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Category Archives: employer associations

Patrick Manning
July 7, 2009

IT’S NOT every superannuation fund chief executive who can persuade Al Gore to come to Australia to launch a plan to move the nation to clean energy.

Bob Welsh, head of the $6 billion Vicsuper fund, can – partly because he is one of the biggest local investors in Generation Investment Management, the London-based fund manager that Mr Gore chairs.

At a business breakfast in Melbourne next Monday Mr Gore will launch Safe Climate Australia, a non-profit, non-partisan organisation working on Australia’s move to a zero-carbon economy.

The organisation was inspired by Mr Gore’s “Repower America” plan to transform the US economy in 10 years.

Vicsuper, which has more than 247,000 members, is hosting the launch and has previously backed other programs set up by the Safe Climate chief executive, Brendan Condon.

Mr Welsh, who has headed the former public sector fund since it was set up in 1994, has been a “green super” pioneer. His aim is to make Vicsuper, truly sustainable, and he has been prepared to break a few rules to get there.

Vicsuper has made sustainable investment an integral part of its strategy instead of an option available to members who choose it, as most super funds do.

It now has about $1.4 billion in a range of sustainable investment strategies, including $580 million in listed domestic and international share funds, $92 million in forestry and $250 million in its Future Farming Landscapes program, which is buying up rural land and water in northern Victoria. Another $122 million is committed to sustainable private equity.

Mr Welsh has been prepared to sideline the actuaries who advised, for example, that such venture capital investments were “risky” and had “no track record”.

In late 2007 Vicsuper seeded the Cleantech Australia Fund – which invests in Australian start-ups such as the wave-energy converter Oceanlinx – with $30 million.

“That was really satisfying,” Mr Welsh said. “Because the asset consultants said, ‘Look, this is a first-time approach; we don’t know whether the investment case makes sense’.”

Vicsuper is unusual in another way: it does not provide its performance figures to independent ratings agencies such as Super Ratings, although the figures are available on its website.

“We think it’s important to get people to focus on the long term,” Mr Welsh said. “It is impossible to compare returns unless you have exactly the same weighted cash flows and asset allocation. The league tables can be misleading. We don’t think it adds value.”

Vicsuper has a total of $135 million invested with Generation Investment Management. The fund manager does not discuss its performance figures either, but Mr Welsh said it had been “shooting the lights out” – finance-speak for caning it.

Thursday, 23 April 2009

Fresh approaches to national skills training are urgently needed in order to meet the challenges of the economic downturn and to position Australia for a return to growth and prosperity, according to a consortium of peak industry, trade union and youth advocacy bodies.

A report released today by the National Skills Policy Collaboration (NSPC) – comprising the Australian Industry Group, Australian Council of Trade Unions, Group Training Australia, Australian Education Union and Dusseldorp Skills Forum – recommends a new wave of training reform to take advantage of opportunities beyond the current economic crisis.

The report Investing Wisely sets out a framework to elevate skills development and to entrench a culture of learning across the workforce.

Heather Ridout, Chief Executive, Australian Industry Group said the importance of skills cannot be taken for granted.

“Despite rising unemployment, we cannot afford to take our foot off the pedal in addressing the skills gap in Australia. As soon as labour market conditions improve skill shortages will re-emerge with a vengeance, especially given our ageing workforce. It will bring with it all the familiar pressures on our ability to have the skills we need to sustain investment and growth. Indeed, we need to avoid the mistakes of past downturns where training was seriously neglected and businesses need to be positioned to emerge with the skilled workers they need to take advantage of the recovery,” Mrs Ridout said.

Sharan Burrow, President of the ACTU said: “Increased productivity flowing from enhanced skills and training will be vital if we are to emerge from the economic slowdown with a more skilled workforce that is able to compete globally.

“There is always a risk that in the current economic climate, the focus on skills will take a backseat to other more immediate concerns. That would be a big mistake,” Ms Burrow said.

The report stresses that skills development needs to keep pace with the demands of the new economy, and that there must be a focus on quality, not just quantity.

The consortium says improvement is needed in four key areas:

Accurate information about skill needs, and mechanisms that shape public policy and funding decisions;

A prevailing industry culture that values investment in skills development and makes the most of the skills at its disposal;

A focus on people and the skills and opportunities they need to participate in society and the economy; and

Government funding which supports the development and use of the right skills.

“The shortcomings identified are not new and they will not be fixed merely by more funding or more training places,” Jim Barron, Chief Executive Officer, Group Training Australia said. “Action is required to maximise the value of investments in skills, and achieve a more strategic use of public funds”.

AEU President Angelo Gavrielatos said: “The report highlights the need to place a well resourced public TAFE system at the heart of any strategy to increase participation and equity in Australian workplaces and society.”

