce into trade unions, into demarcation attitudes from the like. The ACTU is committed to changing them. We believe it is necessary and absolutely essential that there be an up-grading in terms of multi-skilling whether it is considered a buzz word or not, in terms of career-pathing in terms of generally raising the skill level.


Therefore we welcome the White Paper and the issues it raises. The White Paper correctly focusses upon the award structuring as an essential part of the process of change.


There are some who are saying that the award changes should only reflect the final outcome of what occurs at enterprise level. Well I am sorry I have to disagree with my predecessor speaker in saying that if that was the case then we would not have a problem of skill in the building industry where it has been so totally deregulated and left to every contractor and sub-contractor around the country to determine what it is that they will give to the community by way of quality products.


Some of the skills I have observed in the building industry in recent times by compulsion of having to get a house built, could only be described as deplorable, and if that’s the product of deregulation and total sub-contracting with no intervention, then the quicker something else is done about it, the better.


One can observe top quality products manufacturing and delivered on site but put together in the most dreadful fashion and then handed over to people as being their dwellings into which they put their life’s biggest investment in.


There is a necessity for both issues to be addressed, that is, the award and enterprise needs. I am going to just spend a couple of minutes on this issue because it is emerging as far more important than what was previously imagined.


We have had a great deal of critique rendered about the inadequacy of the outcome of secondary education in preparing young people for entry into the workforce. This critique has been well based with much that is now in the process of being corrected.


One doesn’t, however, want to be carried away to the point of imagining that what needs to be turned out from our secondary schools is a range of highly specialised individuals, rather, the debate is more laterally focussed upon the necessity for an adequate broad base of understanding and skills, equip people to be able to take on the role in the world of work that will meet both their individual needs, social needs and the economic needs of the country.


This has become accepted by all sides in industry that the broad base is extremely important. If you listen to those who manufacture computers they will say quite bluntly, they don’t know what it is that constitutes the knowledge and training that really makes a top level computer architecture designer. All they know is that they find them and there is a variety of inputs by way of the education in the individuals that they choose. As I said, it is now a well accepted fact that a broad base (an adequate base but broad) is the outcome of secondary education.


I would argue on international experience and certainly from a firm belief, that on the basis of the rapidly changing technology, the necessity to address the issue of quality in the world market, which sits alongside price today as one of the principal market determinants, that we are going to need a broad based level of education and training at a number of levels. The outcomes of secondary education will be only one of those levels. There will be equivalent broad based outcomes needed from certificate courses, advanced certificate courses, diploma courses and degree levels upon which enterprises will then be able to get the necessary skills that meet their requirements at all levels. They will then be able to get the diversity that they require, the flexibility that they’re arguing so much about.


Without this broad base at a range of levels, there will not be the diversity available, there will not be the flexibility that can be delivered to industry’s requirements, not merely now, but well into the future; taking into account that for the future the workforce is going to be required to go through constant learning throughout almost an entire working lifetime.


It’s going to be a matter of judgment, as to what the balance is between being able to provide a broad base at various levels and the degree of diversity and flexibility that is required at enterprise levels of companies.


Career-pathing is well addressed inside the White Paper and the trade union movement especially welcomes that also.


Some reference has been made already today to the award restructuring process. The award restructuring process is not going to deliver all of the skill requirements without taking into account wage adjustments. Wage adjustments will be fixed according to the work value requirements as needed by industry and the enterprise.


If we have got to argue the issues of remuneration relative to increased skills and raised productivity, then so be it, we will have that debate on the way, but some of these things are raised more as an excuse it seems to me, for doing too little rather than simply as a means of identifying the problems to which answers must be sought.


On the other hand, the question of funding seems to be almost the exclusive question of focus for some. That is, that they are already spending a lot. It may not be good enough but they’re spending a lot and there is no pot of gold from which anymore can be obtained.


I want to take this opportunity to correct something that came over the Australian Broadcasting Corporation T.V. last night, when again it portrayed that what the trade union movement in this country was putting forward was that the funding should be by way of a centralised collected fund and centrally re-distributed. The trade union movement has not put that forward at all! What the trade union movement has put forward is that there be a requirement upon industry to spend a certain proportion of payroll on training to hold that and use it at enterprise level.


Expenditure is against an amount of 20% reduction in tax that companies are getting from the federal government, this financial year.


We propose that it is expended at enterprise level, certified by management, by the trade unions, and by an accredited educational institution.


In other words, to create a quasi market. To have money looking to be spent upon training and to have the training institutions of this country going to industry looking for what their requirements are. Taking into account that there are two sets of requirements to be met. Broad based and enterprise specific.


That is what the trade union movement has actually put forward, it is disappointing that the media keeps repeating that the trade unions are asking for a centralised collective fund and a centralised distributed fund. We are doing nothing of the sort.


I want to take one moment to just correct a remark by my friend, Paddy McGuiness, who said in the Financial Review this morning, that the Trade Union Training Authority is busily spending time and moneys on teaching trade union officials on how to impede skill development adhering to old demarcation issues and so on. That is not the case. I don’t know where Paddy got his source from, but I invite him to come along and to have a full discussion as to the changes that have been affected in the Trade Union Training Authority this past two years, including, the appointment of trainers for specific industry sectors nationally – we have trainers – appointed for national work even at State level who are being required to carry through the ACTU program broadly reflected in the White Paper but more specifically of course, in the ACTU’s own policy positions that we laid down at the last Congress in regard to skill… and the urgency to overcome outdated provisions in awards. I might add that many of the courses that the Trade Union Training Authority has run have been clearly responsible for some of the major micro economic reforms on this country. For example – the one in the Hunter Valley – Hexham Engineering would not have been successfully carried through had it not been for the role and input of the Trade Union Training Authority. Neither would a range of others and at the present time the advances being made in the Metal Industry and in the clothing, textile and footwear industries and a number of other industries, would not have been made to the extent that they are currently at, without the work being done through the Trade Union Training Authority – seminars, courses, State and federal based with the direct involvement of the ACTU.


I will finalise by saying that we welcome the White Paper, we welcome the opportunity to lift this debate to a new and higher level throughout Australia. Investment, new technology, plant and equipment on the one side and skills and new work organisation on the other are the two principal things that we must face up to.


The trade union movement is constantly arguing that this must be the case. Funding ought to be seen by industry as a genuine investment in its own future and in this country for world class enterprise production for service.


This can be stimulated by the award restructuring process that will provide a framework for enterprise specificity. It should then give us the diversity and the flexibility that is required both on a multi-skilling level and a career pathing level. It should meet Australia’s skill requirements well into the future. It cannot be done on the cheap. The experience of every country so far is that it produces quite a substantial growth in productivity and more than pays for its own cost.


There is no shadow of doubt that time is not on our side. The windows of opportunity that are available for our industry and for our future at the present time may not be available at all by the turn of the century if we have not done the job now.


Other people are looking at all of the windows of opportunities that are currently available to us. Either we grab hold of them and address them in time and get the answers in time or alternatively we will face a future of constantly declining living standards, expressed through balance of payment deficits, balance of trade deficits and increasing indebtedness.


I think we can do it. I was adjured before speaking to be positive and not pessimistic. Well, I am never less than positive and I am always optimistic. I’ve got my own definition of being an optimist. That is that the degree of pain intensifies until you do some bloody thing about it.


Address By: Laurie Carmichael – Assistant Secretary. ACTU Melbourne Seminar. 7 December 1988.