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P£NDIX I I

,-. . ' ..

1.

APPENDIX I

TO

PETITION OF THE PUBLIC SERVICE ASSOCIATION OF PAPU~"1Q_ NEW GUINEA TO THE TRUSTEESHIP COUNCIL OF THE UNITED N£8:121!§. ORGANISATION.

PART "A"

Until September, 1964, the wages policy of the

Administering Authority in respect of indigenou:J public

servants of the Trust Territory, ensured that an indig enous

public servant who possessed qualifications, ski.. ll, and work

output similar to those of a non-indigenous publ ic servant,

would be paid at the basic non-indigenous rate.

2. In September 1964, indigenous public nervants 1 wages

J.

were, without reference to any independent authority reduced

by executive decree to about 45% (on a broad average) of

basic salaries for non-indigenes in equivalent positions.

The Publ ic Service Association strongly deplored the new

salary levels, not so much because the principle of equal pay

for equal work had been departed from, but because the new

salary rates were fixed at levels which entailed a vastly

inferior standard of living for indigenous public servants.

Whil e the Public Service Association has not challenged

the proposition that a difference between the wages of

indigenous and non-indigenous public servants may be justified

on e conomi c g rounds, it deplored and challenged immediately,

and still deplores and challenges a level of wages for

indigenous public servants which puts beyond the grasp of

indigenous public servants, the attainmen·c of living s ".l::-:ndards

bearing a reasonable socio-political __ relationship to those

of non-indigenous public servants, performing similar, or

in some cases, less responsible work. The abrupt change

in the Administering Authority's policy, and the unduly low

level of indigenous salaries which result ed from it, has

caused throughout the indigenous public service strong

feelings of resentment, disillusionment, and disinc entive.

The Public Service Association was obJ_iged and

willing to take to arbitration, claims for substantial

4.

6.

- 2 -

I increases, on behalf of its indigenous members. The

proceedings were initiated in April, 1965, and, after

protracted hearings, were completed in May, 1967 when the

tribunal, which consisted of only one man (known as "the

Arbitrator") with no previous experience in any matters

approaching such complexity and magnitude, no special

qualifications in respect of the affairs of developing

countries and no previous experience in or of Papua or

the Trust Territory, delivered the decision which is in­

cluded as Part "B" of this Appendix.

The arbitrator's decision was not, in the carefully

considered view of the Public Service Association, made in

accordance with dictates of equity, good conscience, and the

substantial merits of the case before him. After consultation

with its members, and with representatives of the Papuan and

New Guinean community 1 the Public Service Association, within

a week of the arbitrator's decision, applied for its review by

a competent tribunal of three qualified persons. This

application for a review was given widespread and articulate

support in both Australia, and Papua and New Guinea. Attention

is drawn in particular to a statement of the Australian Section

of the International Commission of Jurists and a parliamentary

speech of the president of that body, Mr. Edward St. John,

Q.c., M.P., (copies of both of which are included in the

documents, forming Part "C'' of Appendix I) indicative of the

hostile and critical reaction to the arbitrator's decision.

On 28th November, 1967, the arbitrator responsible

for the May decision, refused to grant a review of that

decision; his reasons for this refusal are set out in the

document which forms Part "D" of this Appendix.

The Public Service Ass c c iation strongly deplores

the delegation of decisions on matters of such difficulty

and magnitude to one man of such limited qualifications in

whose appointment neither the Association nor any body other

than the Administering Authority had a voice, and who was

-3-

, appointed several months after the new salary scale was

introduced. In particular, the Public Service Association

stresses and deplores the abs~nce of an opportunity for it

to obtain an independent and objective review of the

Arb itrator's decision; and now seeks to obtain the appoint­

ment of an independent, qualified and expert Commission to

investigate, with full and adequate powers for the first

time in an independent, objective and compet ent manner the

appropriate level for Public Service salaries for Pa puans

and New Guineans;

7. Papuan and New Guinean public s e rvants have, since

8.

1964, repeatedly expressed their bitter frustration and

resentment at the payment to them of salary scales substantially

inadequa te to provide a decent standard of living having regard

to expectations built up by the Australian Government 1 the

education they have received, and the standards of the

European segment of the multi-racial society in which they

have been incorporated and in which they may for an in-

definite future, be required to work and live out their

lives. The present level of wages and allowanc e s paid to

base grade Papuan and New Guinean employe e s and officers of

the Public Service is (in the opinion of the Public Service

Association, and of an export witness on nutritional matters,

who gave evidence in support of the Association's claim at

arbitration) not adequate to meet the reasonable minimum

living needs of such employees or officers and t heir families.

The Administering Authority has given a s its primary

justification for the levels of wages and allowa:~ces, the lack

of economic "Capacity of the Self-Governing Count ry of the

Future" to pay higher rates.

However, this may be, in the history of colonial disengagement

the relation of a country's wage levels, to the e conomic

capacity of that country, has been a measure usunlly

introduced almost immediately preceding th e grant of in­

dependence, or subsequent to independence, when the relevant

-4-

/!conomic capacity is accurately ascertainabl e , In the

Trust Territory, no target date has yet been set f'c:r

independence or self-government. The existi~g sala~y

levels and the attitudes and react ions dis~uptive

of stability and progress bred therefrom may ~.nd e :fini tely

continue without the coming into existenc e of t he n e ed

to rely solely upon local economic capacity , end without

the compensating political r espons:'.bili ty and control

normally associated with such extreme wage differentials

in other developing nations.

While the Public Servic e Ass ociat i on does :1.ot 'i'iish

to be taken as expressing any vi e ws as to t he Administer~ng

Authority's policy in relation to the ra to and ;-:12 11.ner o f'

political development in the Trust Territory i t does , having

regard to the foregoing, exp ress the vi ew t ~ c~ t b o pol icy of

imposing upon indigenous public s e rvants now" C'.PG. f'or ,vhat can

only be seen as an indefinite futur e , e conomic sacri fices 1·:hic~1

the Administering Authority se e ks to justi:fy ·:.,y rel'ercnce t o

the appropriateness of such sacrific es t o n atione ,,vhi c h have

passed or are about to pass fro m colonial contro l, involves

pro tanto a d e reliction of trust, exacerbates tensioc3

within the Trust Territory and c an only add substanti.2.ll_;r

to the immediate and long term difficulties o:f the 9eoples

of the Trust Territory in following and no t :forsaking a way

of stable and peaceful development.

fJ ' • . /)1/ !klt-t l.;;...t.• t~Cf -. -~ ad;:J{ck, . J;-G. Smith, General Secretary . Preside nt.

T . Ri cako, Vic e _=>res i d 0nt ,

For and on behalf o f the Pu b : i c Service Ass0ciation o ~

Papua and New Guinea.

I APPENDIX I

TO

PETITION OF THE PUBLIC SERVICE ASSOCIATION OF PAPUA AND NEW GUINEA TO THE TRUSTEESHIP COUNCIL OF THE UNITED NATIONS ORGANISATION

PART 11 B11

I

TERRITORY OF PAPUA AND NEW GUINEA

DE(;ISION No. 2 of 196~

LO(;A.L OFFlfJERS' fJASE

, I

TEHRITORY OJ!, PAPUA AND NE.7 GUINEA

A.>l.BI'l'HATIOH (PUBLIC S".li:RVICE) OHDINANCE1 1952-1965.

In the matter of -

THE PUBLIC SERVICE ~SOCIATION OF PAPUA .AND NE.'! GUINEA

Applicant

and

Tlm ADUINISTH.ATOR AND THE PUBLIC Sl!:llVICE COJ.TI IT.3SIONEH

Respondents

AND in the matter of a memorial re salary rates for officers in the Second and Third Divisions Jf t he Public Service other than Overseas Officers.

Decision No. 2 of 1967

R&1.so:rs l?OE D:;;CISION

L. G. JV,TTH.8;-tS, ESQUIHE. PUBLI C S;~~;VICE ARBITRATOR

( P .APUA A,.11) NEW GUINEA)

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ARRANGEMENT

Section

1. The Fo:rmal Claim

2. The Jurisdiction and Nature of ~ the .Arbitration Proceedings

.,

3. Appearances, Witnesses, Dates and Places of Hearing

4. The Pre-1964 Salary Structure for Local Public Servants

5. Proposals for Reconstruction - The New Ordinance

6. The 1964 Salary Scale and Method of Assessmant

7. The Casa up to July, 1966

B. The July, 1966, Salary Alterations

9. The Department of Labour Survey of Income and Expenditure

10. The Association's Further Evidence and Submissions

11. Family Needs Allowances - The Association's claims

12. Salari es Cllrimed by the Association

13. Limi tine Decision to Members of Association

14. Submissions of the Employers Federaticn of Papua and New .Guinea

15. The Administration's Case

16. The Association's Reply

17. Conclusions

18. Decision

5

8

10

13

18

25

28

37

40

44

51

58

58

6.3

?6

78

85

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1. .m. FORMAL CLAIM.

On 15th April, 1965, the Association filed a memorial in the following terms:-

"The Public Service Association of Papua and New Guinea submits the following claims for decision by the Public Service Arbitrator (Papua and New Guinea):-

1. That the salary ratas applicable to officers in the Second and Third Divisions other than Overseas Officers set out in the Second and Third Schedules of the 'Rublic Service (Salariea and Overtime) Determination' of the Public Service (Papua and New Guinea) Ordinance, 1963, with variations to date, be further varied.

2. That in such variation the Arbitrator re-assess the said rates by talcing into account a factor to be known as a 'basic wage• and a further factor to be known as a •margin'.

~. That the factor known as the basic wage be standard. throughout all classifications and be an amount determined by the Arbitrator as not less than is sufficient to enable an adult male officer other than an overseas officer of average health, strength and competence to maintain himself and his wife and family of three children in a fair and average standard. of comfort.

4. That the factor known as the margin be variable in the severe.l classifications and be an amount determined by the Arbitrator as f air and reasonable taking into account the degree of learning, aptitude and/or skill required for an cfficer other than an Overse~s Officer to properly and efficiently carry out the duties and functions of the particular classification in t~e Public Service."

The Respondents filed an Answer in these terms:-

"(a) The Respondents object to the claims made in the Memorial.

(b) The claims in the application are not specific and therefore it is not possible to determine whether the Respondents can reject or admit them.

(c) The Respondents deey that in assessing salary rates there should be taken into account factors to be known as a Basic Wage and a Margin.•

Arising from these documents developed tho hearing in the Territory of the Local Officers Case, as it became known. The determination of the maey issues which arose in the case, now left for my decision, will affect the whole salary s.tructure of the 10,045 "local", i.e., indigenous, officers of the Territory Public Service (the number as at 31st December, 1966) (1) and indeed of the 19,921 positions so far created in the Service to which local officers m~ be appointed,

( l) Second Di vision - 232; Third Division - 9,813.

In addition, J,355 students, trainees and apprentices were employed. Administration servants totalled a further 769.

For comparison, overseas officers as at 31st December, 1966, totalled 5,867~

It is desirable to mention the following:-

(l) The Public Service (Paput. and New Guinea) Ordinance 1963, which came into operation on 10th September, 1964, defines an overseas offi cer as one who was born outside the Territory or who the Minister for Territories certifies it is expedient or desirable should be appointed to the Public Service on overseas conditions. Indigenous officers are known generally as local officers , although the Ordinance mentions only "officers other than overseas officers• .

(2) By section 50 of the Ordinance, officers are to be given such classifications as are determined by the Minister. By sub­section (3) of that section the classification may provide for a salary or salary scale when the office is occupied by an overseas officer and a different salary or scale -when occupied by "an officer who is not an overseas officer".

(3) By !:linisterial Determination of 10th September, 1964 (1), salary scales were provided for Second and Third Division officers, male and female, with in most cases different rates for overseas and local officers being shown separately for each classification. However, in quite a number of classifications, salary scales were provided for local officers only.

(4) First Division officers are the Departmental Heads of the Public Sernce and in respect of these officers no "local" salary rates have been presc~>j.bed as yet.

(5) The Determination provides separately for cases of junior officers and for female officers occupying a position for which male rates only are prescribed. Deductions at specified rates are made, according to age, for juniors from adult rates shown in the Schedules to the Determination and a deduction - a female "differential" - is prescribed for adult females occupying a position classified at an adult male salary.

(6) The salaries prescribed for overseas officers are fixed on the principle of parity with salaries applying to officers of the Commonweal th Public Service. In addition, they receive "overseas allowances" at the following annual rates:-

On After 2 After 1 AEEOint- years' years'

ment service servi¥e -$- s $

Under 18 years of age 250 Single officers 18 years

and over 500 550 600 Married male officers 860 9),0 960

The foregoing allowances, applicable since May, 1962, were confirmed by me in a decision dated 23rd November, 1966, given on an application by the Public Service Association seeking increases therein.

(l) Public Service (Salaries a.nd Overtime) Determination 1964 -No. Min. 1 of 1964.

-5-

The Association did not proceed with its claim that thl3 salaries for local officers should be sfJparated, even notionally, into "basic wage" and "margins" components. The original course, no doubt based on Australian industrial arbitration practice established over many years but in latter times coming 1x> be questioned and maybe even moving towards a "total wage" concept - was not persisted with. It was in any event opposed by t.-he Administration and objected to on the first day of hearing by the intervening Employers Federation of Papua and New Guinea. As dealt with later herein, the Association based a large part of its case on and emphasized the importance of establishing the "base range" of . salaries for local officers at ,1hat they considered the proper level. From this level the higher salary structure could be built.

Houever, in asse::ising the base range salaries, the minimum "needs" of local officers were emphasized by the Association. The base rarl£"e had been fixed by the Administration on the concept of minir.1um needs. As will be sho,m from .. hat is r,~corded later herein as to the July 1966 modifications introduced and npj_)lir::d by tluJ b.drninistrati on to t he l ocal officers' salaries structure, Farn.ly Needs ... \.llo,-:ances became payable. These now ap:ply, irrespective of the classifi cation or position of local officers, as minimum salaries for mn.ri~ed officers. They vary according to locality and take account of up to three dependent children also. Some similarity or comparioon wi t h the early Australian concept of a "basic wage" is accorciiP.gly possible, but there are important differences in what has now been applied in the Territory Service.

The other most i mportant aspect of the formal claim, the fact t hat it was in creneral terms with no specific claims of wh at s alary rates shoulcl be granted in substitution for t hose prescribed in the 1964 Detem~nation, i s dealt ,rith in the next section of this decision.

2. THI:; J1JRISDICTIOJ:l A.HD NA'l.'illlE OF THE ARBITRATION P EOG .Ltlfil El GS

The Arbitra tion (Public Service) Ordinance has ope rated in the Territory since July 1953. It is largely modelled on the Commonwealth l ecislation under which the Co= onweal th Public Service .Arbitrator acts. Hitherto, pro ceedings under the Territory ordinance have been concerned with matters r elating to overseas officers. It is accordingly desirable to set out here some of the provisions of the Ordinance that are of pc.rticular r elevance to t hese proceedings , if only for the benefit of the local offi cers affected. I also include in this section some remarks on t:ie nature of arbitral proccedines such as tho se under this Ordinance.

An i ndustrial organization ret:;istered under the Industrial Organizations Ordinance 1962, all the members of which are officers of or employees in the Fublic Service, is e;iven power uuder the Ordinance to submit to t he Arbitrator by memorial an application relating to the salaries, wages, rates of pay, or terms or conditions of service or employment of members of the organization. The Public Service Association is such an organization; indeed, at the time of lodging the Memorial it was t he only organization so registered in resp ect of officers of the Territory Public Service. The Local Teachers Association subsequently became a r eei,stered organization but did not join in the proceedings directly , althoug~, two of its officers gave evidence for the Association.

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The Arbitrator is gi'IJen power to attempt to reach, by way of conference, conciliation or otherwise, a settlement of the whole or any portion of an application. This may be carried out before or during the arbitration. In t he present proceedings, as will be indicated later, a series of pr ivate conferences both before and during the proceedings were held by me with the parties.

The Arbitrator is required to al'bi trate on any application not settled init ially between the parties or by subsequent conference or conciliation. The arbitration process connotes a hearing of the parties, including such relevant submissions and evidence as they choose to put bef ore the Arbitrator in support of their respective cases. Such sub­miesions and evidence are given in public hearing. Evidence is given in public on oath or affirmation, similarly to a Court of law, but the Arbitrator may order evidence to be given in private hearing if there are reasons affecting the public interest wbich he considers make this • desirable. In the present case some evidence was so given in private. Also some documentary material was ordered to be not published, as being confidential.

The arbitrator is enjoined by the Ordinance to act in relation to every application before him according to equity, good conscience and the substantial merits of the case, without regard to technicalities or legal forms. He is not iP be bound by rules of evidence but may inform his mind on any matter in such manner as he thinks fit. A further power given him i s to do such things as he deems necessary or expedient in relation to proceedings before him.

The wide powers given t o the Arbitrator include his decision not being restricted to the claims made iP him or even the subject matter of the application; he mey include in his decision any matter or thing he thinks necessary "in the interests of the public or of the Public Service".

The Arbitrator's decision cannot be challenged or appealed against; unless disallowed by the Governor-General - this is the only provision in the Ordinance that may operate against his decision - it must be compl ied with by the Administration and all members of the Public Service and any decision affecting salaries and conditions of employment of members of the Territory Public Service overrides a Territory Ordinance or regulation. This latter aspect is recognised in section 6 of the Public Service (Papua and New Guinea) Ordinance 1963, which states that that Ordinance does not affect the operation of the Arbitration Ordinance or any determination made by tbs Arbitrator.

In view, no doubt, of the extensive powers conferred on me as Arbi trator, t he Administration neither in the conferences I held with the part ies immediately the application formally came before me in October 1965, nor in the subsequent public hearings, raised aey objection against the general and unspecific terms of the Memorial which initiated the case. It was clearl y apparent, and readily accepted by th9 Administration, that the proceedings were to be the means by which the "reconstruction" of the Public Service which it had implemented on 10th September, 1964, in respeot of the new levels of salaries for· all 1ocal officers of the Territory Service thereby introduced, was to be called in question and fully examined before me in public hearii,g.

-7-

Specific claims for levels of salaries for all local officers in the Terri tory Service were made by the Associ ation at the close of its case, before the Administration was called on to present its case to me. The Associati on wisely adopt ed this cou.rse, in my view. It was able to submit to me that the m,'Vl salary levels it t hen claimed were based on the evidence it had called, which had i ncluded a great number of local officers giving cral testimony. To have nominated new salary levels in its claims in advance of the evidence could possibly either have resulted in undue expectations being aroused in the minds of local officers generally as to the outcome of the lengthy proceedings which ensued, or on the other hand, the Association itself mi ght have been met with views expressed by its own local officer members that the Association i n conducting the case had undervalued the wor th of local officers.

• The very concept of arbitration - the challenge or "appeal" thereby possible to be made to an independent authority established by Territory law aeainst decisions of the Government itself - must be strange to many local of ficers. I hope that the publicity given to these proceedings during the case has brought some appreciation to them not only of the nature of the proceedings but the great range of i mportant issues calling for consideration in the case.

The proceedings , in effect, came to be something akin to an inquiry i nto the whole salary structure for local officers of the Territory Service. They had even TI'ia.er i mplications in r espect of possible r epercussi ve effects on wage l evels in private indu stry am even in plantation and other agricultural employment. It is i dle to speculate whether an i nquil"'J - such as the Board of Inquiry i nto Rural \'/ages , appointed on 17th December, 1964, by the Administrator under the Industrial Relations Ordinance , 1962, whos e Report Y1as released in September 1966 - would have been a more appropriate course for investigating and reporting ·on salaries for local officers in the Public Service. The Arbi t::.-ation (Public Service) Ordinance had been in operation for 12 years, had been U8ed for salary determinations for overseas officers and, as will be sho,·m later, was not only pointed to by official members of the House of Assembly as being available , when criticism was expressed in the ITouse i=ediately after the nel7 salary levels for local officers were announced, but i ndeed Tihen t he Public Service Bill was introduced in 1963.

I consider one great advantage of proceedini;s in a "contest ed" arbitration hearing i s that witnesses give evidence on oath at the i nstance of one party and are subject to cross-examination by the other party not only on the direct evidence they have given but on any matters relevant to the arbitration issues . This test ing of evidence by the opposing party is one of the great values existing in pract ice in arbitration procedures. Its value in tl:is type of proceedings -rrhere frequently matters of cpinion are a 10.rge part of the evidence is no less than in Courts of l aw where questions of fact are gener ally being investigated.

One other aspect of the jurisdication under the Ordinance should be mentioned. Section 10 allows the appointment of t wo assessors t o advise t:he A.rbi trator in relati on t o an application. Asses:::ors sit with the Tribunal duriil,'.; tb.e hearinG but only have advisory duties and no pouer of decision. The assessors , one each to be nominated by the organization and the Administration, mey be appointed by the Arbitrator in his discretion, either on his own motion or t he application of a party. Nei ther the Association nor the Administr ation sought that assessors should be appointed and, on considering t he matter before the hearing commenced, I decided that

-8-

as only the parties themselves had the right of nomination of assessors, any persons great'.cy experienced in Territory affairs or otherwise suitable for appointment would be likely to be of more assi stance to me as witnesses, with their views being subject to testing by another party.

The wide range of witnesses who appeared before me during the proceedings confirmed the view I initially fomed not to propose that assessors be appointed.

3. APPEARANCES, WITNESSES, DATES AND PLACES OF HEA.RING.

The principal advocate for the Public Service Association for most of the case was Mr. R.J. Hawke, Advocate and Research Officer of the Australian Council of Trade Unions. He was assisted by Mr. P. Munro, Indu3trial .Advocate of the Association. For part of the hearing, Mr. J. Greville Smith, President of the Association, appeared, assisted by the Association's then Industrial Advocate, Mr. I. Macphee.

Mr. J.H. Wootten, Q.c., with (initially) Mr. Neal, of counsel, and (later) with Mr. R. Marr, of counsel, represented the Administrator and Public Service Commissioner.

Mr. J.E. Henry, SecretarJ, and (later) Mr. V. Watson of counsel, appeared for the Employers Federation of Papua arn New Guinea, which was granted leave to intervene in the proceedings.

Mr. A.L. Redwood, officer-in-charge, Research arn Planning, of the Territory Department of Labour, appeared for the presentation of material, prepared by the Department at the joint request of the parties, based on an income and expenditure survey of "base grade" local officers conducted in 1966, together with a pricing survey of food, clothing, etc.

For the Association, 114 witnesses gave oral evidence,. including some who embraced in their evidence information concerning a number of local officers.

The Association's witnesses comprised -

56 local officers; 10 other indigenous witnesses; 35 overseas officers; 13 other European witnesses.

For the Administration, .six wi. tnesses gave oral evidence, four of them being overseas officers in the Territory service. In addition to private conferences with the parties, held during October and December 1965 and June and Ju'.cy 1966, public hearings were held on 88 sittillG days. The following sho,vs the dates and places of hearing:-

Port Moresbx:

1965

1966

October 26, 29 December 13-17 February 21-25 March 23-25, 28-30

~✓-- Kwikila:.

1966

Port l!oresbi[:

1966

Rabaul:

1966

Kavieng:

1966

~= 1966

1966

1966

1966

Port rnoresb_y:

1966

1967::

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March 31

April 1 July 11-15, 25-27

August 18-20

August 22

August 24

August 26, 'Z7

August 29, 30

September l

September 12-16, 21, ?:7-30 October 10, 12-14, 17-21, 24-26 November 28-30 December 1 January 9-13, 18-20, 23-27, 31. February 1, 3, 6-8, 13-17.

At tl1e Association's request, inspections were held as follows: -

Port Moresby:

Kwikila: Rabaul: V/ewak:: Madang:: Mount Hagen:

Kaugere and Hohola housing . areas Apprentices hostel Transport pool housing

· Hanuabada housing Australian Broadcasting Commission staff quarters, Boroko

P ari village Konebada labour quarters.

Government housing Government housing Government housing General hospital Dental hospital and Government housing.

To conclude this Section, I mention that tha transcript record of the proceedings totalled 3,700 pages.

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4. THE PRF-1964 SALARY. STRUCTURE FOR "LOCAL" PUBLIC SERVANTS.

By the Public Service Ordinance 1955 there was added to the \hree Divisions comprising t he Territory Service an Auxiliary Division, formed to provide training opportunities for indigenes to help them attain the qualifications required for entry into the Service. The Service up to then had been staffed by expatriates, mainly Australians. The qualifications and entry standards prescribed for the Second and Third Divisions of the Service were -

Second Di vision (professional and higher clerical positions) - Vic t orian Leaving Certificate or equivalent.

Third Division - qualified technically (by Australian standards) for appointment to technical positions; New Sout!l Wales Intermediate Certif:i.cate, or equivalent, for clerical positions.

The educat ional qualifications for entry to the Auxiliary Division were -

Assi stant (clerical) - Standard 9.

Assist ant ( teaching) - Standard 9 plus one year of teacher training.

Assistant (higher technical) - Standard. 7 plus two years of training.

{In recent years, Terri t ory primary schools have finished at Standard 6, wi th Technical or High Schools - Forms I, II etc. - taking the place of previous hl gher grades.)

Regulations to i mplement this Ordinance were made in December 1956 and by 30th June, 1958, 188 "local" officers were employed in the Auxiliary Division. For male offi cer s the original salary scales commenced at $400 f or j uniors, with minimum rates for males i r respective of classi fic ation of $800 at 21 years of age, $830 at 22 years and $860 at 23 years and over. The highest salary prescribed for males in the Auxiliary Di~ision was $1,400.

By 1964 the Auxiliary Division salary rates had been increased slightly:-

Assistant {clerical ) - $400-1280 plus $134 cost of living adjustment f or adu l t males.

Assistant (teaching) - . $400-1480 plus $134 cost of living. Assistant (higher t echnical) - $400-1360 plus $134 cost of

living.

Annual i ncrements of $40 were provided in the salary ranges.

As a comparison, t he lowest adult male salary prescribed in 1964 f or an overseas of ficer was $1,412 plus S370 basic wage adjustment• $1,782. Salaries for overseas officers were subject to the overseas allowances previously mentioned - minimum $500 for single officers over 18 years and $860 f or marrled officers .

•

..

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..I The number of local of fi cers in the Auxiliary Division progressivel y increased to 1,204 as at 10th Sept ember, 1964, when the service was r econs tructed. The Auxi liary Division then ceased to exist and the officers were taken into t he Third Divi sion.

A small number of local officers had, by 10th September, 1964, alr eady become officers of t he Second or Third Divisions of the Service, the numbers (permanent and temporary) being:-

Second Thi..£9. ~ Divi sion Division

30.6 . 1961 28 30.6. 1962 12 45 30. 6.1963 14 111 30. 6.1964 19 171 10. 9. 1964 22 167

Lo cal offi cer s appointed to t he Second or Third Divisions, on t he basis that t hey possessed the equival ent qualif ications t o those prescribed for overseas of ficer s , were paid t he sane salari es as the overseas officers in the cl assifi cations co ncer n.ed - not including any overseas allo,wnce , but in effect the saina sal aries as payable t o officers of t he Co= onnealth Publ ic Service.

At 30th June , 1964, there vrere over 5, 000 expatria te (no;, tenned "overseas") offi cers in the Service.

\/hen the recons tructi on took ef fect in Sep tember of t hat yea:r, t lle new salarJ level s which were then determined for local officer s :::e:pr esented a mar lccd and rl r runatic alter ation. For fu ture appointees -t he principl e of "no r eduction" ,ms appl ied to all existi ng off icer s -t he lrmest l ocJ.l a.r-d highest l ocal sala;ry r anges became from 31 to 41 per cent of the overseas r ates \T.i. t hout basic vraee adjustment s or overseas allowonces: l ocal minimum adult mal e salary ::;4,1.0 , lones t overseas sal ary r ate f>l , 412; hie;llest local salo.ry r ate !J3 , 360, mos t seni or over seas Secor.a. Division officer 38, 0'.;2. These are only examples of t he percentage co;:1:;>:;;.::.·ison, t here bein/3' no conscious as::;essment on t his basis. The per­cent age3 fo r the various classifications varied widel y but were of t he order of betvecu 30 to 50 per cent of t he "st andard" sal aries of overseas officers . As a bro ad generali sation, t hey probably averaged 40 per cent.

Des:;ite t he f e11 local officers i n t he Servi ce proper, t ll ei r exryecc~tions of fu tur e advancement on Aus tralian s al ary r ates, coupl ed with t h; exp,.3ctat:.cns of the Auxiliary Division of ficers a.'ld students and trainees , Yr'3re drastically altered by the now sal ary ranges . 1!any of them then saw no pr ospect of an actual salary i ncrease - their "non-reduction" allowance wou. la. sii:rpl y decrease with incremental or pr omotional advancement for many ye2.rs .

The reconstruct ion of t he Service had been in prospect since 1961 but this, of course , did not sof t en t he i mpact on t ho se officers already in the Public Ser vi ce at t he t i me t he salary structure was completely altered.

The Administration employed, as a t 10t h September, 1964, a total · of 778 stu~en~s and trainees and 245 apprentices . Their salary rates were a lso pr escribed by the new IJinisterial Determination operative from that date. Adul t male trainees were gr anted the $440 rate which was the minimum prescribed for any adult male local Third Division officer.

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Prior to the 1964 reconstruction, there had been employed, unde1'_. , the Administration Servant s Ordinance 1960, "local" employees who were not , part of the Public Service but were employed in many different categories. At lQth September, 1964, there were 7,966 Administration Servants. These were taken into the Service after that date, subject to medical fitnes;; and no further recruitment of employees as Administration Servants took place after the 1964 reconstruction. At 31st December, 1966, 769 employees remained cl assed as .l,' ·ninistration Servants.

Two brooo methods of payment of this class of employee existed. In the urban areas of Port Moresby, Rabaul and Lae, where Urban Cash Wage Awards were applicable in private industry, wages payable fully in cash

I I

'

were paid to Administration Servants. In other "non-urban" areas a m-.tch •, lovrer cash payment was made but the employee was provided with rations, accommodation and clothing issues. Issues were also made to the employee's wife and dependent children but "l'lly if they were, w.l. th approval, living with him where he was stationed,

The main scales of salaries in urban areas commenced at S312 as a trainee through various grades appropriate to particular classifications, the maximum salary provided in arry scale being $811.20. Up to five annual increments were provided in the various grades. In non­urban areas the cash portion of the wage commenced at $39 per annum and the maximum provided for any grade was $559. The range of classifications of Administration Servants embraced such positions as messenger/cleaner, yard­man, agricultural field worker, artisan's assistant, able seaman, motor transport driver, boiler attendant, clerical assistant, teaching assistant, lab~ratory assistant, broadcasts assistant.

Examples of educational qualifications required for Administration Se:rvant classifications were:-

Messenger/cleaner Artisan's assistant (various :trades) Clerical assistant Laboratory assistant Teaching assistant

Standard 3 Standard 4 Standard 6 Standard 7 Standard 7

The Urban Cash V/age awards mentioned above provided S312 for all unskilled employees irrespective of age, except those engaged in primary' production, domestic service, stevedoring or shipping. Thia rate was the minimum, as mentioned earlier, applied to any Administration Servant. For Rabaul urban area, a new award was made in April 1964 providing $312 only for unmarri ed male juniors, other unskilled employees being incre~sed to $338.

Female Administration Servants were employed in such cl assifi cat ions as infant welfare and/or midwifery assistant or orderly, typi ng assi stant, seamstress, pre-school assistant. There appears to have been no female "dif ferential" in wage rates of Administration Servants.

A small category of Public Service employees comprised Asian and "mixed race" officers, who, it appears, were paid salaries assessed somewhat below the overseas standard rates. The details were not given to me and are not very material now; there were only ~5 such officers at 30th June, 1964. After the reconstruction, t~ey became either overseas or local officers. Australian citizenship attained by some of these people enabled them to be classed as overseas officers.

. I

: I

.,.

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Before the 1964 reconstruction of t he Service there were the following classes of indieenous officers and employees of the Territory AdmiDistration:

(1) A small number employed as overseas officers of the Second and Third Divisions, on Australian rates of pey without overseas allowance.

(2) A few Asian or mixed race officers employed at "intermediate" rates.

(3) 1,200 Auxiliary Division officers.

(4) 1,000 students, trainees and apprentices.

(5) Nearly 8,000 Administration Servants with wage scales at full cash rates in urban areas, and cash rates plus rati ons, accommodation and other issues elsewhere.

(6) In addition, over 10, ouo "other employees", e.g. , field workers and general labourers, nearly 3,000 police, 500 warders and 1,500 aid post orderlies v,ere employed. Apart from police, the provisions of the Native Employment Ordinance or Urban Cash Wage awards were applicable to these employees. (Over 9,500 such employees are employed at present - exclusive of police who are now governed by a speci al Police Ordinance.)

This was the setting for the 1964 reconstructi on.

5. PROPOSALS FO R RBCONSTRUCTION - TIIE NEW ORDINANCE.

Late in 1960, a Tripartite Mission from Australia visited the Territory to study labour matters. Its Report (1) among other comments on the Territory situation, strongly urged complete reconstruction of the Administration's public service based on its ultimate nativisation, with salary rates for local officers fixed vtlthin the capacity of the Territory's economy. Expatriate Australian members of the Service should receive the same rates, the :Mission stated, plus allowances to bring their salaries to the Commonwealth Public Service level, together with compensatory allowances designed to attract Au.stralians to the Territory Service and retain them pending nativisation. The need for recasting the Service was urgent, to avoid considerable unrest and ultimate harm to the Territory' s economy, the Mission considered. "It v.rill be much easier to attend to this now", the Mission stated, "than later when nativisation of the Public Service has proceeded some distance."

( 1) Report of Tripartite Mission on Labour Matters to Territory of Papua and New Guinea, September-October 1960. See pp. l>-9.

The Mission was comprised of the Past President of Associated Chambers of Manufactures of Australia and Adelaide Chamber of Commerce; the Treasurer and Past President of the Australian Council of Employers • Federations; the President and a Vice-President of the Australian Council of Trade Unions; and the Secretary of the Commonwealth Depart­ment of Labour and National Service.

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The Report further stated:

"On the native side we were repeatedly confronted with as1:1ertions that the various wage scales applicable to the various sectors of the Administration could not be justified and were working injustipes •••• These differentials were criticised by native and mixed race groups whom we met and by some Europeans as well. We were asked why, if it were proper to pay a native 3rd division clerk the same rate as an Australian doing the same work, a native car or truck driver should not be paid the Australian rate. And again, why, if Australian rates were appropriate in the Third Division, the plantation v,,orker should not receive at least the Australian basic wage."

"The problem of wages policy that faces the Territory is not novel: it has been faced in other countries progressing towards self­government. The fact is that wages in the Territory must be related to the capacity of the Territory's economy to sustain them - not Australia's. While, at the moment, the Australian taxpayer is subsidising the Territory, at some stage it must be economically viable in a competitive world con­sisting basically of Asian, African and Latin American countries in the tropical belt. We have therefore to keep before us the future economic viability of the Territory."

As local officers were first taken into the Third Division on Australian salary rates in the year emed 30th J•.me, 1961, by which time there were only 28 such officers, considerable public awareness of that move must have existed for the Mission to have made the foregoing comments arising from its visit in September/October, 1960.

A Ministerial statement on 21st October, 1961, _stated the Government's intention to expand the indigenous sector of the Public Service.

The first indication in arry detail that the kind of approach advocated by the Mission was being adopted was in a Press statement by the Administrator on 25th January, 1962, stating the Government's objective of a unified Public Service "which in due course would be within the capacity of a self-governing Territory to recruit and finance". The principle of non-reduction v;ould apply to indigenes in the Service proper or the Auxiliary Divi ::i ion TThich ,vould be absorbed into the new Service.

In an :Hld ross to the Annual Congress of the Territory Public Service Associat_on on 1st September, 1962, the then Minister stated that plannine for reconstruction of the Service had been initiated by him in May, 1961, "in response to the growing capacity of the -native people to share in the Administration". He said:

'' The planning of the new structure raises many problems related to standards of entry, rates of pay and all<;>wances, and terms of appointment and brings under examination the broader questions of the level of wages and salaries in the Territory and the capacity of the self-governing country of the future to maintain its own public service ••••••• The question to be faced - and it is one that the thoughtful leaders of the native people have to face in their progress towards self-government - is 'Whether an indigenous public service can be maintained at the Australian rate of salary and whether its members should receive the expatriate allowances and conditions given to the Australians. This is not a question

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of equal pay for equal work but a question of the capacity of the country to pay, and a question, too, of social equality in the indigenous community. It will be bad for government and bad for the community if the self-governing country makes the bureaucrat a more hiehly-pri vileged person than arry other citizen.• ••••••• "

The Minister said the Government was prepared to adopt the Association's then preference for a Territorial Service with an expatriate division. For the Territorial Service the Public Service Commissioner would "fix a lowest rate and a highest rate based on a broad judgment of the long-term capacity of the Territory economy and within that range he will classify positions according to work value and qualifications required. The lowest rate will take into account the present minimum urban rate for Administration servants".

The Minister hoped to ensure that after the inauguration of the new service -

"there will be a period of settling down without general claims for arbitration, so that the newly-created indigenous public servants will have a fair chance of adjusting themselves to their new circumstances."

In earlier discussions with the Public Service Association, in Mey, 1962, the Uinister had suggested that the new Service should be constructed on the lines recommended by the 1960 Tripartite Mission, i.e., a uiiified Service with salary rates at "local" levels and with expatriates receiving additional allowances. In accordance with the Uinister's statement in September 1962 that the Government was prepared to accGpt the Association's then view that a separate expatriate division should be provided for, the Bill introduced in late 1963 to the Territory's then Legislative Council was framed accordingly.

However, in his Second Reading Speech on 11th November, 1963 -the Bill had been introduced in September an:l. its contents "widely circulated" with "considerable public interest" generated - the Assistant Administrator (Economic Affairs) mentioned a further alternative scheme which the Association had l ately proposed, under which there would be a single line of positions, each with two standards of pay and service conditions, for locals and expatriates respectively. He instanced apparent advantages of the alternative scheme as being: that a single line of positions avoided ..hat might seem to be a racial division of the Service; it avoided the impression of structuring the Service for ease of withdrawal of expatriates; and positions could be occupied by either local or expatriate officers without procedural difficulties of creating or abolish­ing positions in separate divisions of the Service. But he considered, on the other hand, that the appearance of racial division would be, in fact, not avoided but rather emphasized because separate expatriate and local salaries would need to be published upon every gazettal of a vacancy or promotion.

Of particular relevance to the subsequent arbitration proceedings are the following extracts from the Second Reading Speech:

"There would be no disagreement with the proposition that, in line with the steps formulated towards a fully representative legislature, the trend must be towards a public service recruited in the Territory ••••• but there is general recognition that, for the

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length of time for which planning is possible, am. beyond, the assistance of expatriate officers will be needed.

"In a country such as ours, the Administration is the largest single employer in the work force, and it is inevitable that the levels of emoluments established in the Public Service employment fairly closely set the patterns for salaries an:l. wages in industry and commerce. It is important, therefore, that a legislat ive framework be provided for establishing these emoluments and conditions of a public service based on local recruitment.

"The Territory economy, providing for no more than a third of the public revenue, is almost certainly one of the most dependent economies in the world, and Budget needs are rising sharply year by year. Progress towards self-government does not depend absolutely on progress towards economic self-dependence, but it remains a fact that complete political self-dependence is incompatible with extreme economic dependence . It will be apparent that, in the interests of the future of the Territory and its people, salary levels must be related to the ability of the economy to pey, having due regard to the necessity that base rates must provide sufficient for essential living costs •••••••

"The new level of salaries is a major decision with far­reaching i mportance. It must be related closely to the ability of the economy to withstand it, and the recognition of the essential costs of living, and it should be established initially by a Government decision which results from consideration of the total structure ani then be open to be tested by arbitration."

I n the Legislative Council the main purpose of the proposed new Ordinance r eceived general support but the non-official members, who were in the majority, substantially amended the form of the new Service, broadly · in line vr.i.th the changed views of the Public Service Association. Where a position was classified for both local and "overseas" officers, separate salary scales were to be sho\m. Under the Salaries Determination of 10th September, 1964, and in every issue of the Government Gazette and in all staff :records the two differing salary scales were forcibly brougl!,t under notice. This did nothing to alleviate, but indeed only enhanced, the natural feelings of "difference" engendered in the minds of local officers taken into the Public Service.

This position is now being altered. The Territory Treasurer on 8th September, 1966, announced 1J:> the House of Assembly - which in 1964 replaced the former Legislative Council - that a Public Service Committee's recommendation for urgent attention to be given to one aspect of public service administration, had been accepted by the Minister. The recommend­ation was that all positions in the public service be given classifications based on the local officer salary structure, with overseas officers receiving additional allowances to make up their existing rates of pay. The Treasurer said:

"Thus the present recommendation of the Public Service Committee is for the salary arrangement that was favoured by the Government in the first place and which was departed from to meet a preference expressed by the Public Service Association."

.,

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,/ It is too much to hope that th.1.s proposed alteration in the method of expressing the respective salary rates as between local am overseas officers will do aeything much in the short run to undo the difficulties wbich have occurred since 1964, from what was put to me in evidence, through t\,o salary scales for each position necessarily having to be always referred to. To take a longer view, fue new procedure when implemented must b& an im?rvvement on what now exists.

A Press statement on 31st August, 1964, by the Administrator foreshadowed the new Ordinance as passed by the Legislative Council being brought into operation within two weeks an1 it came into force, together w:i. th the ne,7 Salaries Determination, on 10th September. The then Minister in his September 1962 speech had undertaken that consultations would be held w:i. th the Public Service Association on the new rates of pay and in the Explanatory Notes on the Public Service Bill 1963 it had been re­iterated that on salary rates and other matters affecting their members opportunities would be afforded for full consultation with the Public Service Association.

But there appears to have been a lack of any such consultations on salaries. Tbis did not assist in the furore of criticism that arose immediately the new local salaries became known.

The new House of Assembly had no opportunity to debate the local officers salary issue until January 1965, when it did so fully as "a matter of public importance". Criticisms were raised by ~'u.ropean and native non-official members at the lack of re:Jl explanation as to how the actual salary rates \7ere to be assessed before the "actual cold shock of what follo i:;ed" on :i;iromulgation of the n017 Ordinance: the "lack of incentive" in the rates for hie}l.er positions; anomalies in the scales announced; and criticism that the salary rates v1ere insufficient for married officers. The principle of lower rates for local officers, as compared with overseas officers, was not challenged. Official members conceded. anomalies in the ne"\7 scales but pleaded that these could be adjus ted in time and also pointed to the independent processes of arbitration being available as the proper means to test vrhetb.er wage injustice had b0en done; the House of Assembly was not t h,, proper venue for sal~l"Y fixation.

