THE ACCORD
The Accord has been the framework for economic and social policy under the ALP Government in
co-operation with the ACTU.
Its focus was not only upon economic growth and wages, but encompassed a broader agenda.
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taxation reform
active labour market policies
industry policy to underpin restructuring
a more equitable approach to retirement incomes
Medicare
maintenance of Family Income Support
development of Child Care
The Accord is based on the premise that policies-need to be comprehensive and equitable, based on
co-operation not confrontation.
This approach has been vindicated with an unprecedented period of very low industrial disputation,
which contrasts starkly with the Fraser administration's performance.
The original Accord was originally designed to tackle the problem of stagflation, ie. simultaneously high
unemployment and inflation with Iow economic growth.
Until last year the Accord era has been associated with consistently better macroeconomic outcomes:
- Growth in GDP and employment was considerably higher relative to both the Pre-Accord period and
outcomes experienced in the OECD.
Real unit labour costs have fallen 8% since March quarter 1983 consistent with supporting better
employment investment and living standards. In return the social wage has been boosted. Real
household disposable income per head, which captures some but not all benefits, has risen 11 ½% since
March 1983.
There has been a shift in factor shares which has boosted the profit share of GDP from the weak and
Iow levels of the 1970s and early 1980s.
In return the real growth in investment was exceptional over the late 1980s.
WAGES POLICY
Since the original Accord in February 1983, there has been a series of Agreements (Accords Mark II to
VI) which have evolved to address the changing economic and industrial circumstances.
The Accord Statement in 1983 was premised on half-yearly wage indexation linked to movements in the
CPI.
Even in that period the ACTU was sufficiently flexible to accept the lower CPI outcome associated with
the introduction of Medicare.
In September 1985, the Government and the ACTU--sought to quarantine the inflationary impact of the
substantial exchange rate depreciation from wages [Accord MK II].
In return for tax cuts and 3% Award-based Superannuation the ACTU accepted a 2% discount of the
wage rise-based on the CPI.
Over the 1986 there were further external shocks to the Australian economy, with further slumps in
export prices and the terms of trade.
Accord Mark III implemented in March 1987 marked the end of formal indexation facilitated the more to a
two tier system of wage fixation requiring efficiency offsets in exchange for wage increases through a
Restructuring and Efficiency principle.
However, the focus of many parties on short-term cost-cutting measures tended to limit bargaining to
cost-neutral outcomes.
Accord Mark IV Agreement of 1988 built upon steps taken by Accord Mark III.
The aim was to generate increased productivity and establish the Structural Efficiency Principle as a
central element of wage fixation.
Commencement of Award Restructuring in order to improve efficiency, provide workers with access to
career paths, encourage multi-skilling and minimise demarcation.
Accord Mark V in 1989 was intended to secure wage restraint while providing improvements in real
disposable income.
Based on a combination of moderate wage increases, substantial cuts in personal income tax and
improvements in the social wage.
Continued process of Award Restructuring.
Accord Mark VI - agreed to in February 1990 and revised in November 1990.
- continued support for Award Restructuring
- Increased focus upon the enterprise
Wage - tax - Superannuation trade off
$12 per week wage rise from May 1991 tax cut equivalent to 0.7% September quarter CPI rise further
improvements in employer-funded superannuation
Enterprise Bargaining as endorsed in October 1991 NWC.
Hence the Accord has overseen a major shift in the attitudes and nature of industrial relations over the
last nine years.
In particular the emphasis has devolved considerably from the period of wage indexation through a
period of transition to workplace bargaining.
Increasingly the ACTU has been encouraging individual unions to be more self reliant in terms of
organising workplace bargains within a broad general framework.
Hence the ACTU views enterprise bargaining as part of the continuum of change which commenced
under Award Restructuring, but with a greater emphasis on change at the workplace.
Whilst we support a need for workplace bargaining, this will not weaken the crucial role of minimum rates
of pay and National Standards such as hours of work, annual or long service leave with pay. These serve
to protect the industrially weak who shall not be sacrificed in the-process of labour market reform.
The wages system has been in transition since the mid 1980s and under the Accord labour market
reform has been achieved without the level of disputation the early 1980s experiment in deregulation
achieved.
Union Rationalisation And Future Strategies
The ACTU recognises the difficulties with the current structure and function of the union movement and
that urgent action is needed to ensure that the trade union movement is a relevant and effective force in
the future.
Of concern is the decline in union membership during the 1980s. The number of employees who belong
to unions has fallen from 51% in November 1976, to 46% in August 1986, 42% in August 1988, and
40.5% as at August 1990. (See graph) Union membership in the private sector was only 31% in August
1990 with 67% in the public sector. But the rate of decline of union membership was fastest in the
mid-1980s and has slowed since 1988, in fact the number of union members has actually increased by
5.9% between 1976 and 1990.
In 1987, the ACTU produced 'Future Strategies for the Trade Union Movement'. Since that document the
ACTU has, undertaken a strategy to reform the union movement. A key problem was that there were too
many unions and many of them were too small to meet members' needs. ACTU Congress in 1991
reaffirmed the need for unions to amalgamate to form larger more efficient unions. The amalgamations
have been mainly taking place on industry lines as appropriate but both occupationally based and
industry based amalgamations are supported.
In 1986 there were 326 unions in Australia, in 1990, 295, and-in 1991, 275 unions: Amalgamations have
been proceeding at a rapid pace. At the time of ACTU Congress, 199.1 over 70 amalgamations were
taking place at the Federal level. The aim is to have 17-20 amalgamated unions in the near future.
These larger unions should have open and demarcation structures to encourage mature Participation of
members. The amalgamations will provide more resources to more effectively service the needs of
workers.
Enterprises, which had to deal with a large number of small unions previously will too benefit from these
changes and instead deal with better-resourced, large union organisations. The number of unions in
each industry will be reduced and structures developed to enable unions to co-operate with one another
and extend coverage to the non-organised sectors of the workforce.