The report makes five key recommendations:

Work closely with industries and employers. A significant funding investment should be made in encouraging industries and enterprises to pursue high-skill strategies;

Develop a culture of learning across all levels of the workforce. Key personnel should be developed and supported to engage workers across all sectors in learning. Managers should play a critical role in this process;

Make public funding mechanisms more flexible and responsive to demand. This does not necessarily mean responding to the demands of individuals and individual firms; rather, responding to broader industry and social objectives;

Ensure sufficient investment is made in the public training system. A legacy of government funding cuts must be reversed; and

Ensure sufficient investment is made in the development of essential skills. There is a good case for maximising the public and employer contribution, and minimising the individual contribution, to this end.

Media contacts
Australian Industry Group, Tony Melville: (02) 6233 0700
Australian Council of Trade Unions, Mark Phillips: (03) 8676 7266 or 0422 009 011
Group Training Australia, Bob Bowden: (02) 9241 2811 or 0412 753 298
Australian Education Union, Angelo Gavrielatos: 0488 012 045

More information
Download a copy of Investing Wisely here.
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Wednesday, 22 April 2009

Measures must be taken to prevent a generation of young Australians becoming victims of long-term unemployment as a result of the Global Financial Crisis, say unions.

Commenting on the release of an OECD report, Jobs for Youth, ACTU President Sharan Burrow said avoiding a blow-out in the ranks of unemployed young people must be a major priority for the Australian economy in coming months.

She said employers had a special obligation not to retrench trainees and apprentices at the first sign of tough times as this could lead to them not finishing their qualifications and finding it hard to secure decent work.

Ms Burrow said unions welcomed the recent $300 million Federal Government program to enable young people to complete their apprenticeships.

Unions have called for a job compact for young Australians unemployed for 18 months or more.

This would involve a six to 12 month job placement, primarily in the private sector, to all who have been on unemployment benefits for more than 18 months.

Intensive help must also be provided for people aged under 18 to search for suitable full-time work, training or education through the Youth Training Initiative.

Ms Burrow said the latest data showed that 91,000 young Australians in full-time work lost their jobs in the past year.

“We must ensure that young people beginning their working lives are not left behind by the GFC,” she said.

“It would be a tragedy if a generation of young Australians were trapped in long-term unemployment and poverty as a result of this downturn.”

Ms Burrow said improved industrial relations protections for young workers were also very important and should not be undermined by the Global Financial Crisis.

Vulnerable young people featured prominently among the victims of WorkChoices with AWA individual contracts stripping away wages, conditions and rights for thousands of young people, especially in the retail and hospitality sectors.

The recently-passed Fair Work Act will provide better protection for young workers, and Ms Burrow cautioned against any roll back of the new industrial relations laws that would leave young workers more exposed to being ripped off by employers.

“We must not go back to the days when young workers were exploited and ripped off under a system that gave them few rights at work,” Ms Burrow said.

BHP Billinerals Adam Morton
April 22, 2009

AUSTRALIA’S big miners are pushing for a merger of 11 industry bodies in a bid to cut costs and centralise lobbying power under the Minerals Council of Australia.

Organisations targeted under the plan include the Australian Coal Association, the Australian Aluminium Council, the Australian Uranium Association and state and territory minerals councils.

A letter signed by chief executives at 11 companies, including BHP Billiton, Rio Tinto and Xstrata, says it would “improve national consistency” and reduce a combined operating cost topping $45 million a year.

“Quite simply, we will not continue funding organisations as separate entities to the Minerals Council of Australia as we have previously,” it says.

Sent on the eve of Easter, the letter has angered some industry bodies and their junior member companies.

Most declined to speak, but industry insiders said they feared concentrating power in Canberra would strip some commodities of representation and deny others a strong voice at state level, where much of their business lies.

Tony Fawdon, executive chairman of minerals explorer Diatreme, said the Queensland Resources Council had been crucial in the industry winning $50 million from its State Government in 2006.

He said the national minerals council sat in an ivory tower with little idea of what happened at state level.

“Frankly, I don’t think the (minerals council) is going to have any practicality at all — the bigger the company, the bigger the chamber, the less hands-on the practitioners are at the top of it,” he said. “How are you going to cut up a very, very thin cake of funding across the states?”

Minerals Council chief executive Mitch Hooke said the plan was a commonsense approach that would “enhance regional capacity, not diminish it”.

He said the states would continue to be represented by branches within the national council, as Victoria had been since a merger in 2004. The Northern Territory Resources Council had already volunteered to take part.

“The goal is alignment of advocacy, the goal is improved efficiency and effectiveness,” Mr Hooke said. “If Victoria is anything to go by, the regions are richer for working within the national secretariat while maintaining autonomy to deal with the state issues.”

Mr Fawdon said this meant little: the Victorian minerals council was “pretty toothless”, unlike its counterparts in Queensland, South Australia and Western Australia.