I comment that it was most unfortunate tbat full explnnation, · particularly of t he manner in which the base ranee of salaries was assessed at the time, vras not made publicly in justification thereof by the Administration. Indeed it was not until December 1965, after these proceedings had commenced, that the full details of this assessment were mad0 a-railable to the Association and to me. Probably not so m'.lch what was done, but hov1 it was done - the l a.ck of consultation arnl r. :q,lanation -assisted in arousing strong feelings expressed inmany quarters following the announcement of the new rates. For the great bulk of married Administration Servants who were to be taken intc the Service - and who subsequently e:q,ressed their willingness to do so - the Administration rates represented in cash fo= many of them a considerable benefit. Against this, of course, was brought into being the practical difficulties they experienced in learning how to ma.r,.age their ovm domestic affairs on a fu.ll cash basis. During the evidence from m~• former Administration Servants, this process was shown to have been a painful one. Not that all Australians handle their monetarJ affairs wisely and well, even those on a low wage level who might be expected 1X> have to take great care in the directions in which money is spent. The Territory situation of the indigenous employees in the

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Public Service - in many cases bee ,use of such employment - is complicated , ,.., greatly by family and tribal commi tments and obligations.

As a final note concerning the reconstruction of the Service, the principle of the Government's proposals had been endorsed by the World Bank Mission whose report (1) on the economic development of ' the Terri to:ry was given to the Government in the middle of 1964. At page 36, the Mission stated:.

"Moreover, in the longer term it is vital that Terri to:ry standards, applying also to wage and s14-ary levels~ should be adopted if financial viability is to be achieved. The Mission has noted that so far the over-all cost of administration has been high because it has been necessary to employ Europeans and pay salaries geared to Australian levels..... The Mission recognises that salary levels for expatriates in the Administration, as well as in business, have to be geared to Australian levels in order to secure the skilled personnel required. However, this should not set the pattern for the future. Salar'J levels in the public service should be set at levels in line with living standards and costs in the Territory. For the expatriate an additional allowance will be necessary ••••••• The gradual conversion of the public service to one largely staffed by indigenes •••••• would permit substantial savings in the costs of government and would contribute towards the eventual goal of economic and financial viability."

6~ THB 1964 S.\LARY SCALES .IIIID THEIR METHOD OF ASSESSMENT.

Under the ne,r 1964 salary scales, an adult male base range of 57 classifications was established commencing at $440 and rising by annual increments of S40 to $760. Based on the average marrying age of Territory indigenes of about 23 years, children being born of intervals of about two years thereafter, and the statistical average family consisting of 2.6 children, the range assumed a "single" rate at age 21, a "married" rate of $520 at age 23, i.e., the third year of adult service, and children at the 5th, 7th and 9th years of adult service when the maximum of the range, $760, was reached.

The $440 minimum adult male rate was evolved from the $312 provided for unskilled employees under the Urban Cash Wage Awards in 1963 for Port Moresby, Laa and Rabaul. The $312 was also the minimum annual

(1) ·11The Economic Development of the Territo:ry of Papua and New Guinea":

Report of a Mission organized by the International Bank for Reconst ruction am Development at the request of.the Government of the Commonwealth of Australia (1966 John Hopkins Press). The Mission was in Australia and the Territory from JU!le to September, 1963.

..

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' _.r' wage of Administration Servants in those areas. The $440 was made up as follows:-

Rations::

Clothing, bedding and utensils

Transport

Accommodation

Furniture and other facilities

Superannuation

$1'30.87

12.13

36.40

62.40

10.20

21.90

Average retail cost of fully imuorted rations as at 6th March, 1963, prescribed under Native Employment Ordinance.

Actual cost of basic issues under Native Employment Ordinance.

Whilst a mnximum of $46.80 (90c. per week) was deductible by an employer providing transport under the Urban Cash '"aga Awards, this was reduced to 70c. per week as an overall figure , on the basis that apart from Port Moresby little or no transport costs were involved.

This was the maximum deduction ($1.20 per week) under the Urban Cash \lage Arrards, but the Ad.ministration stated very few Administration Servants paid this amo1mt; the majority accommodated in Administration premises paid bet-ween 60 and 90c; others resided in t heir home villages.

The value of furniture issues to single Administration Servants was S2.04 p.a. but the above accommodation component was deemed adequate to cover this. The value of other facilities, e.g., water, electricity, garbage disposal, firewood etc. in urban areas was estimated at $12.71 per annum for single employees. This was reduced to $10.20 as an overall Territory figure because outside main towns refuse could be disposed of and firewood arranged by employees themselves and in some cases no charges were made for water and power.

Based on 55~ of salary.

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Cash component ~166.10

Total $440,00

~ (Cf. the residue of $59.80 if maxi!IIUJll permissible deductions for rations, transport and accommodation were made from the $312 prescribed under the Urban Cash Wage Awards and taking into account also the value of clothing, bedding and utensils.)

The "married" rate of $520 - assumed age 23 ar.d third year of adult service - comprised an additional $80:-

Accommodation increased from $1.20 to $2 per week

Superannuation on $520

Wife's rations

Wife's clothing - cost of issues to wife as prescribed by N.E.O.

Additional married facilities -lieht, power, water, etc.

Residual cash component reduced from single rate

$40.90 $166.10

Additional

$

41.50

4.00

109.00

10.00

40,60

$205.20

-· 125, 20

$ 80.00

The annual increments of $40 in the range purported to provide an additional 380 per annum for each child, rations am j ssues for children being assessed at that amount approximately.

Usinc the 1963 Urban Cash Wage Award rate of ·35 per week for unskilled workers as the base, the lowest adult male salary paid to a local officer represented, in the Administration's view, an additional amount of approximately S2 per week in cash to the latter above the essential requirements of a single officer, as set out in the Administration' e explanation: $166.10 assumed cash residue as compared with $59.80. For married officers and those with up to three children the residual cash component became $40.90 per annum or approximately 80c. per week. The Urban Cash Wace Awards are silent on the question of accompanying dependants but the provisions of the Native Employment Ordinance probably still apply, under which rations and issues vihere dependants are accepted as accompanying the employee must be made to them. An employer may refuse to recognise or withdraw his consent for accompanying dependants so that in

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practice it appears difficult to regard the Awards as providing in fact a family wage. The Wau-Bulolo Timber Industry Award 1966 - not in an urban · area - formally recognises family responsibilities by allowing deductions for food, accommodation and issues provided for the employee and accompanying dependants, but the deductions are on a sliding scale depending on the employee's wage level. The award embraces skilled employees in its coverage and the deductions permitted safeguard those on lower incomes from their cash_ wage being extinguished by deductions for family responsibilities.

The wide range of classifications embraced in the base grade range included artisan's assistant, boiler attendant, broadcasts assistant, cane V10rker, chainman, clerical assistant, driver, duplicator operator, interpreter, laboratory assistant, messenger, orderly, postal officer, steward, stor.eman, X-ray assistant, telephonist and teleeraphist.

The qualification for an orderly is stated as assessed ability to undertake training as an orderly. A steward's qualification is ability to perform the duties. For other classifications in the base grade, satisfactory completion of secondary school Form 2 or previous satisfactory experience was laid do,m. Good English comprehension and fluency, as well as Form 2 education was required for a broadcasts assistant. For a clerical assistant, Form 1 or assessed equivalents in education and experience was required.

All adult male trainees were graIJ.ted a salai"Y rate, not a range progressing m. th service or l ength of training, of $440. Junior male employees were assessed at 8260 at 17 years and under, $280 at 18, 8320 at 19 and $360 at 20. The assessed values of rations and issues were not reduced for juniors but some other i terns were , al though the principal variation in the assessment was in the residual cash component. For adult females, the base range - accounting machinist, Grade 1, orderly, seamstress, telephonist, typist - was set at $360 to $600 , annual increments being $30. The female "differential" for adult local offi cers was $80 l ess where the adult male rate was $440 , increasing to $160 where the adult male rate was $760 or over. Junior females commenced at 8260 under 18 years , $270 at 18, $290 at 19 and 8320 at 20 years. For both junior males and junior females, however, the salary rates took account of years of service as well.

In its ex-.9lanation of the general approach made to fixing the new salary structure, the Administration stated that minim.L"ll rates were

· determined primarily from a consideration of basic ne':lds. It was necessary, as banic needs varied from community to community, to take a very practical view and to determine basic needs in the light of the actual standard of living in the Territory. So t..11at the starting point was the minimum rates being paid in urban centres under private industry awards. In the

; circumstances of a heavily dependent economy, the approach should be, subject to ensuring that minimum basic needs can be met , to require the average standards of confort to be adjusted to a wage influenced as far as possible by the economic circumstances and future outlook. Such an approach would permit the standard of comfort to rise in due course as the economy strengthened. An approach which provided a wage f or all adults which was deemed sufficient to maintain a man, his wife and three children was con­sicl.ered inappropriate in such an economy. On this latter aspect of a family wage, the Administration stated that "the Territory at this stage should not be burdened with a system of basing the salary of all males

• over 21 years on the assumption that they have a wife and three children when on an average males did not have such a family until they were 29."

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It is impossible to be impressed with this last statement. Local officers are not unique in not having such a family until that age. But the Association did not move to seek a family wage for all adul~s, even though its Memorial was based on this concept. The Association, it will be seen later, did not, in its final claims, challenge the principle of family allowances i ntroduced by the Administration in July 1966; the same principle had been adopted in conversion of the wages of former Administration Servants. So that the history of what had been done previously came to dominate the proceedings aml the cuITently existing methods of payment for local officers in the Administration. Further, the concept of a family wage has not, up to the present, been accepted in Urban Cash Wage Awards for private industry.

As to maximum salary levels the Administration stated that the implication from economic considerations was that they had to be kept as low as possible but, at the same time, sufficiently high to provide .a reasonable margin to enable varying degrees of work value and responsibility to be re~arded and to provide for normal career advancement.

The initial response by the Association to the Administration's disclosure of the basis used for assessing the new salary r anges for local officers was that the statement put in issue between the parties the consideration of basic needs in the assessment of the minimum base rates; so that the Association would devote main attention to the ascertainment of amounts necessary to satisfy appropriate needs at the base level. The Administration statement was defective, the Association alleged, in that the standard of living that would result from the new salaries had not been ascertained, nor the reasonableness of that standard in the eyes of local officers nor its adequacy as regarding nutritional or other standards. The new salary scale placed local officers' incomes at such low levels as amounted to social injustice and would tend to a disheartened, disaffected public service. Factors affecting incorruptibility, efficiency, loyalty and ambition were reduced by the new scale and it would affect adversely endeavours to accelerate the pace of economic development.

The Association made it clear that it did not accept the Administrati on's assumptions used in assessing changes in needs and responsibilities in the base range.

The method by which the actual cash value of wa.g-e and other emoluments of Administration Servants was ascertained for the purpose of applying the "no reduction" principle to them, and the manner of ascertaining their standard salary when they entered the reconstructed Service, were as follows:-

(a)

(b)

No adult male would, receive less than $440, no 20 year old male less than $360, no 19 year old male less than $320 and no younger male less than $312 ( the minimum rate for any Administration Servant). As mentioned previously, new juniors received a minimum salary of $260 at 17 or under, and $290 at 18 years.

Single Administration Servants in non-urban areas receiving rations etc. had their wage converted to the urban full cash rate. Then S202 (cf. the $205.20, less $4 extra superannuation payment, used to assess the "married" 'rate of $520 in the new base range) was added in the case of married employees and $80

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for each dependent child under 16 years. As pointed out earlier, the amounts assessed for wife and children were added irrespective of cases where they were not receiving rations, accommodation or issues from the Administration previously. There was no limit to the number of dependent children to be taken into the assessment. (In one instance a standard salary of S520 had almost $1,000 non-reduction allowance added thereto on account of wife and children.)

{c) The "assessed former emoluments" thus being found, this amount became the total amount of salary and non-reduction allowance on the Administration Servant entering the Service. The amount of aey non-reduction allowance would decrease with any increments, promotion or higher duties allowance received by the officer. Otherwise it would remain as part of the total salary to be received subject to reduction of $80 p.a. from the allowance for each dependent child, over three such children, who attained 16 years of age.

(d) The standard salary of the officer was ascertained having regard to the actual cash wage (converted where necessary to the appropriate urban rate for an Administration Servant) of the officer himself without family. The standard salary rate payable in the new Service was that of the next incremental step in his classification range.

{e) Credit was given, in determining the new standard salary, for previous service with the Administration to the extent that the employee's wage had increased by annual increments and promotions to higher grades of ths same classification as an Administration Servant.

The manner in which credit was given for former service was not that the officer was placed, for example, on the fourth increment in the new salary range if he had completed four years' service. He merely became anti tled to the salary rate in the ne17 range appropriate to his existing salary. This was corrected to some degree in the July 1966 modifications but, to my mind, not fully so.

Shortly after the announcement of the new salary scales in 1964, modification of the position of students and others in training was made by the Administration. Demonstrations and protests had been made to the Public Service Comm:i.ssioner on this issue. The new provision was that students and apprentices, also officers specifically appointed to training positions, who were recruited before 1st September, 1962, muld receive a special allowance on completion of training to bring their salary up to. the amount they would have received i:,rior to the reconstruction. Those recrui tad after 1st September, 1962, and up to 10th September, 1964, would receive, in addition to the local officers' salary when their training was completed, an allowance of two-thirds of the difference between their salar,r and what they would have received previously. The special allowances did not apply to officers receiving "in service" training or · taking courses of study on normal salary.

In December 1965 when the arbitration proceedings really commenced, . the Administration announced that the local salary rates provided for a large group of professional officers had been altered from $1,000-1,800 to

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$1,464-1,800. Several senior positions for female officers were also raised in salary. For medical and dental officers the previous 81,000-1,800 range was separated into a range of $1,080-1,240 for those in their period of residency after qualifying and thereafter $1,464-1,800.

In addition to the new salary rates, the Minister also approved payment to local officers from 10th September, 1964, of nine grades of Location Allowances. These had an affinity to a scheme of air-freight allowances fixed earlier for overseas officers in localities with transport difficulties in obtaining supplies. The air-freight allowances had been paid to local officers already. in the Service proper before its reconstruction and they continued to receive them thereafter if still at the same location.

The Location Allowances for local officers became payable at 108 different stations in the Territory. They were stated to be interim until a Committee was established to make recommendations on permanent allowances. However, the July 1966 introduction of family needs allowances has overtaken this intention, apparently. · For single officers, they ranged from $6.50 p.a. in Grade A to $123.50 in Grade K. Married officers 1·eceived from 313 p.a. to Sl82 p.a. according to grade and married officers with any family received from $19.50 to $260. In July 1966, 1,636 permanent local officers (23%) received such an allowance, out of a total of 7,084 permanent officers.

To the complex picture of how the 1964 salary rates were applied with particular reference 1x> existing local officers and employees of the Service, there was added in early 1965 the introduction of so-called _ "economic" rentals payable when Administration housing was occupied. The introduction of economic rentals had been urged by the World Bank Mission. For overseas officers a maximum rental of $416 p.a. was assessed for European-style houses. For local officers (except where they chose to occupy such European housing, if available) generally the maximum rental, for the better-class houses of a lower standard, was 3208 p.a. For many officers occupying loW'-cost housing the rentals were about $1 to $2 per week. However, during the evidence a number of local officer witnesses expressed resentment not at the rentals b:u.t at the fact that a special allowance had been granted 1x> overseas officers 1x> enable them to pay the higher rental s. Previously the maximum rental for overseas officers had been S96 p.a. , and an allowance was paid to make up the difference between the old and new rentals.

The timing of the introduction of the new economic rentals -shortly after the 1964 reconstruction - and the manner in which the rental subsidy allowance for overseas officers was introduced, were not calculated to induce sat isfaction in local officers at their comparative situation in this respect , as with others. The new rentals had been introduced in line with · recommendations of the World Bank Mission that previous Government policies of benevolent paternalism affecting indigenous people, including Administration employees, should be departed from, to .avoid a tradition of providing economic services free or at subsidised rates, becoming established.

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CASE UP TO JULY 1966.

At the initial heari.ags in October 1965, Mr. Wootten recorded that the Administration and the Government welcomed the opportunity the arbitration would .give of e:..'J.)l&ining the reasons for the decisions taken on local officers salaries and to have such decisions considered in an arbitration. Co-operation vdth the Association was promised with the object of having all material produced to enable a proper decision to be arrived a.t by the arbitration.

The Territory Employers Federation, granted leave to intervene, stated that what was determined for public servants must have repercussione in the private sector because there was an inevitable relationship, even if not a precise one. Awards for private industry were due for review in 1966 but the Federation had already expressed the view to one Workers 1

Association that the outcome of the arbitration should first be ewai ted, even though there was no suggestion of automatic adoption of any decision ,in these proceedings.

Employers in private industry, Mr. Henry said on behalf of the Federation, would not agree to any radical change in award wage structure while the Public Service hearing was continuing, as what they did could have a bearing on the case. A:ny radic;al changes sought by Workers' Associations would have to go to arbitration which would thus duplicate the present hearing.

The opening submissions by Mr. Hawke for the Association stressed that as the Administration had fixed the base :.ange of salaries on basic needs of those officers, the adequacy of such salaries was clearly foundational to the whole salary structure. The greatest stress in the Association's case oould therefore be put on considerations appropriate to that matter, m. thout disregarding throughout the case the problems of officers above the base r&.11ge. The inadequacies of the new salary structure had engendered such a de,'s1'ee of dissatisfaction, even bitterness, militating against a strong, efficient and contented Public Service that considerations of economic capacity should have a subsidiary place in deciding the issues to be raised.

From the oral evidence and docwnentary material adducad before me from December 1965 to early April following, I record the followingr

The results of an exp end i ture survey conducted by the Association over a fortnight in December 1965 in respect of local officers, each with wife and three dependent children, in Port Moresby, Lae and Rabaul . were tendered. Ten of the officers surveyed gave oral evidence as well. The great amount of earnest effort expended by the Association in this surrey, however, did not result in any clear picture emerging of the minimum needs of base grade officers with families. The "standard" salaries of the local officers surveyed ra!lged from $440 to $960 and in all cases non-reduction allo\7ances were being received, so that in one case the total salary was $2,006. What emerged was a complex picture of expendi tur_e habits complicated by local officers sharing accommodation with relatives, main­taining relatives p~riodically at the local officer's expense, and contributing from salaries for kinship obligations of numerous kinds. In many cases thd fortnight's expenditure exceeded salary considerably, being

. met by bank withdrl!1,wals or booking up goods at stores and in one case from gambline winnings.

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In the light of thee,._ t·ience of this survey, the Territory Department of Labour was approached to conduct, at the joint request of the .A.ssociation and the Administration, an income and expenditure s.urvey of local officers receiving totaJ. actual salaries within the base range of $440-760. The results of this survey, produced to me in July,. 1966, were of great assistance to the parties a:a:l. myself in indicating the actual standard of living of base grade officers and their e~endi ture patterns.

. From other evidence, including that of welfare officers in Port Moresby, various estimates of the "needs" of married local officers w:i. th three children were put to me,·ranging from $18 to $26 per week. Detailed budgets of expenditure that were produced in support of these estimates suffered from the serious criticism that the incomes of the local officers and employees in private industry covered in the budgets varied widely. Broadly they showed only how incomes from about $20 to $30 per week were being spent and from this it was put forward that such standards of living should be made the minimum for local officers with three dependent children.

I cite the following from the views put to me by the various Association witnesses, ranging from local and overseas officers to other 1'.,'uropeans:

"Only a small minority of local officers desire a complete F.'uropean diet. In post-war years an intermediate standard of living has developed, between 'rice and bully beef' and European diet. The imposed standards of the Native Employment Ordinance (used for plantation workers' rations and previously for Administration Servants) are now irrelevant to the situation."

"The native society is one of interlocking mutuaJ. obligations. Affluent members are expected to give help when sought and receive help in return. When some live in a money economy and others in the subsistence economy, the more affluent tend to give more than take. That is the indigenous form of social security. There is shame and emotional strain when obligations cannot be met. Even the affluent borrow to meet sudden obligations."

"The more affluent put in more than they take out."

"You get a sudden influx of visitors, friends around town, a:a:l. after you treat them and make them comfortable you find you are running short of money all the time."

"You cannot stop relatives from visiting you, They come with the excuse to buy produce at the market and stay with you."

"If a local officer is forced to depend on parents or relatives for accommodation they feel more and more at liberty to make claims on rd s salary. "

"I hate ix> be always taking gifts (from Europeans) and being unable to give things. It causes me and my friends great shame."

"We have our own kind of pride and we want to be able to return hospitality reasonably,"

"T"nere is a pyschological angle. He goes into the Service as a local officer and he thinks he should lead a more exemplary life to the

,-,local people - instead of rice, meat and cereal, bully beef is purchased or tinned sausages an:l. so on. "

Re sharing accommodation: "It depends on who has the money at the particular time mo spends it." "Itinerants bring children who are more or less adopted by the other family, m.th the father contributing something."

Local officer, married with one child: "I am still paying off bride price - £500 cash and £300 goods. I assisted my brother with his bride price. I have to partially support also my father, mother and sister."

"1iost complaints have come from married officers and those who won't receive increments for many years ( due to non-reduction allowances)."

In respect of the higher ranges of salaries and positions:

"It is important that as local officers advance in the Service they Bhould receive increments in salary that adequately recognise their qualifications, experience and responsibility, and which act as incentives and also encourage the next generation to pursue their education with vigour. To Papuans, status symbols are not a joking matter. In primitive Papuan society power stemmed from prestiee, maintained by exhibition of its outward symbols. Local officers will expect and will be expected by their own people to be able to display similar status symbols and will not be accorded respect orbs able to exercise effective authority if they cannot do so. They should be in a position to mix socially vtlth their overseas colleagues roid other Europeans without embarrassment caused by poverty. They must be able to offer, as well as to receive, hospitality."

"It is for the Arbitrator to decide if amounts paid as kinship obligations are unnecessary in view of superannuation, workers compensation and sick leave being provided for local officers. 11

"A long scale of increments is necessary for teachers so that old, experienced teachers won't feel humiliated by new teachers with higher education."

"Fixing salary levels isn't an easy business. You just can't say that they must be tied to the country's capacity. There are some very important political considerations. At present our needs are more simple than those of most Australians. This doesn't mean that they should be less tasteful, though. Most of us are ashamed to invite Australians to our house and we feel we should at least be able to afford a reasonable home furnished in an Australian or local wey."

"Lower paid New Guineans would accept an invitation from me without ' embarrassment because they would consider me fortunate."

"Leaders need the symbols of their status - clothes, cars and houses - especially in developing countries where their status is recently acquired and has no traditional basis. The Public Service is a political issue in the widest sense of the term. 11

"The wage cuts are bound to alienate the emerging elite which, as experience in other areas has proved, is of crucial importance in the process of decolonisation."

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"T"ne effect of the new salary rates was particularly p~onounced f or those near the t op of the aala:cy ranges. The decision was interpreted as racial rather than economic. Attitudes unfavourable to harmonious race r elations will accelerate to alarming proportions if nothing is done to remedy the present marked dis:pari ty in salaries at professional, sub­professional, technical and specialised lf3vels."

"The people would accept at this stage that,thP. economic development of the country would not make it possible to pay Australian rates, and would be willing to accept something less, but the present rates are far too much less."

"The indigenous people of the Territory hava had an opportunity to digest a culture that is vastly different to their own. They have also been taken out of a communal existence into an indivifrualistic society with a cash economy, tom1 life !l!ld individual responsibility as opposed to collective responsibility to uhich they have been accustomed."

"If economic realities had been spelled out, I think t.hey would have been accepted by the people but the salaries have been cut without adequate explanation. This is what I would feel."

"We have not found whether or not New Guinea would be able to pay its workers £12...£15 per week. We have made a statement that New Guinea will not be able and it is a statement in the air."

"We are training young people to accept standards of life and social responsibility by the enviroIJl'lent we provide in training institutiona but their salaries on graduating do not enable them either to live up to those standai-ds er to fulfil their responsibilities."

I have refrained from identifying the Association witnesses from whose evideuce I have extracted the foregoing statements which demonstrate in a very brief and re3tricted fashion the trend of the evidence and the issues raised in this stage of the case. A few indigenous witnesses claimed that Australian "standard" rates of pay should be restored at the highest levels of positions; on the other ha.."ld, "big pay" of $20 per week would satisfy at least one supervisor of semi-skilled employees. The difficulties many local officers had in managing their finances, the claims they felt they were in a position to meet, or had to meet 1 towards kinship obligations because of their positions as Government officers, and the directions in which, in some cases, large parts of their incomes were channelled, were features that became clearly apparent. Much of the later evidence confirmed and added to this picture.

a. TIIE JULY, 1966 1 SALARY ALTERATIONS.

At the Administration's request, I held a series of conferences with the parties in late June and early July. The Adminj,stration put forward proposals for settlement of the proceedings, such proposals having been formulated in the light of experience of the operation of the 1964 reconstr~ction, the evidence presented to date by the Association and the Government's review of the whole salary structure.

In the conferences, the Administration sought the Association's agreement to its proposals for salary adjustments and the introduction of family needs allowmices. No settlement of the proceedings was reached in

•

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these conferences but the Administration announced publicly to me on 11th July that it had decided to implement its proposed modifications with effact as from the beginning of July. Mr. Wootten stressed that the Government was not offering the modifications as an interim adjustment in the expectation that further increases would follow as the result of the arbitration. The Government would submit that I should confirm them as the final result of the proceedings, he stated.

The Association welcomed the improvements in the salary rates announced by the Administration but stated it was firmly convinced that the new proposals were inadequate to meet the "reasonable needs and .demands" of local officers at all levels. The Association therefore desired the arbitration to continue.

The modifications !;o local officers' salaries and allowances made by the Administration were as follows:-

(1) Family Needs All0i7ances:

In lieu of the concept of the base range being constructed on the assumption of the officer being single at age 21 and having family responsibilities increasing at two-yearly intervals thereafter, in future salary classifications would be based entirely on work value within a structure which at its lowest point was related to the needs of a single man; but those officers vii th actual family responsibilities up to three children whose classified salaries and non-reduction allowances were below "assessed family needs" in the area where they were living would be paid allowances in addition to salary to make up the difference.

The Administration considered that the existing minimum salary of $440 was _sufficient for a single man in all parts of the Territory.

Minimum family needs, on the basis of living costs in different parts of the Territory, were assessed by the Administration, as the result of a pricing survey it con~ucted in May, 1966, in four categories of a married man, and respectively families of one, two and three children. Eight towns comprised in the survey were grouped and the groupings and family allowances were:-

Famil;z Needs Allowances kl Zones Zone 1 ~ Zone 3

12.§.4. Port L~e. Rabagl, ~ Moresby Kavi e!!.S: 1 Mad.!!llii, ~ Scale and I.It. Wewak

Hagen $ $ $ $

Single man 440 440 440 440 Man and wife 520 650 500 650 Man, wife, l child 600 740 650 750 Man, '\'life, 2 children 600 830 720 860 Man, wife, 3 children 760 930 000 980

Family needs allowances for other centres in the Territory were later determined by the Administration and were announced in the closing days of the hearing. They now cover 43 localities grouped into seven zones •

. The details are shown on the following pages. It was stated that an estimated 72 per cent of local officers were serving at the centres named. Details of allowances to apply at the remaining centres are to be announG:ed at an early date.

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------FAMILY NEEDS ALLOW&ICES BY ZONES

as announced 16 1 &1 1~67.

Single .Man and wife Zone Location man Nil One Two Three

child- child- child- child-ren ren ren ren

$ $ s $ s l -ltGoroka 440 650 750 860 980

:Mandi Woitape

2 lli'ort Moresby 440 650 740 830 930 ifMt. Hagen

Tapini 440 600 700 800 900 Lwni Chuave

4 Kundiawa 440 500 650 760 860 Ambunti Losuia Tufi Amanab Imonda Green River Kokoda Kerema Bereina

*Rabaul 440 580 650 720 000 Maprik

*Lae Kukipi Ihu Angoram

-Wewak Ai tape

i!Madang Daru

*Kavieng

6-, Vanimo 440 500 600 690 780 Buin Kerevat Kieta Morehead Saiho Wau Bulolo Samara:!.

*Previously announced.

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Man and wife Single

Zone Location man Nil One Two Three child- child- child- child-ren ren ren ren

$ $ 3 $ $

7 Popondetta 440 480 560 650 730 Buka Kokopo Lorengau Cruneron Plateau

The Administration also announced that until costs were available at all centres where a locality allowance is paid (presumably to assess family needs allowances) no decision would be made about that allowance. But married officers of all classifications now receive whichever is the greater - their present salary including any non-reduction allowance plus locality allowance or their nerr saln.ry with family allo, runce.

Apart from the locality allowances mentioned in section 6 of this decision, the payment of minimum family needs allowances according to the centre in which the officer was stationed represented a direct recognition of differences in living costs and to that extent departed from the flat salary rates for the whole Territory applied under the 1964 scales of salaries. But it was not an introduction of differing "basic wages" for various areas on to which, as on the Australian private industry pattern, differentials for skill were to be added.

( 2) Reclassification of former base range positions:

With the introducti on of separate family needs allowancea , I.lie Administration was enabled, Mr. Wootten atated, to classify officera i n the base range according to work-value. The existing scale had provided for every base grade officer to progress to a salary intended to bo sufficient to support a 'wife and three children. The justification for that approach had been to relate the minimum rates, from an economic viewpoint, to Territory conditions; it inevitably involved the placement within a single range of positions of varying levels of skill and responsibility.

Without reducing the salary or salary range of existing local officers, the base range of classifications within the adult male range of $440-760 now became divided into five groups:-

Group 1 - $440-560 (embracing duplicator operator, gardener, messenger, orderly grade 1, steward and tipstaff)

Group 2 - $480-720 (11 classifications) Group 3 - $520-760 (30 classifications) Group 4 - $560-800 (17 classifications) Group 5 - £600-850 (broadcasts assistant, hygiene and

welfare officer, teacher - "A" certificate - and driver, grade 3).

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(3) Additional grades of classifications:

Based on instances brought to light during the Association's evidence of local officers with previous considerable experience being placed in the base range when the reconstruction was made, the Administration created additional grades within some designations. The individual officers• positions were to be reviewed as soon as possible for the purpose of t hem being graded. The n91v grades would enable many officers to overtake their non-reduction allowances within the foreseeable future, it was stated, by the recognition of previous service in their standard salaries. Examples of new grades were -

Pre'Vious classification N61v gradi~

Driver $440-760 Grade 1 $520- 760 Grade 2 $560- 800 Grade 3 $600- 850

Clerical assi stant -Grade 1 $440-760 Grade 1 $520- 760 Grade 2 Grade 3

Storeman

Storeholder

(4)

$800-920 Grade 2 $960-1,040 Grade 3

Grade 4 Grade 5 Grade 6

3440-760 Grade 1 Grade 2

$800-920 Storeholder

Junior rates and minimum for adult females:

$800- 950 $1,000-1,050 $1,100-1,200 31,250-1,300 $1,350-1,450

3480- 720 3560- 800

$850- 950

Based on suggestions by Association wi tnes.ses that junior rates were insufficient for needs, particularly in the case of females, the Administration brought into operation a Third Division base level scale of -

18 years and under - $320 (males and females under 18, an increase of

19 years

20 years

$60; females at 18, increase $50; males at 18, $40 increase)

- $360 (females $70 increase, males $40 increase)

- $400 (females $80 increase, males $40 increase)

Minimum adult rate for females - $440 (increase $80).

At 21 years of age, therefore, female officers were placed on the same minimum salary of $440 as for a.n;y single male adult. The adult female "differential" as previously noted, had levelled out, from the progression starting at the beginning of the base range, at an amount of $160 below aey male rate of $760 or over. Ur. Wootten stated in July that consideration was being given to whether that relativity would continue to be maintained. At the close of the proceedings in February 1967, I was informed that a decision had still not been made but was expected shortly.

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( 5) Salary rates for senior positions::

Mr. Wootten announced that the Government had accepted that for the more senior and responsible positions, especially those requiring academic qualifications and substantial experience, the r9\vards for attaining these positions and discharging the responsibilities should be relatively greater than in the 1964 scales. The broad pattern of the modified structure to be introduced was similar to that in a number of other developing countries, it was submitted. Examples of the new salary scales are shown in the following pages:-

Group

Clerical and administrative

Professional officers (engineer, architect, agricultural development officer, veterinary officer, surveyor, medical officer, legal officer, forestry officer, agronomist, etc.)

Clo.ss 1 Class 2 Class 3

Class 4

Clo.as 5 .

Chief of Division

Education Teacher ("A" Certificate) Teacher ( "B" Certificate

Grade 1 Grade 2 Grade 3

Education officer Grade 1 Grade 2 Grade 3

Headmaster Grade 1 (Primary) Grade 2 (Primary) Special (Primary)

PART EXHIBI'l' 6 .

Present $

640-1,040

1,080-1,240 1,280-1,416 1,464-1,608 1,656-1,800 1,860-2,040 2,100-2,280 2, 340-2, 520 2,520-2,640 2,760-3,000

1,464-1,800 1,860-2,040 2,220-2,400) 2, 340-2, 520 2,520-2,640) 2, 520-2, 760) 2,760-3,000 2,760-3,000) 2,880-3,000) 3,120-3,240 2,760-3,000)

3,360

480- 760

840-1,200 1,240-1,416 1,464-1,608

840-1, 200 1,240-1,416 1,464-1,608

1,656-1, 800 1, 800-1, 920 1,980-2,040

Proposed $

640-1,050 950-1,200

1,100-1,300 1,350-1,550 1,600-1,825 1,900-2,125 2,275-2,575 2, 775-2, 975 3,225-3,525 3,875-4,275 4,875-5, 275

1,700-2,475 2,675-3,225

3,525-3,875

4,075-4,475

4 .• 675-4, 875

5,075-5,475

600- 850

850-1,300 1,350-1,550 1,600-1,825

950-1,500 1,550-1,750 1,825-2,050

2,125-2,275 2,375-2,575 . 2,675-2,875

Group

Education (contd.) Inspector

Grade 1 Grade 2

Superintendent Chief of Division

Trades Artisan's assistant Artisan ( 2nd class trade) Artisan (1st class trade) Senior artisan Foreman artisan

Grade 1 Grade 2

Works supervisor Senior works supervisor

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Technicians (Posts and Telegraphs) -Technician's assistant Technician Senior technician Supervisiug technician

Grade 1 Grade 2 Grade 3 Grade 4

Technical assistants and technical officers -

Technical assistant Technical assistant

Grade 1 Grade 2

Technical officer Grnde 1 Grade 2

Senior t echnical. officer Grade 1 Grade 2

Chief' technical officer Gradel Grade 2 Grade 3 Grade 4

Miscellaneous Comptroller of customs Crown Soli citor Deputy Crown Solicitor Horticulturalist/experimentalist) Livestock officer )

Gradel Grade 2 Grade 3

Present $

2,040-2,160 2,220-2,340 2,400-2,640 2,760-3f000

440- 760 720- 840 720-1,000

. 1,040-1,120

1,160-1,280

l,416-1,512 1,608-1,704

440- 760 720-1,000

1,040-1,120

1,200-1,200 i,368-1,464 l,512-1,608

1,704

440- 760

720-1,000 1,040-1,080

l,160-1,280 l,520-1,416

l, 4.64-1, 560 1,608-1,704

1,800- 1,920 1,980-2,040

2,340-2,520

2,760-3,000 3,360

2,520-2,760

840-1,200 1,280-1,416 1,464-1,608

Proposed $

2,975-3,225 3,375-3,675 4,075-4,475 5,075-5,475

520- 760 760- 850 950-1,050

1,150-1,300

1,400-1,45'1 1,550-1,600 1,700-1,825 2,125-2,275

520- 760 950-1,050

1,150-1,300

1,400-1,500 l,600-1,700 l,825-1,975 2,125-2,275

560- 800

950-1,050 1,150-1,250

l,300-1,400 1,450-1,550

1,650-1,825 1, 975-2, 200

2,375-2,575 2, 675-2. 875 2,975-3,075 3,225-3,375

4,875-5,275 5,075-5,475 4,075-4,475

1,050-1,550 1,700-1,900 2,200-2,475

/

Postmaster -Grade 1 Grade 2 Grade 3 Grade 4

Traj_nine officer Grad.e l Grade 2 Grade 3 Grade 4

Co-operatives assistant -Gradel Grade 2 Grade 3

Communica+,ions officer Senior communications officer -

Gradel Grade 2 Grade 3 Grade 4

Present $

1,080-1,240 1,280-1,416 1,464-1,608 1,656-1,800

1,280-1,416 1,464--1,608 1,656-1,800 1,860-2,040

800- 920 960-1,200

1,240-1,368 720-1,000

1,040-1,160 1,200-1,200 1,320-1,416 1,464--1,560

Proposed s

1,100-1,300 1,350-1,550 1,600-1,825 1,900-2,125

1,350-1,550 1,600-1,825 1,900-2,125 2, 275-2, 575

800- 950 1,100-1,200 1,400-1,500

950-1,050

1,100-1,250 1,300-1,400 1,450-1,550 1,700-1,825

The highest salary rate provided in 1964 for any local officer was $3,360 (various a3sistant directors in PubJ.ic Health Department and Crown Solicitor) with Chiefs of Division of various Departments being on a salary range of $2,760-2,880-3,000. The new rates announced were, at the top of t he Second Division:

Cl erical and administrative

Prof essional ) Education ) Crovm Solicitor)

$4,875-5,075-5,275

$S,075-5,275-5,475

Artisans in firot-cl nss t r ndes were increased from $720-1,000 to 0950-1,050.

Assistant Directors of Public Health, by the new salary scales, became entitled to a maximum sal orJ eg_ui valent to 68 per cent of the 1964 overaeas classification excludine basic wa1:;e adjustments. (In 1965 a "margins" increase was applied generally to overseas officers and a further basic Wd.ge increase in 1966 of !n 05 per annum.) Previously the relativity was 41 per cent, as noted earlier .

First class artisans moved fro m. a relativity between their maximum ·sal ary to t he 1964 "standard" salary fo r the highest overseas grade of artisan of 46 per cent to 49 per cent, but the minimum of their salary range was subst antially increas ed.

******-*******

I stated in the proceedinas, when the M.ministration's proposals were announced, that each of the matters covered therein were matters that had occurred to me during the hearing to that stage as requiring consideration. Whether what had been done was adequate in amount in acy direction would no doubt be t he subject of much i'urther argument, of course, in view of the Associationes non-acceptance of the proposals • .

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I comment now that tl1e f ami ly needs allowance, as part of salar,J to be paid by an employer i s pr obably a unique concept and one that could be implemented only by a public authority and not by private industry in its own v,aee structure. Quite surprisingly, counsel for the Employers Federation, in submissions later in the case, made no reference to the matter. The allowance introduced by the Administration no doubt stemmed from the particular history of the Administration's previous procedures of rations and issues for families of Administration servants in some instances, the method of conversion of their total emoluments on Administration Servants being taken into the Service, the differing "location allowances" according to family responsibilities and finally, the criticism by Association witnesses of the inadequacies on a family basis of the base grade salary scale. Parenthetically, overseas officers all contribute towards child allowance payments made to those Vii th dependent children, in similar manner to the Australian social service schemes, so that family responsibilities are not part of the wage structure from the employers' viewpoint, The Association did not challenge the concept, but only the amounts, of the family needs allowances.

Without the particular history behind their introduction and Vli.thout consideration of the present stage of the Territory's development and that of the Territory Service's "localisation", I comment that views could no doubt be expressed against setting up a wage structure dependent, at least t o the extent of a wife and three children, upon the particular family responsibilities of an employee.

I shall comment further on this aspect of family allowances in my consideration of what alterations should, in my view, be made to existing salary levels.

I have come across some references, in relation to wage structures in under-developed African countries, to family allowances but I have no knowledge of t heir details or circumstances.

The substantial increases in salary rates introduced for the highest levels of local off icers were a recognition by the Administration of the importance of incentive to local officers to study for and attain positions rec;:ui ring hieh qualifications and acceptance of heavy responsibil­ities in administering the Public Service for the benefit of the Territory.

Two i ncidental effects of the July salary alterations were stressed by the Administration. The increased salaries and additional grades created for some positions should enable many serving officers to overtake, within a reasonable time, their non-reduction allowances, and, further, because of the shortage of staff and the policy of advancing local officers rapidl y to senior positions, the Administratio·n considered some of the more highly qualified officers were likely to rapidly receive actual increases in total remuneration.

The July, 1966, announcement by the Administration did much, in my view, to correct anomalies that had been exposed in the 1964 salary structure and enabled the hearing to be completed and this decision to be prepared with t he knowledge that the personal situation of many present local officers had been ameliorated. The July modifications transformed the hearing.

..

/ -37-

9. THE DEP.AR'l.'LiENT OF LABOUR ~RTh"Y OF INCuME AND EXP£:NDITURE.

The survey, referred to in Section 7 of this decision, of income and expenditure of 90 local officers receiving less than $760 per annum in total actual salaries, conducted by the department over a fortnightly period in hlay 1966 (for Rabaul, Lae and Mada.ng) and June 1966 (Port Moresby) r elated to a random sample of 1,095 base grade officers in those towns. They compris ed:

Sinl;le

Rabaul 9

Lae 5

liladang 11

Port Moresby 27

52

Marri ed

6

10

4

16 ( plus .l widowed

1 divorced)

38

15

15

15

45

90

Counting partially-supported dependants as having half their needs supplied, 21 officers in Port r,;oresby supported an average of 2. 7 persons. The same number in t he other tovms supported an average of 2.3 persons. A number of "fellow residents" with no obvious source of income were reported but were not i ncluded amongst dependants.

The survey was competently conducted am not subjected to any critici sm by the parties. Amongst the valuable material produced from it, I have selected only the following analyses as illustrative of the actual mo de of l ivine of base grade officers under the 1964 scale of salaries and classif i cat i ons , i.e., before t he July 1966 modifications and the introduction of f amily needs allowances. The salaries of the officers covered by the sur vey did i nclude non-reduc t ion allowances for former Administration Servants but only ,mere the total amount of salary was below the then maxim= base grade sala ry of $7&:J.

