PM lauds franchising

The Federal Government recognises the contribution that the franchise community has made to the Australian economy and we do very much respect the values on which the Franchise Council of Australia has been founded and the motivation behind the efforts of your members. The contribution that many in this gathering have made, and the contribution that franchise people have generally made to the Australian economy, has been an integral part of the success story of the Australian economy over the last decade.

I have frequently employed the expression, ‘the enterprise worker’ – a modern description of the reality of the Australian workplace. Old descriptions such as ‘white collar’ and ‘blue collar’, even ‘knowledge worker’, are no longer adequate to properly encapsulate a growing number of people, some of whom own their own businesses either as franchisees or otherwise, but many of whom remain employees but see their future as tied up with the future of the business for which they work. They understand better than people in earlier generations did that the old ‘them and us’ mentality of the Australian workplace is gone forever and that it is working together for our future which is the dominant consideration, and working in an environment where the success of the enterprise is indistinguishable from your own personal success, whether you own and operate the enterprise or whether you work for the enterprise.

It is not surprising, therefore, that a few weeks ago a statistic came out which says a lot about what has happened to Australia over the last decade or more, and that statistic is that with 1.91 million there are now more Australians who are self-employed than there are members of a registered trade union.

Now, I do not say that in denigration of trade union memberships. There has never been anything in my philosophy which denies or disputes or argues against the right of people to organise themselves into trade unions, or to belong to trade unions, or to have trade unions fairly and legitimately represent them in pursuit of their workplace goals. But we are a nation transformed – we are more entrepreneurial, we are a nation that understands the value of the enterprise worker. Whether that worker is an employee or an owner, he or she represents the Australia, not only of today, but the Australia of the future. I agree with what your chairman (Stephen Giles) said: the world’s best practice in franchising can be found here in Australia – the transformation has been remarkable.

Franchising was virtually unknown in this country until the 1970s and driven at first by major corporations such as McDonald’s and KFC, and perhaps exemplified by nobody more so than the late Charlie Bell, who rose to become the head of McDonald’s before cancer tragically took away his life at the all too early age of 44. But the example of people like Charlie Bell is replicated a hundred fold or more in this gathering. What all of you have done is to recognise what your chairman said, and that is you don’t want governments telling you what to do, you want governments both out of your pocket and out of your way, and if you are given the right environment and the right climate, you can build businesses and you can generate jobs.

And that, of course, brings me to a document that I released yesterday (9 October, 2005), and that is a document that explains in great detail the government’s proposals (since tabled in Parliament) for workplace relations reform. I have a very simple message to all Australians about industrial relations reform and that is that it is a strong economy that provides job security, higher wages and better conditions, nothing else. All the regulation in the world won’t save a job or increase a wage or improve a condition if the economy is performing poorly and therefore the true, indeed the only test, of the worth of a nation’s workplace relations system is the contribution that system makes to the strength and productivity of our economy.

Many of you would remember the early 1990s. I look around the room – quite a few of you would, quite a few of you wouldn’t, in terms of business experience that is, and that is a commentary on the great variety and the age structure of the franchising community in Australia. But in the early 1990s we had a deep recession, we had a million people out of work, real wages in many sectors of the economy were in free fall and job security was a myth. The reality of course was that it was a myth because the economy was on its knees. Interestingly, in the early 1990s we had all the rules and all the protections and all the regulations under the sun, even more than we have now.

But those regulations and those rules didn’t help the economy. In fact, they helped contribute to the economy going into free fall and as such my point is very obvious and very simple – that in the end it’s the strength of the economy and the contribution that a workplace relations system makes to the strength of the economy that provides job security, higher wages and better conditions. You cannot regulate for job security and higher wages and better conditions if the economy is weak. If a firm has gone broke, nothing can save your job. The contribution that the rules and regulations make to preventing the circumstances for the firm going broke are the things that really matter.

Can I say, specifically in relation to the franchise sector, that the changes we have initiated will provide an even simpler agreement making process. We have retained multiple business agreements, something used extensively in franchise operations, and for someone opening up a new franchise agreement making will be simpler because there will be a greater range of agreement types. You can have an employer or union greenfields agreement, and you can negotiate an AWA or a collective agreement with employees once they have been employed in the new business. Under the new arrangements it will no longer be necessary to have a full bench hearing of the Industrial Relations Commission to achieve some of the things you had to in the past, and the whole process of agreement making will be simpler.

Can I finally say that the contribution your industry makes to the economy of this country is impressive, not only for its size and its scope, but for the extraordinary growth that has occurred over the last decade. Over the last 10 years there has been an increase, for example, from 39,000 to 50,000 in the number of franchise businesses. On one estimate the franchise sector now contributes 10 percent of Australia’s GDP and provides employment to approximately 600,000 Australians. It has produced some remarkable men and women. It is a sector of the Australian economy that is essentially unregulated and individually driven. It can start on the kitchen table or around the barbeque. It’s welcomed a growing number of women as people who have begun franchises – indeed, some 30 percent or more of all new small businesses opened and operated in Australia are run by women, with a growing number of them operated from home.

All of this speaks of an economy transformed by flexibility. Whenever I address audiences about Australia’s economic future these days, I employ the metaphor of participating in a foot race towards an ever-receding finishing line. The responsibility for and process of economic reform can be an immensely frustrating one. You never get there. It is like participating in a foot race towards an ever-receding finishing line; you are driven to keep going, not by imagining that you are ever really going to get to that finishing line, but because there are other people participating in the foot race and that if you slow up they’re going to go past you and they are going to gain the competitive edge. I think probably more than any audience in Australia, this gathering will understand that. It is why we need as a nation to continue to pursue economic change, economic betterment and economic reform.

There are people who say to me, John, why do you keep talking about further reform. You’ve had a whole lot of reform over the last 10 years. There was reform before that, which you supported. Why don’t you just have a holiday, have a rest, we’re all doing well, go away, leave us alone and we’ll just keep running on the strength of the reforms that we’ve had to date. That, my fellow Australians, is a recipe for this country losing its economic momentum. You know from your own businesses you either go forward or you go back. The idea that you can run on the spot, maintain your market share without ever increasing competitive effort is an illusion, and if this nation ever settles for that illusion, this nation will have lost the economic drive and the capacity to be flexible and to change which has been the engine room of our success over the last 10 to 20 years.

So can I say to all of you, thank you very much for coming to Canberra, but most importantly of all, thank you very much for the contribution that you have made to the strength of the Australian economy over the last 10 years.

The strength of that economy is not something that exists in some kind antiseptic isolation. A strong economy means good conditions, it means decent wages, it means good profit, it means tax collections that fund things like health and education and defence, which is so important to our social wellbeing. Can I thank all of you for the contribution you have made to the enterprise culture which has transformed this country over the past few decades and given it the respect of which earlier people spoke, and stamped the Australian brand as a brand to be respected and to be followed and in some parts of the world to be admired.

As business men and women you have played an integral role in that, and I very warmly thank you. I will continue to work and my ministers will continue to work very closely with your organisation in the years ahead.

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