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Speech
ANNUAL CONFERENCE OF THE AUSTRALIAN HIGHER EDUCATION INDUSTRIAL ASSOCIATION (AHEIA)
15 MARCH 2007
I am delighted to be here this morning for this Association is playing an important role in working with universities to foster more flexible and efficient workplaces.
A modern and internationally contestable workforce has to be adaptable and it has to be flexible. It also has to be productive. Workplace reform will help to drive further economic growth through workplace productivity improvements. Without such flexibility we will fall behind the many countries eager to compete with us.
The university sector is not, and nor should it be, immune from wider workplace reform. For too long the university sector cloistered itself in a web of last century’s – or indeed 19th century - work practices!
The sector continues to call for funding increases but it must be able to demonstrate to the taxpayers that sustain them that our universities are efficient, flexible and well governed. I am nowhere near convinced that all that could be done is being done.
Governing councils are cumbersome in number and composition. They should be nimble decision making bodies! Increasingly audits are showing that greater efficiencies and productivity, particularly in the workplace, are not only possible, but necessary.
As human resource and industrial relations practitioners, your professional interest is people.
The Australian Government’s vision for workplace relations reform is all about people too – more and better jobs, better reward for effort and the expertise people bring to a job, and more flexible arrangements that are to the mutual benefit of employers and employees.
My vision for workplace change in universities is to shape an environment that supports people to be creative and innovative.
Our universities not only equip graduates with skills for the professions and industry but also create new knowledge to underpin our economic prosperity and international competitiveness.
Workplace relations reform is necessary to enhance diversity and sustainability of the sector and increase its capacity to respond to change.
The theme of this conference is about the Higher Education Workplace Relations Requirements or HEWRRs, and the title is ‘HEWRRs 2, WorkChoices 1 – the Next Move?’
The chess scoreboard has HEWRRs in front but its opponent is not Work Choices. The opponent is entrenched, out-moded and inefficient work practices. That is where universities need to go in to bat so they are not lumbered with a deadweight dragging them down as they try to move forward.
Workplace reform in our universities is being advanced through HEWRRs but HEWRRs 2 has barely taken us out of the blocks.
This race is global and there is much to be done if our universities want a podium placing on the international scene.
While our universities are autonomous institutions they are also the recipients of $8.2 billion of taxpayer funding this year alone, and as such have to be accountable for how they spend that money, and demonstrate that administrative and workplace practices are efficient and flexible and that there is genuine choice in agreement making.
Yes, universities might be autonomous but while they continue to rely on public funding as a major source of income, they cannot abrogate public accountability. Students, staff and taxpayers expect that our universities will be well managed, flexible and efficient institutions where funds are going where they are most needed.
HEWRRs is all about providing genuine choice in agreement making. I wrote to all Vice-Chancellors last year asking them to follow up on specific aspects of agreements because I remain concerned that the sector is still not embracing HEWRRs as it should.
Sure, I found all universities compliant with the letter but it is the spirit of the HEWRRs that I want, and expect, universities to embrace. This is not a proforma exercise where universities can continue to do the bare minimum to get their extra 7.5% in funding. HEWRRs is designed to drive a more flexible and productive university workplace.
No-one is forcing staff on to AWAs – freedom of association remains a key pillar provided by the Government’s workplace relations reforms.
But universities’ work practices must come into the 21st century.
The HEWRRs delivered an additional $151 million to the sector in 2006 and a further $240 million in 2007.
Progress has been made – I do want to acknowledge that – but much more needs to be done.
It is the depth of that change after HEWRRs that we need to pursue.
First though, let me say something about the other side of the chess scoreboard – WorkChoices.
The implementation of the Government’s WorkChoices reforms has enhanced the workplace relations landscape in Australia.
Our unemployment rate (4.5%) is the lowest in more than 30 years and we have more people employed (10.3 million) and more in full-time work (over 7.3 million) than ever before.
The WorkChoices reforms have provided greater flexibility and choice in the workplace. Not only have more than 2 million new jobs been created since the Howard Government came to office in 1996, but real wages are rising and more money is being put into the pockets of Australian families every week.
Contrary to scare campaigns that there would be mass sackings and wage reductions, the fact is 240,000 extra jobs have been created under WorkChoices and real wages have risen.
Direct discussion between employers and employees over how the workplace is best run helps to ensure outcomes that are tailored to the needs of businesses and their staff.
Higher education is no exception.
Like the national economy, the higher education sector has gone from strength to strength over the past decade.
The university sector is thriving with sector revenue having risen by $6 billion since 1996. Net assets stood at $25.7 billion in 2005. Despite this, the sector also faces many challenges and that is why we need to position ourselves for the years ahead, unshackled from the practices of the past.
Today our universities compete globally and attract increasing numbers of students from abroad.
International education services are now this country’s fourth largest export item, worth approximately $10 billion to the economy each year.