PROPORTION OF EXPKIDI TURE Ilf :c:ACH CATEGORY DURING SURV:E.'Y. ·

Rabaul All Total Average Category Madang Port towns No. of actual

Lae Moresb;z combined 12urchasers e!]2enditure** % ,; % s

1. Trad.i tional food 5.2 6.0 5.6 64 l.48

2. Non-traditional f ood 37.4 28.4 33.l 90 B.62

3. Toiletries 2.0 1.0 1.5 62 .41

4. Stimulants, cigar-ettes etc. 11.1 11.0 1216 16 21~ C/Fwd. 58.7 46.4 52.s 13.80

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Rabaul All Total Average Category Madang Port towns No. of actual

Lae Moresb;y: combined J2:Brchasers e~enditureH-% % %

B/Fwd. 58.7 46.4 52.8

5. Minor miscellaneous household items 1.7 1.0 1.4 71

6. Household goods and other durable assets 4.9 2.6 3.8 25

7. Clothing 8.6 6.5 7.5 46

8. Fuel and light 1.6 1.9 1.8 47

9. Public utilities .3 .2 2

10. Rent, cost and main-tenance of housing 3.2 4.4 3.8 35

11. Transport 3.7 4.9 4.3 71

12. Stationery, books etc. .3 .2 .3 34

13. Education 1

14. Cultural, recreational and sporting fees .5 1.5 1.0 34

15. Gifts, religious, social and tradi tional oblie;ations 11.8 21.3 16.6 56

16. Insurance, superannuation and credit account and loan repayments 3.6 6.2 4.9 53

17. Taxation 1.9 1.0 2

18. Gambling

19. Miscellaneous 111 A'l -~ 1~

Total: 100 100 100

** Total expenditure for the fortnight in each category divided by 90 officers in survey.

s

13.80

.36

.99

1.98

.47

.04

1.04

1.15

.oa

.28

4.38

1;}0

.n

122

$26.32

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/ T.o\BLE 31: USUAL !,:ODE OF TRAVEL TO WORK.

la!§. fil.- Walk ~ Average · cycle ~ distance for those

walkinf; (miles) % % % %

Lae 6.67 13.33 60 20 .37 Madang 6.67 6.67 66.67 20 .60 Rabaul 80 20 .75 Port Moresby 44.44 2.22 48.89 4.44 1.06

TABLE l~: AVERAGE UTCOME.

Rabaul Lae ~ Port All

Moresby ~ s $ $* ~ $ Gross wage 21.18 21.34 16.75 19.47 19.61 Overtime .79 .22 .77 .86 .12 Gifts 4.87 1.07 1.31 1.50 1.92 Sales .29 .04 Produce consumed .88 .43 .01 .25 Miscellaneous /J .o:;i 10!02 1.02 ~.02 · 3186

Total: 26.92 33.55 20.55 25.92 26.40

* Most Madang officers were single and some received junior rates of pa,y.

p Some Lae officers received leave peyments in the period, and also one Port J,ioresby officer.

TAELE 32: AV'illlAGE EXPEHDITURE DURING THREE DAYS PRIOil TO PAY DAY

Port Moresby Rabaul lfadang Lae

$2.64 1.69 1.45 4.11

TABLE 5: 0\ilflo:RSHIP OF ACCOl'JlftODATION. Percentage

Rabaul, Owner or allocatee Lae Port

J1ladang Moresby,:

Administration-rented or free 24.4 15.9 Interviewee 15.6 6.8 Close relative - rented from Administration 2.2 6.8

Close relative or friend 6.7 25.0 Domestic servants quarters

allocated to friend or relative 2.2 15.9 Administration hostel or single

men's quarters 42.2 29.5 Other J.d --

100.0 100.0 -

All ~

20.2 11.l

4.5 15.7

9.0

36.0 --2..d. 100.0 -

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10. Tllli ASSOCIATION'S FIJilTHE.tl wVID:E:NCE AUD 3UBllISSIONS.

Between July and October 1966 I heard evidence from a large number of local officer witnesses holding a wide range of representative positions in the Service from the base grade up to Acting District r.ledical Officer. Expatriate officers in the Service holding supervisory and senior positions up to Head of Department also gave evidence, as well as indigenous officers of various Workers Associations and a native member of the House of Assembly. In addition to Dr. Margaret :McArthur, called by the Association in relation to nutrition, there were the following expert professional witnesses from Australia -

Dr. R.G. Crocombe, Executive Offi cer, Nw Guinea Research Unit, Australian National Uni-versi ty.

Professor R.S. Parker, Professor of Political Science, Institute of Advanced Studies, Australian National University.

Professor P. Lawrence, Professor of Ant,1ropology and Sociology, University of Queensland.

Further, and possibly uniquely, senior counsel for the Administration, Mr. Wootten, ~- C., was called as a w:i. tness by the Association. I allowed this course over Administration objection. Mr. "\7ootten was examined by the Association concerning an article he had written for the Sydney "Bulletin" (1) on race relations in the Terri torJ in l!'ebruary, 1965, before the proceedings were initiated, and also on a.'1 article he wrote on the development of a native legal profession in the Territory. Both articles were admitted into these proceedings.

I was helped in my assessment of the position concerning race relations by the balanced and sober expression of views he gave in the complete article he wrote for the "Bulletin" (as published, its balance was not preserved fully) and by the evidence he gave before me in amplification of his written views.

The Association claimed that I should require the production by the Ad!!linistration and admitto.nce as evidence of a report of the Aueust 1964 Conference of Territory District Commissioners - held just before the reconstruction '18.S made to the Service - and a memorandum to the Public Service Commissi oner by the Departmental Head who was chairman of that conference. It was evident that these documents concerned the local salary structure proposed for the reconstruction. I upheld the Administration claim of Crown privilege aeainst their production. 'My decision was confirmed by the Territory Supreme Court on reference to it under the Arbitration Ordinance of the question of l aw involved.

I coul d not hope to adequately set out, even in summary form, all t hat was put to me in the great volume of oral evidence and documentary material by the Association. What I have chosen to include here, both in relation to this evidence and I.lr. Hawke's submissions at the close of the Association's case which included an analysis of this evidence, are aspects which impressed me as requiring deep consideration in reaching my conclusions. The Administration's replies thereto, as well as what it put to me otherwise, are mentioned later.

( 1) Forum: "The World's Mo st Generous Colonisers", "Bulletin", 27th February, 1965.

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A great deal of the evidence concerned the serious effect on race relationships engendered by the 1964 reconstruction. Disappointed expectations, damage to pride of local officers, bitterness and hatred, destruction of incentive for the future, were voiced by local officer and other indigenous witnesses and reported by expatriate officers and the independent huropean witnesses. The latter were characterised by Mr. Hawke as all having "an abiding concern m. th the Territory's welfare and the view that existing salaries a.re not just improper but dangerous". The importance to the future development of the Territory of a strong, efficient and loyal Public Service was stressed not only by the European witnesses but by indigenous witnesses outside as well as p.:i.rt of the Service. The witnesses looked to this arbitration, which had been clearly invited by the Administration, to rectify a situation of potential political danger. A great desire for friendship and harmonious relation­ships m. th Europea.'1.s in the Territory existed at the same time.

The Administration's economic planning and objectives for the Territory would not eventuate w:i. thout a significant alteration of the present salary structure for local officers, it was claimed, because of the adverse social and political implications of the present scale. It was in Australia's enlightened self-interest that a significant increase be granted in the strategically important sector of the public service~ The Austra·lian Administration had created institutions, given their language and absorbed into their own culture the local officers it had taken into the Service. A comparison with the economic situation of other developing countries in Africa, Asia and so on was irrelevant, because local officers inevitably compared themselves \'Tith the situation created for them, i.e., the comparison with their Australian counterparts. It was important to realise, not whether it was right that they thought that way, but that they did think so.

Quotations were given from the book "Austro.lia•s Defence" by Dr. T.B. 11:illar, Fellow in International Relations, Australian National University, who stated that whilst Australia had an obligation to defend the TerritorJ, it was in Australia's interest to see that eastern New Guinea remained defended and the attitude of the local people was therefore involved.

It ,ms subroi tted to me that t he rapidly increasing proportion of Australian expenditure in the Territory devoted to defence could be rendered nugatory if lo cal attitudes were not taken properly into account. Australia had the economic capacity and moral responsibility to accommodate any increase in public service salary costs.

An Administration booklet "Careers in the l'ublic Service" stressed the aim of a strong local Service, qualified academically and by experience, to take over the more responsible positions. School leavers were looked to, for the required attributes of leadership qualities, integrity ani honesty. Mr. Hawke said that a multi-racial Service would clearly exist for a considerable period, so that comparison in emoluments between locals and expatriates was inevitable, particularly where local officers had been promoted to positions with expatriate subordinates.

The Association• s witnesses and submissions joined issue with the Administration's original statement in support of its 1964 salary ·structure that "it would be bad for government and bad for the local community if public servants were to be made a more highly-privileged class than any other local citizens". This statement, the Association said, meant that the social ard political consequences of the local salary

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structure had been raised a.>1d recognised by the Administration itself, so. that the poli tical realities had to be assessed in this arbitration. On the evidence a public service "elite" would not be resented by the local population, who would regard it as a source of pride and an incentive for thei r children. If the "elite" in the community were "offside", it would be a most dangerous th..ing for the Government. The proper quality and attitude of t he local public service were basic essentials for economic development t hrough education and administration.

'rhe Admi nistration had admitted in July 1966 , the Association claimed, that there should be stronger incentives and rewards offered in the Service. However, the significance of the July adjustments had to be tested by their effect, which had been negligible: the considerable increases in top part of t he salary structure had no effect at present because no local officers were in those positions. No si/;nificant increases had been applied in the area of current realities of positions presently occupied by local officers.

On the justification put by the Government and Administration for the existing level of the salary structure , local officer and other indigenous witnesses said it had not been shown what the present capacity was of the Terrltory. The view was expressed by th em and others that , on independence, the people aui t heir national Government could reduce salaries if they could not be afforded then. The local people were not clear how nruch had been saved by the 1964 "salary cuts"; "if independence were near, the people ­would understand t he need for economies to build up the country quicker, otherwise people think they are only working for their white colleagues".

Particulo.r emphasis was given in much of the Association evidence to raising salazy levels for local officers possessing the higher qualifications, training and skills - those qualified for the higher appointments. The vi ews of various witnesses on the appropriate salary levels included the followine:-

A medical student~ ";'/e want reasonably good salaries - cut domi the expa t riate r ates by one-third."

Dr. Crocombe: "Race relationships are very important at the higher levels. These people who have the highest aspirations are the most sensitive to discriminations of this kind an.l expectations are rising very rapidly an.l much more rapidly among persons at the higher levels. At the lower levels of skill there is a wide range of tasks undertaken by locals exclusively. I am very greatly concerned with rates at levels where both local and expatriate persons work - teachers in high schools upwards."

do not paid. salary

Senior officers course student at Administrative College: "I really believe that all officers, regardless of colour, be equally A Training Officer, Grade 1, should be paid the overseas standard less a quarter."

Professor Parker: "I don't disagree with a differential in total emoluments. There are practical reasons for not paying Australian rates of pay without allowances. There is the effect on other wage levels in competing occupations that would damage other industries. I would not say every public servant should be more privileged than every other member of the community. The Public Service should not be paid inadequate salaries merely because inadequate salaries are paid outside. The Public ·

/ -43-

Service may have to set standards, to some extent. Insofar as the Government must look to reasonable economy in the spending of its grant, that is a consideration which might justify paying lower local officer salaries. Salaries should be sufficiently similar so as to have mutual social exchange and physical conditions for st-udy and work. Severe discrimination would be felt if the minimum ratio is not at least 50 per cent (60 per cent would be reasonable) of the expatriate base level. At the top it should be 75 per cent."

Professor Lawrence: "70 to 7':ff~ of European base rates would be fair, basing this on one-third or one-quarter of expatriate salaries having to be spent in Australia on education, fares, leave and so on, Local officers rates should not go below 50 or 60 per cent of European rates. You have to take the economic situation into consideration - you can't satisfy everyone straight off, Work out the most strategic area to satisfy first, to produce less discrimination than now. As in politics, you must choose between alternatives, neither of which is ever ideal, It is less dangerous to subsidise an economy on high wages for important people than to tie wages to what is produced in the country and subsidise it for other improvements."

President of a Workers Association: 1175 · per cent of the overseas base rate should be paid in lower ranges where the majority of people are now in positions of responsibility. Above £3,000, perhaps 66 per cent. 11

Expatriate Head of Department: "You can• t divorce the economic from ·the social anl politic al aspects. I haven• t paid much attention to the base grade, which gets into rather a cloudy economic area, I think we are in a jam, in that we have brcught people into the Public Service who haven't the qualifications to proceed very far. I don't think people with easily­learned skills can ask - nor do they expect - anything like the Australian basic wage. But having been brought into tne Public Service they must be able to live comfortably. Where they have acquired skills previously confined to Europeans, they develop advanced values, awareness and an uneasy self-assertion. I have never met a local officer vlho claimed parity. They would have been prepared to settle for two-thirds of total Australian rates at the top level if qualified by Australian standards. If not so qualified, somebody could come up with a reasonable figure to meet reasonable needs. Australia is pouring a lot of money and effort into the Territory and the only . return we can get is goodvrill."

A senior Administration officer: "The 1966 salary alterations did not go far enough in some of the higher positions requiring superior technical, academic or training qualifications."

A further part of Association evidence arrl submissions related to suggestions by local officers that they might seek positions in private industry with higher wages, and instances were given of former local officers securing such positions. The Association submitted that the Administration's evident view that public service salaries should not unduly embarrass private enterprise was a wrong approach, as "private enterprise pays for what it wants" and was "picking the brains out of the Administration". Whilst Mr. Hawke stated that the Association had not been moved in any identifiable sense by what is being paid in private enterprise, but had based its approach on the evidence it had produced of local officers leaving or considering leaving to join private industry, he submitted that if

· Public Service rates were "nearer to private industry" it would enable the Public Service to compete with "unirlh.i.bi ted private enterprise". As to the evidence and submissions concerning private enterprise, I comment that

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I am far from satisfied that at any but the higher levels private enterprise generally . is paying rates in excess of the Public Service. The evidence on this aspect was fragmentary and unsatisfactory in many respects. Higher rates in some inatances were due to longer hours and overtime or reiated to employment in defence and other construction work with no security of tenure or length of employment. Instances of co-operative officers trained in the formation or supervision of co-operatives resigning to be employed by them had occurred but were inevitable in :the present stage of scarcity of requisite skills.

A final comparison made by the Association was with salary rates for the Territory police force, where a local sub-inspector had been granted a commencing salary of $1,700 in 1966, the same commencing rate as for local officer graduates - though the latter had a long incremen-l;al range. No other direct comparison with the police force was pointed to b:, the Association in its claims concerning local officers and I do not propose to use the salary rates for this force as any guide in iey task because of the vastly different circumstances of the latter•·s employment, etc.

The claims made by the Association for specific salary levels higher than those now prescribed are detailed in a later section of this decision. Mr. Hawke submitted that the growth of the Territory's national income was proceeding apace end the claims did not represent a burden that was not capable of being matched by growth of national income.

11. FAl,!ILY NtEDS ALLOvl'ANCES - THE ASSOCIATION'S CLAIMS.

The Association did not disagree with the Administration's concept of needs allowances superimposed on standard salary but considered the July allowances inadequate. I was informed, also, that the Association had an open mind on which was more appropriate, Territory-wide needs allowances according to family size or allowances varying broadly according to locality.

As a conservative average figure, it was submitted, $600 should be granted Territory-wide for single male adults and Sl, 200 for man, wife and three chi:).dren. No intermediate average allowances for married officers or those with one or two children were nominated by the Association.

The claims made by the Association on needs allowances at the conclusion of its case were:-

M M+W M,W + l M,W + 2 M,W + 3 s s $ $ $

Port .Moresby:-P. S. A. 606.19 896.78 1,043.80 1,192.68 1,358.75 Admin. a]lowance 440 650 740 830 930

Rabaul: P. S. A. 550.96 788.74 893.94 1,002.04 1,114.62

Madang: P.S.A. 537 •. 33 803.88 930.42 1,059.42 1,196.61

Lae: P. s. A. 559.23 801.60 924.70 1,049.59 1,178.99

Administration allow-ances for Rabaul, Madang and Lae 440 580 650 720 800

/ -45-

·I mention here that the Association proposed that I should require a clear indication from the Administration of the grounds upon which the Public Service Commissioner will exercise any discretion in granting needs allowances for dependants. Mr. Hawke said the allowance should be granted in cases where there was in fact a responsibility for wife and children and this should not rest on any test of legal adoption.

I have no evidence or even suggestion during the case concerning disputed questions of dependency, and whether the Commissioner's discretion had been exercised unreasonably in any case was not apparent. There were a number of instances in the evidence of local officers caring for children of relatives, at least for the time being, but the circumstances were not shown. I do not consider I should impose any requirement on the Administration on the question of dependency for the purpose of payment of needs allowances. The Commissioner must have had considerable experience on this issue when converting Administration Servants "assessed former emoluments" on them being taken into the Service.

On the Association's first alternative of uniform needs allowances, in my view such an average approach would fail to give adequate recognition to considerable differences in l iving co sts between various areas of the Territory. Much of the Association evidence showed the considerably higher costs prevailing in Port Moresby due to many factors, which include high costs of fresh food and transport. These costs are directly recognised in both the Administration allowances and the Association claims. The Administration even on an averaging basis covering 43 localities already embraced in its needs allowances has had to divide them into seven zonal amounts.

I mention i ncidentally that the $600 claimed for single men by the Association is almost t he Port Uoresby figure in its det ailed claims, the average of claims for t he four towns mentioned being only $563. Against this, the 31,200 claimed for a family with three children compares with $1,212 average.

The Association was only able to compile its claimed needs allowances for four towns, based on food regimens proposed by its expert witness on this topic and on prices obtained for other i terns in such towns by the Department of Labour and by various wi. tnesses.

I am not sati rJfied, bearing in mind the groupings that have already had to be made by the Administration (covering only 72 per cent of local officers) that it would be reasonable, even if it were practicable, to determine an average needs allmvance for each family grouping for the whole Territory.

The Association claimed that food "needs" of local officers and their families could be assessed with great confidence, taldng into account food preferences, variety, availability, and meal planning, because of evidence it led from Dr. Margaret lvkArthur, currently Lecturer in Anthropology, University of Sydney. She holds u.sc. degree in Biochemistry, University of Melbourne, post-graduate certificate in Nutrition, Institute of Anatomy, Canberra. She has conducted research or been a consultant on nutrition in New Guinea, Malaya, Jndonesia and Africa. The food regimens compiled by the Administration as the basis for Family Needs Allowances were critically ·examined by Dr. McArthur in her evidence and she compiled alternative regimens for Port Moresby, Rabaul, Lae and Madang.

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The Administration called as a witness on nutrition, Dr. E.H. Hipsley, Medical Officer in. charge, Nutrition Section, Commonwealth Department of Heal th, Canberra. He has had considerable experience in nutrition research in New Guinea and was closely concerned with drafting the Ration Scales applying under the Native .Employment Ordinance since 1948. Such ration scales were applied to many Administration Servant's and their families before the Service was reconstructed in 1964. He has been a member of the Nutrition Committee of the National Heal th and Medical Research Council in Australia since 1949.

In both the Administration needs allowances .and the Association claims, food cocprised roughly 25 to 30 per cent of the money amounts allocated for single men rising to around 50 per cent for families with three children. The follo,ving sets out the weekly cost of various food regimens for male adults as put before me during the hearing. Family food requirements were calculated from the allowances for men.

Minimum cost of "nutritionally adequate" diet in accordance with Native Employment Ord­inance.

Per week $

Port Moresby 1.90

Lae 1.66

Rabaul 1.64

Madang 1.83

Goroka

Mount Hagen

Kavieng

Wewak

Original Needs food selections allm,ance costed at Depart. as fixed of Labour July 1966 survey prices

Per week Per week $ $

2.39 2.45

2.08 1.99

1.79 1.88

2.23 2.02 (Revised)

2.90

2.45

2.04

2.13

Claims Increase sought by

P.S.A.

Per Week $ "

.3.79 55

3.14 57

2.69 43

3.29 63

Within the monetary amounts for food comprised in the Administration's needs allowance, Dr. Hipsley made two other selections of diets in addition to the Administration original selections, all of which he claimed were nutritionally adequate. The food consump_t ion patterns of local officers, as shown in the Depar~nent of Labour Survey, were referred to particularly by Dr. McArthur, who, as mentionen earlier, also paid particula.i attention in her regimens for the four urban areas to variety, meal planning am availability of various fresh foods. Dr. Hipsley did not deny the motives behind Dr. McArthur• s regimens and even considered them preferable, al though he categorised them as liberal in respect of calories and nutrients for the purpose of assessing minimum needs. I shall not attempt to summarise the considerable amount of technical evidence put to me relating to diets, nutrient values, etc., in the various regimens and the nutritional reaea:roh

l· I I

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~ arried out previously in respect of Territory inhabitants. There is, of course, no way of ensuring that a:ny monetary allowance prescribed to provide an adequate diet, from nutrition and other aspects of food consumption, will be spent by recipients in the desired manner.

The various food regimens compiled by the Administration for eight areas and by the Association for four towns naturally varied in detail according to availability of supplies of different foods in the areas. (It will be noted that a revised food figure for Madang was mentioned earlier, the Department of Labour pricing being carried out when the price of yams was high, due to short supply.) The pricing of seasonal i terns or those subject to other fluctuations in supply is, of course, a difficult problem.

In respect of components other than food in the Administration's needs allovrances the Association accepted the cash values assigned to some items:-

Rent Furniture rent Public utilities,

and garbage Electricity and kerosene

*Firewood

superannuation

Per annum

$62.40 $4.00

sanitation $30.00

single single

single /

$13.00 single

Per annum

$104 married $10 married

*$37 .45 married *$38.89 married, but $43.20 for three children. _

*$23.40 married, but $26.00 for three children.

$38 (flat allowance as for officer on $760, maximum of former base grade.)

*Varying according to locality, Port Moresby fie;ure shown only.

The Association claimed considerable increases in clothing items and the values to be given them also for household utensils, toiletries and transport. The residual cash component for other than listed items of expenditure was claimed at $130 for single men (Administration allowance $52} and $104 for married officers (Administration $52).

It should be noted that the Administration assessed needs allowances for single officers in all cases of the eight towns comprised in the July 1966 allowances were considerably below the $440 minimum rate for any male adult officer even when taking into account $52 specified cash allowance:-

.ADI1IINIS'l'RA.TION ASSESSED 1,INII,M11 NEEDS FOR SINGLE OFl!""'ICEH.S

Port liloresby Lae Rabaul 'Madang Kavieng Wewak -Goroka Mt. Hagen

$411. 56 $377 .27 1393 $335.83 $317.95 $337.84 $393.18 $374.02

$28.44 balance $62. 73 balance $47 balance $104.17 balance

$122.05 balance $102.16 balance

$46.82 balance $65.98 balance

In the Administration's regimens for clothing, household utensils and toiletries a mmber of additional items were included as the result of _ claims by the Association in conferences in June 1966, though the Administration did not include all items then sought, as can be seen from the amounts for needs claimed by the Association.

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In my consideration of the P.S.A. claims for increased family needs allowances, I am faced with the practical impossibility - even if I accepted the regimens and pricing of each item or whether I considered they should be modified in any direction - of dealing with any towns except Port Moresby, Rabaul, Lae and Madang. It would be possible, of course , for me to firstly prescribe allowances for these towns and then endeavour with the parties to consider in detail any claims that may be advanced by the Association relating ix, other towns for which allowan~es have already been fixed by the Administration or for remaining areas shortly due to be announced.

As appears from the Native Employment Ordinance, whi.ch as to food requirements prescribed for the many thousands of Territory indigenous employees, is most detailed and comprehensive, there are many alternatives which can meet dietary requirements satisfactorily. Further, when entering the field of clothin&, 'household items, utensils and so on, not only the quantity of any items to be taken but their quality for pricing purposes would be the subject of much argument, as evident already in the vie;vs put to me by the parties in respect of the four main urban areas of the Territory and the Labour Department pricing survey. I would not shrink from this task if I thought it the desirable and reasonable course to adopt for present purposes, but have decided not to follow it.

The problem before me is to decide whether what has been allowed by the Admini stration in assessing minimum needs allowances represents fair and reasonable treatment for local officers at the present stage of the Territory's development. Regimens including specific amounts for various items of expenditure required to be met, on the average, by Administration local officers, can be no more than a guide bearing in mind the great variety of individual preferences , commitments and circumstances of employees.

It was put to me by the Administration that its fixation of a minimum public service rate of $440, when urban cash wage awards for un­skilled employees prescribed only $312, was itself a recognition of social considerations, even though the present economic situation of the Territory required a stringent view of needs. 'rhe later introduction of family needs allowances, I consider, certainly represented a majorrecognition of social aspects. It is ap~arent that urban awards for unskilled employees in private industry were not assessed on a needs basis - and not even on the basis of a family wage. The Report of the Territory's Native Employment Board dated 11th August, 1969, on ·;1age Scales for Natives stated that it had not been established what ,1ere the "needs" requirements of minimum wage earners; the Report recorded agreement having been reached between employers and the workers• association for urban cash wages of £3 per week (since increased. to £3. 5.0 per week for unskilled adults) which "took account" of cost of rations and issues required under the Native Employment Ordinance. 'l'he agreement reached also r eferred to the employees• representatives having emphasizoo their view that "no satisfactory labour situation could exist in the Territory until the base wage took into account the fundamental necessities of a married man and his family", and the agreement of employers on the desirability of ."co-operation of the employers, employees and the Government in a joint effort to expand industry, raise management efficiency and workers• output in order to obtain the progression from the present wage to a living wage on a family basis within a few years."

It is quite clear from the evidence of man,v of the lower-grade local offic~rs l'lho appeared. as wi tnesse.s that they were having difficulty

-49-,I ' ~n managing their affairs on a cash basis. Some witnesses even said they had had no problems when receiving rations, issues and accommodation as Administration servants. There were some notable examples of lack of budgetary ability since being placed on a full cash wage, to the extent of insufficient money being available for food because of what they had chosen to spend in other directions. It was evident that many former Administration Servants had regarded themselves, whilst continuing to do the same jobs, as being promoted in status and prestige by being made public servants -and that this was so also in the eyes of their relatives and friends.

No doubt based on former traditional modes of life, there_ appeared many instances of an absence of cost-sharing on any equitable basis amongst either single off icers or families sharing accommodation with others. Not only amongst those on low incomes with heavy family responsibilities, but with others on comparatively much better wage levels, what could only be termed unessential expenditure was quite a feature. Without categorising insurance premiums (in addition to superannuation payments) as unessential, about 10 per cent of local officers, including some on low incomes and with considerable family commitments, had chosen to make this part of their expenditure. For some, l~~ of their gross income was spent on insurance and superannuation. _I appreciate that, as an Australian, I naturally have quite a different approach and outlook from that of local officers. The demands on their incomes, the direction in which local officers choose to spend their salaries, their "relative values", particularly bearing in mind the short time which many of them have had to get accustomed to managing a full cash income, present problems quite different from people, such as myself, brought up in a completely different, European context of individual responsibility.

I can only approach my task with as much sympathy and endeavour at understanding as I can. But I cannot - even while appreciating the eXJ)ectations evidently raised in the minds· of local officers at the status and presti&e of being made public servants - overlook or disregard the position of other workers in urban and rural employment, including the almost 10,000 "other employees" of the Administration. The present state of development of the TerritOI"J dictates, to my mind, that a quite heavy ine-redient in considering any standard of minimum "needs" for all local officers must be a regard for the economic situation. No definition or assessment of "needs" can be given except in the context of what exists, or is reasonably possibltl to apply, in the economic situation of any country at a Given time.

It is clear from the waee position of many developing countries that base rates do not attenwt to be founded on, let alone satisfy, any concept of reasonable needs; they cannot afford to be so based. I 'must agree with the Administration view that, even accepting for Territory local officers that the concept of needs should-be recognised - as it has been specifically in the July 1966 allo"\"/ances - the reasonableness of amounts based on such concept must be tested against what is or should be economically possible.

As I have said, the minimum family needs allovrances introduced by the ~dministrati.on for its local officers , irrespective of the positions they may hold, rer~esent a considerable social advance in wage assessment for the Territory's public servants. What effect, if arry, they may have ultimately on wages in urban private industry cannot be foreseen. As I have also mentioned earlier, I cannot envisage that the system as such can be applied in private industry. Nor do I think that it is an appropriate method of mi.ge payment for general application to differentiate according to family

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responsibility to any degree. In a situation of l abour availabili ty it could only lead t o encouragement of employment of singl e worker s .

I have come 1P the co nclusion that, even if it wer e practi cable to do so for every area in which local officers may be employed in t he Territory, I should not determine at this point of time minimum needs allowances at higher rates than those recently fixed by t he Administration.

The present needs allowances and those to be prescribed for remaining areas should continue, I consider, for public servants for the time being. My decision on this question can, of course, be subj ect to further consideration and possible review i n the course of time. At some future stage it can be seen how they have worked in practice in arry or all of the areas, t he actual standard of living achieved by local officers thereby and too, what may have developed as -to private industry. In my view, rather than endorsing the family needs allowance approach to public service wage assessment, it muld be preferable for the actual wage levels at the base and the higher wage structure built on to it to be increased accor ding to the progress of the Territory's development and t he economic possibi lit ies for this course from time t o time. ·

Under the f ami ly needs appro ach inequities i nevitably, of course, arise; families with more t han three children being restrict ed t o an allowance for an average family, and officers on a salary level higher than the base on account of training, skill and responsibility, r eceiving a lower total amount than a lesser-skilled employee with more family responsibilities.

It seems clear that, with the great differences existing in food and other costs between various areas in the Territory, a uniform Public Servi~e wage scale to apply throughout would also be inequitable. For overseas officers, location allowances have had to be introduced even t hough salary rates are unifo nn, based on Commonwealth Public Service practi ce.

I add two other comments in concluding this portion of my decision. With t he decision being taken to reconstruct the Public Service in 1964 in order that its "localisation" should be proceeded with as r apidly as possible, the Administration endeavoured as far as it was able to ensure no worsening -in many cases an improvement actually occurred - of the situation of the thousands of employees it previously' employed as Adminis tration Servants; in 1966 it moved to ameliorate the position of t hose with f amily responsibilities who had entered its employment since 1964 as well as those former Administration Servants who had either undertaken family responsibilities or incur red addi tional family responsibilities since they joined the Service; · and it recognised the differences in living costs betw~en various areas, particularly so in respect_ of the great number of local officers employed in Port Moresby. These moves showed a proper concern for the welfare of its local officers.

The other comment relates t o a matter not within my purview: the standard of housing for local of f ic ers. I am aware of the great difficulti es , financi al and pr actical, facing the Administration in providing facilities and, where necessary for officer 3 l ocated away from their home areas, housi ng or other accommodation; the progress already made in recent years is considerable, in my view. I mention this subject because a great deal of evidence from local officers dealt with this matter, as being of great

.importance to them - as of equal concern in marry instances as the matter of salaries for their various positions in the Service. This was confirmed by a number of the European witnesses, too. There waa a tendency to expect that

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the Administration should provide these requirements for local officers without the local officers making arry effort towards improving their own standard of furniture, furnishings or equipment. Such an improvement appeared to be within the financial ability of at least some of the witnesses who gave evidence, although there were noteworthy examples of achievement of a pleasing standard of accommodation by employees themselves or great efforts towards that end.

12. SALARIES CLAIMffi BY THE ASSOCIATION.

At the end of its evidence and general submissions, the Association specified the actual salary claims it was advancing, based on and supported, in its view, by the evidence it had brought before me. Working from the former base grade, which had been split into five groups based on work value by the Administration in July, 1966, the Association claimed that Group 1 should have a salary range of $600 to $760, comprised. of increments of $50, $50 and $60. The minimum salary was that claimed as the needs basis for single men, as dealt with earlier herein. Proportionately to the increases claimed for Group 1, the new two groups were calculated. Groups 4 and 5 should have commencing salaries of 55 per cent of the comparable overseas officers' "standard" salary .rates, i.e., excluding basic wage additions and, apparently, arry salary adjustments since 1964.

I do not accept the proposition advanced by the Association that I haye no emund for accepting the detailed work-value assessments of each classification in the former base grade. The true position is that no attempt generally was made by the applicant Association to establish any different work-value for positions. I am accordingly not able to sa:y tha·!; the Administration's assessment of the relative position of those classifications is not justified. and should be altered. The Association, however, accepted the present classification groupin~ of t he Administration except that it claimed that nurses and pre-school teachers should be raised from Group 4 to Group 5, based on evidence it had broueht on these particular female officers.

The particular claim s became:-

Examples of classifications:

Former base gre.de:

Group l - Orderly Grade 1 J\ilessen.o-er Gardener Steward Tipstaff

Group 2 - Orderly Grade 2 Storeman, Grade 1 Coolc, Grade 1 etc.

Group 3 - Artisans assistant, Clerical assistant

Grade '1; Interpreter; Driver, Gradel; Laboratory assistant etc.

1-' r esent salary rn.nr;e

'./440- 560

$480-720

3520-760

P. S.A. claim

$600-760

$650-950) ) ) )

$700-l,OOOj

) ) ) )

Basis of ~

$600 minimum

for all single officers

Relativity maintained. with Group l

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Ex!!:!!!l!les of classifications: ;fresent salarv ~- Jla!i!ili S?t ran.ge ~ ~

lormer base B!':ade (contd.) :

Group 4 - Post al officer; $560-800 $950-1,250 Commencing Ambulance attendant; at 55% of Fork lift operator; overseas Supervisor, standard etc. rates

Group 5 - Broadcasts assistant; ) ) ) · Hygeine and welfare ) ) ) off icer;, ) $600-850 I $1,000-1,300) Commencing

Teacher ( "A" certificate)) ) at 5:ffo of Driver, Grade 3; ) ) ) overseas Nurse; ) ) standard Pre-school teacher $560-800 ) ~ rat es

Artisans (lower grade), plant ) ) operator, radio telephone ) ) 60-66% of

, . operator $760-850 ) ) overseas ) Sl,100-1,300) standard

'Mess supervisor, ) ) rates dental assistant $760-900 ) )

) Store holder, et c. 1800-950 Sl,100-1,400}

Broadcast assist ant, Grade 2 S850-l,OOO Sl,150-1,550( 66% of ( overseas ( standard ( rate

Teacher, Grade l $850-1,300 Sl,300-1,750( 701/o at ( minimum ( to 59% ( at maximum ( of overseas ( standard ( rate

Instructor, mot or driver, nurse $900-1,000 u,200-1,350) Maintain ) relativity

Assistant librarian S900-l,050 $1, 200-1, 550 ) with previous ) ranges = ) 61 to 701, ) of overseas ) standard ) rates

Artisan (first class), Average 66% dental mechanic, foreman storeman, of overseas book binder, linotype operator, standard etc. 1950-1,050 Sl,250-1,400 rates.

/ Examples of classifications:

Instructor, Public Heal th and Treasury

Postmaster, Grade 1 l.ledical technologist, Tutor, Public Health

Exceptions:-

Teacher, Grade 2 Teacher, Grade 3

Co-operative assistant Grade 2

) )

Local Government assistant) Grade 2 )

Welfare assistant, Grade 2)

Grad.uates etc. (Present e;raduate, Class 1, range $1, 700-2,475)

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Present salary range

$1,000 and upwards in 3rd Division

$1,350-1,550 $1,600-1,825

$1,100-1,200

Basis of claim

66% of relevant overseas standard rates

$1,825-2,125 To talce account $2,200-2,575 of three local

officer teacher grades as aeainst one grade for ovel'­seas teachers.

$1,450-1,550 No overseas officer counterpart

$1,700 and upwards in 2nd and 3rd Divisions

7~;, of relevant overseas standard rates.

On the basis put by the Association, it would appear that the highest salary clc.imed, that for Assistant Directors, Public Health Depart­ment, would be $6,039, compared with present $5,475. In the administrative area, a maximum local salary of 35,719 against present $5,275 was indicated.

Ho junior should receive less than $600, the minimum adult male rate on a needs basis, the Association claimed, as juniors had to meet the same needs as a man at 21.

Fo·r female officers the present minimum adult rate is $440, the same as for adult males , but a "differential" is progressively applied to hieher salaries , levelling out at $160 for existing male salaries of 3760 and above. The Association claim for females commenced at a minimum of $600, vri th a maximum female differential of S96 where male salaries were ~1,000 and above.

As indicated earlier, the Administration at the close of the hearing Tias still considering the matter of the female differential.**

** By letter dated 17th April, 1967, the Public Service Commissioner advized me that the minister had authorised the Respondents to propo.se a maximum "differential" of $100. After consideration of · this matter, I have decided to adopt this proposal.

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Broadly, the Association in relation to higher levels of female salaries adopted the same percentage approach to female overseas officers as for males.

"Standard" salary rat.es for overseas officers - excluding

\

overs,ms all=ances and basic waGe adjustments - were taken by ·the Association "by force of circUlllstances", it stated, as being the only published salary ec'lles for comparison. To the extent that , for example, 75 per cent of the standard rate was less than the actual salaries of overseas officers without an:y overseas allowance added thereto, the Association said their claims were conservative. In coming to my .decision, it was submitted, I should "ensure that for the future the relativity is to the total bass salarJ for the European officer, i.e., minus (-only) Territorial allowances ••••• so that no difficulties arise ,men there is ~n adjustment of the }furopean rate. Your determination should be put in terms that the relativity for the local officer is maintained when there is a fluctuation in the :rate for 1'uxopean officers."

For practical purposes, the Administration calculated that the rates claimed by the Association for the higher levels of local officers represented 70 per cent of actual overseas rates excluding overseas allowances compared w.i. th 75 per cent claimed on "standard" rates; 62 per cent aa compared with 66 per cent of standard rates.

The Association, in adopting the approach of local off~cers salaries being assessed as a percentage of comparable overseas salaries, ran into considerable difficulty. It did not wish to unduly disturb existing relativities between salaries for different classifications of local officers but found itself faced with a bewildering variety of overseas salary rates and incremental ranges. Fo~ example, the expatriate teacher range continued for 13 years of increments, whilst the local officer teachers he.d a 10-year range in Gradel, five years in Grade 2 and four years in Grade 3. Again, the European mo·tor driver instructor had only a single salary rate and no range. The Association claimed that this local officer classification should have three increments, whereas for other classifications with the slJllle commencing rate a range of eight increments was required to maintain relativity with the next lower range of classifications.

The Association claimed that as the Administration salary scales for local officers showed no consistent relationship with expatriate salary ranges for similar positions this was clearly anomalous a.~d should be corrected, whenever possible, at least on an average basis.

To my mind, the Association approach in its endeavour to establish and maintain for the future any set relationship to Australian salary scales is quite unjustified in the circUlllstances of the present state of development of the Territory Public Service. I fully endorse what was put to me on the general salary structure for local officers by Mr. Wootten for the Administration. I shall consider the absolute level of salaries at a later stage of this decision but quote from what·was put to me on the Administration's behalf on the salary structure itself:-

The "formula" approach of the P.S.A. produces some dramatic results in altered relativities. A local officer clerk, with Intermediate certificate, is at present on $640-1,050. A carpenter, with Form l education and five years apprenticeship is on $950-1,050. On the P.S.A, claim the clerk - reflecting the higher salary payable to an overseas clerk with Leaving Certificate - would rise to Sl,558-1,986, but the carpenter would be $1,250-1,400. In Australia present salary structures favoured white collar workers, particularly clerks, at the expense of tradesmen. Every

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_/ peculiari.-bJ of Australian wages structures, whether relevant to the Territory or not, would be incorporated in the local officers• scales on the Association claims. Some of the differences between Australian rates refiect differences in time or· circumstances under which rates have been fixed. In this connection, various professional groups in Australia have progressively had their salaries determined over a period of years.

As Mr. Wootten put it:

"Differences in training affecting Australian assessments are not necessarily goine to be the same here and the rf:llative training of different occupations is not necessarily going to be the same. These things are still being worked out. Entry standards are rising, standards of tuition are rising, ran(,res of courses are changing and courses are being worked out not for the purpose of qualifying people by Australian starrlards but for the purpose of developing people with skills that are appropriate to this country at this stage of its development. And it has not, for example, in medicine been the case that the Territory has set out to produce a doctor whose qualifications would be accepted in Australia. \'/hat it has set out to do is produce a doctor who is trained to be a useful professional man, to deal with the problems of this Territory."

i'i!r. Wootten referred to the Northern Territory rate for medical officers, a rate higher than for the rest of Australia, having been the basis for the salary fixed for European medical officers in New Guinea. The salary ratee for medical technologists and radiographers were not uniform in the Commonwealth public service: due to scarcity of these officers, the rates vary in each State according to local circumstances in order to be competitive in each State:

Mr. Wootten added:

"There is undoubtedly and deliberately some broad-banding and broad grouping amongst qualifications here, and deliberately not making all the fine dist:i.nctions that have been worked out in rerrard to overseas officers through all the various factors tha~ have operated to produce them in Australia.

"And this, we suggest, is only sensible and inevitable at this stage of the posit-ion because · tllo 1,rhole question of qualification, t:raining, entrance points, ultimate responsibility, i s still in the melting pot in this Territory. The TThole situation is quite fluid and it -,,1ould be completely illusory to attempt to draw a lot of fine distinctions at this stage.

"Aeain, one would not expect tho.t the present structure would remain uniform, one would expect it would. be adjusted over the years as it became clearer what real differences there were boine to be in responsibility, training and so forth between the various occupation8 . But at the moment they are changing, they are all being trained free and there is no mea~Jre available of the relative attractiveness of the different occupations, as they are all being built up from a position of shortage.

"Therefore the sensible thing, we put, is to start off with ·some­thing which is a broad, reasonable assessment of relative positions at this stage and let it be worked out on the basis of what actually happens in New Guinea, not on the basis of what has happened or may in the future happen in Australia."

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Apart from certain specific cases, which Mr. Wootten referred to, I agree that there was no evidence on which I could act to alter existing relativities between salary ranges of local officer classifications. In the July, 1966, salary alterations, the Administration took the opportunity of altering the incremental pattern of a number of· classifications in the light of •i ta experience of · the v.orking of the original 1964 salary structures. I comment that it is a much more "sensible" structure than that of 1964.

The length of incremental ranges for various classifications and the grading of classifications has been given considerable attention by the Administration and I do not disagree with the principles it has applied. Broadly, the basis was a minimum salary for a position based on qualifications and trainint:; ui th the maxin:.um salary according to average length of time in the position to reach full competence. Two social factors were also taken into account: a fairly comparable minimum salary for positions requiring formal training and the desirability of a long scale in base grade positions so that occupants may be .assured of a career if they did not move beyond that scale over the years.

Fr . Wootten referred to one matter that arose from the evidence of the Territory's Director of Public Health: a suggestion he made that the starting point of graduates in their salary range of $1,700-2,475 should be increased in cases of graduates with loneer periods of training. Mr. Wootten said section 54 of the Public Service Ordinance allowed the Public Service Commissioner to start particular officers at points along tho salary range higher than the mininrum, where appropriate. The Administration considered it premature as yet to lay down any rigid rules as to v'.l.riation of commencing rates for graduates, but it accepted in principle tlw. t it was proper to have regard, in the starting salary of g~aduates, to the type of degree or qualification possessed by officers and the length of their trainine. The Association made no specific claim in t his regard and I accept what was put by the Administration as being the proper method of rl ealing with this matter.