Mr Hooke will convene an implementation committee to be chaired by former Newmont executive Paul Dowd.

Other companies backing the plan are Anglo Coal, Downer EDI, Barrick Gold, Minara Resources, Newcrest Mining, Ausminerals, Thiess and Newmont Asia Pacific.

Several industry bodies declined to comment.

Monday, 20 April 2009 | AAP
Interesting piece on retail sector responses to the economic downturn.

Michael Stutchbury, Economics editor | March 31, 2009
Article from: The Australian

AFTER returning from the G20 summit in London, Kevin Rudd should hit the pause button on Julia Gillard’s second round of workplace re-regulation. Otherwise, the Rudds will not want to get sick outside standard business hours. Their local chemist could be shut because of punishing new penalty rates imposed by Gillard’s award “modernisation”.

Before he left for overseas, Rudd was pinned down on the ABC’s AM program on how pushing up the cost of labour through the new workplace legislation and the separate award modernisation would protect jobs. The Prime Minister had no answer.

Gillard since has conceded that “there is a negative relationship between minimum wage increases and employment” and that “there is more reason to be concerned” about this as the economy slides into recession. The “biggest thing” on the Fair Pay Commission’s agenda should be jobs, she says.

Until now, the FPC set up by John Howard has lifted the minimum wage in line with price inflation. Gillard’s call for a “considered increase” from the FPC’s scheduled July decision appears to mean a real cut to the minimum wage, possibly compensated by tax offsets for low income earners in the May budget.

Gillard talks of the FPC’s decision as being important for “low-income Australians”. But most of the 140,000 workers on the $543.87 federal minimum weekly wage are not in low-income households.

They’re typically students or second income earners. And most of the 1.3million working Australians on allminimum wages adjusted by theFPC decisions are paid considerably more than the $14.31 an hour federal minimum. They’re onaward pay scales that stretch beyond $40 an hour and even into annual six figures.

This is the award system that Gillard has ordered the Industrial Relations Commission to modernise as it morphs into Fair Work Australia and as Howard’s FPC bites the dust come July.

Unique to Australia, the award system is a sediment of compromises over countless industrial disputes stretching back more than a century. By one reckoning, there are 4053 different awards, containing 4000 pay scales and 105,000 job classifications, along with all sorts of detailed rules about penalty rates, meal breaks, overtime and loadings.

The Striptease Industry Conditions Award provides a $20 loading for employees required to expose “nipples, buttocks or genitalia” in any “parade representing the employer’s business”.

But rather than relax the grip of the shambolic old award system and pay-scale structure, which the Fair Pay Commission planned to do, Gillard’s exercise will tighten it.

The new simpler to manage grid of pay scales, loadings and sundry conditions on Australian businesses and the 10.8 million people they employ will be reinforced into something more solid and more downwardly inflexible.

The exercise aims to structure awards around industries, largely reflecting the history of coverage disputes between the monopolistic trade unions that pay most of Labor’s bills. But there will still be occupational awards across industries when occupational unions are institutionally strong enough, such as for metal maintenance workers, nurses and clerks. Emerging new industries such as call centres, web design and biotechnology will be more easily roped in through “common rule” and a catch-all award.

Rather than fashion flexible working arrangements around evolving business dynamics, the exercise inevitably reflects the mindset of the old system. So-called hard-won gains – such as the peculiar Australian award condition that workers must be paid 17.5 per cent more when they take annual leave – cannot be surrendered when times change. Instead, a union beachhead of higher pay and conditions wrung out of one vulnerable business or industry through collectively bargaining must be consolidated so it can be spread to the rest of the award system. And the new Fair Work Australia will run award test cases every few years, perhaps on maternity pay or sex “discrimination”, which will insert new minimum award conditions to be obeyed by collective bargains.

Gillard’s impossible decree that modernisation cannot cut employee conditions or push up employer costs predictably is producing the default position of levelling up. Casual employment has been the great escape from the system, particularly for service industries. Levelling up to the metal trades standard will impose a higher economy-wide casual loading of 25 per cent, which prices a lot of casual work out of business.

Two weeks ago, this column explained how the restaurant trade would be forced to operate under the “modernised” award designed for the more unionised hotel or pub industry, including penalty rates of up to 275 per cent for serving food on public holidays.

The IRC relented on its first bid to rope the pharmacy industry into the modern retail award based on the conditions won in big department stores. But the levelling up for the new Pharmacy Industry Award 2010 will mean an end to the modest penalty rates that until now have applied for casual pharmacy assistants and that have allowed many chemists to remain open outside standard business hours.

First, the new award will impose the new standard 25 per cent casual loading on top of full-time wages, which themselves will increase by up to 250 per cent for public holidays. For casuals, Saturday work after 9pm will attract a 150 per cent casual loading; Sunday work 200 per cent and public holidays 312.5 per cent.