On the domestic side, there are record numbers of students at Australian universities. The numbers of eligible students seeking but unable to get a university place is now negligible by historical standards. Since the Backing Australia’s Future reforms, the Australian Government is funding around 50,000 additional university places by 2011.
But what about the long-term prosperity of the sector?
The higher education sector is not immune to the global pressures faced by other industries in Australia and it is naïve to think that reforms are not necessary for the sector to keep pace.
There is a continued need for greater diversity and accountability in the sector, and increased efficiencies in the management of universities. There is also a need for greater responsiveness to technological developments, such as the growth of on-line learning and the changes to work patterns in universities that flow from these new communication technologies.
The prosperity of the sector is dependant in large part on the continued implementation of workplace relations reforms that promote higher productivity and reward the high performance of individuals – a reform process in which you all play a key role.
Dispute resolution and termination procedures have been simplified, restrictions on casual and fixed term employment have been lifted, and simpler, more flexible workplace agreements have been produced.
While progress has been made in advancing workplace reform in the sector, I believe that there is considerable scope for further improvement. Let me consider one area in particular.
The requirement to offer Australian Workplace Agreements (AWAs) to all university staff provides each university with the opportunity to develop workplace arrangements tailored to their particular circumstances, and the needs of individuals, rather than being forced into a ‘one size fits all’ approach.
Individuals should be on arrangements which best suit their and their employers’ needs - but I am concerned that some universities retain elements of the old industrial “club” approach rather than the more flexible and mutually beneficial arrangements better suited to today’s workforce.
I am not convinced universities are giving employees sufficient encouragement to consider alternative workplace arrangements because the general terms and conditions in individual agreements often simply match those in collective agreements.
At the end of 2006, almost 70,000 university employees were covered by a WorkChoices agreement – 94% were on a union collective agreement, 3% were on an employee collective agreement and 3% were on AWAs.
I want to see greater diversity between what AWAs offer and what collective agreements offer, so that prospective staff are given a genuine choice and high performing individuals are attracted to our universities.
Australia does not just compete for students in the international market – we also compete for high-quality lecturers and researchers. The Australian higher education sector may face staff recruitment difficulties in the years ahead if it is not able to offer competitive salaries and conditions.
The HEWRRs provide universities with an increased ability to attract, retain and reward high quality staff by allowing for performance-based agreements and working arrangements tailored to individuals.
In allowing for more flexible workplaces, the HEWRRs enable universities to adapt to the changing needs of students and industry, thereby remaining relevant and competitive in the global education market.
Unless more universities are willing to develop and promote real diversity in the employment conditions they offer staff through both AWAs and collective agreements, the advantages of greater workplace flexibility will not be fully realised.
Workplace efficiency is another area where I believe the sector can make more progress.
As a service industry, staff expenses are the major cost in higher education and the qualifications, skills, and culture of the higher education labour force are central to resource allocation by universities.
In 2005 there were almost 95,000 full time equivalent employees in the higher education sector and 59% of university operating expenses, on average, went into salary and salary-related expenses.
I am told by various consultants engaged by different universities of significant savings being identified through the introduction of basic good business practice – such as pooled procurement arrangements to harness bulk purchasing power – in travel, IT, stationery and the like – we’re talking millions of dollars in savings from greater efficiencies within universities.
This is an area I intend to focus upon in coming months.
The Australian Government is committed to assisting universities to move towards a more sustainable, internationally competitive model by improving their efficiency. The Workplace Productivity Programme has been established for just this purpose.
Like the HEWRRs, the Workplace Productivity Programme is designed to advance workplace reform which strengthens the capability of universities to manage and implement workplace change.
In round 1 of the programme in 2006, I approved 48 projects across the sector worth $60 million. Some of you may be directly involved in these projects, as a number are for improved HR systems, and the redesign of management and academic structures.
I am today calling for applications for round 2 of the WPP and I will be making available $74 million to drive workplace reform and greater efficiencies.
The Australian Government’s policy framework for workplace reform in the higher education sector, as encapsulated in the HEWRRs and the Workplace Productivity Programme, is helping you to bring about much-needed change in your universities.
As human resource and industrial relations professionals, I don’t need to caution you against scare campaigns, or reactions to unsubstantiated findings in some studies, that endeavour to undermine workplace reform.
The Australian Government’s workplace relations policies have been driven by a consistent set of principles, which encourage job creation; recognise a more direct relationship between employers and employees; promote productivity; and ensure genuine freedom of association and choice of representation.
The Government’s vision for workplace relations in universities looks to the long-term prosperity of the sector.
It is a vision committed to workplace arrangements that support creativity and innovation – arrangements that attract, retain and reward the very best people.
It is also about ensuring the sector can make an ongoing contribution to our economic prosperity and international competitiveness.
It is a vision that I look forward to achieving in partnership with you.
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