As to the P.S.A. claim that nurses and pre-school teachers should be regraded from Group 4 to Group 5 of the former base grade, this was supported by the Director of Public Health, who also suggested a similar up­grading of X-ray ,.ssistants. Mr. Wootten said he made no submissions to the contrary to me on these suggestions. I am satisfied from the evidence and from what was :put by Dr. Scragg on these matters of increased training and levels of responsibility that the claims should be granted. This will mean an increase in any event from a salary range of $560-800 (males) and $500-640 (females) to 3600-850 (males) and for females a range according to vrhat is determined as female differential.

,.

I was informed by the Administration that th-e July 1966 revisions to salaries were estimated to have increased the maximum liability for salary 1 ·

payments, on ths basis of the service being staffed wholly by local officers, from $20.7m. to $22.6m. per annum and that on this basis the P.S.A. claims, if granted, would mean a further increase of $11.5m. The cal'culations were based on using almost 20,000 positions in the Service. The Territory Treasurer, who gave evidence in the Administration's case estimated $2.&n. as the immediate additional cost of the P.S.A, claims and he had allowed $450,000 in his Budget for 1966/67 for the increased cost of the July 1966

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alterations. I do not gain much assistance from any of these estimates. It is clear that the process of estimating the increased costs even for the current financial year would have been most difficult with the very recent introduction of family needs allowances for a large number of areas; the present non-reduction allowances being received by so many officers would have meai1t a close examination of the salary position of each officer in order to gauge correctly the effect of the July 1966 revisions. No doubt the ultimate maximum liability for a wholly-indigenous staff of the Service is a relevant consideration in considering the cost of the P.s.A. claims, but there can be no estimate of when this may be achieved, the size of the Service at that time nor the economic position of the Territory at that juncture.

However, it is undoubted from the amounts of salaries claimed for particular positions in comparison with existing salaries that tha immediate cost of ths claims v.ould be considerable.

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1..3. LIMITING DF.CISI(J{ TO MEMBERS OF ASSOOIATICN

In t he closing stage of the hearing, Mr. Hawke claimed that any increases granted by my decision should be specified as applying only to members of the Public Service Association. He said it was a decision of the Association Executive, on \m.ich local officers were represented, to make this claim. Having accepted the responsibility to prE1sent a case, involving considerable expenditure of time, money and effort, the Association consider­ed that those 'Who received benefits from this should understand 'What had been involved. The arbitration syat_em could only work adequately if the Assoc­iation could speak with reel. authority on behalf of local officers. The democratic working of the Territory's political processes would be thereby enhanced.

Mr. Henry, for the Employers Federation, emphasized that the working of industrial legislation depended on dealing with registered organ­izations representing employees and employers. However, in dealing with awards for private industry employers were averse to committing themselves to members of employee organizations.

Mr. Marr, for the Administration, stated that objection was advanced in principle to the Assoc.iation claim. If my decision were made applicable only to Association members, the Administration would follow the Commpnwealth practice of nevertheless applying it to all local officers affected.

Section 7 of the Arbitration (Public Service) Ordinance, under \m.ich I act, restricts organizations to making claims in respect only of its members. Whilst, under Section 14, I am not limited to the claims as made, I consider I should follow the practice applying under the Commonwealth Public Service arbitration system, such legislation being in similar terms to that of the Territory, and confine the applicability of my determination to members of the Public Service Association. I cannot prevent it being applied generally by the Administration but in deciding to follow what is done by the Commonwealth Public Service Arbitrator I express my view in support of what was stated by the Association in advancing this claim, Membership of indus­trial organizati ons should be encouraged as part of the development of democ­ratic social processes in the Territory and it is most desirable that they be organizations able to speak and act with the confidence that they are fully representative of the classes of employees for whom they are formed.

14. THE SUBl1ISSICNS OF THE EMPLOYERS FEDERATIOO OF PAPUA AND NEW GUINF.A.

The Employers Federation represents the major employing interests in private industry in the Territory and a number of the substantial employers have large plant at.ion interests also. The Federation ~ad a general concern with the future development of the Territory, Mr. Watson said in making his submissions for the Federation. In its view, these proceedings were closely bound up with the general capacity of the Territory and its future develop­ment. Standards set through this arbitration could have a material effect on wage standards generally, as public service salary increases must inevitabl . over a period of time, influence the level of wages in private industry. kn:, increases would be passed on fairly quickly in urban areas and ultimately affect costs in rural industry. The Territory depended almost entirely in its exports on agricultural products and timber, and competed on unstable world markets, so that exporters could not pass on costs of higher wages.

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, In the Federation's view, socio-political factors as put as part of the Association I s case, were not proper to be taken into account in assessing wage levels; but if they vere to be considered a.CJ to the public service, Mr. Watson asked that I declare such considerations were not applicable to private industry "which must stand or fall on its ow economic strength". The Territory's cost structure in private industry, because of . the special circumstances of it being a developing tropical producer, should not be indirectly geared to the Australian "1age structure.

Whilst it was agreed that salary rates fixed for local officers in the Public Service inevitably have a relationship to the salaries for its expatriate officers, the Federation was concerned that local officers' salaries be not fixed on such a relationship so as to produce, prima facie, a movement in such salaries when expatriate salaries increased due to changes in Australian wage levels.

As to liJr. Watson I s submissions that public service rates would have an influence on private industry, I refer to evidence given by the President of a Workers I Association, who said that what was fixed for local officers would set a target and the Association would aim to get ·as mu.ch for the same jobs in private industry. Employers had asked that negotiations for a new urban cash wage award be deferred pending the outcome of these proceedings. He stated this was II a reasonable enough request11 •

It is desirable to record here the present level of wages under . private industry awards for urban areas. From the position in 196.3 of only wage rates for unskilled workers in some urban areas at $6 per week, the current position is:-

Port Moresby. Rabaul. Lae, Madang

Unmarried juniors

Unskilled adults and married juniors

Semi-skilled - Grade B

Grade A ••

~p6 per week

$6.50 per week

$6.75 per week in first year $7.25 thereafter

$8 per week in first year $9 per week in second year

$10 per week thereafter

Two weeks annual leave and. six days sick leave per annum also apply in Port Moresby, Rabaul and Lae.

Samarai, Popondetta, Gorol: r,i :

$6 per week plus annual and sick leave as above.

!{ewak. Kayieng :

$6 per week.

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Port Moresby. Rab8lll.. Lae - Qµalified Tradesmen's Awards;

First Class Trades $18 per week $19 per week $20 per week

1st year 2nd year .3rd year

second Class Trades

$l4 per week $15 per week $16 per week

A "certificated" tradesmen's award for New Britain for employees without apprenticeship but qualified by experience -

1st year 2nd year .3rd year

$15 per week: $16 per week $17 per week

The following comparisons between the urban award rates, in all cases negotiated by agreement, and the present salary scales for local officers ~ be made:-

Sem.t-skiJJ ed: Artisan's Assistants Urban awards -

Grade B Grade A

Local officers

§k1JJed Trades - Artisans

$350-402 per annum $4].6-468-520 per annum

$520-540-6oo-640-680-720-76o

2nd Class - Urban awards $728-780-832 Local

Officers $76o-800-850

1st Class - Urban awards $936-988-1,040 Local

Officers $950-l,000-1,050

In private industry a 44-hour week operates, compared with ,3/ ' hours in the Public Service.

AB at 31st March, 1965, the latest figures !!V"ailable to be presented, the Territory employment statistics were as follows:-

/ - 61 -

Territory Indigenous Employment

Urban areas -

Government

Private (including 3,0:37 domestics)

Rural areas -

Government

Private (including 2,050 domestics)

31st March. 1965.

11,925

14,067

16,400

49,361

25,992

65,761

91,753

Mr. Watson referred to the Report of the Rural Wages Board of Inquiry which was released in September 1966. The Administration increased the Board's recommendation for 50 cents per lunar month addition to the cash wage of rural workers to $1. Amendments to the Native Employment Ordinance as from the beginning of 1967 made the following minimum wage scales operat­ive for rural workers:

$4 per lunar month in first year (plus rations, i ssues and accommodation)

in second year

in third year.

With the assessed value of rations, issues and accommodation being fp]. 73 per annum, the new annual minimum emoluments became -

1st year 2nd year 3rd year

~);225 ~:,231. 50 t'238

Cf. minimum urban cash wage for adult unskilled workers, Port Moresby, etc. = $JJ8.

Mr. Watson referred to the Rural Wages Board's concern 'With 11 urban drift 11 • I quote the following from the Board's Report:-

11156. In the course of this Inquiry the Board had it brought forcibly to its attention that the rural workforce was not insulated from the effects of changes in the urban wage structure, but on the contrary tended to be quite mark­edly influenced by this. Evidence of particular importance on this point was received from the New Ireland Workers Association, the Planters Association of Papua and the Rabaill Workers Association.

11157. Discrepancies between urban and rural wages tend to be a problem in all countries where significant changes from a mainly rural econoicy- are taking place and particularly where new urban concentrations are developing rapidly. Costs of living in these urban concentrations tend inevitably to be much higher than in rural areas,

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thereby exerting a strong upward pressure on wages. The higher urban levels then in turn create pressures in rural areas, either through direct comparisons made by workers or wrkers representatives, or by causing a drain of labour from the rural areas. These pressures are in evidence .in the Territory ar.d specific attention to this was directed in evidence of resulting problems given by representatives of the Rabaul Workers Association and the Papua Planters Association.

n159. One of the problems in countries such as Papua and New Guinea, where the bulk of the popuh.tion has only recently emerged from a primitive subsistence culture, is that rises in urban wage levels do not automatically result in rises in living standards but rather the trend is for an increased number of people to be supported at the old mini.mum standard of living, causing a drain from rural areas to the towns and an unproductive concentration in the towns.

11160. In Papua and New Guinea the discrepancy between urban and rural wages is not at present great, but as demon­strated by evidence to the Board is sufficient to be already creating problems. 11

The Administration, on the other hand, in putting to the House of Assembly (1) its proposed amendments to the Native Employment Ordinance said:

llWhilst there is no suggestion, indeed it is not feasible that rural rates should be brought into line with urban rates, members will agree that some relativity is desirable; the proposed increase will to a limited extent ameliorate the growing disparity which has occurred. A growing urban drift has become apparent in recent years, as rural employers adj ac­ent to urban areas can vouch for, and making conditions of rural employment more attractive is a positive measure in slowing down this rate of drift. Certainly, rapid develop­ment as is now occurring inherently creates and broadens the consumer wants and desires of the indigenous people and this trend is not reserved to the urban context alone. 11

This matter of urban drift and the relationship between rural and Ul'ban wage levels received much further attention in the economic evidence brought later during the Administration's case.

Mr. Watson tendered to me and quoted for his purposes from "The F.conomics of the Developing Countries" by H. Myint (2). • I think it approp­riate to quote the following therefrom, not only in relation to "urban drift" but the Territory's situation generally and the issues before me as to local officers:-

(1)

(2)

House of Assembly Debates, 25th November, 1966, page 1982.

Senior Lecturer in the F.conomics of Underdeveloped Countries, University of Ox:ford (Hutchinson University Library, 1965).

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PP.19/20: 11 ••••• poorer rural colllllllID.ities in the underdeveloped countries where the traditional social structure is more intact seem to be less discontented than richer urban centres with a greater problem of adjustment to the new outside forces. Similarly, some of the seem­ingly most discontented underdevtloped count~ies are those which are relatively better off and are therefore able to appreciate and resent the gap between themselves and the advanced countries more keenly •••••••• Contrary to popular belief, the vigorous pursuit of economic development policies designed to raise the level of material income in the future may frequently intensify, rather than reduce, the existing level of discontent in the developing countries. 11

I shall deal later with the position of the level of urban wages presently applying in private industry and the effect it should have as to my consideration of the salary rates for local officers of the Public Service.

15. THE ADMINISTRATION'S CASE

In his opening address, Mr. Wootten submitted that the Associe.t­ion1s case had not dealt with the actual issues that should be decided. Questions of Australian defence, external aid policy or taxation policy, the Territory's internol security, race relations, the creation of an elite, housing problems of local officers, were not matters t;o be solved by this arbitration. My function, he submitted, was to do justice between the 10,000 local officers and the two million Territory inhabitants who received the benefits of the work of the public servants. Either as present or future taxpayers those inhabitants had to find the money to pay public serv­ants or forego benefits otherwise available to them from the Territory's total funds.

The question was not what was just between Australia and local off.i.cers or between Australia and the Territory. The decision in this case would be given at a turning point in Territory history, c.s large numbers of educated and trained natives became available in the next few yea.rs. The impo!'ta.nce of this case '\-tas not so much for today as for tomorrow, as the education a.tJ.d training policies of the Territory wer,-i creating a rapidly changing situation. If the Territory continued to use arbitration for wage fixation, then at some future time a Papuan or New Guinean would be the a=bitrator and he would have to take his ccuntry as he found it.

As the present arbitrator, Hr. \lootten said, I mu.st also take the Territory's finances and state of development as I find them.

As to the views submitted by Association witnesses, including senior expatriate pc!.blic servants, Hr. Wootten said Governmental decisions have to be taken with many considerations in mind, far more than usually carry weight with people concerned more with so:ne particular aspect of affairs. In the difficult problem of fixing salaries for local officers there were various countervailing influences to be balanced, some with strong emotional appeal: the desire to eliminate discrimination and smoothing the path of

· inter-racial relationships, which are noble and deservedly popular sentiments.

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Mr. Wootten said:

11 I t is easy for those who did not have the painful responsibility of considering all aspects of the problem to assume that those who have felt it necessary to make. a painful and unpopular decision are either illiberel or ignorant. This is the assumption made by the P.S.A. in its case •••••• The problems of race relations are obvious. The difficult question is what you do when you weigh them along with all the other factors relevant to wage levels in this country."

The introduction of an appropriate wage level - a decision taken over a period of time, publicly recommended to the Government and openly discussed in various ways - was an issue that would inevitably create a situation of "agonizing re-apprai.sal11 for the people directly affected. Until recently, those local public servants who broke through the former educational necessity of producing people with even a minimum level of educ­ation were so few that more attention had been paid to bringing them into existence and training them than to working out the implications of that growing class for the future of the Territory.

Traditionally, New Guinea society had been one of the most dis­persed in the world, with no towns at all and many people living only in small hamlets that could not be dignified as villages. The towns now exist­ing were necessarily entirely European creations and until recently had grown to meet the needs of Europeans carrying out commercial, industrial and governmental functions over the past 80 years. So that for the emerging group of advanced natives there had been no intermediate stage between village life and the life they saw being led by Europeans in the towns. There was no local precedent for the transition to urban life. Had the numbers of educated natives been greater, they might have been more concerned with comparisons between themselves than with Europeans.

Former li.dministration Servants, who had never enjoyed anything like a European standru.·d of living and who were sheltered from the problems of transition from the traditional way of life by being paid partly in kind, still comprise the overwhelming majority of local public servants. The provision of rations, housing and some clothing had partly defined. a way of life for them and protected them from the problems of converting cash in hand to a way of life. That situation has ceased and people entering the Service at that level had naturally fac ed a number of difficulties, not least being their erroneous eA--pectations that on becoming public servants they could live in a quite different way. A different and more acute problem was rais­ed in relation to the relative handful who had been admitted to the Service on equal basic salaries with Europeans.

In Hr. Wootten I s submission, the proper approach to the problem of race relations was to recognise it as a temporary one which would dis­appear as qualified Now Gu.L.'l.eans r eplace the highly paid Australians. With­in the foreseeable future, all but the highly qualified or specialised Australians would be replaced and would be relatively so few that they would not embarrass the general standards of living. Australians in the Service were only here t o meet the special needs that could not yet be met from the country's o,-m resources. The future prospect was that the specialised Eur()peans who would remain in the Service would be employed at levels where their native counterparts would, in terms of the salary rates now operating for local officers, be able to have reasonably easy social mixl.ng. This was one of the factors taken into account in the July salary adjustments.

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~1r. Wootten also referred to what seems to me to be a most important feature of Administration policy in the employment of the, as yet, comparatively few local officers of higher education and training, a feature that appears to have been not appreciated in its significance, even though its effects were constantly adverted to in the Association's evidence. This is the deliberate policy of rapidly promoting to higher positions those local officers deemed to have the education or training for such positions whilst lea:ving many lower positions for the present to be occupied by European officers. On the one hand, the necessity to still engage 11 European base grade clerks11 because of this policy did not seem to have been considered by local officer witnesses and, on the other, it inevitably led to local officers in the higher positions comparing their financial, social and living situation adversely with that of their European subordinates. This was particularly evident in relation to medical and teaching positions. As ~. Wootten put lt:

11 Obviously very large numbers of the jobs these base grade European officers do could be done by (local officers now in hieher positions) they having gone on and been train­ed for other jobs, they have the capacity and have gone on and been trained higher up. It is only at the point where you get the numbers you are about to get that you can spread them down to the lower levels where in the meantime the only thing to do is to employ these Australians. The alternative, of course, I suppose would have been to dramatically lower the standards in the public service ••••••

11 •••••• the out-tu.rn of schools is about to produce people in sufficient numbers not only to go on and train for higher jobs but to fill the more lowly ones, the filling of which by Europeans arouses this feeling •••••••

11 This is the picture that one seems to have seen develop in some other countries, never letting your European and local people overlap. You never let a higher local person get past the louest overseas person. This is one way, no doubt, of resolving this particular problem but it is undoubt­edly also a way which holds back the development of the local people to a very much greater degree ••••••

11 I have already pointed out that there are reasons in the recent history of New Guinea why it is almost inevitable that a salary scale adapted to the circumstances of the Territory and the laying down of this pattern for the Territ­ory will be disl:iJced and resented by those who had come to expect something better. This is a problem that will have to be lived with and dealt with by other means until it finally resolves itself by a wider understanding of the real issues involved and by the disappearance of such exacerbating factors as the junior European public servant. It cannot form any basis for salary fixation and is not the responsib­ility of the Arbitrator. 11

In order to put in perspective the financial aid Australia is · making to the Territory, I was given a great deal of information both as to the international scene and the Territory. ~. Wootten made the £ollowillg points therefrom:

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(1) New Guinea is one of the few countries in the world that has its general budget supported by outside aid.

(2) Australia is the only country that gives its inter­national aid as a straight-out gift 11 with no str~gs and no repeyment of any kind".

(J) Compared with a United Nations target of 'aid to under­developed countries of 1 per cent of the combined national incomes of the economically advanced countries, Australia's official aid has been steadily growing to .6/$ in 1965, whereas the over-oil official flow of the major giving countries was decreasing - • 61% in 1965.

(4) Australia's grant to the Territory for 1966/67 was estimated to represent ;135 per head of Territory population; Australia I s in·ternational aid to countries including the Territocy will represent in this year $11 for every Australian.

On the economic position of the Territory, the Administration referred to the World Bank Report and the chapter entitled "The Economic Structure11 by E.K. Fisk, Senior Fellow in Economics, Research School of Pacific Studies, Australian National University, appearing in the book "New Guinea on the Threshold" (1). The Administration called as a witness Sir Leslie Melville, Chairman of the Commonwealth Grants Commission and a Board member of the Reserve Bank of Australia whose: previous experience in­cluded a Professorship of Economics, an Executive Director of the Internation­al Monetary Fund and World Banlc and an Adviser on Development to Syrian-Arab Republic (1963) and Phillipine Government (1964). In late 1965 and early 1966 he had made a study for the Australian Government on wages and industry in the Territory and this paper formed the basis of his evidence-in-chief.

Included in this evidence were extracts from "Development Plann­ing - The Essentials of Economic Policy!', a book by Sir Arthur Lewis (2), and also an I.L. O. Report on "Problems of Wage Policies in Asian Countriesn (1956).

(1)

(2)

From the evidence by Sir Leslie, I have extracted the following:­

(1) For many years, wage and living standards in the Territory will be dominated by the prosperity of a few major agricultural export industries.

(2) The average earnings of the indigenes will no doubt increase as Europeans are replaced. 1'his may not mean that there will be much more available for mini­mum wage levels and if efficiency were tQ decline

Edited by E.K. Fisk and sub-titled "Aspects of Social, Political and :Economic Development". A.N.U. Press, Canberra, 1966. .

George Allen and Unwin Ltd., 1966. Sir Arthur Lewis is Professor of International Relations at Princeton University. . He has been :Economic Adviser to Ghana, the Caribbean Commission to Western Nigeria and held various United Nations appointments.

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there 1,10uJ.d be less. It may be, however, that a sufficient supply of indigenes will be forthcoming to fill the managerial roles efficiently at wages less than are now paid to Em:·opeans. Moreover, local o;mers of plantations may be satisfied uith a smaller return of interest and profits th2n Europeans who must face the risk and unfamiliarity of investing in an under-developed country. But it is clear that the capacity of plantations in the Territory to pay higher wages will be subject to seve.-r-e limitations.

(3) If the urban wage level were set. too far above the plantation wage level nnd proved to be a continuing attraction for more of the indieenes than could be found employment in the cities and towns, it 1,/0U.ld create serious social problems for the Administration and the indigenes. The urban wage level therefore needs to be set at a point which will provide a decent living but not so high that there will be: many more people offering for work than can be found employ­ment. The attractions of urban life by drawing labour to the to.ms would be likely to undermine the incentives for indigenous farming. Unless the plant­ations and cash crops th.rive there can be little mean­ing in urban expansion.

(4) At present the shortage of trained indigenes is so great that it would not be practicable, and was not desirablB anyway, to set public service wages and salaries much higher than urban wages and salaries generally. If public service salaries were increased, u.rban employers would have to match the increase.

(5) The ~ost important ingredient in employment policy is to prevent too large a gap opening up between wages in the modern and earnings in the traditional sectors. There can, of course, be no precise measurement of the differ0nces that are possible or desirable. This must be a m ... tter of broad judgment.

(6) There are so few indigenes in senior positions in the public service at present that no generalisations about what should be paid in these circumstances are at present possible. 1'here are, however, social and other rea5ons why it may be good policy to pay salaries in the highest positions closer to those paid at present to the expatriate staff. It is very much in the inter­ests of the Territory that they pay enough to retain the more brilliant of the local people. They can per­form a service which could not be performed as well by expatriates. There are also social reasons why for heads of departments there should not be too great a difference between their living conditions and expat­riates who are performing an essentially similar task. On this aspect, Sir Leslie added that since writing his report, the July 1966 salary alterations had over­come doubts he had had about salaries for hisher positions.

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(7) Sir Leslie gave information for a f ew countries for which figures were available comparing the head of department salary r atio with that of the minimum wage in the country:

Head of M:i.nim1Yll Rili2 D~12artmcgj;i £A. 12· s!.•

£A. 12• Sil.•

Brazil 3,000 163 18 Singapore 4,200 230 18 Malaysia 4,355 124 35 Ceylon 3,700 125 30 Ghana 3,400 156 22 Papua-New Guinea

(presumably based on (1964 urban £1,500 maximwn for cash wage) Chiefs of Division under 1964 scale) 2,000 156 13

( On the basis of the $5,475 currently applying to Chiefs of Division, this comparison with the present urban cash wage minimum of $338 is 16 : 1).

(8) Management can be more efficient, labour productivity cotLld be increased and some greater mechanisation is possible. These are in the long run improvements that will make possible a rising standard of living. How­ever, these changes can be made only slowly and most of the economies would be gained by r educing the employ­ment of indigenes.

(9) It would be a very distressing future for the Territory if the pluntations did not require more labour than they are employing today. It is an essential part of any viable development of the Territory that there should be an expansi on in the employment given in the agricultural industry either on plantations or in small ho;I.dings with indigenous owners. It will be very difficult to get an indigenous population to t ake an interest in small holdings i f they can see the possibility of getting larger incomes by going to urban areas or into the public service.

(10) There will be many more people in the Territory in the near future with a very much higher standard of education and for whom it will be a real choice whether they indulge in cash cropping or go on a small helding or choose to seek a position in the urban areas or in the public serv:ice. ·

(ll) He agreed with Sir .Arthur Lewis that fl a good civil service is a crucial _part of the infra-structure, since the quality of all other public services will depend on the quality of the Civil Service ...... A good Civil Service is thus even to aome extent a ;pi,e-requisite or -rapid gro1Jth. "

:(lLZ} Jlf' ~s Tise in rural areas very much, the plantations wi1lU 1.be iiDll!i:bited in their development and if wages in

< - 69 -

rural areas do not rise when urban wages are increased you will have a drift of population to the urban areas. This drift to the cities has taken place in many parts of the world where there is even a super-abundance of labour availabla for plantations.

(13) In his view, the Arbitrator's function was to fix a level of wages that was fair and equitable as between different sections of the community.

(14) The question of undesirable "urban drift 11 was the major emphasis in the paper he had prepared for the Government, as this was a problem imminently facing the Territory. The P.S.A. claims, if granted, were not remarkable but seemed to be quite sufficient to sat this · train of events in motion. But the relation­ship to be maintained was a matter of judgment, feeling and intuition.

During Sir Leslie Melville's evidence, attention was drawn to a paper on "Aspects of Economic Devel~pment in Papua and New Guinea" by Mr. G. C. Gutman (lJ who stated:

(1)

"In the Territory, therefore, more than elsewhere, economic plans if they are to be socially and politically acceptable, may have to deviate from the strict course of rationality if the attempt to relate these efforts to the needs and aspirations of the local population is to have any meaning".

In discussing wage policy, Mr. Gutman stated:

"It does not appear to make economic sense to attempt to introduce Australian wage scales into the Territory environ­ment. But it is more difficult to formulate principles on which these wage scales could be based. Moreover, the problem is posed not only for the average level of wages but also for relative wages. Just as there seems little justification for fixing average wages or earnings in the Territory with reference to Australian levels so there is no justification for assuming that Australia's egalitarian wage structure will necessarily be appropriate to the Territory •••••• As present minimum wages reflect an element of Australian social philos­ophy by being related to needs, market forces could be expect­ed (in the absence of the European administrative apparatus) to work in the direction of reducing minimum wages. In other words, wages of unskilled labour would more nearly be ruled by the i:iarnings ava.Hable in the subsistence economy than is the case at present. On the other hand, the scarcity of skills would be greatly accentuated by the withdrawal of ex­patriates and it would be possible to illlagine that the rewards for skill would at least be maintained at their present level or might even rise considerably. It is a matter for consider-

A First Assistant Secretary, Departme.~t of Territories. The paper was presented to the 10th Annual Conference of Australian Agricultural F.conomics Socillty in February, 1966.

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ation to what extent wage structures within the Public Service, or outside, should or should not be permitted to reflect these relative scarcities of the market situation."

It is pertinent to mention at this stage that Mr. Wootten also tendered to me an address (1) by Mr. A. W. McCusker, Economic Adviser to the Territory Administration from which I quote the following e:x:tracts:-

11The Territory of Papua and New Guinea is in some important ways quite d!.fferent from nearly all the other less-developed countries. To begin with, the people are not so hard-driven by sheer necessity; the land belongs to them, they are not starving and they are not destitute, there are too few of them and their numbers are not, except in a few limited areas, increasing fast enough to threaten the adequacy of their essential food supplies. Moreover,most of the other less developed countries are newly independent and are struggling in a fairly cold world with the twin problems of achieving economic development and building up stable and secure politic­al societies. The Territory of Papua and New Guinea has not been thrust so precipitously on its own resources; it is being given the chance to develop a degree of stability and economic viability before it has to fend for it­self.

11 0n t he other hand, the Territory shares map.y of the problems of the other less- developed countries. Its people have for the most part not yet advanced very far towards the standards of education and technical training required for the manning of a more advanced economy; many live in areas cut off from others by great national barriers, speak a large number of different languages and live and work in accordance with traditional customs that frequently do not accord well with economic activities. They do not as yet have a sense of national unity or national purpose •••••

11 It would be wrong to erect a structure of public service and facilities that would be too ambitious and too costly for the Territory to sustain in days of self-determination. If the people become used to stand­ards that cannot be maintained, the task of satisfying them after self­determination might become intolerably difficult, and the general fabric of the emerging society might be threatened •••••

11 If, however, standards for such people (expatriates) are kept high while the standards enjoyed by most of the indigenous people are at a lower level, t he ordinary human failings of jealousy and erwy, which may be seen at work anywhere in the world, with overtones of colour discrimination, will be given fertile ground to grow in. The idea of a double standard, whether it be of morality or anything else, is a hard thing to stomach by anyone.

"There is no really satisfactory answer to this problem, which i s riddled with economic, social and political complications. Certainly a high degree of tolerance and mutual understanding on all sides is bequired, but this is likely only if there is some progress in handling the basic problem itself. An important necessity is to place a high premium on the acquisition of skills and technical and professional qualifications by the indigenous people, so that their productivity is raised and hence also the

(1) Address to the Papua and New Guinea Society at Port Moresby, 14th April, 1966, reported in "Australian Territories", Vol.6, No • .3, June 1966.

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capacity•to increase their remuneration and t he standard of services avail­able to them..... Above all, planning must take full account of the needs aspirations and capacities of the indigenous people."

I also cite the following, as put in evidence by the Administrat­ion, from a paper(l) by Mr, S,0, Asabia, Permanent Secretary, Ministry of Establishments and Training in Western Nigeria, delivered in November, 1956 :

"The significant thing about all this is that, in developing countries, work standards, wage rates, etc., are frequently patterned on established practice in Government. The reason for this is that Government is often the largest employer of labour and established practice in various aspects of employment policy is inevitably reflected in the private sector of the economy.,, In my view, the rather peculiar circumstances of under­developed countries in these matters impose on senior civil servants and the Government a very special obligation which requires that, in deciding issues which might at first sight have the appearance of limited application within the public service, they are in fact laying down principles and policies which are likely to spread quickly throughout the economy."

Mr. L.W. Johnson, Assistant Administrator (Services) who was until recently Director of Education, in which capacity he had been called as a witness by the Association, gave further evidence for the Administration with particular reference to Territory education generally and the training facilities and institutions being developed in the Territory especially in relation to courses for existing local officers. Almost 70 per cent. of recurring expenditure on education, he stated, was for teachers' salaries and allowances. At present 35 per cent of children in the Territory were receiving primary education and this was planned to be increased to 42 per cent by 1970, requiring a 20 per cent increase in teaching staff, the increase being all indigenous officers from now on at primary level. Mission schools at present were responsible for two-thirds of primary education, with sub­sidies being paid by the Administration. Secondary education in Administra­tion schools comprised mostly boarding schools with tuition, clothes and accommodation being provided free. For almost all tertiary students, scholarships and traineeships were granted for free tuition and living costs. In Mr, Johnson's view, in making a difficult choice between substantially higher public service salaries or greatly improved educational training, the Territory's self-interest would dictate the latter; choices were inevitable in allocating Budget funds.

Questioned on the effect of increases in urban wage levels on rural wages, Hr. Johnson considered the "pace of sophistication" was such that there would be an accelerating rele.tionship between the two classes of workers, although there was no simple, straight-forward relationship between the respective levels of public service, urban and rural wages. There were already signs of unemployment in Port Moresby and Wewak with defence con­struction contracts coming to an end. In Mr. Johnson's view, social and political considerations, which had had an influence recently in the level of rural wages, were relevant considerations in arbitration. As to the relativ­_ity of local officers salaries with those for expatriates, he was concerned with this principally at the upper levels, such as a local officer headmaster in charge of expatriate teachers,

(1) Reported in "Public Administration" (U.K,) Summer, 1966, Vol,44,

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The Territory Treasurer, Mr. A.P.J. Newman, in evidence stated that public servic9 salaries, local and expatriate, comprised 30.87% of the Budget in 1965/66, and would be 31.15% in 1966/67. Not until the stage had been reached, at some future time, of retrenchment of overseas officers or replacement of uastage of expatriates by locals would there be any decrease in the total salaries bill. Expected recruitment of local officers in

-1966/67 would be 1,600, and it was planned to .recruit 366 overseas officers also. Emphasis in recruitment of overseas officers was on positions associated with economi~ development. There was at present serious diffi­culty in recruiting local officers for administrative .positions, including Second Division clerks; school leavers were showing great preference for professional positions in health, agriculture and education. The aspirat­ions of Territorians with higher educational levels were much more marked than in Australia on account of their increasing cultural contacts and social responsibilities. There was no present unemployment of persons with any skill, but there was a social problem of itinerants in the towns, living on other peopl e.

Mr. Newman agreed that the Te:?:Titory 1s internal revenue was now Wm. compared with the World Bank .Mission's programme for an average of $27.6m. over the period 1964/65 to 1968/69. The Australian grant, although increasing yearly, was a gradually decreasing proportion of total revenue: 66% in 1959/60 {no loan revenue) and 58./4% in 1966/67 ($7m. loan revenue included for t his year). This picture took no account of other Commonwealth expenditure i n the Territory.

In 1966/67, $J.7m. had had to be provided to cover increases in salaries of local officers, police and warders, and also for salary adjust­ments of overseas officers. The annual Territory Budgets were for 1964/65 $90m., 1965/66 $104m. and 1966/67 $]20m. compared with the World Bank Mission projected average budget of $1.00m. ·

Unforeseen expenditure, not included in Budget plans, could only be met from any revenue in excess of estimates, reductions in planned expen4-iture if occurring, for example, from lack of physical capacity for construct­ion work, or recalculation of expenditure to remove items of lowest priority. The Minister had stated in the House of Representatives, when questioned in October 1966 on the possible extra costs arising from these arbitration proceedings, that any increase in wages in the Territory had to be met within the Territory Budget.

The Treasurer's estimate of the $2.Sm. immediate cost of the Association claims has been mentioned earlier herein (see page 57). Mr. Wootten later said this was 2o//o increase on the $9.7m. present cost of local officers salaries.

Mr. Wootten•s further submissions at the conclusion of Administr at­ion evidence included the following:

(a) In the 17 months since the Service was reconstructed in September, 1964, only 163 resignations - an annual rate of • 55% excluding resignations for marriage - had been received from permanent local officers. In the Commonwealth Public SeI"rice the comparable position between 1962 and 1965 had varied from 4 to 7 per cent. Eiccluding marriage, only two Second Division local officers had resigned.

(b) J. comparison of the July, 1966, public service rates with rates for private .enterprise shown in Department of Labour statistics at 31st ¥.arch, 1966, showed that even calculating public service

(

(c)

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rates with overtime up to 40 or 44 hours - to bring the public service 38-hour week into line with private industry where the awards specified a 44-hour week - the level of wages in the public service was higher generally.

The Australian grant should not be looked at as permanent subsidy to a level of consumption in the Territory, but as assistance to enable it to develop towards a stage of self­sustaining growth and a. decreasing reliance on outside aid. Australia had promised increased financial assista..'1.Ce on the basis that this was for the purpose of reducing economic depend­ence in the longer term. In August, 1966, the United Nations sub-committee on implementation of the declaration on granting independence to colonial countries. and people had expressed concern not at the level of aid but at the economic dependence being still an obstacle to future independence. The Indian delegate had desired the employment of a larger proportion of the indigenous population.

(d) Economic growth depends largely on mobilizing under-used labour in the subsistence sector and also land usage and considerable outside investment was required.

(e) Present Territory revenue was largely derivative from the Australian grant and would otherwise be only a fraction of present size.

(f) Agriculture was labour-intensive, competing with other tropical countries on low wage levels. Wages should not be so high as to promote unduly capital-intensive re-organization of employ­ment. Tea and palm-oil would take a considerable time to make any substantial contribution to exports and copper production was still uncertain.

(g) On the matter of political and social considerations which had not only been featured in the Association's case but also in cross-examination of Administration witnesses, Mr. Wootten said every consideration put before me - social, political, economic or some other kind - should be analysed in deciding whether it was of assistance in fixing just and reasonable rates. The possible consequences of my award could not be limited to the next two or three years, however, and the wage structure should not be bent in an endeavour to solve every problem thrown up before me.

(h)

(i)

Even if fair and reasonable rates were fixed, serious shortages in particular areas of governmental· employees may occur, but that would call into play the Administration's function, as would any problem of loss of staff to private enterprise. It had been clearly established as not the fwiction of arbitrators to attempt to solve such problems if they occurred.

An I.L.0. Report to.the Government of Ghana on questions of wage policy, prepared by Professor J.E. Isaac of Melbourne University in 1962 was referred to. I cite the following therefrom:

"In a country in which hardly 20 per cent. (1) of the workforce

Mr. Wootten estimated the comparative position of the Territory at 15%: 90,000 wage earners out of a potential workforce of 600,000. But plantation labourers with only a small cash element in remuneration make up half the Territory workforce.

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are employees with wages and salaries as their main source of income, wage policy can neither ignore the relatively low income of the majority of the workforce in the traditional subsistence sector as compared with the wage of the unskilled worker; nor neglect the impact of an increase in the minimum wage on .the workers in the traditioual sector ••••••

"The gap between the minimum wage and the incomes of those in the traditional sector is not simply a matter of equity. It is also an economic force which sets in motion a movement of 1mski]] ed labour from the lower to the higher income sector. The wider the gap the greater the movement of labour which may be expected from the traditional area in quest of wage eruploy-­ment. At the same time, the higher the minimum wage, the smaller the absorptive capacity of wage employment, both because at a given level of productivity fewer persons can be employed and because greater capital substitution is stimulated. Thus the minimum wage in Ghana should not be designed primarily as · a 11living wage" for unskilled wage earners but rather as the wage which will determine the absorptive capacity of wage employment for those in subsistence farming to whom movement into paid employment means a higher standard of living".

(j} I was also referred to an I.L.O. Report prep_ared for the Second African Regional Conference in Addis Ababa, 1964, on "Methods and Principles of Wage Regulation". Mr. Wootten cited this Report on the question of undesirable urban drift. I quote the following:-

"Para. 86. When real wages are very much above the incomes of the traditional sector, the search for wage employment may cause excessive migration from the rural areas to the tows, where most such employment is located, and the resulting exodus may very much exceed the power of absorption of the towns and the number of jobs really available. Accordingly, wage move­ments should not, without economic justification, raise the real incomes of wage earners far above those of the rest of the population."

I take the opportunity to also cite the following from the same Report:

"Para.. 80 •• •••• a wage policy in Africa today should take a cautious approach to the general wage level but be generous wen it seeks to establish incentive differentials for skilled workers as compared .with those wo lack experience and stability."

"Para. 57. A wage policy, being part of the general policy of development, must therefore be conceived, more peculiarly than other elements of that general policy, in the light of social considerations. Indeed, it must be aimed essentially at ·achieving a double balance that is difficult to strike and to maintain - a balance between the sacrifices asked of the various groups at present, and also a balance between the satisfactions and sacrifices of successive periods and generations."

"Para. 92 •••••• Where there is scope for wage increases, it may be preferable to 9se this opportunity for increasing useful incentives and r01lloving perverse ones (such as the over-valuation of clerical work)·:rather than to give indiscriminate uniform increases. n

•

•

•

- 75 -

"Para.111, One final criterion is suggested here for increases in the mir.imum wage. It would seem preferable to raise the minimum in relatively frequent small steps rather than in occasional big jumps, so that the effect of rising minimum wages on employment can be closely watched ar.d controlled, 11

"Para. 94. There is also a need in certain countries for progress towards a simpler composition of wages, commuting payments in kind for cash, integrating various allowances into the basic wage and, above all, establishing a clearer and closer relationship in the mind of the worker between earnings and work performed." .

"Para. 440 ••••• If an important part of his income consists, for example, of family allow&nces, his interest in improving his qualifications or increasing his output may be appreciably reduced. 11

(k) Mr. Wootten referred to the rapidly increasing urban areas of the Territory.

The indigendus populations, even though small, nevertheless had increased considerably as follows:-

Estimated ~ J.9.§1. J..~

Port Moresby 23,787 31,3ll Lae 5,500 13,321 Rahaul 5,000 6,947 Madang 3,000 7,939

(1) Salary rates for local officers influenced other Government employment: 3,000 police, 1,000 Administration Servants, 745 warders, 1,529 local employees of Co11111onwealth Departments and

(m)

instrumentalities. The influence of the July, 1966, adjustments had not been completed as to other sectors of Government employ-ment or private industry. The July increases were masked by existing non-reduction allowances but this would only be temporary as the Service grew from now on; rates fixed as just and reasonable between the Public Service and the rest of the communit.y could be increased as the general living standard of the community rose.

Whilst the Association claims were not remarkable by comparison with Australian salaries (the basis used by the Association) there could be a tremendous impact on the ex.'l.sting equilibrium, comparing the $338 urban wage for unskilled workers with the claimed $6o0 plus family allowances up to t:J.,200 or $1,300 for the base grade of local officers.

(n) Supply and demand would not determine minimum wages in the urban or rural content; equity considerations dictated some of the recent increase for rural employees. · Considerations of equity were going to be vitally important factors in all wage levels of the community, so that even ru:-al wages were affected by whatever concepts ·or wage justice were applied in other awards.

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(o) The reasons for discontent that had been advanced in the Association I s case did not lead to a conclusion that it would be just to alter salary rates on their account. It

(p)

was a problem for the Government if discontent or inefficiency remained. Local officers could not be elevated into the sole privileged group.

The Public Service was not being built up with a permanent discriminatory salary structure. No overseas officer had been given permanent appointment since May~ 1964. The Service now comprised (31st December, 1966):-

Permanen:t ~ Officerlj!

Local Officers 7,431 ( 78',k 10,045 (

Overseas Officers 2,043 (22% 5,867

{63%

b7% (q) The July, 1966, salary alterations had adequately increased the

rewards for skill as the salary scale progressed, in accordance with the principle that emerged from Sir Leslie Melville's advice to the Government and a broad consideration of the situation in other underdeveloped countries. In the latter respect, I was given material indicating the present salary structures in Kenya, Malawi, Ghana, Ceylon, Fiji and the Solomon Islands.

16. THE ASSCX:IATION 1S REPLY

Mr. Hawke, in replying to what had been put in the Administrat­ion's case, continued to place great emphasis on the socio-political aspects raised in the proceedings. He asked that I give much more emphasis at this point of time to the social and political realities of the Territory, which the Administration had agreed could not be ignored. The Minister in his speech in the House of Representatives in October 1966, on the Papua and New Guinea Bill had said:

"With this economic, social and political advance, demands and requirements are growing. The capacity to do more is grow­ing. In looking to the Territory's future, however, none of ua can lose sight of the fact that if the Territory is to stand on its own feet politically and constitutionally, it must be brought closer to the stage were it can stand on its own feet economic­ally.

This aim in itself will require an increase in external aid in the immediate future if dependence on external aid is to be subsequently reduced. Social and political and human factors cannot be ignorec;i or unclerweighted. In the process of budget­making in the Territory a proper balance must be kept and as large a share of the available resources as possibl' has to go into strengthening the economic foundations. Thi~ along with the advancement of the i ndigenous people of the Te~Titory, is the basic strategy recommended by the International Bank Mission."

