Cabinet papers 1992-93: national wages fixing at an end

The Keating government shifted the nation’s wages system towards a new model of enterprise bargaining.

The Keating government shifted the nation’s wages system towards a new model of enterprise bargaining, winding back the traditional wage-setting role of the Australian Industrial Relations Commission.

In 1991, the commission had ­refused to ratify the latest Accord between the ALP and the ACTU, prompting then ACTU secretary Bill Kelty to describe the commission decision as “vomit” that ­unions did not intend to eat.

The government moved to reduce the commission’s influence. In July 1992, cabinet backed a proposal by ­industrial relations minister Peter Cook to limit the commission’s wage-setting role to setting minimum pay rates.

Bargaining above the minimum rates would be the responsibility of employers, unions and employees, and not subject to arbitration by the tribunal. At that time, the commission had maintained a central role by testing workplace agreements against an “enterprise bargaining principle”.

Cook said the changes would lessen the commission’s supervisory role and encourage a more flexible approach to workplace bargaining. “These new provisions will ­facilitate the parties to take ­increasing responsibility for their own industrial relations outcomes with the AIRC playing much more of a ‘safety net’ role,’’ he wrote.

While recent years had seen a shift towards decentralised arrange­ments, he said, the wages system had become ­unwieldy and complex. Cook said the combination of bargained outcomes and commission decisions had created tensions. “Unless streamlined, the system’s future effectiveness could be jeopardised,’’ he said.