The Industrial Relations Reform Act of 1993 introduced the price safety net, which requires that rewards (excluding tariff premiums paid) serve as a safety net for minimum wages and conditions of employment that can be negotiated directly. It did so by amending the main act, the Industrial Relations Act 1988. A few years before the 1993 amendment, governments, unions and employers looked at the possibilities and possible consequences of moving from the public procurement system to decentralized wage negotiations. They first attempted to change the rules or principles adopted by the AIRC for the recognition of labour or enterprise agreements. Such a system must be underpinned by a comprehensive safety net, as provided for in the procurement system and in the context of conciliation and arbitration. Delegates must have relevant statistics on occupational health and safety and a process must be put in place to directly involve workers in problem-solving strategies. At the 2003 SNW hearings, ACCI argued that the ACTU`s application was rejected because it was obsolete, economically irresponsible and not industrially justified. The procurement safety net does not need to be adapted at this time and there should be no increase at this stage. Alternatively, if the Commission grants an increase, an increase should be moderate. The Australian Industry Group and the Engineering Employers Association, South Australia (Common AiG) supported an increase of $11 per week to allocate wage rates, subject to the absorption principle. AiG submitted that the $24.60 increase requested by the ACTU would result in widespread net harm to both employers and low-wage earners, but acknowledged that some low wages would benefit. The National Farmers` Federation (NFF) also opposed an increase. In the alternative, however, it argued that, if the Commission was inclined to grant an increase, the negative effects of the drought on rural businesses would have to be significantly eliminated to determine the level of the increase.
It also called for an amendment to the Commission`s principle of economic incapacity, under which the Commonwealth`s characterization of “exceptional circumstances” is considered to be consistent with the requirements of this principle for drought-affected employers.