\ The underlined portion is what Mr. Hawke t.1,11pha.sized. He said the Administration had deliberately invited this arbitiation, 'With no

\

•

•

•

- 77 -

suggestions then that there would be inhibitions placed on the whole matter being arbitrated, including the political environment and political realit­ies involved in the question of local officers salaries. On the whole evidence brought in the case, local officers were supported by the Territory community in seeking a reasonable relationship with their Australian counter~ parts. No one could assume that Australia would not increase its grant to accommodate any local salary increases to avoid cutting present expenditures on hospitals, schools and other expenditure. Planned development could still go on, because the Territory was increasing its output, national income was rising and the Territory financial position was significantly better than as projected by the World Bank Report in 1964 •

Mr. Hawke said Sir Leslie Melville in his evidence did not think he could disagree with Dr. H,C. Brookfield(l) that Territory 11 development is impeded by external factors - the overwhelming economic control exercised by a few large Australian trading firms. 11 (Dr. Brookfield had added 11 and the reluctance of these and other companies to invest in a territory whose political future is uncertain".) Administration witnesses could not say that private employers had not the capacity to pay higher wage levels.

On the emphasis placed in the Administration's case on the prob­lems of 11 urban drift", Mr. Hawke submitted it would be wrong to give any significant weight to that because of the differences in the Territory situ­ation from Africa and Asia. There were many thousands of Territory inhabit­·ants who in a lifetime would never be potential applicants for the Public Service. The II equilibrium" referred to by Sir Leslie Melville between Public Service, urban and rural wage levels, if it existed before July, 1966, had been destroyed by the Administration's salary adjustments in July 1966, Mr. Hawke said. Conversely, if there had not been a desirable equilibrium before July, 1966, no one could say the present position was one of equilib­rium.

Sir Leslie Melville had agreed, Mr, Hawke stated, that economics were not the sole determinant of rural wages, nor wages in the urban areas. The P.S.A. also agreed that the total context had to be looked at - the economic realities and the social and political aspects - in considering appropriate levels of wages in the Public Service as well as elsewhere. There was no evidence, it was submitted, that the wage rates claimed would inhibit investment if they influenced other wage levels in the community. The Administration had set a minimum level of $41~0 for the Public Service in 1964 whereas the urban minimum wage was only ~~338 now and the rural wage level ~t:224, So that it could not be said that the .Administration thought the same considerations applied to the P~blic Service as to other sectors.

On Territory development, alternative opportunities to previously existing products were opening up, so that the Association's claims would not impose a burden on the economy that was not capable of being matched by growth of national income and internally-generated revenue. The economic evidence brought by the Administration, rather tha.'1 inhibiting the granting of the claims provided support for them. In the Association's view, the economic basis for the present salary levels had not been established by the Administration 1s witnesses.

On the base grade salary claims, Mr. Hawke r.ontended that the amounts sought would give an opportunity for expenditure on kinohip obligat­

. ions which were a part of the local officers I fabric of living. On the

(J,) Author of· the chapter II An Assessment of Natural Resources" in "New Guinea on the Threshold11 , previously cited. The passage quoted is at P• 74,

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Administration salary levels they had to be achieved at the expense or other necessary items.

Comparisons made by the Administration with urban awards were inappropriate, such awards having been arrived at not on terms ·of equal bargaining strength of the parties; the urban award rates for tradesmen, which had been paralleled by the Administration, could not be said to have been reached on an assessment of work-value.

The predominant characteristic of the Territory Public Service • now and for the foreseeable future was one· of local officers working along-side expatriates, leading to the inevitable comparisons made of the differ-ing salary levels. Granting the Association claims would create an Eriron-ment that would facilitate the economic and political development of the Territory.

Although former Administration Servants with little education had been taken into the Service, this was an isolated situation in that, in future, people with increasing educational qualifications would be entering. The view of an indigenous member of the House of Assembly should therefore be supported, that those taken into the Service on its reconstruction had a claim, based on the value of their experience, for the same treatment as those who would enter later with higher education.

17. CONCLUSIONS.

It must be appreciated that even in a decision of this length, which has been dictated by the great range of evidence, material and sub­missions, as well as the desirability I have felt of setting out the existing salary structures and how they came into being, I cannot record more than a restricted summary of what was put before me. I have included what appeared to me to be major aspects of the many issues raised and what I have regarded as significant and of important relevance to my task. That task resolves itself into an act of judgment in a social context as are all decisions in industrial arbitration. In dealing with the monetary rewards to be fixed for employment, decisions become social judgments in the widest sense, relating to human desires and aspirations on the one hand and economic real­ities and possibilities on the other.

Arbitrati on decisions may set a pattern for the future and frequently do so by establishing new salary rates or working conditions. It is stressed by the Administration and accepted by me that with a rapidly in­creasing localisation of the Territory Service the impact for the future of my decision will be of great importance. But my fixation of salaries aris­ing from these proceedings does not represent a decision that need necessarily endure for any long period of time. The situations that arbitration deals with are living and dynamic ones. My decision can only relate to the exist­ing Territory situation in all its varied aspects and as it may be reasonably possible to forecast that situation for the future. Particularly with the tremendous growth .and rate of change now taking place in the Territory, even acknowledging the great growth in its development that is still required, it is to be hoped that the salary levels I consider should operate now for local officers in the Public Service can be built on and improved at some approp­riate stage if the future economic development of the country allows this to be done. This is fully recognised by the Administration in its submissions in these proceedings, and it is also to be hoped that the Administration will act on its own accord, not only to make specific adjustments to salary scales when deemed warranted, as it submitted was its intention, but to the general level of salaries when this may be possible.

•

- 79- ·

· I have come to the conclusion that, notwithstanding the import-ant respects in which in July, 1966, the Administration altered the salary structure it had introduced in 1964 when it undertook the complete recon­struction of the Service to enable it to be rapidly "localised", increases in the axisting levels of salary are warranted at the present juncture.

THE MINIMUM BASE GRADE SALARY

• The rate of ~t440 per annum presently applies as the minimum

•

adult male and female salary for the Third Division and adult trainees.

I consider that I should adopt a cautious approach to any increase at present in this foundational rate, to operate for local officers whose level of skill, whilst above that provided for quite unskilled adult employees in the larger urban areas in private employment, is not great. The local officers to whom this minimum applies have an assured progression to $560 for males and ~~500 for females. Local officers with any real degree of skill- or training are accorded higher salaries, as will be seen, as recorded earlier, from the five salary scales into which the former base grade classifications were grouped.

I am fully conscious of the 11 differential 11 that the lowest group of local officers receive over the urban awards for unskilled workers and the comparison that appears between the semi-skilled classes of local officers with the similar classifications applying under the urban awards. And the family needs allowances introduced by the Administration in July, 1966, are an important consideration for those affected thereby, who include officers whose actual wage rates are still broadly covered by all the five groups who were comprised in the former f¼.40-760 base grade.

The aspect of the relativity or balance between the various mini­mum wage rates currently applying in the public service, urban and rural sectors and the possible earnings from cash crops in the large subsistence sector of the Territory community and the undesirability of impeding the growth of agriculturo.l production and employment by undue increases in public service minimum salaries which may influence successively the wage levels in the other sectors, are also fully recogniaed by me. In the private sector, both urban and rural, increased wages may be balanced by higher productivity or output of employees, but the Territory's development requires that the actual level of such employment for wages and in cash crop­ping should rapidly increase. I !:l.Ccept that in the course of time the level of public service salaries, particularly in the lower grades where acquisit­ion of required skills requires minimwn education or training, will influence wage levels outside the Service •

Against this, I do not consider that I can rely on the present minimum wage levels in urban awards as anything more than prevailing rates whic.h employers are prepared to pay. The minimum urban wages ha:ve been increased from t~ per week to ~>6.50 for unskilled adults, commencing in 1964 and extending to various urban areas - with the. former C:-0 minimum being applied to new urban areas - and no doubt, even apart from this public service hearing, would not remain at present levels as the expectations of Workers Associations and employees increase and the requirements of wage

. employment are more fully accepted by workers at the base level in the private sector.

. In fixing, in 1964, the minimum public service adult wage at $440 the Administration must have fully appreciated the different requirements in work attitude and output they expected from their base-level local officers

- 80 -

in comparison with the unskilled worker in urban employment. The $440 level was assessed i n r e1 ation to the urban wage levt"J. of $312, not the ~~338 which had been appli ed in Rabaul in May 1964 and was later extended to other main towns. It i s clear that in the urban awards the concept of a "married" wage has not yet been applied, The Administration's family needs ~lowances of July 1966 are in essence - though higher in some areas in the case of families with two or three children - a recognition only of actual family responsibiliti es against the assumed basis of the original $440-760 base grade salary range. This range extended over nine years of adult service, dl.lZ'ing which the value of the employee in any classification would increase with training and experience. So that at the lowest level in the public service and i n private industry in urban areas there still remains the concept of a single adult employee.

Were it not for these proceedings - initiated in April 1965 - the effect of the public service minimum of $440 on the urban wage level mey have provided me wi th a firmer guide to a relativity between the public service and private sector of wage employment. Any effect on the level of · employ­ment of a wage increase in private industry that may have resulted could h!Ue been assessed, This is an important consideration but it has not been put to me that the private industry increase from $6 to ~~6. 50 per week or the recent increase in rural wage levels had or will have an adverse effect on present or fut ure employment levels,

Prima facie, if the Public Service minimum of $440 in 1964, uhich still operates, was a proper and reasonable assessment then in compari­son with ~~312 for urban unskilled employment, at least the ~126 increase that flowed in the latter sector should accrue to the public ser;ants at the lowest level, As I have said, I do not accept that even the present urban minimum is a sound basis on which to work, as it could not be said that it is largely influenced by any social concept of "needs11 • ·

Whilst I consider it proper to adopt a cautious approach to the minimum public service wage, in view of the great number of factors put to me as requiring consideration, nevertheless I consider the $440 base salary should be incr eased to ~t480.

I am fortified in this assessment, based on all that was put to me, by Press reports of an address(l) by the Territory's Economic Adviser, Mr. A,W. McCasker, delivered on 4th April, 1967, that the rate of growth overall of the Territory economy, even though still very undeveloped, placed it among the most rapidly developing economies in the world, with, for · example, exports increasing at an average annual rate of n.4 per cent.

As a final note to my assessment of the minimum salary level for adult officers , I quote the following:(2) • ·

11 In general we think it reasonable that for a subordinate service the Administration should aim at standards of pay some-what bet ter, at the minimum, than the statutory ·or generally • accepted minimum for unskilled labour. We do not think that public servants should become a privileged class, but we do think

(1) As reported, for example, in New Guinea "Times Courier", 13th April, 1967,

(2) From the 1960 "Report of the Commission on the Public Service of the East .African Territories and the East African High Commission", page 36,

•

•

I - 81 -

that employees thought worthy of admission to a permanent cadre should be paid more than the legal minimwn wage. • • • • lforkers at this level are in process of changing their way of life, by the purchase of other than traditional foodstuffs, by the adoption of a European style of dress and by gradual absorption into fully urbanised communities. \Je accept that in rural areas an employee will still supplement his cash wage by produce grown on his own land-holding, and that this will continue for many years to come; but for the larger towns we thinlc it proper and natural that workers should increasine].y look to the wages earned for the full support of themselves and their families • We understand that this is the policy of the governments and have noted that this has found expression in recent years in increases in the statutory minirnwn wage in Kenya and in the minimum wages fixed by the Uganda and Za.'lzibar Governments for government employees. 11

The ~'.40 increase in the minimum base salary represents one annual increment on the present salary scale. In my view this increased amount should also be applied to each incremental salary in the lowest adult male range of :~440-560 and the appropriate base range for adult female officers. The same increased amount should operate in all salary scales for adult males below a salary of '.'600 or the equivalent fit;ure for adult females, based on the 11 differential 11 that is referred to later.

JUNIOR Il.A'l'ES OF PAY

As to the Association's claim, in effect, for the elimination of lower rates of pay than the adult minimum for employees under 21 years of age, there was nothing put to me which should warrant the abandorunent of the Administration's graduated scale of junior rates according to age combined with experience and the appropriate adult rate to which they were progress­ing, nor the .Administration I s relative assessments of resulting junior rates. That system should be applied to the higher adult rates I now fix.

ADULT F"~, ·'. DIFF:::illill'.['IAL

The Association I s cl ,ii•.; Chat the present 6rraduated female differential rate of salary - with ' !LW.l rates of pay at the present :~440 adult minimum, but with a gradua l.u.J differential thereafter up to ~;,160 where the male salary is ('760 or above - ul10 llld be reduced to a maximwn differential of ~;,96 , was reported at page 53, t•)[_;P.tlier with the .Administration I s proposal

• that it be reduced to :':;100 at :;:;7Go and above. The .Association 's explanations of how it calculated its claimed d:i.ffcrerrtial, including using a proportion of male and female expatriate bas ic wages based on 1964 figures, now inappropriate, were not convincing and, on the other hand, there is no

• explanation of the basis of the existing :,•J.60 Administration differential. The proposal now put to me by the Administration is very close to the claim and is stated to be a judgment of what is appropriate to present circum-stances of the Territory Public Service. The Association seeks to maintain a differential on the same principle as now applying. I have nothing before me on which to disagree with the approaches of the .Administration and the

' .Association and I propose to adopt what is now put forward by the .Administr-ation. The increasing differential should be applied from the new base level of ~);480 upwards to each incremental step . or salary level for males in the salary scale thereafter on the following basis:-

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New male salary

Progressive differentials thereafter

$480 - Nil

- $15, 30, 45, 60, 70, 80, 90, 100

(maximum}

THE TOP SALARY LEVEL5

I do not consider, on what was put to me by the Association and its witnesses, or, indeed, by the Administration in its case, including the specific evidence of Sir Leslie Melville and the documentary material relating to relative salary structures in other developing countries, that • what was prescribed by the Administration in July 1966 is sufficient, in the existing circumstances of the Territory, to provide as the highest ·salary levels attainable for local officers of the Second Division. As I have indicated earlier, considerable emphasis has been placed by international authorities on providing sufficient incentive at this level, with the oppor­tunity to associate on proper comparative terms with counterparts in other countries as well as their own. The Administration 's approach, even in the substantial modifications it made last July was somewhat cautious and conservative at this level, i n my view.

On the basis of all the material before me, I consider the most senior positions now provided for local officers should be raised as follows:

Chiefs of Division - Administrative

Present salary range Decision

Highest professional and education officers and Crown Solicitor -

Present salary range Decision

~4,e{75-5,075-5275 $5,475-5,675-5,e{75

~5,075-5,275-5,475 $5 ,675-5,e{75-6,075

The ~t,600 increase I consider appropriate represents three increments on the present salary structure at this level and approximates the Asso~iation I s claims. At September 1964, the highest "standard" salaries (excluding basic wage adjustments) prescribed for overseas officers were for Assistant Directors of Public Health at £4,026, with the position of Crown Solicitor being £4,060. Chiefs of Division in administrative departments were on £.3,454 but since then have received fairly considerable salary • increases. On the Association's claim of 75 per cent. of standard salaries, the highest claim would be $6,090, but the Administration at this level, as · with others, has combined the varying overseas classifications into two groupings only. I stated in Section 12 of the decision, at page 54, that I • fully endorsed the &eneral approach to the local officers salary structure adopted in July, 1966, by the Administration and that any endeavour to establish and maintain a set relationship to each Australian salary scale was unjustified.

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I IllTEHMEDIATE SA.LARY fui.NGES

I cannot hope, in my decision, to set out fully new salary ranges appropriate for all classifications between the lowest range and those in the hie)lest positions. It was originally accepted during the proceedings that I should fix only several levels as "bench-marks" from which the complete structure could be evolved. The present salary structure in its incremental pattern is an orderly and desirable one, the amount of annual increments increasing progressively from 8'40 for salaries under 1':800, ~)50 up to ~~J., 750, $75 up to ~~,275, and reaching ~:200 for salaries of t J,675 and over.

• Classifications with salary ranges overlapping these points are adequately accommodat ed therein.

I do not consider that a strict proportionate approach should be a adopted for salary ranges between those I have fhed at the bottom and top

group of classifications if only because this would result in the amount of each increment throughout the entire structure being 'of a different value. My approach for the lowest and highest ranges has been an equal salary increase over those ranges.

I have decided to prescribe new salary rates at the commencing point of the ranges for what I regard, at the present stage of the develop­ment of the local public service, as significant classifications:-

(1)

(2)

First class artisan; patrol officer; education officer; (;I'ade l; clerk, (;I'atle 2; produce inspector, grade l; technical assistant, grade l; technician; medical assistant, grade l; co~operatives officer, grade l; etc.

Professional graduates, class l; assistant district officers; agricultural officers, grade 2; works supervisor; etc.

Present commencing

snlary

As to the first group mentioned, I appreciate that the present tradesmen's salaries in the Service are almost identical with those under private industry awards and that in the public service a lower working week applies . But I cannot take the level of the urban awards for tradesmen as the deciding f actor in my assessment. Lower working hours are not a

• crucial factor in the minds of many employees (unless regular or consider­able overtime is based thereon) but the wage rates for the job are a great influence. Predominant in my assessment is the comparative incentive to acquire and use efficiently the skill of a qualified tradesman in comparison

• with other positions and also the point that I have no basis for accepting the urban rates for skilled artisans other than their recent introduction into urban awnrds. The present salary level of $950 is an important part of the salary structure for many positions either as a starting point or .where that rate is within the salary range. In my assessment it should be raised to ~l,070.

At the professional graduate commencing level - accepting the Administration's assurance, recorded earlier, .of flexibility in the starting point within the range for particular degrees as being within the competence of the Puhlic Service Commissioner - I consider the rate of $1., 700 should be

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increased to $1,950. This amount has been fixed after taking account of all that was put to me concerning the fixation of salaries for positions requir­ing high educational attainments and comprises a fµrther II bench-mark" for positions now assessed comparatively both below and above the graduate level.

It will be seen that the salary rates and increases assessed by me for these two levels of classifications are not directly proportionate to the increases granted at the lowest and highest 1-:wels, but in excess of such proportion. The new rates at these levels represent my considered assess­ment of what is appropriate at .these points.

The filling-in of a complete salary structure from the four points made in my assessment will, no doubt, involve a considerable amount of work. In my view, it should be left to the Administration to construct a complete scale of salaries therefrom including rates for juniors and female officers.

As this process will take some little time, I propose to fix the first pay period in July, 1967, for my decision to take eff ect, if not dis­allowed by the Governor-General. A further consideration in allowing this time is the desirability of any actual increased salary rates, i.e., for officers whose total salaries will not still be affected by non-reduction or family needs allowances, being granted promptly.

In accordance with the method I have adopted in fixing the salary scales at the base level and most serdor level, it would not be inconsistent therewith for intermediate ranges of salary to represent levelled-out, equal amounts of salary increases over suitable lengths of in-crements in the salary scale.

LCJ,/ER RANGE OFFICERS WITH LONG SERVICE

Earlier in this decision I referred to the method by which salary rates for former Administration Servants were fixed on them entering the Service as not fully recognising previous service with the Administration. In the July 1966, modifications, a number of classifications were placed in various grades, thereby allowing adequate recognition to be accorded to officers in these classifications for their ability acquired by experience.

I express the view here that there may well be other officers who have not been placed in graded classifications and who, whilst not having educational qualifications to enable them to progress to higher classifications, nevertheless have acquired ability through previous experience with the

t

Administration that may warrant them being placed higher than at present in t

the incremental range of their classifications.

I make no decision on this particular matter but commend to the Administration an examination of the work-value of particular officers of the type I have mentioned.

FAMILY NEEDS ALLCWANCES

In Section 11 of this decision, I have set out my reasons for coming to the conclusion not to alter the rates of family needs -allowances determined by the Administration for a large number of areas. I have been advised that the necessary work to enable an assessment of remaining areas in which local officers are employed to be arrived at has been completed. So that an early announcement of rates for those areas should be possible.

18.

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DECISION

My decision in respect of the Memorial herein is that officers of the Territory Public Service who are other than overseas officers and who are members of the applicant Public Service Association of Papua and N9w Guinea shall, in lieu of the annual salary rates prescribed for officers other than · overseas officers by Determination No. Min.l of 1964, or as varied or altered up to the present date, be paid salary rates in accordance with the conclus­ions set out in Section 17 hereof.

• . Provided that the salary rates payable to nurses ( graduate but not registered), pre-school teachers and X-ray assistants, other than over­seas officers in such classifications, in the Third Division shall be

f increased relatively as set out in Page 56 hereof.

I fix the beginning of the first pay period to commence in July, 1967, as the .date from which the foregoing decision shall take effect.

Unless disallowed by the Governor-General as provided for under section 20 of the Arbitration (Public Service) Ordinance, 1952-1965, I fix the date of operation of this decision as the date of the expiration of a period of 14 days following the date of submission by the Minister of this decision to the Governor-General.

DATED this llth day of Mq, 1967.

Sgd. (L. G. Matthews) Public Service Arbitrator

{Papua and New Guinea).

APPENDIX I

TO

PETITION OF THE PUBLIC SERVICE ASSOCIATION OF PAPU~ AND NEW GUINEA TO THE TRUSTEESHIP COUNCIL OF THE UNITED NATIONS ORGAL~ISATION

PART "C"

-.:

COPY OF PETITION 3IG:fED BY 1700 I1JDIGEH01JS PU3LIC SE!-1.VA:~TS . D:81TOOED • BUT NOT FORM.ALLY PR.E.3:::•TED TO ADl-IIPISTEal~JG AUTiiC~ITY ~-

p E T I T I O N 'I,

61nce October. 1965 the Public Service Arbitr~tor has e n considering the case brought by the Public Serv oe

usociation for salary increases for Local Offieer~ of the Public service of the Territory of Papua and New Guinea. In spite of the lengthy proceedings and the lo.ng deiay it took t he Arbitrator to deter mi ne the salaries rates for Local .O!f1cers, he arrived a t the most miserable and contemptuous results - far below our expectations.

2. tt t he conc lus i on of its case i n November 1966, tha Public oervice s socia t 1on f or t he f irst time wade de tailed and spec ific cla ims for r ates of salary. The Publi c Service Ar bi tra tor a t the time approved of t he Associa t ion ' s decision t o l eave unt il the end of the case t he exact l evels it was claiming and stated t hat the ssoc iation had acted with w1sdoin and re spons i bilit y in seek ing t o avoid t he crea t ion of high expecta tioro in the minds of Loca l Off i cer s .

3. The salaries cla i med by the Public Service .A~1sociation were ~00 as the commencing rate for a .Ba se Grade adult ma l e · in place of the t hen existing ra t e of $440, ~L250 far a Technician in the Third Division of t he Public Service in place of the t hen existing rate of ~950, and about $2900 for a Law Graduate i n pl ace of the then exist i ng r a te .of il.700.

4. The sa lar i es c l a i med by the P.S.A. wer e ar rived at after di scussion wi t h gr oups of Local Officer s affec t ed and considerat ion of a great volume of evidence. From t hese discussions and th i s evidence and our own feel ings in the matter, considerabl y higher claims could have been made . However, we were persuaded that the claims should be of t he or der finally made by the P.~.A. and we were so per suaded on the assurance t hat the P. l. .. A. would make clear to the Ar bitrator and that he would unJ.erstand th:-it the claims so i::,.~d.e were not to be regarded a.:: fetting the limit of our claim (as we u~Jurstooct happens in ordinary arbitration in austra lia) 1 u1t could b0 UI1J.01 ~tood as representing the minimum amounts that would sati::fy our legit imate aspira tions .

5. From the time of the announcement of c la i ms , their modesty has been a matt er of guileral comment throughout the Territory and, we are given t o under stand, i n Australia also. Tho Administration's own witnesses, i nc l ud ing their economic expert, ~ir Leslie ~illlville , and the Treasurer of t he Territory, Mr. Newman, acknowledged this fac t in their evidence . In one of the many independent criticisms of the judgment which has ~ince been made, the Rev. Canon Stuart of the Anglican Church in Port Moresby has referred to the "mode~t" cla .ims of the P .s .A. which he said should have been satisfied. ;

6. On the 11th May , the Public Service Arbitrator, Mr. Matthews, made h is judgment and at only one salary point, the very hi ghest, did he fix a salary equivalent t o the salary claimed by the f . R.A. ~tall other points fixed by him, he ga1e only a small fra~tion of the increase claimed by the P • S .A •

7. We considvr that th0re is widespread dissatisfaction with the decision given by the ~bitrator, which dissat1sf otion we share .

8 . We stro~ly support our beli f that this dissatisfaction

-------------- -----...,;:::::, smr :mt - cer - - n m ... - ,I-· 7mi - ~~ .. i!ill.ittNt JMit ;;;;;-;;;;:::: •. ·~

ilil

C · ~

~ 1 . • . 1

has in fact created feelings among younger p:ien and among all educated men adverse to Australia, thereby changing their and our present conviction that the fut'U.t'e of this '.I: rritory should be bas ed upon a clof..le and continuing associat · on with Australia and the Australian Goverrun.ent, rather than upon a lesser association with the Australian Gov0rnm.ent and a closer association with tho~e nations of South East .~sia with which this country ha s a community of interest ~nd background •

9. 'vJe are conscious of the fa-:;t that ill feeling .felt by Local Officers towards expatriat0 counterparts in th~ Public .Service brought. about by the existing w1Je gal? in standards of liv ing has conduced to inefficiency nnd ~a thy towards their duties on tho part 0f l.Dcal public servants and that the Arbitrator I s dE:ci.:·' .m has and w1ll substantially contlnue to increas2 211ch :Ul fe1.. ling.3 :>n tne part of i.iocal 0f1 i-:-: ''-'rs towarrl s 0.:xpa t.r ia te pubU.c ser •rants and all ~xpa tr iates • Thus we ieei tlm L tnu Arbitrator 1 ; failure to recogn~ze and 1e~ Lie upon ·ens .... r. por t..ance D1' the uvar inG of wage::: upon race rc-1 .. at:;.on:;hips a 05s .fniL.u: to grant i11cr0ase.3 of a,n ord1:::r ~uffic ient to a::·sist in the .tmprov,~ment of relations 0etween 8~p~triete and local p~bli~ servants will sub. tantially rtJu2e ~he eff1~1~ncy ~~dedication to duty ,:,f local public ~wrva11ts v.•nose incentive to s tudy and senre of togethe:·ness ir ,: unifL1d e.ticl lL.tct.~ral Public t:.ervice and whose incentive to effort in conjunctiJn w1th expetript0 publ i~ servants in f'urtheranee of t.r0 -le:na~1d.-: -11,: '.im~i ~··: tlLL:: Territory aad of the austra~ inn C}ove .rmont L'"'s br:::v"' ~i,rL..·ur}.y iu.~pair,.;d Ly the ~:ruitrator '::: o.r. ·ci_s.; .. 0:-1. r,ow o r ;, pcs 1 r;h,' e.,:pec 1·atic)r1:.: t-ire ~r-a~.,-r,:::c.. ,,,.: t-L\.r , • ..nv p, t:t·.J .-nc c:. 1 strr~.Lt.a .. : CrCJ 1T(~·:r~··tu .. 11;. .-.~~-1·1 1·~c ..... l.• I 1-~ :; Ll 1 ..... C:"" .J"' ·i'f'CflCJ''" that:

t11 '"'n i:rt ·,r .. ,Jr»-.J' r i ;,..1 "i.:-·;. .lov: ··- 1-.1. .. •. ·-tt.:!.· - . . ~."3 rn(:,.1t UA..J. , t.A.i'll\· .. ,c1 vtc\~-· ;\rc:.t.2c1t.or: and

(t) tr. --,t, 1;J.~ -\·'-"-:··~.1'~nLir.,c \.:l ~8 l'l[I~G{T', -.;..vtt~,;·~~ir1v t11~T, a :-:~alar .\ r~_~r-~-~·-·1 t 1 "'rc h~\riJ~~:; 'J.~ i--::: ~~ 1 .:i~ -:,,;·.Ll,' ~ai.ar .. iez ..;laLned .-1y t;n._, ?.t-.L.- b0for-(; ,.,·.c ,\rbitr1tc:)1· be 0sta bli:::ht:: 1.

t-igna t1u·e ---~·- Pcsitfon -----+---

4b 24 ut M & U CA .. &RCZ U - ===••t□

•

Speech to Austral an House of Representatives of I-fr. E.H. St. John, Q.c • ., President of the Australian section of the International Cor.unission qf Jurists.

1 ) ' . ' I ,

did not by the

w td 'he taken the

e recent r 10 vi· f he very

. de d be the PP pi!al or wlud1 the Public Ser•

f rt

dee'

t

Territory durina .the yean y the nd I ltory

.-epresimtatio aso­

lt1a tion dea~t n the particular I dtc' ed e same

knowledge e etTi-ckground in ich

decision d~.

· ore ly6dys t w I to a J!Cat .

do:linmret

de ts . • I tter le w I able

fW Approp,lqlion Bill (No; J) [R 8P P..Sf.i.NT A TrVESJ

· r e of opioiotl · indebt«t to the f r enabling me m . a fab'ly brtnd

undertaken '° 3, ~p hnolved, but cewrt.helcss I feoJ

• I ha far · ow t~ h~ is a matta.- oC the g anco which at a.st imrlts furth

; ,

I had rn de known to the Adtnin . trat« of the ;rerritory before I left l!Jld I ha

• · Territorie, A tralia

,. they dis-a . . . O'UY that If I my y to ;

Stid. t

at~ ll()l

. . b a tter ff ,. Wbi"'h trail

nds t • But ·tt tly I-should like to , atternpt to place t matter: in a broader to speak in • general· ay o and of - t Ui happening ik,e to C y t-o bonoura~ me t we~ poa,.

l , the aclt. e adventure <>f • ntw nation ooming g, :use t1ut is what o feel in .the.,air of the Territory t Pie presfflt time. l t ck with me

fQ:r souvenir . lue a· from the •South P,lldllc .Jlost'~ 9.n',,tn nt pa .of th•t publ ls a . hotograph of big laud n tiv · tl tin such u Wtl ·. 11 in t Ha~ Show. On , the rev togr of. tour J rmer ' who are now.Jea1 becomo CQronlCt • • . , . . . . a.ti Y.C

IJlCJl ,and o who care " that in their beari demeanour they ~ . . the youth of A e " · · · 'd of the yQ hoof m I

ts . Y t~ ' . . • Iptteed, t

be1 pro d to d them son .,or d uah it; .

J vjjit , of l • Oala-Riu:ua wJ}o r Gtly. ;ex~ from tbo .Pan,u

Pnti for being a attic in advance of the other ra of · Pangu Pati. 1

ltfl3 be ril not tbiak I am breachmg the la of hospiwity wh I uy that

ou it ·he is regarded, if we may judge . ' P reporu, as being IOOlething of an

t1 · t, rtrait of Ker Maj ty the en ·fN smiling down on bis hoe hold

....,,.sc rcely bat one woutd expect in the t: cf someone pie ured u something of

ll'l extttmi t. Perhaps Oala Oala-Rarua is ah d of«ber members of the Pangu J>ati, but the action taken in expat!inc him shows clearly that the Pangu Pali · JlOt the

tremiat b r:y which in some quarters it i• pieced to be. lt kl largely controned and

I d by offl.cen iD . the Twitory J>ublic Service or former offlcen of the Public Service. Honourable meJ:nbcts on both &ides of Ute House have had tbe pteasur~ and intel'i during.t~ l· t w. k of meetina sonte of the er of the ang1 Pati and other Pa,:,uatts ind New Guineans- wbo have been visiting Canberra and ho have been present in tbs HoUle during otne of d bates. We ktJ.OW fcom personal con• tact ·th them bat em.inen y rational and co teous beJn they are. I &.."fl every pros­pect of · a happy .. assoclatioo between Australia and tho New Guinea of the futu but only if we o carefully at this

rooiAJ juncture in relationa between us. Undonbtedly the solution• t.o the prob­kms f the. Territory will Ho in education, education and pm· education. I baYe before e a copy of, the · er'• speech delivered opening f the Goroka T e Co He : .ointed ®t that 20 years lt 1947,~ ._. en the Adm.ini-

tion est::ltm:med · a -. · 04partment of Bducation tbn'e- er· oruy, e 1,100 pupils in Administration 8Cbools. Today there are ~ .76,000, , Ourleg the same period pupils h1 the' ru' ion ~scboqls have almost doubled and now 0111:nb r about 140,000. Tremendous strides have been taken in ·Iha Id of edu.cadoa, in the field of health Nd in the d velop10cnt of the econo y. Thttte has boen a 50% increase in C%pOft inoome in the 1-ea

The Australian Adminisuation h broupt to ~ peopie bcmiBta of law a.nd order and of com • s, and tho grea, and ·It& ~ t of a oommon bln •. Eaglisll Ian~ wi ich will open. hole· &JJ. of kno:wledgc to

t A.ppropriatfon Bill (No. I) J 3O AuouST l 96 71 (Budget Debaul 627

them. We have in the Territory of Papua a11d New Guinea mud, of which the ,t..us­trt1li•n people and the Australian Gcwern m..:nt ma) be proud. One docs discover up there sO'l'Mthing -..hich, I thi.nlt, is all too ,,ften lack'na here--a sense of true devot,on and Je<,1,cation on the part of many of our Australian public servant, who are giving up a larBC part of their lives in JeaJing lh-~se people to tM wlf government anJ evenut'.11 independence for which they will probahl) ask and which \\C h'tve prnmi~ed to g1\·e th,m \\hen the\ h,tve 1eachcd the i 1agl! of really d<'s.inng it and arc rc..uly for it. There i, a rc:ilisatt1>A on the pa: t llf

At•stralian officc1~ up there th::it th,• , 1 c ptay111g a vit:il role m th1, 111,hn,c,d µn,ce!-.\ fhi: procc!'.s of localisa,,on ~l, c .. !ll, t!ic process of the tra1111n , ,ii local o,h, .. h • 1.l th~·•• ,ubstitulion ft>r the ex,,;il 1.,1,· oftken

-1,, going <'n apace, c.:rt uni~ at an lu'..:,·,·,1 1u-:e, but m som~ department-. ll> " h:ry , ot,1hh.. degree. For exa.npk, I ,pc11t .in '1oi,. \', 1th the Elec1orul (. omni ~\IO!ll r ., hL toh.1 me that in the ;:iro .. 'C'~, of ~o:ne 5 y,:;,rs he cll:•lc.:•, the whole o! the l.'lcc10.-,11 Othrc t,i I1e 1dm11vstered b; ,. l\lvc ;ll1bl1c set

v.rn•, lit- h.1d iutting t-e iJt• him th.: ~ wn,; ,,an,, ,Hti.:1 r who ~·111 lill,c ,1ver Ii •m h,,11 11\ ~ ,, t, vt',1r, •·m.-,. ',m1i!arfy, I I IC

l)cpa't'll~lH ot p,,~t~ ~11.J J,kgrarh, r.:- ,: t!f,,tt, l Vt hee, , ... dt! h1 t'·1u 1 u.,, ·· ·~L~:r ·, i. ''- , ,c..f ,gLtn,,t ,:, ki. h.i, df .. h d"

t hiev l ~, ..,, ht."e n 1. l1 i , "i.. t,, .& d, g cc "o:v fl•d .. : I \ furor~ t,l ,t ,nd 11.l l11t ~ ar.: '.1: Ltg the plttce 01 • " f :he P11rl1ru!_1n

wch, ·,.1n~ A gh.a .'" .1 ul 1.,1,h .,nd J

,:n:,ll ,k.il ,,t pallen,: is r·:qu,rcd h> .:n 1hk tiJ1:. ,.. '.h11 gs to b<! ,11..·1.,.lmpli~heJ, hut they are bemt ace()mpl~htd '>1 I• 1'\ wi ,, th th 11 kind of devdopme,1( ,b,·1.: t\ u , polit1c.1l development- the e-.ldhl,· I,riIen1 o! fo.:;11 gowrnm,·nt 1.ounc1b , 1•e ,._urn; •,p M t'ie Hut,•.: of As,.; nt, y ~' ' th•· nrJ •11, 0omr rut,on,J tlevek,pt11c11t tu"warus an n~r-.!. s 11 5 r,-~.,pt1hs,b. 11"\ )\' :f1.: ,1 .. t!, '> 11,

••1e n ... ning of their O>1.n ,i'i,:,,. lhe ~to,·, h 1.ot .mstrlhtd. but I ~ 1~•1 10 ,11,·c , e I• where ,.;rt'dll 1s du,· ,,.,, 1 .,, 1• '1od 1 <•t

1<\t.,tr ,.;lt.ir, l'4hcer, down it·,,, ;.1 , the

,k~t,le,. lHH.• pafl,cul irl; t> u1,~ l .,. :w ,e ,r, i,« ,c gI~,.•r· gr~m serv,ct- 10 1h ~ I er­Pt 1ry ,tl'ld :t~ people !Phi, 1n. 1•~.:t!}, t1te'e• •_,,,, 'o 1-u~tr~ ia

h ~ agairut th.U backg1 • ,!I i that we m ~ , \aluJte 11•hat h·, \p, r•,•J in t'ie P1 1,1: ..

Service ~al.irie~ case. ~ hy is tlli~ ca~ ,o tmporLmt? We have in N ew Guinea a population of o•er two million people, but the optimum population of New Guinea could welt be in exces.s of twenty miJl,on. I have tbi5 on good at..thority. By compari­son, the optimum population of Austr.ilia •night be over fifty million p;:ople Who can say? Certainly ,l v11st scope lies ahead of us ir. l.>oth the Temtory and Aur.t:alia. fhe,e are merely inform~d guesse~. but it rs certain that the ·1 emtory will one J .. y ~ a gre.it country. It will he our next door neighbour, .ind wh,ll h,1ppeP, there i$ there­f ,re tremendously mpor:.rnt. The pre~.:rva­t•on ,if friendship bt!tv.een the people and Gowrnmc·1t of Au~lralia anJ the people ,tn<l G,n,.rnm1.nt 01 t11e Territory is of paramount importance in 001 external polt,·y . \,\, 11i1 v.l1,>•n rnu~t w,· ,.,a,nt •n trie11d,hip! We mu,t maintain rr:cnd-,h1p w llh the pcopk, and we mu~t ma•n1iiin il, Jt>Ovc nil. with the prospective leade.~s. And who are the:.e prospective !e'ld •r;? They :ue the new elite which is being trained ,ntl they dh! !t.t1geh to be f('lpn ,. I in the Ptthlic 'krvicr It 1s not •n,ivn1fic int that, a, I h.ive a Ire, ,Iv s1.iJ, the le,.ders of the Panli,u P;ir' , to• t'1e mosr pJrt, pul,lk ~Prv:lrt~ ,, .-,,rmcr pL·hlic <i!'rvant,. rh('y Im.. rhe r, ,.. , .. C',11.,t'! n,i the most I'' >Iii! ·;,llv n,, ·••!" "' the- •1<!wh emerging _,'ite in the [.:rriw1}, ~o i: ,~ wor•l-i \\h.lc Iv r-'' ,o:ne attt>n•11·n tc, w'1H h .. , hap• rem.d 111 th,· l,x.a'. \alari..,\ c,ne to he cchJ'J'-'~ ot (tl,1,H•·•'t 1'ld ti~.: i:\.)~..,~Pt rt•J,,"'< w),kh I ''K l1evt _.,_ • f), a re~ 1cw ,., that

\ I. I r, ,1 k.,ud a Dist net C0mm ~,ioner, ,,r a , .. .ouuar 111 \rnlid:ile in Fehru,,ry or th ,I )'Ci'f ~ iiJ·

T\ie irtu,natr S1ll1..t~,. 1 f \t,l(,t1aija:, reLH ,,r~h1., wi!h he Te'" it,)!" \'\' 1 ll iC°' .._ ·n 1t1 gri: .' <1f"~_rt•e, u.pon t~ dc .... •,h.., l'\Ow u11 kt •n~•der~,. •n ):\\ !he '\ro•t l r,r

l·h,t J 1,,. r • , ,:11.e he-en .; • ,1 ':!ntl. •11-! eJ. 1t ,,.,~ , ~ , ·e : 6 ~.it dthamt \tlh)I\ Of

._ 1 r,.: I ~L 'I''' ,c ·his 1·, t11t.· D-:)1 •nal cs>n• C.)I u•PtH 1...! ... ·-- .. r\ I '"t rl\. .. ..._J\ 10n i\ i•~ ere.\ ~irb tral der, · Ill, • ~ • ,h, , l ...1 1 i~d~ l~e• t

,i "'· <'Ot' \~ ,t 1,n, l ,. l'lll' i<._,,•iun~ ar,d i.Jr,hjl&e •1 :,,~ ,;,,\i 1i!t: ,~iJ,l" 1~(! lCilCl!S ft is , r th.,t r, •• - ;h,1t I r ,L .,, t,..t<, s ,ige to ,,..,~i· ·c '" "If w ·:'1 the r~,,uc,st hr a

re\ e4 t" " ~ it 15 I ,d,h to cfi .. ,0c1.1te

·' · I \ ,,

628 Appropriation Bill (No. 1) [REPRESENTATIVES] (B11dget Dehole)

myself completely from any kind of per­sonal attack upon the Arbitrator or any suggestion that there was any sort of col­lusion between the Arbitrator and the Administration. This is, to me, unthinkable. I make no attack upon the Administration or the Minister. I believe, as the Arbitrator himself said, that there were errors of judgment in the way these new wage rates were introduced. He referred to the lack of consultation. The decision of the Administration half way through the case 10 make substantial increases in the sJlaries which had been laid down in 1964 is evi­dence of a lack of due consideration when the new wnge rate5 were introcluced in 1964. But here, then, is this uniquely im­portant decision, and I say that we should pause and consider whether it should not be the subject of review.

It is the first arbitraJ decision o 1 public service salaries in New Gurnea aoJ ,t already affects some 10,000 people. Fairl} soon, of course, a great many more p..:oplc will be concerned. Indirectly it will affect the whole wage structure of the-Trrritory. It will have incalculable effects on race rr!atmns in the T.:rritory It will hJve 1llcalculabh: effects on future rclatio111 between Australia and New Guima .tlld, of course\ tlus is directly related to the defonce and sccurity of Au~traua. Ali these things and more are wrapped up in this trcmen­dously complex issuc in which so 1nany factors arc .ntcrt'.,ine,1 and intt:r•relatcd. Yet it is aliow,d lO rt$l on the final d.:c1s1on, :,$ 1L:ngs stand at the 1110mcnr, ul one m,.m -+<>fl~ fallibk, mortal rnan, Albs, a· :t ,,~re, ne.tr l"•t! the greH rlobl' upon h·s shouluers. It 1s 1..1,1 as important to u, .. ft•tllrt: t>f the Territory as was the original ba.s1c ,,,age decision given by our own ar.bJtrallon court--and perhaps more important. I am not in a position to say that the decision was wrong. I would not undertake to say 110

without a study of the 3,500 pages of transcript, and eve n then l do not think I would be well qualified to do so. Others better qualified than I should undertake that task.

1t is notable th,tt in Australia a right of appeal would undoubt<'dly exist in such a case. Section 35 of the Conciliation and Arbitration Act and section 13 of the Public Service Arbitration Act both provide for " right of appeal by krne of the Commission.