Much of the pharmacy price structure is set by government regulation, reducing the scope to pass on such labour-cost increases. This will increase the pressure on chemists not to open at night, weekends and public holidays.

Gillard’s department lamely claims that “the flexibilities and simplifications available through modern awards and the institutional framework should have a positive effect on business costs”, whatever that means. But the new pharmacy award requires any “emergency” changes to a part-time pharmacy assistant’s roster be made in writing 48 hours in advance. And it requires that any work done in excess of part-time rostered hours be at least time and a half.

Just as it has done for executive pay and maternity pay, the Government should put the Productivity Commission on to assessing what this award modernisation exercise and the in-the-bag Fair Work legislation will do for job creation and unemployment. That may give Rudd some answers.,25197,25265377-7583,00.html

Patricia Karvelas and Ewin Hannan | March 24, 2009
Article from: The Australian

THE Rudd Government has rebuffed a union push for a $21-a-week minimum wage rise, warning that an excessively large increase would lead to job losses and burden small business during the economic crisis.

Employment Minister Julia Gillard and Treasurer Wayne Swan yesterday declared a big rise now would put vulnerable, low-skilled employees out of work.

Contradicting the ACTU’s argument that a wage rise now would stimulate the economy, the Government said minimum-wage increases were best used to protect the low-paid rather than as a macroeconomic stimulus.

Meanwhile, Remuneration Tribunal president John Conde has written to federal judges warning them not to expect hefty pay increases this year in view of the tough economic times.

While declining to nominate a specific dollar amount in its submission to the Fair Pay Commission, the Government said it supported a “considered rise in the low-income safety net, mindful of significant challenges facing the domestic economy”. It urged the commission to make employment its primary consideration.

The ACTU is seeking to increase the minimum wage from $543.78 a week to $564.78 a week, a rise of 3.86 per cent. According to union costings provided to the commission, the ACTU said awarding its claims would add a “negligible” 0.3 per cent to ordinary-time earnings and have a “barely measurable” CPI impact of 0.16 per cent.

ACTU secretary Jeff Lawrence yesterday attacked the commission chairman Ian Harper, claiming he was “not impartial”.

Professor Harper recently reaffirmed there was a negative relationship between employment and minimum wages, and he would consider the impact of the Government’s cash handouts and tax cuts on the low paid.

Mr Lawrence said his comments were unacceptable and did not give the unions “any confidence the process is balanced”. Mr Lawrence said the “moderate” $21-a-week increase would help low-paid workers suffering from the increased cost of living and would help stimulate the economy during the downturn.

But the Government lent weight to Professor Harper’s comments, cautioning the commission that employment levels could fall further if minimum wage increases were substantial in a slowing economy.

The Government acknowledged that increases in the minimum wage boosted wages for some workers, “which may flow through to increased household spending and thereby support jobs”.

However, “higher wages also raise labour costs for employers, which may result in a reduction in demand for the low-paid and could put upward pressure on consumer prices”.

“As such, minimum wage increases are best targeted as an important means of protecting the low-paid rather than as macroeconomic stimulus,” it said.

Mr Lawrence said tax cuts should be complementary to minimum wage increases, while the commission should not take into account one-off cash bonuses because they were designed to create extra spending to boost economic activity.

But the Government urged the commission to take into account scheduled tax cuts for the low-paid.

The influential Australian Industry Group yesterday split from employers advocating a wage freeze and supported an increase in the minimum wage by $8 a week. It also urged the Government to increase the low-income tax offset from $1200 to $1500 and raise the tax threshold at which the marginal tax rate of 30 per cent cuts in from $34,000 to $37,000.

Heather Ridout, the AIG’s chief executive, warned that the ACTU claim would “hurt the low-paid by reducing their employment security and potentially shutting many unemployed out of the workforce”.

The Australian Chamber of Commerce and Industry called for pay rises for low-paid workers to be delayed, claiming the union demand would cost $1.7 billion.

“Just at the moment, an economy-wide wage rise across 1.3 million employees and 250,000 small and medium businesses is neither the smart thing to do, nor the right thing to do,” the chamber’s chief executive, Peter Anderson, said.

“With the economy not growing, the case for wages to be increased by government regulation is very weak.”

The Australian Retailers Association said awarding the union claim would cost jobs. “The unions are stuck in old world thinking and need to be far more conscious of saving jobs, rather than putting pressure on employers to pay more,” the association’s executive director, Richard Evans, said. “We are in unique financial times and need to show caution.”

In its submission, the Government argues that planned tax cuts and one off payments given out in the stimulus package are already giving low income earners support at a time they need it.

“During a period of relatively weak labour demand, an excessively large minimum wage increase could reduce the capacity of low-skilled workers to maintain and obtain employment,” the submission says.,25197,25232848-601,00.html