Thursday, June 21, 2007
GREG Combet said it only once but the Howard Government has replayed it countless times: “I recall we used to run the country, and it wouldn’t be a bad thing if we did again.”
It was a year ago at a union rally and the ACTU secretary raised a laugh, which was the idea. But it was not the humour that tickled the Government’s fancy but rather the comment’s potential to feed straight into the mother of all scare campaigns against Labor.
Admittedly, the Combet scenario is pretty frightening. Look at what happened when unions previously ran the country. This bleak period started in 1983, with the election of union boss Bob Hawke as prime minister. The horrors that were visited on us included slashing tariffs that were protecting manufacturing jobs; floating the dollar; deregulating the financial system, including allowing foreign banks into the country to compete with home-grown ones; and, to add insult to injury, privatisation of the Commonwealth Bank, together with other icons such as Qantas.
The unions, or most of them, opposed all of these measures, but don’t be fooled by that. They wielded real power when the government made them partners in the Accord. And guess what they did with it? They slowed wages growth by accepting rises in the “social wage” - tax cuts, superannuation and government spending in areas such as health and welfare - as a substitute for part of their wage claims.
It was a successful prescription, given there was a centralised industrial relations system that had allowed wages and inflation under the Fraser government - with John Howard as treasurer - to rise rapidly as successful claims in one industry flowed to others. The Accord allowed profit levels to recover, encouraging investment, faster growth and ultimately higher employment.
These days, Howard delights in contrasting the higher real wages growth under his Government with that under Labor. The reason for the difference is that by the time he was elected in 1996, the profit share had risen, giving scope for wages to start increasing again. They are still rising after inflation but not as fast as profits, which are at record levels.
Of course, we know there are some nasty union leaders just waiting for Labor to get back into power before they run rampant. Just look at what happened when union bosses such as Norm Gallagher, secretary of the Builders Labourers’ Federation, were given their heads. If you haven’t heard much about the BLF for a while, that is because it was put out of business in 1986 - by the Hawke government in Canberra and the Cain Labor government in Victoria.
Gallagher and the boys were famous for the ways in which they made employers sit up and take notice, by walking off the job in the middle of concrete pours, which did not do wonders for productivity, let alone profits.
Gallagher was an ardent communist (Maoist wing) but he was broadminded enough to stick his hand out for some fat developers’ commissions that allowed him to build a nice little beach house. When police had the effrontery to charge him, solidarity demanded the BLF slap bans on Melbourne building sites to force the state government to drop the charges. It didn’t, Gallagher went to jail and the Hawke and Cain governments legislated to deregister the BLF, meaning it could no longer represent its members before industrial tribunals. For good measure, the Cain government ordered police to raid BLF headquarters and seize its assets.
It was the Hawke government, too, which in 1989 broke the domestic pilots strike and destroyed their union by using military aircraft, foreign pilots and international airlines to carry passengers. Some claimed Hawke was doing the bidding of his friend Peter Abeles of Ansett. But that could not be right, because Hawke was a union boss.
Former Federated Municipal and Shire Council Employees’ Union junior official Paul Keating was in thrall to the union bosses as well. Just look at what he cooked up, once he became prime minister, with then ACTU secretary Bill Kelty. They introduced enterprise bargaining, which sounded the death knell for centralised wage fixing. It also led to a substantial increase in labour productivity, more than the Howard Government’s favoured Australian Workplace Agreements are likely to produce. That is because there is more scope to find ways to work more efficiently when an employer negotiates collectively with employees than when he or she reaches agreements with individual workers.
What accounts for such unfriendly behaviour by union bosses-turned-politicians? Believe it or not, once they have managed to claw their way in to office, they want to get re-elected, and being seen to govern for only one part of the community is not the best way to do it.
That is not to say Rudd government legislation would not be more favourable to unions. Given the Howard Government has stripped them of most of their rights, it could hardly be tougher on them. But as someone who did not come up through the unions, Rudd is even less likely to see eye-to-eye with them on many issues than did Labor leaders of the past. He would have the authority of an election win to stand up to rogue unions.
Sure, Combet and former ACTU presidents Martin Ferguson and Simon Crean would play a part in his government, but they would be no more successful in wrecking the economy than was Hawke.
When the Prime Minister says, as he did last week, that Rudd is the “patsy, the proxy, the delegate, the surrogate of the union movement”, you’d better believe it. And that goes for his Workplace Relations Minister Joe Hockey as well when he asks, as he did on Sunday: “Does anyone seriously think that the Labor Party is going to stand up to the trade union bosses when it comes to the construction industry? They’ve got no history of doing it.”
Doubting these assertions would require looking back over a longer period than the past three months, and there’s no time for that in an election year.
Mike Steketee is The Australian’s national affairs editor.
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