No such app.:al 1s at present provided for by the law of the Territory. But it is notable that at the inception of this diapute, and at the time when arbitration was in the offing, t~c relev1rnt ordinance of the Terri­tory provided for the appointment of asscss<m to sil with the Arbitrator at the request of either parry. The Public Service A~ociat on inllmated that it would like such assessors ,o be appointed. The Administra­tion 1J en rap:llly arranged for an amend­,ncnt of the ,,rJinance to provide that assessors should be appointed only on the d1:cis1on of thl' Arbitrator himself and not at the request of either party. So the Public Service Association and the local officers \\ere Jcpnved of the b.:ncfit-the great bene­fit- which might very well have been JcrivcJ from assessors, expert men, sitting v. i1'1 the Arbitrator on this great issue.

The honourable member for Frcmantlc. in an article in the 'Canberra Times' ot ~th July last. anaryse<l the steps m the rrocess, anJ ii is perhaps unnecessary for me to repeat them h~n:. more particularlv havi,ig regard to the passage of time.

It will be recalled that origma:Jy w<· Ja;J J,i .•.n a policy oi equal pay for equal work. That 1s a poli,) which l am sure would make a great appc:.i\ to everyone m this chamber and ,t \,as ,1nty with reluct .. nc.e th,,t it v.as e\l.:r :l10ught necessat') to dep,rt twm 1t. Bt1I we :,;,-. c departed from ii. No d(luht t hr rcas· 'lh ur that .ire c, gent ~:either thl' Public Snvice Association nor 1he loca o!lkc1s •h•tmselvcs rh 1W ask for equ,i! P"Y fm ·qua! work. They accept the !act ;111d the nccc~s:ty for soml: kind of diffcr<:ntiation, 1'ut what they say is that :here ~honld be a much greater relativity as they call it, between the salaries paid to expatri:ite officers and the salaries paid to local officers. Under the original decision annou nced in 1964 the relation between the salarie11 of local officers and expatriate officer~ respectivelv was complex but on an avn,ge the local officer WIL~ paid something like 40% of what the expatriate we~ paid, although it occurs over a wide range of s<wething betwc-en 30% and 50% . Fven allowing for the increases granted io 1966 by the Administrnt;,:m, and again by the Arbitrator m 196 7, that d i!proportion, or ,omething of that or,Jer, still obtains. It ill sal(l that the rise in the minimum wage between l 964 and 1967 is !es, than what

(30 AUOU!IT 196"/) 629

would have been necessitated if we had made a proportiona~ increase having regard; to the increase in the cost of living, 10 tbat a very serious disproportion still rerna~· s. The question arises whether this dispro rtion is justified or whether we shoul not have gone a great deal elmer to the European salary scale.

Th~ arbitration wu long, difficult and expen$ive and one might well ask how the Public Service Association was able to afford such fl protracted case. One might think that t~e local officers provided the funds for thb fighting of the case and one might wonder where the money came from. It may ¢ome as a surprise to some to know that t~e bulk of the funds for the case were provided not by the local officers hut by the expatriate offken. The Public Service Asmcialion Is still largely controlled by the l'f patriate officers--although they are by no nK11ns the majority in numhers they are the people of training, experience, edu• cation and qualifk:ation. The very fact that they 1,iave seen fit to take up the cause of the loFal officers in this way and to continue this tight over a period ,)f several years must surely in itself give us pause and provi~e strong evidence that something may l-e ra~licnlly wrong with this decision. For this great hody of expatmlte officers who lrnve served for so long, and many of them ,o atjly, in the Territory, m..:luding some very l!enior and some ver y highly qualified people, have been practk:all·f unanimous m their support for the council of their A.~soqiation in contesting the Administra­tion's decision announced in 1964. Nor do they stand alone in this. A great ran,.e of e11.per1 opinion ha5 come to their aid and ►upport. Their request for a review of thlis deci!ion is 1mpported not only by the Press hul by other persons and bodies of high standins in this community. I have m mr hand, for example, a Presa release of th~ Australian Association for CulturaJ Freedom, dakd 19th May 1967, in which a strong cmie is put for a rc~iev. of thh decisjon. ) alsc bave a c:opy of a statemeul by Proie,sor David Derh.un, Dean of tile Faculty uf I.aw al th<! Monash University an<l Vice-Chancellor Designate of the Uni­versi tiy of :Melbourne. Professor Derham g..,es on record 10 say thrtt there are ptima fac•e arounds for mgge§ting that ►here are arguments that ought to be heard for an

appeal. In other words, be says that there should be a right to apply for leave to appeal and, indeed, that is .U the Public Sorvice Associatron asks at the moment. It asks that the President of tho Common­wealth Conciliation and Arbitration Com­mission should be given the chance to look at this transcript and decide whether or not an appeal should be beard. It Is not askina for the right to appeal bul the right simply to apply for leave to appeal. a right enjoyed by public servants in Australia and by wage earners in Australia generally. True it is that such an, appeal or review is granted only where the Comm1-.sion regards it as a matter of sufficient pubiic importance. Per­haps it suffices to s.iy that quite recently the Commission thought that sufficient pub­lic importance existed to justify it in grant­ing a right of appeal even to musicians employed by symphony orchestras. I do not w1sl, to say anything to bc:liule musician, hut if their's was a case of pu b:i.: importance then surely this also is a matter of transcendent public importance.

Evidence was given by Professor Peter Lawrence, Professor of Anthropology and Sociology at the University of Queens.land, by Dr Crocombe, Executive Director of tho New Guinea Research Unit ut the Aw.­tralian N at.ional Uni vo:rstty, by Professor Parker, Professor of Political Science, Institute of Advanced Studies, Australian National University. All in all one can say that both imide the ,1rbitralion proceedings and outside it the great body of expert opinion, the officers who have had decades of experience in the Territory, the acade­mics who have taken the trouble to interest themselves in the people of the Territory end their reactions. appear to be practically unanimous in saying either that the decision i~ wrong or at the least that there should be an authoritative review of it. I make no apology for getting up in this House and saying-contrary I know to what baa been up to this moment the policy of the Mimster and the Government-that some \l!\.:h .,ppcal or review should he grantt'J. In the face of testimony from such people who would dare pmsay it? [t is an open se<:ret also that tfie District Commi,­sionen' meeting in Port Moreshy in Augu<;t 1964 joined unanim,rnsly in questioning the wi:;dom of this new ~a lary scale. True, it ha~ been ~omewhac ameliorated since but

f, 630 Apprfopriatlo11 Bill {No. 1) [REPRESENTATIVES} • , (ltwlget De&ate-1

I daresay/ if their opinions could be c.an- because we p etend it doe not cx.i5t. This vassed n<l,w they would be of the am d«i:sion "ii be and ia, • Y. a source· of opinion ~till and n.o co pv.r1hlo testimony iru:reasing binc.rne , and I aaw evidence o1 ball been ! given :m th arbitni.tlon procee.d- tbis in ·If in my in · ·th th.• n;itiw ings on 1,pe otbel' side Qf the l.tfgufll¢nt pcopl4' (Ill my r cent vllit. People re cQn-

. , fused. They have Oft Ult one band a body What js tht other S-ide of tile araumeot? of people-the A9m~, d.. few top

l would inot tiee:k to ntinhnise fr. It ls an officials--telling them. tha.t l ' must be, antf argumeilf b.a ed on rconomie nc:e~ily. 1 that this i11 the proper decision, and yet they do not for one moment su"cst th.U: we h~ve a gr t body of expatt' t.e oftkers. nd must no• have regard tb the atsum nts of a great body ·of E;illperi ¢t:!ion--indecd common sense; we must have rcgn.r(f to th alQtOSt t:\'.t;eyon . w{tb ~ -quaUftc11.tions lo mean, atailable to us; but l rely upon what this Jicld-telUn t1lell2 tf.uJ elt~ this ckd­was said by Mr Woottl!ll himsett, cotinse_l slon is wrons or at the least ft should ht for the Administration. He said that to revjewed. They know that publie servants approach the matter having regard merely iJ. a similar situation ii) Au.u-nl}a J)ave a to ecorjomic factors s(mply completely ril:!,bt to a review, ~d that is what they ignores tht reaHties of the development of seek for thorn$C;:lve11. It is liaid on . .t~ other New Guinea; in pnrtfcuiar it i :nores the hand that if we pay .more to the public ser­realities of the poUtioal situation and the vants there will be less to speud on educ~­political1 developrnet.tt of New Ouin~ and tion. I hav . no time to expati;\te on that, i5 one ;that thcttfote ~himJd be rejected. but l cannQt and will not acc~t .that if it This lsinot simply a conflkt between togk were to bt- deddetf by a rc,per tribunal and co mon sen~ QJ.'l the o.ne band, and thttt we should pay mora 'iq tllese people emotio . or sentitnentallt}' . 1;,n lhc other, Tbe we shOtlkt in fuet al.loeate fo their school· best lo ic surely afld Ifie best eonllllOn sense tmtf thdr be pitat l ~ ~ think SQ little must h ve regard to thew emotional fact01 of t'ttg,,~rrment as to.' , lne that. that which re so tremendously potent and i.m- wouto be 4\ A. ~ or · ' ·~ble .conser portan~ in a commutiit} such as ew quenee o'r payina more if, J~ this would Guinea where we have the -white man and be the proper and wise thifla to do. the hl~ck man, the poor man and the rieh man, in effect, living and working side by side, ~oing the same work and yet beiqs paid s\tch vastly differing rates of pay. Thi surely I is a case of greater importanoe thlfl any case that has come before any arbitra• tion tn"bunal in Australia's history, and. as T sav. we have left it to the final d<'chion of one· man. ft fs not fair surely to the Jooal officers, to the people of the Territory, to the people of Australia <>r even to the Arbittator himself that it should be left there. that so much responsibility should be e~st on one pair of 11houlders. This is a mattter fit for profongtd debate in this Parlitment; fit almost to be de~lded by ri Rom n senate; fit to be submitted · at the least ~o further appeal or review by three or four (P~ople of the highest qualifications lest we s,llould have taken a false turn In the read from which it might sO<.'ln be too late to ti1rn back.

~ it i8 · said that the tocaJ officers should ahide by the umpire's decision. Bnt this is nor 11 ·me In which some players have agreed to nccei,t the verdict of an umpire. lt is a m11tter of great national importance. The local public sen«ants ha~ no cholee. They had only one tribunal to wbieb they could re.'IOtt:------the Arbitrator True, they had a right to have assesson sitting with him, but that right wrui taken from them. They are now asking--and I believe that they are entitled to ask-that they he given -MlO'te ri~t ol appe'al or right of review. U-adtt our htdieial'y Act there if; a right of appt-al to the fflgb Court of Australia on a matter at laue involviD!I a sum not ext:eeding $1,000. If the Public Service Al!IIOCiatioo'~ claims for these people were admitted in full a farther pay­ment of SOl11(thi11g over $2.Sm would be involved. If ttm. having regard to its racial, political and defence implications, is not • c se of high importance that justifies an appeal nothing ill .

In the very short time left hl me may I say ihat it mig.~t l:>e mggested that what I am (loiog is stirring up trouble. In answer to t~al let mr say tMt the trouble exists ThcJe • D()t time for m. to i.ay more, and I will not di!appear or die down just Mr DeJ)\Jty Spe11k,er . I ropoet: This i11 in

Approprlatlc11 B ll ( .Vo 1) [30 :\1 •r.t•• _j.;,1,

ro sefiw an o1ttc1.:k on th.: AJmir 1~trat,,r. he rbitr.Hl.)r ,he Min,~tcr fo Territor e

C' au}, nc el . It i~ ~i nr:> a pie .• which ti I eve is I Ms;:-rcJ ,n.! "h•.:,1 1, hascd ,,. wb. t I 'i_ " , lf1 for mv,elf ir ,~1e Terrnor r.r. 1 ,, 1 I• I c•o;t ,p, 1 t .11lv ce ..iva1!.1hle t.., ~'- r t°' \ ah of \lr n.-. iJ h:not, r}, , l cretJry , '. the DLpJrtmc nt llf the Admi mtrato, 111 t 1c arJ,itr,1t1on procced-11 g,, th. r, J 1 /•., arc winking. \\'hen h.:: ,,1s , ,k, J h"'' h·' felt a'iout the m.1tter he

,aid liL ,\ , d •rLiridcr t and he added· 'The r _ ' lights are winking'. l ct u, ~ie,:d the • rn i: , th,~ ,xpcrienc ·d pnh,ic t.cf\ ant

1: 1' i • arL j, k,d :•! .1 l.l'L'~fft'.lcb In fair-' ., Tu 0, f lv,:s ,tncf the r- Opie or t:11: I, : 1'°\ ,,,, i ,,u\' h.1,.: anotre, look a . • ~. ~ 1 • ·11.11 i~ 1ll t ,i~k l ct oth..-r

l r, :1.,\L ,,:,,, ~.c.r )l,ok at it

!\tr l)f l'l'TY "IPl'.AKFR (Mr <:lark)-· 0 er! Tl,, h, "t'lirable mcrriher', time ha~ l'Xp r I

,,

•

THE CASE

FOR

REVIEW

of Decision on

LOCAL OFFICERS'

SALARIES

in the Public Service

of Papua & New Guinea

given by Mr. L. G. Matthews

on 11th May, 1967

THE LOCAL OFFICERS' SALARIES CASE

In 1964 salaries for local (indigenous) officers in the Public Service of the Territory1 of Papua and New Guinea were drastically reduced to levels averaging approximately 40 per cent of their European counterparts.

When announcing this decision the Administration declared that the matter was not closed. It invited the Public Service Association to take the matter to arbitration •.

The P.S.A. did this.. Over a period of some fifteen months the case was argued before Arbitrator L.G. Matthews under the proyisions of the Arbitration (Public Service) Ordinance. Judgment was delivered by the Arbitrator on 11th May, 1967.

The P.S~A. is convinced~ for the reasons set out in the memorandum and letter to the Prime Minister which we here publish~ that the judgment constituted a tragic mistake ..

This conviction is concerned not only with the minimal increases awarded in the relevant ranges of local officer .. classifications,. More fundamentally, we believe, the judgment has made a mockery of the pro­cesses of independent arbitration in the eyes of the people of this country. The judgment does not reflec~ the record of proceedings in the case. We are certain that the Arbitrator did not act, as required by the Ordinance, "according to equity, good conscience and the substant.ial merits of the case 11 •

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Sllgg7stions are being1made for recourse to means outside_the law to rect ify the situation emerging out of the Judgment. My Association is seeking to exhaus t all lawful processes to ensure t hat justice i s done .

We ar.e confi dent that a review of the recor d of proceedings by an independent body will substanti at e our conv~ct ion that just i ce has !!2i· been done .. We ~ e seeking t he appointment by the Government of such a body for t hat purpose.

We pu?l ish th~s booklet not for the purpose of securing publl.c. support fo: o'!r salary claims as su~h. Rather, ~n the conviction that all who r ead thi s_ document will see the necessity f or .a revi ew of the J uqgment.._ We t rust that this conviction will be asserted publicly.

J .G ,. SMITH President, Public Service Association

of ·Papua & New Guinea. 1st June, 1967.

Public Service Association of Papua & New Guinea.

KONEDOBV, T.P.N,G.

24t.h May; 1967 •

The Right Honourable H, Holt, M. H.R., Prime Minister of .Australia, · Parliament Hollse, CANBERi1A. A. C.T.

Dear Mr. Prime Minister,

The immediate purpose of thi s letter is to secure t,he support of your Government for action des igned by t he Public Service Association to utilise lawfu;L processes f or seeking a review of t he decision recently handed down by Mr. L.G. Matthews in r egard to salari es for l ocal officers in the Public Service. This is done i n pursuance of resolutions passed by the Counci l of t he Association on 18th May, 1967, (attachment A). .

We acknowledge straightforwardly at the outset that strictly speaking the Ordinance under which the decision was given makes no provision for an appeal., as such, from a decision of the Arbitrator. However, you will appreciate that the memorial which is now being lodged (attachment B) uses the specific provisions of Section 12 of the Arbitration (Public Service) Ordinance to obtain a review of the decision. It seeks to do this on the basis of having the whole transcript of proceedings refe.rred to the President of the Commonwealth Conciliation and Arbitration Commission and two persons nominated by him; for the purposes of investigation and report as to the adequacy of Mr .. Matthews' judgment in the light of t hat record of proceedings. We are sure you will agree that no fairer method could be devised of obtaining a lawful review of t he decision. We are equally conf identt particularly in view of certain events with which yoll have been closely asso ciated recently, that you will not adopt t he quite meaningless appr oach of . saying : "The umpire's deci sion i s fi nal and must be obeyed". You , and your Government 1 r ejected thi s appr oach when t he question of t he possible i nadequacy of t he Royal Commi s s i on' s findings int o the ' Voyager ' disaster was ventilated~

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~!though you obviously felt strongly that the matters raised 111 support of the move for a reopening of an issue considered closed were ~limsy and unconvincing and that it was not normal pr~ctice to have such a reopening, nevertheless you and your uovernment , decide,d that action should be taken to ensure, as fully as lay within your po~~rs, that justice should be done and should be seen to be done. Specifically you referred the matters so raised for enquiry by a body of• three appointed by you for that punpose.

We have prepared a detailed memorandum (attachment C) setting out the reasons why we a:ce convinced that justice has not ~een done, and manifestly has not been done in Mr. Matthews' Judgment. This memorandum is closely argued and is based completely on that judgment in relation to the record of proceedings from which it purports to flow. .

There.is n? point in attempting to summarise the propositions contained in the 28 page memorandum. We are convinced that a s~udy by you of the document will, to put it no higher, satis,fy you. that a prima fa?ie case has been made to support 01;1r contentio1; !hat the Arbitrator has not acted in accordance with, !he provisions of Section 9 of the Ordinance: "In rel~tion to every ~pplication made to him in pursuance of this Ordin~nce, the Arbitrator shall act according to equity good consci7nce and ~he substantial merits of the case ••• ". 'we are quite certain that you will find the evidence in the memoran~um much more compelling for reopening this case than that which moved you to act in the 'Voyager' matter. ·

There.can be n? do~bt !hat the issues involved go beyond the ques!ion of d?J.1:-g Justice to local officers in the Public SerJice, sufficient though that is in itself to warrant this a~tion. The unshaken evidence of independent expert witnesses - detailed in the memorandum - establishei that the peacef1;1l orderly development of the Territory of Papua and New Guinea, the future relations of that country with Austral~a ?nd conside:ati?ns_going to the security of Australia itself are intrinsically involved in a proper settlement of this matter.

Mr. Prime Mi1;i s!er, these are not just our opinions. They are.the convictions, expressed on oath before the Arbitrator of_i1;dependent experts uniquely equipped to express an opinion. The Head of the Department of the Administration spec~fically_c?ncern7d with security questions in the Territory, giving evidence under subpoena in support of the

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P.S.A., said in relation to the attitµdes generated by the existing salary structure: "the red lights are winking". (p.1830 of transcript., see para. 22 of attachment C).

It is within our certain knowledge that the situation has deteriorated following the judgment of Mr. Matthews. The tragedy is not simply the inadequacy of the amounts awarded. It is that Mr. Matthews has not directed his mind or made a decision on these matters in the judgment. This despite the fact that the parties were clearly at issue and that the Administration in its very final submission to Mr . · Matthews said that an approach to the local officer salary structure which "ignores the realities of the political situation and the political development of New Guinea" should be rejected (p.3439, see para. 4 of attachment C). . In the worsening situation that has emerged we, as an Association, have been conffonted with suggestions for ~ecourse to action outside the law as an attempt to have

'the decision overthrown. We have counselled against such action. We have assured local officers that we will pursue every possible lawful means to obtain a review o! a ~udgment which they, and we, feel has done them (and the lerritory) a great ,i :njustice. We are co.nfi~ent y~u will en9orse this responsible approach. You can give efrect to this . endorsement by instructing the representative of the Administration to support our application for a reference of this matter to the independent body of three when the memorial comes on for hearing before the Arbitrator.

May we particularly commend to you the final paragraph of attachment C:

"Finally, it should be understood that this is not merely the memorandum of a party seeking to appeal against a decision i1; which it is disap~ointe~. That is, of course, involved. But the issue is more fundamental. The concept of arbitration is at stake. It is nonsense to talk, in these circumstances, about "accepting the decision of the umpire". It is inconceivable that in the . Federal arbitration jurisdiction an issue of this magnitude would not have been heard by a reference bench of at .least three members of the Commission. Certainly, had it been heard by one man, the appeal procedures would have been ·open and would have been availed of.

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The single l!lan e:1trusted ·with handling this case has p:_r:-oved rnade.quate t'? ~he task in ' terms of the ' requirements of the Ordinance i.mder which he acts Why this is . so does no.t •matter. It is not • necessary t'? question whether the man acted in "good conscience". That.alon e is not enough/

, .No. one should have ar1ything . to fear from having , tlus matter hea7d , a$~in, i1;, the. W<f Y it certainly i.yould . be heard in Australia. Everyone · should l_1ave very much · to fe·ar · if the concept of independent ~rb~trhtibn becomes a mockery in the eyes.of the indigenous population of this Territory."

:~ ~~mmend for.your consideration the other matters contained S .;.resolutions of the Council, passe d by a vote of 20 2 theci·ically we :"'ould ask you to inf orm the Governor-Gene;ai f _atthe ~houl~ disallow t he decision as requested in the irs resolution. · ·

~!: regard to the , other matters covered by the resolutions i~ may be t~at_the best ~ourse would be for representativ;s o my Asso:iation to meet you in deputation following a conhsideration of thel!l by you. We would certainly welcome sue a course of action.

Yours faithfully,

(J. G~', Smith) President.

L

2.

3 .

4 .

5 .•

ATTACHMENI 11 N'

RESOLUTIONS PASSED BY COUNCIL OF THE PUBLIC SERVICE ASSOCATION OF PAPUA & NEW GUINEA

ON 18TH MAY, 1967.

THAT the Association immediately ask the Governor-General of the Commonwealth of Australia to disallow the decision of Mr. Matthews.

THAT the Australian Government be asked urgently to authorise , as an interim me asure,. payment of the increases awarded retrospective to the date of the decision.

THAT another arbitration claim be lodged, utilising the pr ovisions of the Arbitration (Public Service) Ordinance, f or reference of the matter to a body of three men, the Pr esident of t he Commonwealth Concili ation and Arbitration Commission and t wo other s to be nominated by him; that the whole transcript of the proceedings be submitted to this body for investigation and report; that this body have the opportunity of hearing submissions from the parties based upon the transcript of the previous proceedings, and that the Arbitrator act upon such report.

THAT the Association urge the Australian Government to support this attempt to use lawful procedures for a review of the decision.

THAT the Association reaffi r ms its confidence in the system of inde.pendent arbitration for Papua and New Guinea but asks that a Public Service Arbitrator acceptable both to the Minister for Territories and to the Public Service Association be appointed ivi thout del.,ay and calls upon the Administration to introduce legislation enabling industrial cases of great importance in the Territory to be heard by a Bench of three appointed by the President of the Commonwealth Conciliation and Arbitration Commission.

6. THAT Mr. L.G .. Matthews is no longer acceptable to this Association as Public Service Arbitrator for the Territory.

7. THAT the Association take all possibl~ lawful means to have Mr. Matthews' decision re·viewed.

ARBITRATION PUBLIC SERVICE ORDINANCE 1952-1965

ATTACHMENT ,, B II ~ •

No. of 1967

IN THE MATTER OF: The Public Service Association of Papua and New Guinea.

APPLICANT

fil!Q.: The Minister of State for Territories.

fil!Q_: The Administrator of the Territory of Papua and New Guinea.

AND: The Public Service Commissioner of Papua and New Guinea.

RESPONDENTS

IN 'RE a claim under the Arbitration IJiu'b:ric Service) Ordinance 1952-1965 relating to the salary rates payable to officers in the Second and Third Divisions of th.e Public S.ervice other than Overseas Officers (No. 2)

MEMORIAL '

The Public Service Association of Papua and New Guinea submits the following claim for decision by the Public Service Arbitrator (Papua and New Guinea). 1. 1!i6I officers other than Overseas Officers who are

members of the applicant Public Service Association of Papua and New Guinea shall in lieu of the annual salary rates prescribed by Determination No. MIN 1 of 1964 as varied or altered up to the present .date be paid in accordance with the salary structure to be drawn up in accordance with and having regard to the following salary levels for the positions designated: A. Positions at present classified in group 1

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of the Base Grade ranges including Messenger/

Cleaners and Gardeners -11600 per annum in the first year of service; $760 per annum in the fourth year of service

and thereafter. B. Positions at present classified in group 5

of the Base Grade ranges including such designations as l1urse, Pre-School Teacher, X-Ray Assistant, and teacher (A GRADES) $1000 per annum in the first year of s~rvice; $1300 per annum in the seventh year of service

and thereafter. C. Positions classified at the present time at

$950 per annum to $1050 per annum including such designations as Artisan (First-class), Compositor, and Dental Mechanic -$1250 per annum in the first year of service; $1400 per annum in the fourth year of service

and thereafter. D. Positions classified at present at or in excess

of the graduate range of $1700 to be classified in accordance with the claim made by the applicant Association in the matter of a memorial re. salary rates for officers in the Second and Third Divisions of the Public Service other than Overseas Officers (No. 1) dealt with in decision No. 2 of 1967, which claim included a claim for a salary rate for a Legal Officer of $2700 approximately.

2.

3.

4.

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E. All other positions to be classified in accordance with the claim made by the · applicant Association in the arbitration dealt with by Decision No. 2 of 1967.

Ili6I. a Family Needs Allowance ·~alculated in accordance with the manne;r claimeci as appropriate by the applicant Association in support of Memorial no. 2 of 1965 dealt with by Decision Ho. 2 of 1967 shall be established.

. I!:!61 and makes APPLICATION THAT the Arbitrator shall refer the matter for investigation and report to the President of the Commonwealth Conciliation and Arbitration Corrunission and t wo other persons to be nominated by the President and shall reque st His Ex cellency the Governor­General of the Commonwealth of Australia that he authorise in that behalf the President and two other persons aforesaid in .accordance with Section 12 (1) of the Arbitration (Public Service) Ordinance 1952-1965.

THAT upon such authorisation and reference being made the ·Arbitrator shall submit the whole of the transcript and the exhibits r~lation• to Memori~l No. 2 of 1965 and the decision thereon being Decision No. 2 of 1967 dated the eleventh day of May 1967, to the referees for report as to whether having regard to the contents of the material submitted the claims made in paragraphs 1 and 2 hereof should be granted or as to whether any decision on the salary rates payable to officers other than Overseas Officers in the Second and Third Divisions of the Public Service other than that made in Decision No. 2 of 1967

-4-

should be made; AND THAT any such submission shall be accompanied by an authorisation to the referees to hear the parties on matters raised by and relating to the transcript, exhibits and deci s ion and relating to the form and subject matter of any report to be made.

THE REASONS IN SUPPORT OF nus CLAIM are set out in the transcript of proceedings and other documents and set out

in the docume 111t f iled herewith.

DATED AT PORT MORESBY THIS

TO THE ABOVENAMED RESPONDE1'JTS:

DAY OF 1967.

FOR AND ON BEHALF OF THE PUBLIC SERVICE ASSOCIATION OF PAPUA AND NEW GUINEA.

JOHN GREVILLE SMITH PRESIDENT . .

Take notice that the memorial herein was filed in the Arbitrator's office on the · day of

1967, and that you may, within twenty-eight days , from that date, lodge any objections you see fit to make to the granting of the claim.

If no objection is lodged by you (or any other of the parties in the above matter) the Arbitrator will decide the application in favour of the Public Service Association.

Arbitrator

ATTACHl'.1EHT 11 c 11

MEMORAimUM OF REASO!JS IIJ SUPPORT OF APPLICATION FOR REVIEW . . OF DECISION OF L. G. MATTHEWS ESQ. , PUBLIC SERVICE Ai.'l.BITilATOR ON SALARY RATES FOR LOCAL OFFICERS IN THE TERHIT0RY PUBLIC '

L

2.

3.

SERVICE.

The proceedings which became known as the Local Officers' cas~ wer~ conducted under th.e provisions of the Arbitration (Public Service) Ordinance 1952-1967 Section 7(1) of the Ordinance provides: •

"The Arbitrator shall ••.•...• arbitrate upon such mattefs as are submitted to him relating to sala:i~s, wages, rates of pay, or terms or conditions of service or employment of officers and employees of the Public Service."

Section 9 of the Ordinance provides:.

"In relation to every application made to him in pursuance ?f this Or~inance, the Arbitrator shall act acco:ding t? equity, good conscience and the substantial merits of the case ..•.... ".

It is th~ firm conviction of the Public Service Association that Arbit~a!or Matthews did not act in accordance with these P:ovisions. Except in the most formal sense he did not a:bitrate upon ma!ters submitted to him relating to the s~larie~ ?f local officers. Demonstrably, he did not make his decision on the substantial merits of the case.

The issues between the parties which called for decision by the Arbitrator .as .providing the casis for judgment could not have been more fundamental and clear cut. The P.S.A. put its position in opening in these terms:

"We s~y t~at a ~trong, efficient and contented Public Service ~s a sine qua non for the successful progressing development of this Territory. There ca~ be no doubt, and we will indeed be adducing ~vidence !o support the proposition, that the inadequacies of the new salary structure have engendered an~ are.at th!s point of time engendering a deg:ee ?f_dis~atisfaction and indeed bitterness that is militating against the achievement of just such a strong, efficient and contented Public Service.

f

4.

5.

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To the extent that this is true, and we say that it is, we will be putting that considerations of economic capacity should have but a subsidiary place in your mind, as you deliberate upon and ultimately decide the issues that will be raised in this case." ·

In developing the primacy that should be attached t o social and political considerations the P.S.A. emphasized the seriously adverse impact upon race relations of the local officer salary levels and structure.

Against this position, the Administration argued at the outset that primary emphasis had been given by it and must be given .by the Arbitrator to considerations of the econ­omic capacity of the Territory. Initially the Administration put that the political implications of the local officer salary structure were matters for the Government and should play no part in the Arbitrator's approach to the matter. As a result no doubt of the specific repud:ia tion of that argument by a number of its own witnesses under cross­examination, the Administration changed its attitude on this point before the end of the case. In fact the very final submission put by counsel for the Administration was in these terms:

"We suggest that to approach the m~tter in any such way simply completely ignores the realities of the development of New Guinea, in particular it :ignores the realities of the political situation and the political development of New Guinea . and is one that therefore should be rejected." (p. 3439 Transcript).

It is thus clearly beyond question that the. fundamental issue between the parties calling for decision by the Arbitrator; was the appropriateness of local officer salary levels and structure in terms of an assessment of 11 the realities of the political situation and the political development of New Guinea." The P.S.A. substantially based its whole case on such an assessment and the Administration said that an approach which ignored these realities should be rejected. In fact the judgment on its face makes no such assessment and makes no attempt to explain the salary levels . and structure it awards in terms of that assessment. Yet this was in terms of Section 7 of the Ordinance, the matter submitted to the Arbitrator by both sides relating to the salaries of local officers . ·

6.

7

-3-/

The P.S.~. deliberately refra!ned at the outset and through the earlier ~tages _ of l?roce~dings from formulating ,specific monetary ~l~ims. lt_di~ this out of the highest sense of r~sponsibility not 0ishing to engender expectations in the m7nds of ~ocal offi~ers aro:1nd some high "ambit-type" figurE: which the_evidence might not subsequently justify- · the.virtue of this approach was acknowledged by the ~rbitrator at p.3455 of the transcript and at p.6 of the Judgment.

In fact~~he judg~ent by its complete failure to evaluate the !esl,1.-ng of witnesses which occurred under cross­examination mad_: a mocke~y of this responsible approach by the P :S .A. · 1 o get this matter in t _he clearest possible persl?ec!ive reference should be made first to these submissions by the P.S.A. advocate in putting the case after the main body of witnesses for the P.S.A. had been called:

"From thi~ ~enera~ pattern of evidence has emerged our specific claims that we will now proceed to develop before you. It has not been and demon­strably not been a case of stating the claim at the outset and then attempting to fit the evidence to those claims. This leads me to the final submissions that I wish to make in these -intro­ductory remarks before I p roceed to the two-path development ?four case, and also to go to those other two points I have mentioned.

The_final submission I waht to make is this, Mr. Arbitrator: As I ~av~ now indicated to you in these ope~ing submissions our specific claims the a~ount which we the Public Service Associatio~ will.strongly submit to be the proper salaries to be !ixed at the case and at other levels for local ?fficers. These . claims find their justification in, and emerge from.th~ factual evidence given by, and the relevant principles and conside:ations a~serted by, a variety of identifiable and testable witnesses,

Let me ~epeat the point that I am making . there, . Mr. Arbi t.rator: these claims that we will be developing before you find their justification, and they emerge from the factual evidence given by a~d the_relevant principles and the c?nside.rations_asserted by a variety of identifiable and testable witnesses.

-4-

i We as the applicant and the .Public .Service Association claim no special dispensation. We are no omniscient authority which enables us to say, of ourselves, these rates are right that we claim and that these rates are the most appropriate. We have no, as I say, omniscient authority to try to make that approach to you. We believe that certain basic principles are deducible as being most relevant within the context that we are all operating in. The validity of the actual rates which, as it were, we finally hang on those principles depends in turn upon the measure and quality of the support that we can command, both for those principles ~ nd for the general order of the salary rates which we rest on them. Therefore, we must, and we do submit to you, Mr. Arbitrator, that the merit of our claim, the reasons why you as · Arbitrator should move to implement the claimed salary structure, intrinsically depend upon this measure and quality of the support for the principles and the factual evidence which gives rise to those claims.

I trust, Mr. Arbitrator, that you completely appreciate the point we are making. We deny any ability in ourselves. We deny any authority in ourselves to come along to you and say, "these claims that we make are right because we say so." We have not got the· right or the authority to say that. Essentially the validity of our claim is dependent upon the measure and the quality of the support that we can produce in favour of the principles that , we use and of the rates that we base upon those~inciples.

I have said earlier, !Ar. Arbitrator, that there is perhaps an inevitable tendency for Arbitrators, either consciously or unconsciously to assume that truth lies nearer one position than another as between the contending parties and this is particularly likely to happen when an applicant has adopted the ambit-type approach in the formulation of his case. I relate these observations to the situation now before us, Mr. Arbitrator. The Administration, no more than the Public S.ervice Association, or yourself, Mr. Arbitrator, can claim any especial dispensation. They cannot claim any authority which enables the Administration to say that the salary rates which it has set are the right rates or the most appropriate rates." (p.1839)

These s_ubmissions assume particular significance in the light af this passage from p.7 of the judgment:

8.

9.

10.

-5-

"I consider . orie great advantage -0f proceedings in a 'contested' arbitration hearing is that witnesses give evidence on oath at the instance of one party and are subject to cross-examination by the other party not only on the direct evidence they ave given iput on any matters relevant to the arbitration issues. This testing of evidence by thewposing party is one of the great values existing in practice in arbitration procedures."

Any objective reading of the transcript must lead to the conclusion that 11 the testing of evidence" by cross­examination which occurred in the case confirmed the . validity of the P.S.A. cl aims and the unreality of the Administration's position.

Take, first, the question of the 11 needs" base where the parties we.re fund amentally at issue as to the appropriate salary levels. The major component of the needs base was the allowance for food. The P .S.A. produced Dr. Margaret McArthur of the University of Sydney, Nutrionist and Anthropologist of international standing and with detailed practical experience of the Territory, as an expert witness in respect of this matter. The P.S.A. "needs 11 claim was substantially built around the amounts regarded by this witness as necessary to meet the criteria of reasonable needs held by her to be relevant in this connection. The high degree of competence and transparent honesty of this witness was obvious throughout ahd was obviously accepted at the time by the Arbitrator. Her evidence remained substantially unaffected by cross-examination. Where minor amendments emerged as necessary these wer.e conceded and were incorporated by the P.S.A. in its final position.

The Administration called two expert witnesses in this area. The first was Dr. E.H. Hips.ey, an employee of the Commonwealth Government as medical officer-in-charge of the Nutrition Section of the Commonwealth Department of Health. Mistakes both of fact and . approach were revealed in his evidence under "testing" by cross-examination. The witness conceeded that he preferred the approach that had been made by Dr. McArthur. Cross-examination was therefore shortened on the basis, particularly after some questions from the Arbitrator, that the witness would submit another regimen taking into account the factors embraced by Dr. McArthur,

11.

12.

-6-

including questions of food preferences and co~sumption patterns. In the event the material then put in ~y Dr Hipsley was able to be ridiculed because a maJor ba;is for the doctor's approach in regard to f:od preferences and consumption patterns was a survey of the Rabia camp. Evidence was produced to show the hig~ levels of unemployment, under-nutrition and retarded physical development existing in this camp.

The other witness produced by the Administ:raLion who gave evidence in this area was the Territory Difiecto~ of, Health, Dr. R.F.R. Scragg. What emerged from the te:'ting o~ this witness is best conveyed from the following section­of transcript at p.36~0 of the P .S.A's final reply:

"Now' Sir: that b;ings me to the other witne:'s that was'called by the Administration, who spoke in some detail about matters which go to this food component, and, of course, I refer to Dr. Scragg. ·

Sir, one is in an extremely difficult pos;tion as ~o how to address you on this matter. This is something which has worried me to some extent, and I would put to you Sir and I hope. I could a·17oid saying what would ~ther~ise have to be said, by putting to you . what I indicated I would put when I closed my cross­examination of Dr. Scragg, that his performance was one which obviously meant that you had to say that you could place no reliance at all on the evidence of Dr. Scragg.

Sir, if I -felt that that submission had be~n ~ccepted I could leave it at that and not make submissions which otherwise would have to be made, and I do not know, Sirt whether ______ ":' ___ _

THE ARBITRATOR: You can leave it there, Mr. Hawke.

MR. HAWKE: I am indebted to you, Sir. In that case I will only go to a consideration of Dr. Hipsley's position." · ·

In the light of these facts the Arbitrat?r':' deci:'ion to · leave the needs element unaltered makes it i1;1p?ssiJ:>le ~o attach ~ny significance at all t? the proposition in his judgment at p .. 7 that this 1'testing of evider:ice. by the opposing party is one of the great values existing in practi.ce in arbitration procedures".

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13. This conclusion is confirmed by an exah1ination of the ,.- ) "testing" of the parties' other main expe.rt witnesses . Leaving as ide the hundred odd indigenous and European witnesses whose evidence supported the claims the P.S.A. called three independent expe.rt witnesses whose evidence went to the fundamental issues underlying the P.S.A. approach to the case. They were (a) Professor R.S. Parker, Professor of Political Science, Institute of Advanced Studies, Australian National University; (b) Professor P. Lawrence, Professor of Anthrooology and Sociology, University of Queensland, and (c) Dr. R.E. Crocombe, Executive Director, new Guinea Research Unit, Australian National University.

The independence, stature, academic qualifications and practical association with Territory affairs of each of these men is of the highest order and as a fact, was unmatched by any of the witnesses called by the Administration.

14. The following quotes from the evidence of these witnesses should be read in the light of the Administration's final sentence in the case to the Arbitrator, mentioped in paragraph 4 .

15.

"We suggest that to approach the matter in any such way simply completely ignores the realities of the development of I-Jew Guinea, in particular it ignores the realities of the politi¢dl situation and the political development of New Guinea, and is one that therefor.e should be ·rejected."

Professor Parker summarised from official statements the principles which hatl been enunciated in support of the local officers salary structure. He then said (p.1658):

"Now from the political and administrative point of view, some of these pri~ciples seem to rest on fallacies whose perpetuation could be dangerous and deleterious."

He then went to the first principle, in these terms:

"The 'dangers' of a privileged class. As the Administration's own principles suggest, much broader issues are involved in the fixation of salaries in the peculiar circumstances of the Territory, than are

I -8-

involved in wage-fixation in Australia. The most important issue is the effect of wide differentials between local and expatriate salaries and allowances on the general politcal attitudes and behaviour in the local community. I know of no evidence to suggest that the local salary determinations so far have aroused fears in the indigenous community of the creation of a privileged elite among themselves~ They do seem to have underlined, for many people, the exceptionally privileged position of the expatriat~ elite in the Territory. Beyond this, the debates in the 11ouse of Assembly sug~est that local pol itical leaders have, as spokesmen for the indigenous people, identified themselves with the local public servants, and have regarded the salary determinations as an expression of racial discriminatio~ towards the local people as a whole. This appears, in fact, to have been the outstanding political issue th3t has so far emerged In Papua and New Guinea - one v,hich is likely to affect Australia ' s relations with the political leaders of the 1erritorv on every other matter of . political importance . Furthermore, the political fea.ing aroused by the local salaries issue has been intensified by the manner in which the determinations were originally arrived at and later announced. Neither local indigenous opinion nor the opinions of experienced Administration officers with intimate knowledge of the Territory se.ems to have been consulted."

l le then said at p .1660.

1'The positive considerations snggested by the foregoing are that local salaries should be fixed after careful assessment of local opinion, both lay and professional, rather than upon arbitrary assumptions about it, if political development is to proceed on the basis of harmonious relations with the local people."

The Professor concluded on this point at p . 1661 in these terms:

0 The conclusion under this heading, therefore, is that the idea of a well paid local Publ ic Service does not cause resentment among the New Guinea population. If it is on its feet (politically I mean) the remedy would be in the hands of the local people and Government. The attraction of able people to a contented public service

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and the creation, in tbis sense, of an advanced elite among the indigenous population is not in itself an evil to be feared but an urgent necessity."

Other observations from Professor Parker were:

"Thus it hardly seems realistic to base levels of local public service salaries upon a consideration of the disabilities of the Territory's economy at present." (p.1662).

I

His statement of evidence concluded:

"Local salary levels and public service efficiency . Rathern than fix local salary levels at a minimum compatible with maintaining the 'local standard of living', which is the phrase used in Administration documents, a basic consideration should be the incentive and facilities required to enable local public servants to reach a standard of performance appropriate to the modern public service, which has been created. This consideration is especially relevant to the requirements of more responsible positions depending upon professional qualifications. Il.elevant also are the expectations of a modern way of

)

life 7 which have been generated among the potential occupants of such positions by the training and educational facilities already developed in the Territory. It does not seem realistic to, expect that the white-collar public servant in a European system of public adminis­tration can perform his official duties satisfactorily, much less prepare !1imself for higher duties by reading and study, if his salary means living in restricted coriditions. • ·

Reading is a slow and difficult task, in a foreign language and culture.t for Papuan and New Guinean students under the best of conditions. Yet the ability to read newspapers, periodicals and some books - espec­ially textbooks - is essential for local officers if they are to know something of the alien world which is the context of modern administration. Unless home conditions approximate those of Europeans, an almost insuperable hurdle is placed in the way of the average local officer. Related to this is the second point often made in other evidence. To be able to assoc!ate on terms of social equality with Europeans requires approximately similar habits and modes of living; and considering the other handicaps of language and culture

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under which local officers labour, such association would seem to be a necessary stimulus to the self­improvement and self-respect which a local officer needs if he is going to be an effective member of the public service.

Another relevant consideration is the need for a public servant's sal ary to enable him to support his dependants at a level commensurate with his respon­sibility, without depending on extraneous me ans of . support. Experience of other underdeveloped countries shows t hat many public servants there are unable so to support t hemselve s and familie~ without taking suppl ement ar y part-time employment. '{his o~ten result s in inro ads into off icial working time , and in the sapping of the official's emergies. The effect of this on the efficiency of a public service does not need to be underlined. ·

An a ssociated consideration is the need to protect the public service from corruption - which is a pr~valent t endency in emergent nations, in any case - ~win9 to conflicts bet ween traditional values and obligations on the one hand, and the s tandards of probity required i n a modern public service. Clearly, the actual_l~vel of s alary should not be allowed to become an additional incentive to bribery."

16 . !1one of these s t atements was shaken in cross-examination. Indeed some of t hem were not questioned, and where ques­tioning did occur the µ-imary position of the witness was strengthened.

17. The evidence of Professor Lawrence began at p.1726 and contained the following statements:

11 1 have based my submission on my knowledge of the Territory and its people as a social anthropologist, who has worked both in the field of traditional socio-cultural systems and in that of indigenous reaction to Western contact - especially cargo cults before and immediately after the last war. I ca\mot claim to have detailed knowledge of the salary scales proposed for local officers, although I have examined them and know their general nature. I am concern~d with the way in which the inhabitants of the Territory­not only the political and adrninis trative elite but . also the people at large - seem to interpr~t the~e salaries and the detrimental effects to wluch tins could lead in the political and -administrative field. 'i

The professor referred to examples of large disparities between rates for European and indigenous holders of the same position and said (p.1727):

"Hence. th:e gap is in reality very much greater than the l~sted figures suggest, and I believe that this sort pf situation is potentially most dangerous."

Ab p.1728 the professor said:

"I .regard the political argument as paramount: · Aust,ralia' s legitimate interest in the stability of

the area along her northern borders, an interest !hat_has largely dictated her policy towards the lerri~ory fo~ the l a st hw:idred years. The present salaries policy could easily undermine Australia's aim of keeping the area. stable in two ways: first by ex~cerbat;ng race r~lations, and second, by ' creating an internal situation favourable to subversion from outside."

On the same page, the pr_o:fessor said:

"I consider this froin the point of view of the officers themselves and from that of the people at large. In any multi-racial organisation, where members of one race are paid at a rate far lower than that of the · other, they can hardly be expected to be satisfied ~1i th their. lot. Their whole status as men is brought into question. They, cannot easily have normal every day social dealings (the sort of thing we have striven for years to create in the Territory) with members of t~e other r_ac~. . To satisfy their pride they can only withdraw. Ihis has been made clear to me in conver­sations with indigenous public servants and Members of the House of Assembly during visits to Port Moresby Goroka_, and_Madang since September 1964, when the wage' cuts were first announced, with students at the Admin:i.st:rative College, and with Papuan and New Guinean undergraduates at the University of Queensland during 1966. 11

At p.1729 the following passage occurs:

"What I want to ask you , _Professor, in the light of the conversati?ns that you -had with these people and the understanding you have of their feelings what effect if any, wo1;1ld the modifications in the s~lary structu;e announced in July havehad on this opinion in question? ------- I would say no effect whatever. 11

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At pp.1731-1632 the Professor said:

11 The ill feeling among the indigenous elite reflects values which are transferred to the modern situation from the traditional way of life and which are shared with the mass of the people, materialism and egalitarianism; broadly speaking, equal access to economic resources guaranteeing a basic standard of living to everyone. Material resources were a concomitant of living - an accepted part of being alive. To be without them, or to possess them in much smaller amounts than others, was not to be a man. It was a cause. for shame and selfcontempt -as was. not having provided enough food for a complete ly unex pectedly large number of guests at a feast-exchange. In the same way, low salaiies can only result in a loss•of pride, a sense of shame, a feeling of inadequacy a~ong local officers.

It might appear, superficially; that the .case for higher salaries, which I support, conflicts with the atti tud.e of indigenous egalitarianism by placing the elite in a higher social class than ordinary men. This is to confuse the realities of the situation. The mass of people see it in another way. They see their own way of life as having its proper concomitant -its own pride and standing. They see the European way of life as having its proper concomitance - its own pride and standard. They do not necessarily see representatives of the European way of life as superior or out of touch, provided the latter behave with goodwill and decency. But they regard natives who try to live in a European way without the means of doing so - which is what local officers who cannot return ·to a. subsistence economy have to do - as the equivalent of 'White trash' • Around Ma dang, such a man is described with contemot as: 'Emi laik tanim masta nau'; Emi laik makim wetman', which is, in Englis:h, 'now he wants to become -a master' or · ' he wants to emulate the white man'. This is a general expression of contempt.

Thus, provided a well paid elite behaves with dignity and restraint, it would be less likely to alienate the people than poorly paid officers who found their compensation in bad behaviour. A well paid elite would be a source of pride to the people who would identify themselves with its achievement.

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An analO$Y would be Yali of the Rai Coast between 1948-50 lsee Road Belong Cargo, chapter VIII), who was regarded by the Admi.nistration and himself as superior to his fellows, and who certainly enjoyed, for that time, an immeasurably higher standard of living than they did, yet was regarded by them essentially as primus inter pares, His achievement was their pride.

Experience in the whole of the area of which the Territory of Papua and New Guinea is part shows t~at there.are powerful fo~ces concerned to upset tne established order and rorm of government. The ability of the existing institutions to survive on the one hand, and the possible success of those' elements concerned with their overthrow, on the other, has turned and will here turn, in some measure on th~ conviction of the indigenous public service of' the virtue of those existing institutions. It is ~eyond argument that extreme dissatisfaction, a lli ed as it undoubtedly is with overtones of racial bitterness must, to ~ay th: least, lead itself to the possibility ?f suhre:-:;:'ion - Just as, at a l ess sophisticated level, _?.:11 1942 l,_he followers of the anti-European Letub and 1agarab Cargo Cults near Madang welcomed the invading Japanese as liberators and openly collaborated with them. Very recent evidence suggests that relevant interests are not unaware of the possibilities in this regard in the Territory."

The professor concluded at pp.1733 -1734;

"The most effective counter to subversion in countries such as the Territory is the creation of a sound, hone~t, responsible, ~nd ~fficient indigenous public service, wh~ch ~an ~nain-~ain contact with, preserve representative institutiors, and ensure nrogress in th~ v~llages. The Territory must at all 1 costs give priority to ~eveloping a_p~blic service of this type or run.the risk of a politically unpredictable and potentially dangerous situation, which will bP- en­hanced by a salary structure felt by local officers to be unduly low and inequitable. Either the salary structure will create a body of local officers with a narrow, intransigent, chauvinistic outlook: men who are so bitter that one of their main aims will be to work for the eradication of all Europeans

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from the country, or it will discourage able men and attract only men of inferior quality, willing to take on poorly paid jobs stmply for the money they need for a few luxury European goods.

As even good men could not work properly under these conditions, it can only be expected that inferior men will have neither the capacity nor the incentive to do their work well. Lacking dedication and responsibility, inferior men would be open to corrup­tion and manipulation by unscrupulous elements in the µ>pulation. What is of great importance is that they might be tempted to do what all other responsible public men in the Territory have so far, most carefully avoided: form all.iances with cargo cult leaders and other demagogues, when they realise that there is political capital to be made in this sphere.

Should the elite ever be. tempted by such blandishments, District administration could be undermined in many parts of the Territory. A situ~tion ripe for insurgency and subversion, of advantage to neitherPapuans and New Guine.ans nor Australians, could then exist. It is, of course, possible that a hostile power might never have the opportunity to exploit it, but we would be unwise. to allow events to drift to the point where we were forced to take that risk."

18. The same comments can be made in respect of Professor Lawrence as are made in paragraph 16 in regard to Professor Parker •.

19. At p.1461 Dr. R.G. Crocombe said:

III have lived ali my life in a very considerable number of multi-racial situations. I have been in 18 territories of the South Pacific, except Nauru. I have been in about eight countries of South East Asia. I have lived in a multi-racial society in the United States .JI

At pp.l 63-1464 Doctor Crocombe identified himself as the author of a recent article, in which he had said:

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lfRace relations in New Guinea are worse than anywhere else in :the Pacific, with the possible exception of New Hebrides, and a situation of this seriousness will not · change radically overnight. 11

"The most important forms of property in terms of rcic_e relatio1;ships a~e J nc.C?nie;, . h9u~ing, _n1otp,r cars, an;ct. othE:r obJ ects wpich_,;~re, rriuc:h 9~s,ir~d ,qy ;;any

, _:tac,ial g;:r:oyp:' ._ _ .These a~e _at . present _; ~::n~}re,11}!=1 y · uneyenly · divided and presently ,the crisis in certain

'bas,e:s ~iiite'r-racial relations, th~se ;-i;ensfons are :ma/1.,i:[est 1) 61:V and again 'through cai'go -:cults fo the wages c:as.¢.11 - .. . - . -- . ,_ .,

"On the other hand, though the Government advocates n?n-~i~crimination, it does not pr~cti_ce it 'in any sigmf~c~nt sen:'e. It:' policy on vVag~s, hqusing, and privileges is all in the direction of •widening the. gap rather than closing it."

20. Paragraph 18 can be repeated in respect of Dr. 'crocombe.

21. It is significant that the eviden~e of these , thr~e w~tnes:'es in regard to "the ieal_ities" of the political situation and "the political. ,dev,elopment . of New_,Guinea 11

was completely confirmed by the evidenc;e of .the .. Depa:rtmenta~ Head in the Administration most dJ:rictly concerned with these matters. D.M. Fe.nbury, .Depa_rtmental H~?d __ of , tr,ie Departm~nt ,of the Admin_istr_a;to:r~ - VV?S subpoenaed by the P .S.A.

22. At p._~8J9 the fplJ,owing passages -occ1.ir . .i,n ,the-. evid.ence_ of· Mr. Fe,n~>U:i:y.: · . · · · .. '_'' · ·. "" · ,; · _ ' ·· ·· :_'.'.~,;;.ec·,·:, "Mr. HAWKE: I repeat the question: Wnat ' ~vak :y,:;~i' rt action to the introduction of the_ salary _ str1..1c-ture .-for ,.rlocaL c. officers, in September '1964? '..; __ ;.:::..:..:._ Desponden'cV: '• """

Why A~~pfr:i d~ncy? ·,;;.7.:._ ;;~'.:.:.-~-:- ·g~c~~-Ufe:'):_:,~~d:_~ :it{;r;ir feeling that·. tins would atlvers.ely affect, from - now . on; , the atti bides of ·the most · politic ally aware ·_ and the most arti•culate of the ·indigenous · civi.l servants who, . in my assessment, will be determining the political attitudes of this lerritory within the next few years.

Insofar as the salary structure wa.s purported to be justified on economic grourids - and I am not putting that _this was the only consideration which has been put forward - what was your reaction to that sort of

-16-

justification?----------That the assessment \Vas not fully thought out. You cannot divorce the economic aspects · of . the situation from the social and political aspects.

You said you.: were .despondent~ Would the Arbitrator understand you correctly as saying that not sufficient attention had 'been given to these aspects?-'----- ... --Yes. It was my assessment that not suffibient attention had been paid -tothese -aspects in making these determina­tions or arriving ' at decisions which resulted in that. determination which -could adversely affect race relations and the future political attitudes of a relatively few -as yet - people, but people whose attitudes will count most -within the next -few years.

At p.1829 the witness gave •evidence in the following terms:

11 When you introduced this evidence about this gentleman, you said it was about two months ago and it was not concerned with the arbitration. You said you got it as a result of a quickening interest in the Moresby area? ----------Simply because I have a number of contacts with indigenous people. I have other reasons also for remaining in contact with developing situations. Mr. Kaumi and two or three other people in my Department were some of the early ones to whom I paid attention. These were, if you like, unscientific and spot checks but they did confirm rather uncomfortable impressions I had derived from social conversations with a wider range of the up and coming indigenous element - tertiary level students with whom I had previous contacts also.

You say you were concerned with developments that ·were occurring? --------- I was interested - and this is in line with what I said .earlier - that whatever the economic arguments might be, the social effect of the wages determination would be reflected in political attitudes which would not be ver convenient ones from the stralian viewpoint.

How do you mean they would not be very convenient? -------- I think I said earlier - if I did not, I meant to - that if the effect of this wages determination on the relatively small number of

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people who are acquiring real skills and whom we a.re endeavouring to get to acquire professional skills - if the effect on thes.e people is to sour their political attitudes, then this will be . an unfortunate occurrence from both a 1erritory viewpoint and an Australian viewpoint.

Mr . Fenbury concluded his evidence at p.1830:

"So you have not only this element of disillusionment, but also an element of bitterness which has now developed into a fairly distubing amount of emotionalism which is no longer entirely rational.

i\llll.; HAWKE: What do you think can develop out of this disturbing amount of emotionalism?-------It is part of my j ob to watch issues and this is one where I would hesitate to make predictions. All I am prepared to say, at this stage, is that th'e"r"e'd lights are winkin9.,,,:,,

In the Department of which you are head, you have responsibility for internal affairs?------- Yes.

Insofar as you are concerned with internal affairs, would you be concerned with questions of security? --------- Yes."

23. As with Professors Parker and Lawrence and Dr. Crocombe, this evidence of Mr . Feribury was either unassailed by questioning in cross-examination or was in fact strengthened by this "testing» process.

24. Against these authoritative and compelling witnesses called by the P.S.A. to give evidence specifically about

- "the realities of the political situation and the political development -of New Guinea" the Administration did not call a single witness whose evidence was primarily concerned with these matters. And yet in the very final worch of the Administration to the Arbitrator, in the proceedings, an approach which ignored these realities should be rejected.

25. Clearly the P.S.A. discharged completely the responsibility it had acknowledged of producing wi tnesse.s on the basis of whose evidence the actual claims would be formulated. Quite apart f.rom the evidence of scores of local officer

.1 l

26 .

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witnesses and other Europeans ~10 had gone to the actual question of appropriate rates the three witnesses, Professor Parker, Professor Lawrence and Mr . Fenbury considered the matter. While disclaiming any right to speak with authority on particular classifications, these witnesses stated the general order of relativities to European rates which they consideed necessary to meet the situation they had dealt with in their evidence. Using the language of the Administration's final submission thesewitnesses told the Arbitrator the basic reality of the political situation impinging on the issues before him was the ~mlti­racial nature of the public service and of the commum. ty in which it operated. They detailed the implicatio1;s of this, they said that a wage structure for local officers which "ignored" these realities should be 11rejected 11 ••

They suggested an order of salary levels and -structure for local officers which not only did not 11 ignore 11 these realities but was squarely based upon them.

It would in fact on the evidence of these witnesses have been open to the P .S ~A. to claim higher rates than those finally formulated before the Arbitrator. However, this was not done as the P.s :A. wanted it to be abundantly clear to the Arbitrator, as pointed out by its advocate, that the claims made were not mere paper claims but claims which were conservative had been fully endorsed by the evidence and which should be granted in full. The submission at p.1848 could not have been more accurately founded.

'These claims find their justification in, and emerge from, the factual evidence given by, and the relevant principles and considerations asserted by, a variety of identifiable and testable witnesses.'

27. Contrast this with the position of the respondents by the end of proceedings before the Arbitrator. They called two witnesses in support of their economic a.rgument. The first was Sir Leslie Melville. It transpired during cross-examination that his statement of evidence was not in fact prepared for the Arbitrator:

"Let me understand what you mean when you say that 'Perhaps it was improper that it should be put to the Arbitrator'. I do not understand what you mean when you say that?-------- This of course was~ pa12er originally prepared for the Department of Territories. It was not prepared for the Arbitrator at all." (p.2697) .

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Further ·questioning _elicited that . Sir Leslie hadcome to the Territory for_ ~about three -weeks" (p;2698). Apart frorn speaking to Administration officials . he ~aid; "tJ:ie major part of , my time '. would have - bee~ spent in speaking to other , people. 11 ( p. 2699). , _Questioned , about these "other people", ,Sir Leslie answered - in these terms: :- .; , --- - .:··_,:•,': , . ,,_;- ,,__ , ._;. ·

. . .· . ; ,_ . . . . . .• < - j 1 j ,: . '

"THE ARBITRATOR-: . Planters, ,· B~nk•'men:, or , .;,;,. _ _,? • - There . were , a number of ·plante:rs: ·ci'f course and

there. we,r~ people who , were ,-running large . organisations such as the I?ritish ,New. Guinea.

MI-L HAWKE: Steamships?~---.:.,..steamships · · ,Bu;ns Philp and ·Oarpenter. · Also I met ' a numb~r -of indigenes and had diicussions with them; and a · grea!, numbe~ ·of pla1:1ters, some commercial •people running businesses in places outside Moresby and Goroka -and Rabaul and -Hagen and Bulold of course. I met the -forestry people, Bulolo Gold, and the rubber one up in New Guinea Gold.

F1;1rtJ:ie~ questioning showed that the witness had had no significant conversations with indigenes and that favourable reaction to the wage scale had come from private plantation and other business interests:

"MR. J:fA'.VKE: Sir Le~lie, do you recollect any_ specific conversation you . had with local officers which went to the question of their reaction to tJ:ie wages reconstruction introduced? -----Very li!,tle •. There was some discussion on this but my main obJect was not to get their views on their reaction to the wages claim or the scale but to !,alk to them about their activites and their place in the economy of New Guinea. But there was some discussion, I ,recollect, on their reaction to wage scales.

~d wha!- impression did you take away from these discussions as to their reactions? -----They did not like the wage scale.

And did they relate their reactions to this wage scale to this other aspect you mention that is their place in the development of the ~conomy?' -------No.

The discussion did not proceed that far? We did not proceed as far as that, no.

28.

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Perhaps we ., can shorten . this aspect · of the discussion if I put it to you thi .s ,w.ay: You would certainly nq:t s9y 9ny _discul?sion yoµ ,had ,w:l..th the number of loc·al officers on this question of the . salary reconstruction would lead you in any way to p~l~~y~ :t)1~t. 1tl)(::! , p:i,qti,!re v,tl;l9t : has ce.merged in • these

_ ,. p:r:9c~~~i9g§ _ g:f-. th.e. .f~!=lctiq_ri4o ,:the :: leve~ oL ~alary scal.~S, ;: d9 ~s ,nQt ;r;eprgse17t ,,thf? JOVerwbelming picture? s :-.:::- ~s:: -+.fvYe>µ c:. ~+~ :::S-f!,f,e:p:£~ng , to ·/!:he a_ttitude of local

}),Hi~~:i;:l?,. -/; ce,:r;ta~-flly; - g~t ciS • Lsaic,l, .;I _ think . .._yesterday, quite a number of the ind.ivid1,.1c!,ls~l_ .; spoke ,to, -Europeans, certainly favoured the wage scales.

- ., ... , ~ ! ~ '. ·; !,

You say that ' so_me ,of ' th~se l;:uropeans you spoke to were undoubtedly i~ favour of tne ·wage sc:ales; . As far as I can see so far from what you have said -l~~_v:in,g tlw. Atjmi,ni,st+:ai),.Qn people ,-.aside d or _ the mome:11t ,:-;yoi.i s pol~e, •to planters and 1you _ spoke to repre~ent'ati_ves, of Burns Philp, $teamships, .,the Bri_tist Ne_w c;;uinea Cqmp,my . and , some of the ,mining

. cornpanies'.?-------Ihere ,were others. ·

I am · sure 'the;e were oth;:r;-s but ,-in regard to those people You · 'spoke ·to, I suppose it 'is true to say

.that ,gene.rally speaking they were in favour of the :wag~ sc:al.~?·-".'.--.:.--Yes • .

: _, \.' _'; . - .:.:. : , ( l,, .; I , ;,. , . . · . ; i :. , . . ' . . , ,· . ( ~ • •

It ;i .s <?,+ cj<;ru,r;s,~,t,qyi:te .. l1;g:i-t.i)1la_te !,hat th,ese i1:1terests should, -h~ye c:pnv~y~d :tins.. i~p:r;:es.sion ,:to f ~he witness._ l;l~wever.~ .. h~s, ~-f!dl,i,e.,, ~e+Jiari.9~~ ,-up,C?Q 1s~c,l1 conv:ersati-ons was presumably cine of' the reasons for the major inadequacies in his evidence revealed by "testing" under cross­exal)ltn,at:i,,~.n,. , ,:;:r;rhts.:, l,•~t~~$.ti,Qg111 ,o_cqupied 1approximately one week ._ ot the , hea.;r-:i-r.g;s, 1 a_!1,d, ,J ,i;_ 1is;, ,i,mpQ ,5.5)...P.l.e ,_within ,xe.ason-9b)::e .c.ont~riei5., ·of,.,~ _do _c_umerit;jsu,c_h as .. I°tflis., to det:a,il,- all tlu~~e i,ncl.d,equ_a,c_\1=s . ,; _iTh.e . V:J,hble -tl'!eo:r;e,t,j,;c;.9 l : .structur:e \Of S,i_r Les_lie \ ;, . ar,g~ent:: '.,a_bo,\lt :the r .e.la_ti,o_nship bet.ween J, s;~1arf ,inc,:i;~as,~;, . ;for: JoqaJ,_. __ p£_:fi,cers ,in -the. public .s_ervice

, anc:!_ ,the, ·.r~s:t ,of. in,du~t,;ry,,_: µrbary a·nq-.. plantation:, . and the - dervelopment of -indigenous :,ca,sJt-:c.ropping was shown .either . to be at variance 1Nit_h tqe :facts or to be unsupportable by any. factual ,, e,v:id~nce ,avaiJable to the witness. _ His im~r~siions ~bout~ foundational premise in his argument -the availabi,~ity of _labour _s~pplies . for the plantations -wai completely at variance with the findings_ of the Labour Conference held in October 1966 by the Administration with representatives of the plantation industry, findings of which the witness was completely unaware.

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29 .. At several points the evidence and answers of the witness were shown to be directly contradictory or internally inconsistent. For example, at p.2663 the witness answered the following question in these terms:

"If there is a body of evidence which goes to the question of whether a worker would apply himself fully and effectively to his job, is that something which should be.disregarded by the Arbitrator?--;.- -Yes, it should be disregarded by the Arbitrator."

At p.2688 after a section of his evidence-in-chief had been read to the wi tnes.s he gave this answer to the following question:

"It seems to me on reading that, you are putting to the Arbitrator as a relevant proposition which he should take into account in salary fixation the question of the attitude of Administration employees to the Administration and the question of whether they would give dedicated service or not. Are you saying that?-----Yes, I am saying that.II

30. The othe.r witness called by the respondents in regard to their economic arguments was Territory Treasurer Mr. A.P. Newman. The answers of this witness in several respects either served to · destroy fundamental points of the Administration case or, positively, to support submissions that had been made in support of the P.S.A. claims.

31. It is necessary to go . first to certain answers from Mr • . Newman concerning the relationship between any increases in sala:des for local officers to be granted by the Arbitrator as a · result of the proceedings and other planned items of expenditure under.the Terri~ory Budget. From the very outset of proceedings, particularly in . the cross-examination of witnesses, the Administration persistently put the proposition that any increa~e in salaries must be at the expense of schools, hospitals and similar items of expenditure already planned under the Budget or that would have been proce.eded with in the normal course of events. This of course was at that stage merely an unproven assertion from the bar table and in fac.t, as will be seen below, the answers of the

. Treasurer discredited the assertion.

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32. Despite the fact that this was, as indicated above, . merely an unproven assertion from the respondent par~Y. · at the bar table, the Arbitrator embraced the proposition and used it as a basis of cross-examination from the bench of the applicant's local officer witnesses. Ranu Mihara, a 34 year old machinist with the Department of Information and Extension Services, married with three young children, was called by the P.S.A. to give evidence. The utter inadequacy of his salary to meet his reasonable needs was made apparent. Of his domestic situation he had said: (p.173)

"The house is still incomplete. It has no good oven. It has no tables, no chairs, no beds -no furniture at .all. I cannot afford ·to buy furniture for tha house."

33. Counsel for the Administration was pursuing the line of cross-examination of this witness based upon the proposi­tion that the granting of increased salaries !!}_Ust mean less s.chools etc. At this stage the J1independent" Arbitrator - who it would have been thought had the task of ultimately deciding the issues between the parties and not embracing without proof a fundamental a;rgument of one party and using it against a witness of the other - took over the cross-examira tion of Ni hara. At p .182 he put this se.ries of questions to the witness:

"So in your view the Administration should cut down on the rate of education in order that local officers can get higher salaries? Is that what you say? Do not build so many schools? Is that what you say?"

Not content apparently ,-1ith this effo;rt ( to which . objection should have been taken by counsel appearing for the P.S.A.) and the reasonable answer of the witness, the Arbitrator immediately went on:

~Do you suggest in relation to schools, then, that the Administration ought to slow up somewhat and put all the money that might have gone to the schools towards the raising of local officers' salaries? Do you think that is more important? Is that what you say? 11

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34.. This approach by the Arbitrator was completely obj ectionable according to any criteria associated with the princ~pl~s and processes of ind~p~ndent arbitration. It would in itself have been sufficient grounds for seeking his removal at that stage. When the senior advocate for the P.S.A. resumed the conduct of the case and, following the taking of evidence, developed sub­missions in support 6f the claims it was decided to all1;de strongly to this issue and the culpability of the Arbitrator but. to proceed io the confident expectation that .once this had been done the issue woµld be treated equitably by the Arbitrator.

35. In view of the significance of this matter and its subsequent treatment, in fact, by the Arbitrator in the judgment it is necessary to reproduce at some length the actual submissions that were put at that point on behalf of the P.S,A. at pp.1988-1990:

"I suggest that it is absolutely grotesque that this situation could have been allowed to develop, that local officers, local officer witnesses, should have been put in a situation where publicly they appeared to be saying by the nature of their answers to questions both from the Adm~nistration and from yourself that by ·pursuing thei.r reasonable demands they themselves were going to be responsible for having less schools built in the. Terri.tory, that there were going to be less hospit­als built and that the economic development programme was. going to be cut back because they ask for reasonable salaries.

I suggest that is an absolutely grotesque situation · to have been allowed to develop. It is enabling a reflection to be passed upon these people on the basis of a proposition which is a deception because it is not substantiated and could not be substantiated that. the basis of the question was in fact not ·· ' related to facts of the situation.

I ask again: 'I wonder why Professor Parker was not asked these questions?' The simple truth is the A?ministration had absolutely no right to put or, with respect, was there any ; way in which the proposition should h.ave been embraced by you, unless this proposition was accompanied by a

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declaration from the Austr.alian Government authorising the putting of such a proposition.

Let me put to you what the Australian Government_ would have had to declare. The sort of declaration they would have had to associate with this . proposition if it was one which could be validly put in thE s.e proceedings would be that the Australian Government would have had to say this: We have instructed our spokesmen inihe Parliamentary institutions of the Territory to tell the people of the Territory and to announce to the world before and after our action cutting the salaries of local officers in the Public Service, that ours was not the final say in the matter. In particular, we i ns tructed Mr. Reeve, Assistant Administrator of Economic Affairs at that time, in the Legislative Council of llth November, 1963, in moving the second reading of the Public Service of Papua and New Guinea. Bill, to say this:

'The. new level of salaries is a major decision with far reaching importance. It must be related closely to the ability of the economy to withstand this and the recognition of the essential cost of living and it should be established initially by a Government decision which results from consideration of the total structure and then be open to be tested by arbitration.'

"They would have to say, ' We instructe.d our spokesman to say that and the record of the way he carried out his instructions is to be found in the debate of the Legislative Council, Volume 6 No. 10 at page 1007.' They would have to say: •we also instructed Mr. Johnson Director of Education at that time, and now A~sistant Administrator, in the House of Assembly on 20th January, 1965, to say, after we had cut the salaries for local officers 1.: ·

'There is really no secret about how this base · ·salary was a;c:rived at. There is an effective way in which we can determine if it is enough. There is a Public Service Arbitrator. who is a man experie need in settling disputes and dis­agreements of this nature. The Administration has no reluctance to take this matter to arbitration. 1

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"And the record of the way in which pµr spokesman carried out the instructions in this regard is. to be found in the Hansard of the Hous.e of Assembly clebates, Volume 1, No. 3 at p.398 .

"Then this announce.ment would have to go on: Having publicly announced our willingness to go to Arbitration we now publicly announce that we have decided that we will · cut back our expenditure on hospitals and, if we may borrow the actual words of the Arbitrator who is making the decision on local officer salary levels and who puts this position concisely, we will not be able to build so many schools if the Arbitrator decides to increase the salary levels of local officers whom we employ.

"We tell you, this announcement wou ld have to go on, we tell you the people of New Guinea deliberate.ly, and we tell the world as well, whatever the mass of unchallenged evidence before the Arbitrator from local officers, whatever the m.ass of evidence from senior officers e_mployed by us in the Administration, whatever the evidence by independent eminent experts and people of long standing in the Territory that there is bitterness, frustration and hatred amongst local officers because of the salary cuts, despite the evidence that there are serious implications over race relations, despite the evidence that issues gravely con­cerning the present and future se_curi ty of the Territory

and Australia itself are involved, we say to you and to the world that despite .all these things we will not only fight before the Arbitrator to prevent any increase in salaries for local officers, if we are unsuccessful in this we will not adjust our grant to the Territory to accommodate the increase so awarded but we will add swaetness and light to the situation by d.eliberately cutting axpenditure on hospitals, cutting economic develop­ment programmes, and by building less schools.

"Now I issue this challenge. I challenge the Government to make a statement to this effect. I challenge the Government to authorise counsel in this case to say to the people of New Guinea and to the_ world at large; 'This is what we will do and this is what we the Australian Government understand by independent arbitration'. Mr. Arbitrator, no government in its right senses will do this before your decision, but I put this to you, unless this is done the Administration submission, and I quote it again: 'There is no escape from the reality that salary increases for local officers can be granted only at the expense of other items of Territory expenditure, for example, schools, hospitals, economic development programmes', unless the Administra­tion counsel is authorised to make this statement that I

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have suggested then that submission and the whole line of cross-examination founded on this submission is revealed for what it is, and this. is a cheap intimidatory irrelevance unfounded on fact~"

36. This was the setting against which Mr. Newman gave evidence before the Arbitrator with counsel for the Administration having made no submission that he was authorised to declare that in no circumstances would the Australian grant to the Territory Budget to increased to accoijlffiodate the decision of the Arbitrator. At p._2892 he said":

"When an absolute need arises to meet unforseen expenditure not incorporated in the exp.endi ture plan, the funds tQ meet it may be found in any one of, or a combination of, the following ways:

( a) Reve.nue in excess of estimates may be collected and this may be applied to meet such unforeseen expenditure.

(b) There may be reductions in certain areas of expenditure as compared with the appropriations,e.g. lack of physical capacity may prevent some

construction work commencing. These reductions may be used.

• (c) A recalculation of expenditure may be necessary to ,remove items with the lowest priori ties so that the .unforeseen expenditure may be met from the resultant savings.

These are the only ways in which unforeseen expenditure can be met from within the Territory's own resources._ The situation generally with regard to Territory expenditure has been stated by the Minis.tar for Territories in reply to a Parlia­mentary question on 11th October, 1966 which has already been entered as .an exhibit in the proceedings." ·

( The 1O-Line answer to a question without notice put in as an Exhibit by the Administration was in these terms:

"MR. BARNES: The honourable member must be aware that aotal expenditure by the Territory must be met from the Territory Bud.qet. The . situation in Australia is completely different from the situation in Papua _and New Guinea because the Territory's major financial support comes from without the Territory. Obviously any increase in wage's paid to Territory officials has to be met within the Territory Budget.")

37.

38 .

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The. answer manifestly said nothing which went to the question of whether the Australian . grant to the Territory Budget would not be increased in the circumstances.

Thus the stage was set, in the words of the Arbitrator

I I

at p.6 of his judgment, to utilise "one of the great advantages existing in practice in arbitration procedures." The whole passage should be repeated: .

"I c0n s.ider one great advantage of proce~dings in ~ contested arbitration hearing is that witnesses give evidence an oath at the instance of the one party and are subj ect to cross-~xamination by the oth~r party not only on the direct evidence_they_hav~ given but_on any matters .relevant to the arbi!ration is~ues. This testing of evidence by_the_o pposing_par!Y is ?ne o~ the great values existing in practice in arbitration procedures."

The matter which was not merely "relevant to the arb~tratioi:i. issues" but had been made absolutely fundamental to its position before the Arbitrator by the Administration - and, a~ ~hown, had been improperly embraced by him - was the proposition that an increase in local officer salaries must be at the expense of schools, hospitals etc. This could not have been put more unequivocally than in a prepared statement by counsel for the Administration at p.568/600:

"There is no escape from the reality that salary increases for local officers can be granted only at the expense of other items of Territory expenditure, e.g. schools, hospitals and economic development programmes."

At p.2915 the advoc ate for the P.S.A., referring to similar observations in Mr. Newman's Budget speech, put these questions and received these answers from Mr. Newman:

"Am I correct in interpreting what you there say, that no-one can j ust assume that if Mr. Arbitrator l"1atthe~1s in this case brings down a decision ~1hich, by a~ceptin9 our claim, brings about an increase in the Public Service Salary Bill, no-one can assume that the Commonwealth Government will automatically increase the grant to cover that?.;. ____ This is correct.

If I interpret what you have put he.re correctly, no-one can say that the Commonweal th Government ii:ie v~ tably will not make some additional grant to cover this increased commi tme.nt ?------ That is correct.

THE ARBITRATOR: Mr. Newman, are you saying anything different in the first part of your Budget speech an

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pa,ge 137 Yau say there:

'Finally, Mr. Speak er, I reiterate my earlier comment that demands, particularly in the way of increased salaries and wages and improved conditions, cannot be financed indefinitely from additional Commonwealth grants.'

THE WITNESS: What I meant to say there was that we cannot indefinitely go on anticipating an increase in the Common­wealth grant to cover salaries and wages or anything else.

MR. HAWKE: Have you finished on that point, Mr. Arbitrator?

THE ARBITRATOR: Yes.

MR . HAWKE:. So adapting your answer that you · have just given to me that the situation that has been directed to your attention by the Arbitrator again was in this period of the next th.re.e years or something like that, no-one can say that in respect of that period, Mr. Newman, that the Com11onwealth Government will not adj ust the grant upwards to take account of any decision made by the Arbitrator'? -----No, I could not say that.

And so it f ollows from that, does it not, Mr. Newman, that it would ~~2_!l9....i.2.r anyone to say to the. Arbitrator that an increase in Public Service salaries flowing from his decision to grant -~-application m".ist necessarily be at the expense of schools or hospital~ or any other thing? -----Yes,_ using the word .'.._necessarily'.

39. It surely would be thought that the contrast between these answers and the Al;-bitrator's approach at p.182 (para 33) and the Administration's assertions from the bar table, .e.g. at p.568/600 (para 37) could not be more obvious; and that "the great value" in the arbitration procedure" from "this testing evid.ence and matters relevant to the arbi tr at ion issues" would have been acknowledged by the Arbitrator in his judgment bf a recognition that the basic argument of the Administration, in the terms which it had deliberately chosen to put it through counsel, had been destroyed out of the mouth of its own witnesses.

40. The Arbitrator's performance, however, on this issue in his j udgment is little short of incredible. At p.74 he merely reproduces Mr. Newman's evidence-in-chief:

41.

42.

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"Unforeseen expenditure, not included in Budget plan~, could only be met from any r';-venue_in exces~ of estimates, reductions in planned expenditure if occurring, for . example, from lack of physical capacity for cons~ruction work or recalculation of expenditure to remove items of lowe;t priority. The Minister.had s~ated in the House of Representatives, when questioned in October ~966 ?n the possible extra costs arising from these arbitra~ion proceedings, that any increase in wages in the Territory had to be met within the Territory Budget."

At p.79 in purporting to d';-al with "The Association's Reply" the Arbitrator gave something of a resume of the. advocate' s submissions and paraphrased:

"No one could assume that Australia would not increase its grant to accommodate any ~ocal salary i1:creases to avoid cutting present expenditures on hospitals, . schools, and other expenditure."

The Arbitratoi deliberately avoided indicating tha~ the authority for this submiss~on was.the ';nswers obtai~ed from the Administration's. own witness in this. process - the testing of evidence" - which he was e';rl7er !?leased ~o . desianate "one of the great values existing in practice in arbitration procedures."

Rather, the Arbitrator made an abso~ute ~ockery of his own observations about the value of arbitrat7on procedu~es by quoting the "untested" evidence of the witness. This per­formance was compounded by the 1;1nqualifie~ ?bservations at p. 73 on the evide.nce of the Assistant Administrator (Services) Mr. L.W. Johnson:

"In lvtt. Johnson's •view, in making ?' diffi~ult choi<;-e between substantially higher public service salaries or greatly improved educational t~aining, the . Territory's self-interest would di~tate the latter, choic.es were inevitable in allocating Budget funds."

\ ( '

The Arbitrator's performance on this questioi:i of the i~pact of any decision by him to increase loca~ off]_<;-er .sala~1.es on other. items of expenditure has been inconsistei:it witl; the standards of independence demanded of the office wh7ch he holds. The preparedness of the P.S.A. to ove~look 1;is original impropriety in embracing what was describe~, in the. event with complete accuracy, as an "unsubstai:it]_ate<;i and unsubstantiable" assertion, for the purposes of 1:imself cross­examining a P.S.A. witnes.s, turned out to be a mistake.

43.

44.

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There is no dou~t th';t "one of the gr~at values existing in practice in arbitration procedures" can be and normally is the_test~ng ?f evidence •••• and anyriiatters relevant to the <;1rbitration issues •••• by the opposing party." When the Judgment handed down after the procedures in no way reflects th.e "testing!' which has occurred, it is not the arbitration system which has failed but the holder of the office who delivers the judgment.

Under cross-examination Mr. Newman gave a number of other answers of tundamental importance to the P.S.A. case.. These answers ~ither bro1;1gl;t int? question the credibility of basic strands in the Adm7n7stration argument or, positively, gave support to the position put before the Arbitrator on behalf of the P.S.A.

Going fir st to tho s e answers which adversely affected the Administration's basic arguments. These arguments had ~onsisted of bald assertions from the bar table that any increases awarded by the Arbitrator to local officers in the public service would necessarily permeate into urban private employment and the plantation industry and that this must have adverse economLc repercussions, particularly in regard to the plantation industry.

At pp.2900-2901 the following questions and answers occurred:

"~elatin$ to your propositio1; specifically of the rural industries, you are not .saying of course, are you, or are you, that the granting of this application in full by the Arbitrator will necessarily have any adverse ~£feet at all on the future development of plantation industry. You are not putting that are you?----- No. I could not argue that precisely.

Let me put it this way - you are not aware yourself of figures which would enable you to argue it, and you are not aware of any figures which would enable anyone else to argue it?------ No, I am not aware of any."

At p.2904 Mr. Newman gave this answer to the following question:

"So your proposition to me, iu-.Newman, is that you ag~ee with me. You cannot think of any areas of urban private employers who would be significantly embarras­sed by having to pay an increase in wages for their indigenous employees'.?----As a general statement, yes.fl .

45.

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0n this point it is interesting to note that the Territory Treasurer at p.2907 said that he had no_reasonto ~isagree with a statement by Dr. Brookfield in his chap~er Problems of Industrial Developmant" in the book "New Guinea on the Threshhold";

"Development is impeded by external ~actors - the overwhelming economic control exercised by a few large Australian firms, and th~ relucta1;ce of these and other companies to invest in a territory whose political future is uncertain .. "

Mr Newman's answers at a number of points provided strong su;port for f undamental propositions in tha P.S.A. case before the Arbitrator. At pp.2910 - 2911;

"On this question of salaries too while wear~ still on that, I suppose one justification f?r an incr~ase in salaries you would agree, in economic t~r~s, is that it would be normal to expe~t more efficien~y, greater application and dedication to the task if_ the person in receipt of the salary was conten~ with h is salary rather than discontent'.? I_think this would be a theory one would go along with.

And in the case of the Public Service you would go along with that'.? -----Yes.

Also on this same point, Mr •. Newman, you wo1:1ld agree with me and with the authorities on the subJect that in a Territory li.ke the Territory of Papua and. New Guinea a strong efficient dedicated.loyal public service is a sine qua non of economic development'.? · 'les • ." •

At p.2913:

"You readily agree there are a number of directions in which additional revenue could be raised'.?----- Yes .. 11

(This question and answer related to the raising of revenue within the Territory.)

At p.2925:

"I think I understand what you are putting there. Perhaps it does not need expansion but weuld you explain exactly what it is you have in m1.1;d'.?-----­What I am saying is that here we have a different

t ( .

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community from the community in Australia. The aspirations within the different sectors of this community are related I think to their observations · of the overseas officer. Therefore as they become more susceptible to differences in this sort of thing, so the aspirations are so much · more marked. ·

And you are saying unequivocally this is something the Arbitrator ought to take into account'.?----'les. ··

May I preface this question I am putting to you by saying that I am not expecting you to understand every detail of the application that we have developed for the Arbitrator, but on your broad understanding of the sort of approach we have adopted, you would agree that the way we have made our application fits in precisely with the• sort of thing you are saying here in that we h.ave at the base argued in relation to needs and then as we proceed through the salary scale we have. suggested to the Arbitrator that he have regard to the relativities with the European salary and that the · further you go up the scale the closer the relativity should be. You would agree that approach fits in precisely with the sort of tM,ng you are saying here'.? -----Yes, as · a principle applied to that Prescription, yes." · ·

At p.2927;

"And you would agree that not only in regard to the stage of the development of this Territory, there are other factors which quite markedly distinguish the situation dn the Territory from that in any other underdeveloped economy which readily comes to mind. For instance, the nature of the relationship between Australia and the Territory would be unique'.?-----I think that is a fair

· description.

And this of course impinges directly on this issue we are talking about , about what is appropriate to be done in the Territory .. Io take into account when you attempt to make comparisons with other countries we ha-.;re in the forefront of our minds the facts which distinguish this Territory from other underdeveloped economies, otherwise we will not be making an accurate analysis'.?------ Yes.

46.

47.

_33 .:.

And going to the unique relationship between Australia and the Territory you would agree with me quite readily I think that Australia in its own self-interest, leaving any altruism there maJ be in the matter, has a very real stake in the peaceful and orderly development of this -Ierritory?-----Yes.

And looking at it in part j ust from the defence point of view, a peaceful and settled Territory developing in economic terms and moving towards political independence is also something which is very much in the defence interests of Australia?-----Yes.

At p.3049 after listing, in answer to a question about the repatriation outflow of cash as against the inflow in the form of Commonwealth grant, the forms of such outflow i£ Australia, Mr. Newman said in answer to this question:

"Again, Mr .. Newman, I appreciate that you cannot quantify this sort of thing but you agree, I imagine, if anyone looks at these sorts of categories, it would be seen there is a very substantial flowback?----- I think that this would be an accurate statement.

As far as the j udgment of the Arbitrator is concerned this ''great value existing in practice in arbitration procedures", this "testing of evidence and,. .• matters relevant to the arbitration issues!' as with other witnesses, might as well never have occurred with Mr. Newman. The j udgment makes no reference to the foregoing answers obtained from the witness in this "testing'' process which the Arbitrator alleges at the outset he considers "one grea,t advantage of proceedings in a 'contested' arbitration hearing". · The answers dealt not with peripheral matters, but with issues basic to the positions of both parties before the Arbitrator. His performance in ignoring what happened in this process of "testing" literally makes nonsense of his own assertions about the great virtue of the process and is incompatible with the standard of conduct required under Section 9 of the Ordinance.

The answers of Mr. Newman at p.2927 (para 45) confirming the real interest Australia has from a defence point of view in the peaceful and orci_erly development of the Territory serve as an introduction to another illustration of the Arbitrator's inadequacy. In the opening submissions for the P.S.A. the advocate at p.1993 introduced Exhibit DD which is reproduced on the following page.

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-34-

· d by the submis­hibit was accomnam.e The introduction of th~ ext concerned to criticise a~ such, sion' •that "the P.S.A. i~no the Australian Government in tt. h~h t

. ndi ture on defence y . o " The argument was pu ~ 1:f;itory of Papua and New Grn~\958/9 when what was spent ~nd

he exhibit showed a change rone er cent of what was expe1; e ~efence represented l~s~ t~~~ ~udg~t for schools, roads,_b~itrs b way of direct gran ? h in the most recent r>erio_ a~d the like to a situation_w e~i the P.S.A.'s reply-.)_ While

38 6 per cent (at the time of Australia is in many was • bt that the presence . th t in there was no dou · · t of the reality is a respects altruis!i?, anotheff~f~terests of secur~ty it h~~ a terms of Australia s own_se . . in the Territory. l e vested i1;tere~t i7yw~~tu~!u~;~i~~~n~s~ertion fromTt~e ~fh!;~; e P.S.A. did no . re 1 nt portions of Dr. : · but put in evidence the r; evfm part Dr. Millar said: book "Australia's Defence • ,

. tile hands would make attacks "Eastern New Guinea in bossier - Port .Moresby. afte~ all, on our east coast much ea . is and would seriously is closer to Sy~ney thandDa~wi;oute.; to the north. endanger our shipping an air

d difficult though it may be, It thus seems that, costly. ~01. ty that the. island of New so long as there i~ a p~~sih~n~s of a country o~ poten-Guinea could fall into ~ Australia it is in our tially hostile intent againsi ortio~ remains defended. interest to see that the ea; ~~~e~by is as vital to This is not to say that Porin mili ta,ry semantics, Papua. Australia as Port Kembla~. l' t the defence of Australia, and New Guinea is 'essenf~aloseoit and fight on, but we but not 'vital'. dwef co~ greater difficulties." would fight on un er a

. . drawn to the considerations held From this point attenti~n '.'.'l;~ificant in ensuring that.de~e7ce b Dr. Millar to be mos_ si ould have the most meaning u eI enditure in the Territory w . . zed that the authorstressed, ch~nce of success: It '.'.'las emphasititude of the lo~al pr;pula­as the first consider~tionf,t~~ef!~tors going to this primary t . At p 153 he said o • ion.. • consideration;

· 1 policies of the d th economic and socia -h "The attitu es, e especially relevant. le . Australian Governmer:t a.re eared ill-informed, apat~etic, Government has at time~ appf ·tuations in the Territory. or unwise in its handl:ng o sid learned nothing from 18 One would sometimes th:nk we h~l and the Fourth ·Committee years in the Trusteeshif ~~un~~partment of Territories or that the left hand o . . e i ht hand of the. Department acted independen!lY o\t~~ !x~colonies are situated.a of External Affai~s. o . metropolitan ruler. It is long way from their former .

-35-

important to remind ourselves that when Papua and New Guinea becomes independent, in whatever form, it is going to stay where it is, a few miles off the coast of Queensland, closer to the mainland than Tasmania is. The closest Australian island to Papua and New Guinea is actually only a few hundred yards off the Papuan coast. When we cease to administe,r Papua and New Guinea, it will be our nearest neighbour."

The Arbitrator was reminded of the evidence from the earlier expert witnesses supporting the proposition that local officers in the public service constituted the most significant body of opinion-formers in the Territory. It was argued therefore that the evidence from Dr. Millar ta ken in conjunction with this othe.r evidence constituted another compelling reason in favour of the granting of the P.S.A. claim.

. 48 . The Administration 1 s "reply" to these submissions should be

noted. Counsel quoted from the Trusteeship Agreement to establish that Australia can taJ~e steps for the defence of the Territory - something which was not in issue and formed no part of the above submissions put by the P.S.A. Then counsel for the Administration said, at p.3276:

"Many people take a different view to Dr. Millar of where Australia's interest lies in regard to defence •••• "

The Administration, however, made no attempt to give any reference whatever to any authority which took a different view to that expressed by Dr •. Millar. Clearly this was an issue which, in terms of the Administration's very final submissions. (para.4) went directly to "the realities of the political situation" and therefore called for assessment and decision by the Arbitrator, as anything which "ignored" these realities should be rejected, In its final reply the P.S.A. emphasized that the approach by the Administration in the matter constit­ute.ct nothing less than contempt of the Arbitrator. At p.3495:

"Again, Sir, I want to look at this in some detail with you, and I will submit to you when we have done that, that again the Administration, in respect to these important considerations, has treated you with what can only be described as contempt ••••• Sir, if again in an arbitration in Australia you had this situation that an applicant party had come before you and put as an important strand in its case that a certain consideration spelt out by an expert showed that their claim should be granted, and the evidence of the expert was put before you in written form, and the submission of the applicant was spelt out in detail - if you then had a .respondent coming along and saying this to you .: "Well, the evidence of the expert is before you. There are many other people who do not agree with him," and it was left at that, you

49.

50.

-36-

, t Sir would say to that respondent: again, with r .espec , , h t ke a "You cannot treat me like that. I ave . o ma decision on the ~ubs!:n~i~~ ~~!i~s0 ~{ ~~e/!~~a~r~t~ sib~y. The a!t~~~!n~onsideration, and again they have their argumen t and the best you can alluded to_evidence oflange:~~rs;y many people do not do for me is to come a on agree. with that expert•"

"th ct "I cannot You, as an Arbitrator, would say~a~~ a ~!~l:io~ on the be treat;d like. that. I c~nnot if that is all you can ~o" substantia~ m;rits o~ t~e c~s~ the Administration did in and yet this_is pretc;se yfwo~r submissions on defence." regard to this ques ion o

_· dm " . t t. on was right in assuming However, the respondent Aldi~~ss~iftcient for this Arbitrator. that_su~h an approach wou . the merest resume of the In his Judg1;1en! at p • .4~hJ:ie gii~!r and makes no reference ':'t P.S.A. submissions on is_m':' . 1 to these sub:nis-a~l to the_lack ~f any tdmin~n~r~~~nf~~pthis Arbitrator, the sions. While this may_ e_su _ .. t f nyone concerned P.S.A. cannot believe it is suffi~~e~he ~afity of an independ­wi th maintaining the. appearance a . ent arbitration system.

CONCLUSIONS

. d dent industrial arbitrator Parties appearing before an in ep!~11 be treated as equal are ;ntitled to expect_that they ect that there will be n~. parties. They are entitled to exp. rator towards the position predilection on the part~~ th~harbitThey are entitled to expect of one party rath~rdthant ~ olde~iow from the proceedings and in turn that the JU ,gl!1en sou . ·n those proceedings, on '-reflect the way in which t~; parti~~~e~ed or not in establish­the record of those proceet;ngs su_tions adopted by them. The ing support for the rlespfef~- iv: ?~!~e does not so reflect the judgment in the loca o icer . . record of proceedings in that case.

h lmingly discharged the onus The P.S.A .. on th; record, ove~w ;-tnesses including independent of directly calling a range O wi oint the substantial expert _~itnesses, t~ supportta!, ei~~yc~aims made. Those claims submissions put ?Y it to sus aines onsibly) delayed so that in fact were deliberately (and rthp . reflect . the evidence so they would reflect, ~~d no 1;1~r:sse:nwere either unchallenged calle~ in s':1ppor\ h ;se W;d~nce or, if questioned, emerged at maJor. poin~ds o t. euc:-h~!~ unscathed or strengthened. with their evi ence-in- ~

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51. The Administration, on the record, ·failed comprehensively to ma_tch the P.S.A. · performance. The witnesses called were in no sense independent and expert in Territory affairs. Putting that factor aside, however, the evidence of these wit nesse s was either destroyed, shown to be without a reliable basis of support, to be inconsistent with basic submissions put on behalf of the Administration or to provide substantial support for bas.it submissions put on be.half df the P.S.A.

52. The judgment of the Arbitrator utterly fails to reflect or distinguish betwee.n the undistµrbed support received by the P.S.A. on the one hand and this performance of the Administra­tion witnes~es on the other. Fo_r all the judgment indicates, this "great advantage. of proceedings in a 'contested' arbitra_tion •• • this testing of evidence" never occurred and certainly did not occur':i_n a way more favourable to the case of one pa.rty rather than the other.

53 . The Administration either did not produce any witness in support of propositions basic to its case before the Arbit rator and saw those propositions destroyed without effective challenge by expert P.S.A. witnesses, or produced witnesses who failed to substantiate such propositions - or worse, from the Adminis­tration1s point of view, who positively gave answers damaging to the se propositions.

54. Going first to the one of the two propositions basic to the Administration's case, in respect of which it called no witness in support. The two propositions were outlined in an exhibit tendered by ~he Administ_ration at_ the_ very outset of proceed­ings (p.10) i)l. justification of its approach to salaries of local office;i::s. At p.2 of the exhibit it was said:

"It was not a question of equal pay for equal work but a question of the capacity of the country to pay and a question, too, of social equality in t he i ndigenous community in that it would have been bad for the Government and bad for the local community if public servants were to be made a more highly privileged class than any other local citizen~ 11

No expert witness was called by the Administration to give evidence directly on this latter proposition. In direct and unshaken refutation of the proposition there was the expert evidence of Professor. Parker ( p .1658 - see para .15) and Professor ·Lawrenc.e (p,.1731 - see para.17). This expert evidence was confirmed by .the evidence of Mr. Lepani Watson, an indigenous elected member of the House of Assembly and Under-Secretary for E_conomic Affairs , as the fo l lowing passages at p.703 indicate:

-38-

"Well, if you take. a ,ma91 fo:r;. example, a .District . Medical Offfoe'r,- and he was on. a s'ala;r:'y ,'.ot' 'say:; fci'r -exampie, .. £3,000 and lived -_ in the manner· 'of a:n · expa'triate ·, officer, if ·he was .re'sident in · Saqia:tai · iri . your electorate, moved around and lived according to that· salary scale,· do you think ·a District Medical Officer would find resentment in your area hecause: ·of his standard of living? ---- No, I do not think so. The people lo'ok at him according .to what he does and how he lives. ' They cannot do the work themselves but they accept that he is doing something to help them and he is earning what he. is getting.

If you went lower down the_ range and took a local officer Patrol officer and he was living at a standard that would be . about £1,400, the same as a European standard, do you think the people would resent the local officer Patrol Officer here because he was on a higher standard of living?----- As I said earlier, it depends on himself. If he becomes too proud and gets a higher salary and tells people to do things and pushes them around, he would create ill feelings .. But if he could humble himself to the people. he lives with and they see his work and he convinces them that he is their helper and is not there to be i 'Taubada'."

The expert evidence was also confirmed by many local officer witnesses who explained to the Arbitrator the identification of their people with their salary aspirations in terms of a decent relationship with their, Europ.ean counterparts. And, most compellingly, the e~pert evidence was completely con­firmed by the cont~ibtitions of a wide. range 6f indigenous elected members ;i.o. the House of Assembly de.bate on this issue in January 1965. · Before reading from the record in Hansard of these. contributions, the P.S.A. advocate put to the Arbitrator:

"I am not pretending that I am reading everything from every speech of the. local elected members. · I am going to certain points where ·they show their identifications with the cause of local officers, and also going to points which show that they are · representing, as far as they understand it, the point of view which they have found to exist within their electorates."

The contributions of these members were then read in some. detail into the record of proceedings before. the Arbitrator and it is beyond question that those ,. contributions corriplete.ly founded the submission then made:

55.

56.

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"Wheri it is a matter f · · 0 - .. , . Administration which h~s ar 1 t7a~1.on, whei:i t~at_. ve~y the field of arbit t· . prec1.p1.tated this issue -1.nto 'You, Mr._ Arbi trat~: l.~~s~omes a~on~ to yo1;1 and ·:1ays in this matter . : · as a as1.c cons1.derat1.on to 10, ooo· odd · pi~~f~1. !!r~!niours~ltfhas doin~ j1;1stice people of this T · • · s an e two m1.ll1.on equilibrium in t~~r:!f!l- by a_9hieving some sort of servants and the imputed ifns_hip be.tf. ween these public they are lite.rall . . . . ncomes o these people', reflected in that y v::t1 ~~b n~nsen;e ~f w~at has been 'We will go to arbitrati~ -~ e ou O ~hi.ch they said, without any question witgo~tbecaus~_1.n that very debate representatives of the ·· exce.p 1.on, what the not that justice will b~e~~*= ~f thf I':,rritory say is of local office.rs to those v· 11 y re a ing the salar_ies of t he people of the Ie.r ·t l. age people, · to the rest is not what we say. Whai1. ory; ~hey wer': saying Jihat be done in this matter if ;e s;yJ 1.s that JustJ..ce can only that our local offic s. ou . a<e ~ccount_of the fact in a multi - racial pu~icl.~eth':- public :1e.rv1.9e are working appropriate com arison to rv1.ce, ?ne in which the of local officeis and th . be rna?e is between the salaries whom they are working." e salaries of the people alongside

~he position, on the record f d. . issue, could not be clearer o Oprocee ings in regard to this puts a proposition as one of . ne party•. th~ AdJ?i1:istration, its stand before the Arbit ±the two basic JUst1.f1.cations for to give evidence directly f~ ~~P Ii P?f~ced no ex.pe~t witness other party, the P.S.A. od . por o_ . at prop?s1.t1.on. The of evidence including exf~rtuc':-f the widest 9once1.vable range the Arbitrator on the o .w~ nesses who ?1.rectly addressed and uniformly demolish~d f~!1.t1.on. _T~at evidence consistently ment of - that Arbitrator · wh pr~pos1.~1.on: ~nd yet the judg­issue:' between the parties ~i~ ~1:ct1.on !t 1 :1 to decide the conscience and the sub t . or 1 1;9 to equity, good de.<:3-l with these facts~ s f~t::} m7r1.ts of the cas.e", does not a Judgment on the basis of th using ~o iace them and.formulate the Arbitrator has clearl . e recor _o the proceedings, visions of Section 7 and f n~tthactoe_dd~n ac_cor( dance with pro-

. o . e r 1.nance para.l). -In regard to the Administ t· - , • which sought to justif ifa ions other basic proposition economic considerationr i; J~dnd fffore the A~bitrator on mentioned above. The w~akn 1 ca the t~o witnesses support provided for fundam!~;:f of the fv1.dence and/or the of the P.S.A. has alread b . ar~umen s advanced on behalf important exam le s y . ee_n outlined. One basically 1965 modificatlons f~ui~ebfosties;:?• In announcing the July the Arbitrator, counsel for ~~e Aod ~c~rtsatl~ry st~ucture to

. m1.n1.s ra 1.on said that

57 ..

58.

-40- .. .

external financial assistanc.e to the Territory would. have to grow "merely to. provide pasic essentials f9r economic development". (p.568/600). The.answer <;>f Mr. Newman at p.2?11_ (para.45) should be appreciated in the light of that submission'.

"On this same point, Mr. Newman, you_would agr~e with me and with the authorities on the subJect that in? Territory like the Territory of .Papua an~ New G';ine~ a strong, efficient, dedicated, loyal public _ser~ice is a sine qua non of economic development?-----Yes.

The whole body of evidence before theArbitrator,_not merely from local officers the.mselves but reinforced by independer_it witnesses, indicated that the achievement of ":"hat the Territory Treasurer agreed was a sine qua - non of economic development depended upon the granting of salary levels and a salary structure of at least the order claimed by the P.S.A. But again the judgment of the Arbitrator avoids these facts.

In contrast to the avoidance of these matters the Arbitrator says at p.82 of his judgment:

"The aspect of the relativity or balance be~weer_i the various minimum wage rates currently applying in the_ public service, urban and rural sectors an? the possible earnings from cash crops in the large su1?sis~e1;ce sector, of the Territory com..'Tlunity and the undesira~ility of impeding the growth of agricult';ral pr<;duct7oi; and empl<;Y­ment by undue increases in puplic service minimum.salaries which may influence successively the_wage level;: in the other sectors, are also fully recognised by me. (our emphasis) •.

These were issues that had been deal! with particuia~ly ~n the evidence-in-chief of the Administration's two_econom7c witn~sses. On the one hand th.e "equilibrium" theory of Sir Lesl7e Melv7lle ha·d under cross-examination, been shown at every point of its dev~lopmant either not to be in accordance with the facts or to depend upon unsupportable assumptions: Or_i the_ot~er hand the Ie:r::ritory Treasurer, under cross-examination, ir_idic?ted to the Arbitrator that he could not say that the granting in full of the P.S.A. claim would have any adverse effect upon the planta­tion industry, nor was he aware of any figures that would enable anyone so to argue.. ( see para.44).

In other words the only matters "fully reco$nise~•• by t~e . Arbitrator in his judgment are matte.rs put.in evJ.dence-7n-chi~f, but which in fact called for an entirely diffe.rent consideration by the Arbit~tor after what he describes. (p. 7) as ''one !}:teat advantage'! of arbitration, i.~ the "testing" of such eyide~ce­in-chief. That "testing" is not only not "fully recognised -it is not recognis.ed at all in the judgment. In the.se

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circumstances it is 'an utter mockery for the Arbitrator .to say:

"This testing of evidence by the opposing party is one of the great values existing in practice in arbitration procedures."

59. Th~ Arl;>itrator's performance in this respect is rendered more obJectionable by observations made at p.44 of the judgment. One of the Administration submissions had been that public service salaries should not be fixed at levels which would unduly ~mbarrass private enterJ?rise. . While therefore not attempting

60 .

in any_sense to make this a maJor part of its case (a fact recognised at the same page by the Arbitrator) the P.S.A. produce~ some evidence to support its submissions that private enterprise was prepared to pay for what it wanted and this factor suggested by the Administration should n'ot inhibit the Arbitrator from granting the cl.aims made.. The Arbi trato.r commented on this evidence, at p.44:

"The evidence on this aspect was fragmentary and unsatisfactory in many respects."

It is a matter of no moment whethe;r; that was a cor;r;ect assess­men~ or not. What is important is the preparedness of the ~b7t;r;ator t<; address his mind in the judgment to the relia­b.1.lity of evidence on a matter quite subsidiary to a party's 1:1ain submission and his consistent refusal to do the same thing in reg~rd to_t~e matters put befo;r;e him by the parties as basic to the.1.;r; positions. If h.e had be.en prepared to do this and to act on the record of proceedings he would have been obliged to say, at the ve;r;y least, "the evidence. on these. aspects was f.ragmenta;r;y and unsatisfacto;r;y in many :respects." The record would ~.ave :required this but the Arbitrato;r; avoided the problem by saying nothing at all.

The unacceptability of the Arbitrator's approach ;r;evealed by the above considerations is further compounded by his obser­vations at p.56 of the judgment:

"The Association, in adopting the approach of local officers' salariesbeing assessed as a percentage of compa;r;able overseas salaries, ran into considerable difficulty_." (our emphasis). ·

The Arbitrator explained that because of the great variety of ov~seas rates and inc;r;emental ranges the adoption of the P.S.A. claim~ ":"01;1ld mean some_considerable changes in existing relativities between different local officer classifications. He went on :

61.

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"Io my mind the Association approach in its endeavour to es~abli~h and mainta~ri for the future any set relationship to Austrah.an. sala:ry scales is quite

.unjustified in the circumstances of the present state of development of the Territory Public Service. I fully . ern;iorse what was put to me on the general salary structure for local officers by Mr., Wootten for the · Administration." (our emphasis).

After then quoting at length from the Administration submissions the Arbitrator said (p .58 ): .

"Apart from certain specific cases, which Mr. Wootten referred to, I agree that there was no .evidence on which I could act to alter exist in relativities between salary ranges of local o icer classi ications." our -· emphasis ) · . .

These. passages from the judgment at pages 56 and 58 can only be said.to represent a complete perversion of t he record of pr?ceed~ngs . (Let it be understood that attention is simply being directed here to the relationship between the judgment and t he rec.o:rd .- for these pi,4-poses the merit of the P.S.A. approa~h ca.n be put to one sfd1; ) . T~e Arbitrator says, in embracing completely the Administration approach on this issue that he agrees there was no evidence on which he could act to ' alter existing relativities. Put aside, if it is thought to · repres;nt a vested inte~est in the outcome of t he proceedings, the evidence of scores of local officers. What was the evidence ?~ ~.rofessor Pa:::-ker, Professor Lawrence and Mr .. Fenbury about if it was not directed to the very issue of the absolute necessity t o re.late the salaries of local officers to the rates ?f their_E1:1r?pean counterparts - with some consequent changes in relativities between local officers that this •would necessarily entail? Using the language of the Arbitrator at p.56, these witnesses gave compelling evidence that "the circ:imstance of the present state of development of the ~errito~y Public Service." which not merely "justified" but, in the interests of the Territory as a whole and Australia's relationships with the Territory, de.mantled the implementation of the approach adopted by t he P.S.A. was the fact that t he Territory Public Service is and would ·continue in the foresee-al;>le future to be a mul ti"-.tacial public service. These · witnesses detailed the implications of this fundamental " c~rcumstance " and were unshaken in the "testing" of their evidence.

While ~hese witnes~es,.as already indicated, did not . attempt t<; nominate authorita.tively, .rates for particular classifica­tions t~ey were unequivocal in their conviction expressed .to th~ Arbitrator that the. basis o:f fixation should be a relation-s.h:i,p to the European ;r:;ates fo;r:; the · same · classification. · · ··

62.

-43-

Independently of each other they suggested the order of the progression most appropriate in the 11 circumstanc1;s 11 of the Public Service in particular, and the Ierritory_in ge~eral: This .evidence, vie.wed conservatively and taken in conJunction with the othe.r vast body of evidence p:toduced by the P.S.A, provided the very basi:s fot the salary structure then formulated by the P . S.A. before the Arbitrator. It was congratulated, on the record (and in ·the judgment ~or what this is worth in fact) for delaying its claims until the evidence had been presented. Incredibly it is then told by the A-r::bi trator that he has no evidence on which he. could move to adopt its approach!

The utterly bewildering paradox of this section of the judgment, however, is the fact t hat it was the Administration which produced no evidence in ·the form of witnesses who cqµld be "tested" insupport of its approach on t his issue • . The Arbitrator found this no problem however; He · was coJ)ten~, as ·. the judgment shows, "to fully endorse" what was put to him from the bar table on behalf of the Administration. The Arbitrati,.,, · completely ignored the fact that the Admini stration I s own witnesses in varying degree had endorsed the approach made by the P.S .A. The endorsement given to this approach by Mr. Newman could not have been more explicit (see p.2925, para.45.) Sir Leslie Melville asserted the relevance of a closer relation­ship to European rates for local officers h<:lding se~ior· positions (p .2551). (Incidentally, the Arbitrator virtually granted in full the P.S.A. claim in respect of these top . positions. The claim for these positions was based on precisely the same evidence as was the P.S.A. approach for the low-er classifications. But in respect of those classifications the Arbitrator said he. had "no evicience" on which he cou~d act to alter existing relativities - despite the fact that in the very ±op i:l-:Pe.a,s where, somehow, presumably? ~e di~ have evidence;·' t ):1ere. are no holders of the posi t;ons in 7espect of . which he granted the claim~) Perhaps most interesting of all in this regard was the evidence of Mr. L.W. Johnson_. Originally Mr. Johnson, then ·Director of Education, was called in Dece.mber 1965 as a witness by the P.S.A. In the course of his evidence then, Mr. Johnson said:

"I don 1't think that the salaries of the senior positions are sufficient to permit a reasonable degree of social admixture between local and overseas officers and to permit of -satisfactory status in a community which is strongly influenced by Australian patterns of cons~mp­tion .and behaviour~ If the simple procedure of using a percentage figure of overseas salaries were ~dopted, I should say that the percentages used for senior . positions should be greater than th~t us~d fqr compa~able base grade positions. .

63.

64.

-44-

r don't know whether this is clear, Mr. Arbitrator. If you struck a figure of 50 per cent for your lower range salaries I think you ought to think of 60/70 per cent for your upper grade salaries." ·

.Mx. Johnson was subsequently appointed Assistant Administrator (Services) and was called as a witness by the Administration. He gave evide.nce primarily in regard to matters concerning education but in cross-examination conceded that the method of relating salaries for local officers to European rates was one method of fixation although he wasn't then advocating the method before the Arbitrator. · If the method were employed it would be appropriate to increase the relativity progressively throughout the classifications for local officers.

Again therefore, the position could not be more clear-cut. The Arbitrator not only in his judgment misrepresents the record .of proceedings in saying that there was no evidence on which he could act to alter existing relativities. He compounds this mi•srepresentation by accepting without question, witho·ut evidence in support, and against the body of expert evidence upon which the P.S.A. approach was explicit~-Y . based, the submissions from the bar table of the respondent Administration.

At p.7 of his judgment the Arbitrator said:

"The very concept ·of arbitration - the challenge or 'appeal' thereby possible to be made to an independent authority established by Territory law against decisions of the Government itself - must be strange to many local officers. I hope that the publicity given to these proceedings duripg the case has brought soma appreciation to them not only of the nature of the proceedings but the great range of impo:rtant issues calling fo:r consideration · in the case. 11

• The actions, approach and judgment . of the ·Arbitrator do not sustain the proposition that "the v.ery concept of arbitration -the chall.enge or 'appeal '· tl)ereby pqssible to be m;J.de to an independent authority e_stablished bY. Te:rritory law against decisions of the Government itself" has, in fact, been possible before him. ·

65. Certain evidenceheard in camera when the -Treasurer was in the box completely supported basic submissions that had been put to the Arbitrator on behalf of the P.S.A. It also, in ' concrete terms, emphasized the unreality of vague gene:ralisations ·put by Si:r Leslie Melville' and submissions from the bar table on behalf of the Administ:ration .. . That evidence may not be available fox general review. Howeve:r, the whole record of the proceedings,

66.

-45-

other than that evidence, is available. Most of the proposi­tions contained in this memorandum are put in quite definite terms. It is believed that the evidence adduced in the memorandum clearly supports those propositions. But there ~an be no substitute for a careful reading of the whole t:ranscr1.pt of proceedings and consideration of the exhibits tender~d • We are confident that if this task is undertaken by an inde­pendent body of the type requested the val~di ty of the . . propositions asserted in this memorandum will be established beyond question.

Finally, it should be understood that this is not merely' the . memorandum of a party seeking to appeal against a decision . in which it is disappointed. That is, of course, invo~ved., ·· But the issue is more fundamental. The concept ?f arb1trat1on is at stake. It is nonsenie to talk, in these circumstances~ about "acr,epting the decision of_the ':1mpi~e": ~t ~s inco1;­ceivable that in the Fede.ral arbitration Jurisdiction an issue of this magnitude would not have been heard by a reference bench of at least three members, of the Commission. Certainly, had it been heard by one man, the appeal, procedures would have been open and would have been availed of. Th~ single man entrusted with handling this case has proved inadequate to !he task in terms of the requirements of the Ordinance under which he acts. Why this is · so doe.s not 1;1atter. It is. not ~ecessary to question whether the man acted in "good con~cience. That alone. is not enough. No one should have anything !o fea.r from having this matter heard again in the way it certainly would be heard in Australia. Everyone should have very much to fear if the concept of independent arbitration becomes a m?ckery in the eyes. of the indigenous population of this Territory•

-s JfJN 19 GE"

Melbourne, Vic.

EDITORIAL LETTERS

Thursday June 8 1967

NG pay rates JF there were any doubts that resentment

of the recent wage award to Papua­New Guinea native public servants was widespread, a 1500-strong protest march in P.ort Moresby has settled them. Saturday's march was the native community's most impressive display of spontaneous feeling. The marchers were uninhibited by the frowns of the Administration, and readily abandoned any reluctance to question the white man's wisdom. They were proof that the articulate New Guinean elite has the ability to ·muster popular support if the grievance is strong enough.

The Minister for Territories (Mr. Barnes) claimed in Canberra last month that criticism of the Public Service Arbitrator's decision was mainly from the executive of the Territory's Public Service Association. He obviously misjudged the depth of feeling. It is not enough for ~he Government to offer the benign assurance that it knows best. The Arbitrator's decision not to grant the full pay rises requested has offended a large portion of the native popu­lation, and for good reasons.

A rl\Cial distinction was established in 1964 when the structure of the public service was changed. Pay for natives was set at much lower rates ' than for expatriates. The Arbitrator's judgment perpetuated this unfortunate principle. Nevertheless, the disparity had been ac­cepted in the Territory long before he made his award. All the PSA sought was to have native pay rates increased substantially. The pittance handed out, in all but the top wage category, does little more than

compensate for increases in the living costs, and offers scant encouragement for natives to aim at higher educational standards. It was a bruising fir.st encounter with the vaunted arbitration system.

Since the decision, Mr. Barnes has said that the Government proposes to introduce a single base salary structure for all public servants, in line with the findings of a .select committee of the Territory's House of Assembly. He has yet to explain how this will be achieved, but it seems possible that the European wage will be reduced to native base levels. If it does this, the Government will be removing one injustice and confirming another. Expatriates will be fully compensated for any losses. Natives will derive little comfort from receiving the same nominal wage as their white col­leagues if it does not mean more money. For sound economic reasons, native public servants cannot be paid the same total salaries as Europeans. For equally .sound political and humanitarian reasons, native salaries must not be fixed at inequitable levels. Justice suggests the proper level should be from two-thirds to three-quarters of levels paid to Europeans.

Administering New Guinea presents the Australian Government with countless problems. Solutions will be found only if we enjoy the good will of the people. If this good will is destroyed, all the difficulties are compounded. Papuans and New Guineans have made their feeling strikingly clear. The Government should try to redress their grievances and avoid any measures that add to the pr~sent disenchantment.

From

"HERALD" Melbourne, Vic.

3

1S00 NG natives bo

over pay MARCH ON OFFICE

OF . ADMINISTRATOR From ANGUS SMALES •

PORT MORESBY, Today. - Pap~ans and New Guin-eans marched on the o ffice of the territory's admini,trator today demanding wage justice for native public servants.

Six hundred people star ted the march from a sports oval in Port Moresby but by the time they 'reached the administrator's office two miles away their .numbers had swelled to a shouting and booing 1500.

In a private statement to the leaders of the march the administrator, Mr David Hay, made it clear that he had little patiei,ce with the march itself as a form of protest against a public service grievance.

"There are appro­priate ways to seek re­dress on what you be­lieve to be a grievance," Mr Hay said.

day's march was or ganised by the Port Moresby Workers' Association and students' associations.

T he president of the Workers' Association, Mr Oala Rarua, told t he marchers before t hey left: "Keep it orderly. Your purpose is not to create a disturbance but to em- i phasise a protest." ,

CARICATURE I

Later Mr Hay told news­men that if experienced public servants who took part in the march were setting· the example for the future public service of Papua-New Guinea then they had assumed "a c:on­siderable responsibility." .

T he march was ctirecteo Placards carried by the against a recen t arbitra- marchers included "Whites 1 t ion judgment in which labelled superiors and native public servants blacks infer iors." "Blacks were granted salary in- pay the. same as whites for

,creases which fell far cjgarettes." "No confidence

)short of claims made by ifi independen t arbit r a- 1 the territory's· Public Ser- tion." "Take this mate -vice Association, we want our share or Com-

N t . . r . n t mon wealth grants." . a 1ve J?UO ic serva_ ~ o ne placalld ·showed a

,still get 1.ates av~ragm,,, caricature of the Austra­:only about . one-_thJrd of' lian-appointed public ser­those of _theJr white ~oun- vice arbitrator, Mr L. G. terparts m the same J_obs. Matthews, physically hold-

Top legal and political in" down two black men moves have already been wit h one arm. undertaken to upset the arbitration Judgment. To- There were no ·incidents.

although several traffic snarls occurred.

(Est. 1904) 'Phone: 67-51 33

Aust. Press Cuttings Agency Melbourne, Victoria

from

''MIRROR"

4 JUN 1967 Sydney, N.S.W.

.~ NG~ NATIVES ' PROTEST

PORT MORESB Y, Sat­urday. - About 2000 native workers marched through Port Moresby today in protest against their wages.

Nearly 100 police in riot wagons, cars and on foot followed the march over the two-mile route to the administrator's office but there were no incidents.

The Administrator, Mr David Hay, received a de­putation of four who handed him a list of de­mands.

The protest march was organised by the P<;>rt Meresby Workers Asso~ia­tion, the Territory Tertiary students Association and the local Teachers Associa­tion to protest against the recent arbitration decision which fixed wages for in­digenous public servants at about one-third of the corresponding wages for whites.

A member of the depu­t ation, Mr Oala-Rarua , told the marchers later that he did not think it would be long before the Government reviewed the decision.

At least four Europeans, including three young women, accompanied the marchers and scores of Europeans called out en­couragement.

rnone: O✓ -!> l ;s;s

Aust. Press Cuttings Agency Melbourne, Victoria ..

From

"COURIER MAIL"

Brisbane, Q.

JUNJ9fu"1 Diplomats l

POi:tT MORESBY I • (Special)• - The House of · Ass~mbly has askect Aus­tralm. to organise an embryo diplomatic oorpsl from Papua and New Guinea public serv,ants

The proposal calls · for; ~e appointment of

aJ?uans and New: Gumea~s as information and ~1a1son officers, · but attache~ to Australian Embassies, Postings in Oan_berra and at United Nat1<?ns are specifically mentioned in the pro sal.

....... ---Est. 1904

'Phone: 67-513,

Aust. Pre!!.,~!~!!~ Acenc, Frorn

11MORNING HERALD"

Sydney, N.S. W.

NEW GUINEANS MARCH IN PROTEST OVER PAY

More than 1,500 New Guineans marched through Port Moresby last Saturday carrying signs such as "Black Men Grow Poorer White Men Grow Richer," "Hell with $40" and "Down with Matthews." They were demonstrating against increases · awarded by the Territory's Public Service Arbitrator, Mr L. G. Matthews, on May 11. A handful of Europeans, including several women, joined the marchers who booed loudly as they approached the Administrative Headquarters, where they presented the Adminis-

trator, D. O. Hay, with a protest petition.

..

t SELECTIONS OF OPINION FROM THE

ON THE PRESS AUSTRALIAN

LOCAL OFFICERS WAGES CASE 1. Peter Hastings, "The Australian" May 12th, 1967:

''The long awaited arbitration decision on local officers salaries in Papua/New Guinea delivered in Port Moresby yesterday, must have sounded more like a prison sentence than a wages determination."

2. "Melbourne Herald" Editorial, May 15th, 1967:

''The aim may have been to set standards which New Guinea can maintain when it is no longer subsidized by Australia. But a scale which so sharply underlines the pay differences between Australian and Native public servants in the Territory seems a very short-sighted economy. In the interest of racial harmony, the Federal Government should review its award."

3. "West Australian" Editorial, May 16th, 1967:

"In terms of fair play the small pay in­creases given to native public servants in New Guinea are disappointing. Maintenance of a wide salary gulf between native and white of­ficers doing the same job is bound to bring increasing industrial and political unrest.

"Before accepting the new rates Can­berra should convince itself that the scale is the highest New Guinea can afford ... Justice suggests the proper level should be at 2/3 to 3/4 of levels paid to Europeans."

. 4. B. A. Santamaria, "News Weekly, May 16th, 1967:

"Wages in New Guinea.

". . . If the rates ( the Arbitrator) fixed are finally adopted by the Administration, the consequences in our relationships with New Guinea will be serious . . . There is a strong case for paying the indigenous worker between 2/3 and 3/ 4 of the salary payable to the white, granted that the latter has extra ex­pense in educating children back in Australia. The argument for this is, however, not econo-

9

mic but purely a political argument, founded on the need to convince the people and par­ticularly the future rulers of New Guinea, that we do not discriminate according to colour."

5. "The Australian" Editorial, May 18th, 1967:

"More than a Question of Money.

"In describing the Arbitrator's wages de­cision in New Guinea as an "umpire's deci­sion", the Minister for Territories, Mr. C. E. Barnes, has perhaps unwittingly used one of bis characteristically unhappy phrases.

"The year-long local officers' wages hear­ing in Port Moresby was scarcely a game whose participants would, at a blast from the referee's whistle, happily return to work. It was a deadly earnest exercise in po Ii tics in a country for which we have a special respons­ibility.

"The Administration knew this only too well in the presentation of its case. It is doubt­ful that the Arbitrator, Mr. L. G. Matthews ever understood it properly . . . '

"The decision was at best an unhappy one as the volume of protests from local officers religious organisations and not least the Publi~ Service Association testifies. Politically it was unwise as well as ungenerous."

6. "Nation" May 20th, 1967: ''The New Guinea Public Service salaries

case had been historic-until Mr. Commis­sioner Matthews handed down bis decision last week ... In July, 1966, while Mr. Mat­thews was purportedly listening to a critical examination of the "reconstruction" the Ad­ministration demonstrated to him that its hearts were not devoid of charity by granting addi­tional family allowances and by reclassifying jobs WITHIN the scale for "local officers". This announcement, Mr. Matthews says, "en­abled the hearing to be completed and this decision to be prepared with the knowledge that the personal attention of many present local_ offi~ers had been ameliorated. The July mod1ficat10ns transformed the hearing."

e Continued next page

e From previous page

"In other words, the burden was taken off his shoulders. How come that a critical examination of principles is superseded by a few concessions made outside the hearing? This equation of arbitration with conciliation can be plausible only to one who sees his job as that of cooling tempers which have become unnecessarily frayed, one who equates the establishment of an institution in a new country with a minor dispute in an Australian factory or on a building site . . .

"To those of us in Australia who are not affected by the rates of pay set by Mr. Mat­thews, the true failure is an all-too-evident inability to come to grips with the issues, though Mr. Matthews says he has made a conscious effort to enter mentally into a novel situation. A number of opposing arguments echo through his decision, but he is unable to see which of them has force and he tries to square these opposite views by the vague asser­tion that "the task resolves itself into an act of judgment in a social context".

"As far as setting actual wage rates is ,;. concerned, Mr. Matthews rejects the idea that ) wages should be separated into a "basic wage" and "margins" components on the anachro­nistic grounds that the Australian Bench is moving towards a "total wage" concept. He rejects the suggestion of the Public Service Association that there should be some rela­tion in the relative pay of the jobs of "local officers" to the relativities in Australia . . . but he arbitrarily decides not to take into consideration the cost of clothing and other items. How the devil does he find any sort of criterion to help him fix a matter in dis­pute?

"The job required a fearless mind with a cutting edge to assess the relevance of the arguments put to the Public Service pay struc­ture. On his own admission, Mr. Matthews was not that man; "I consider it proper to adopt a cautious approach, in view of the great number of factors put to me as requiring consideration"." e Continued next page

r·············~·····························._.·~ ► ◄ ~ the ~ ~ great Escape Torana ~ ~ Sporty new leader of the ~ ~ low-price field a beautiful ~ ~ break with the past : ► ◄ ► ENQUIRE "NOW" AT ~ ~ LAE MADANG PORT MORESBY GOROKA RABAUL :

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t e From previous page

7. "Bulletin" May 27th, 1967: "Taking a Non-Rise.

"Territories Minister Charles Edward Barnes must sometimes wonder whether it would not be easier to return to raising horses

... In 1964 the Commonwealth Government spelled out its basic philosophy toward living standards in New Guinea in its now notorious ordinance; local officers would have to learn to live at a level which a future independent New Guinea could afford.

"This ascetic attitude aroused consider­able criticism then, not on economic grounds, but because it created acute political pro­blems. Racial tension could only be exacer­bated by a gulf between local and expatriate wage levels. ·

"The present 'increase' could hardly have been better designed to add to the tensions, making local officers ask who is 'taking a rise' out of whom?"

8. Dr. Gunther, Vice-Chancellor of the University of Papua/New Guinea:

( described by the Secretary of the Depart­ment of the Administrator in evidence before the Arbitrator as the "primary architect of the wages determination"): "This wages issue could become the case about which conflict will arise, and the pity of it is it need never have developed if those directly shouldering Australia's burden had shown more wisdom."

(Report apearing in MELBOURNE "AGE" OF MAY 30th, 1967.)

9. Professor S. Encel, Professor of Soci­ology, University of New South Wales, Article in "Nation" June 3rd, 1967:

''The calamitous decision by the Public Service Arbitrator on local salaries, which was generally attributed to pressure from Canberra. will create further problems for all the people in the Territory who are trying to move it forward."

10. The "Age" Melbourne, June 8th, 1967-Editarial:

''The pittance handed out in all but the top wage category does little more than ::':)m­pensate for increases in the living costs and

11

offers scant encouragement for natives to aim at higher educational standards. It was a bruis­ing first encounter with the arbitration system ... For sound economic reasons native public servants cannot be paid the same total salaries as Europeans. For equally sound political and humanitarian reasons native salaries must not be fixed at inequitable levels.

11. The Managing Director of Burns Philp Ltd., Mr. G. C. Goodsell, describ­ed the decision as "fair and one which should be abided by".

12. Of two other well-known figures, the "Bulletin" June 17th, 1967 said.

"Later, Mr. Ian Downs, a conservative planter, Member of the House of Assembly, took up the matter of the mass demonstration in Port Moresby against the recent wage deci­sion by the Public Service Arbitrator.

"Mr. Downs, an Australian who savours responsible government, could not recognize the same groping towards freedom in other people. The 2,000 strong demonstration he said had been organized by the A.C.T.U.'s Indus­trial Advocate, Mr. R. J. Hawke. In a classic example of illogic, he argued that (because) Mr. Hawke had predicted protests which had eventuated, therefore he had organized them."

13. "A.C.S.P.A. News Sheet," June, 1967.

"Most judgments that have marked in­dustrial history have contained some essence of equity and community benevolence. No matter how one looks at the Matthews deci­sion with its consequences, it must be regard­ed as tragic in every respect.

"From the social aspect it will perpe­tuate discrimination and foment animosity be­tween the white and indigene populations and certainly it must harm the essential fraternity between Australia and the Territory.

"From the industrial side its inhumanity, condemning as it does the Papuans and New Guineans to a life of impoverishment, makes it one of the most disastrous decisions ever made at industrial arbitration."

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