Unions Create a Shadow

(From today’s Herald Sun)

The recently concluded B20 meeting in Sydney was addressed by Australia’s top politicians and the cream of Australian business chiefs, including Rupert Murdoch, BHP’s Andrew Mackenzie, and Energy Australia’s Catherine Tanna.

It also brought to Australia the heads of many of the world’s key businesses.

Australia as the host is in the spotlight. But this can have a downside if the world focuses on our shortcomings.

And the Australian economy has some dark corners. None of these is more alarming to business leaders than the prospect that our labour market arrangements may prevent them managing an enterprise with the effect that profitable opportunities turn sour.

The six years of RuddGillard governments gave unions greatly enhanced privileges.

The Fair Work Commission was ever more stacked with unionists, the Australian Building and Construction Commission’s restraints on lawlessness were allowed to whither and Labor appointed one of their own to head up an Australian Competition and Consumer Commission, which was never keen on investigating union restraints to competition.

The police, for their part, seem to be utterly intimidated by unions and refuse to apply the law against them.

To stop the rot, the Abbott Government appointed a royal commission, which is proceeding at a leisurely pace to examine the more notorious examples of union coercion.

One high-profile case involved the Health Services Union, infamous because of the ability of its executives to divert money from the lowpaid workers they ostensibly represent into their own bank accounts.

Similarly, we have seen a focus on the Australian Workers’ Union which intimidated building firms into funding the leadership’s reelections.

But of greater importance is the damage that union monopolies inflict on the economy when they shut out firms which refuse to cooperate with their illegal demands for kickbacks.

The CFMEU is notorious in this respect. It sought to destroy Grocon for not providing it sufficient kickbacks and in the process squeezed any suppliers, including Boral, that refused to participate in illegal and harmful restraints of trade.

Boral’s refusal to join the CFMEU’s conspiracy led to the union “persuading” other firms to choose alternative suppliers.

And the institution supposedly policing this, the ACCC, was missing in action even though in its dealings with firms it readily raids corporate offices and pursues them for trivial misdemeanours.

Union-imposed restraints on managers mean higher costs and lower productivity.

And when this is evident, a showcase event like the B20 meeting can have downsides.

One of the firms represented at the B20, the French petrochemical firm Total, plans to invest $15 billion in Australia.

But its CEO observed, “If you compare the cost per tonne of building LNG production capacity worldwide, the highest cost is in Australia, so it’s a real issue for development in the future”.

Australia’s labour costs are 30 per cent above those in North America and 50 per cent above the UK’s. Only Scandinavian workers cost more. We want to see high and increasing living standards in Australia. But these require higher levels of productivity, which unions and their institutional supporters will often prevent.

Unless this changes, Australian living standards will fail to meet their potential

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36 Responses to Unions Create a Shadow

  1. stackja

    Unless this changes, Australian living standards will fail to meet their potential

    Make the Left happy.

  2. In American cop shows, standover tactics were invariably conducted by mafia types. In Australia they’re called “unions”.

  3. Walter Plinge

    The police, for their part, seem to be utterly intimidated by unions and refuse to apply the law against them.

    Intimidated? I think not. One must support one’s fellow unionists.

  4. Sally Moore

    The same thing happens, to a lesser degree, with regards to extortion of business by green NGO’s. The Green Building Council and its cronies in the the “environmental certification industry” coerce big business to pay them a fortune, to environmentally certify their buildings and the products used in these buildings. Next time you see “5 Star Greenstar certified” on a building’s hoarding, you are seeing the evidence.

  5. Elizabeth (Lizzie) B.

    Unless this changes, Australian living standards will fail to meet their potential

    They will also fail to meet expectations of the workers, many of whom will still have no idea of what the root cause of the problem has been. More articles like the above are urgently needed.

  6. AndrewWA

    The Royal Commission into Trade Union Governance and Corruption has had almost ZERO coverage by Fauxfacts and Your ABC…

    So pleasing to see some of the rorts starting to get exposure.

    Clearly the Union movement has a very strong focus on feathering the nests of already well compensated Union officials with little thought for the members.

    Clearly the Union movement does not deserve the amount of influence it has on all levels of government of this country.

  7. thefrollickingmole

    On a serious note how is the corruption we laugh about in “poor” countries with out and out bribes any better than allowing a person to collect a 6 figure income “regulating” them to within an inch of their lives?

    There is a bewildering number of highly paid people in Australia from local government up, who are paid great deals of money to use their powers to stop business. Yes they may be highly qualified, but if its a qualification in circumlocutory (thanks Dickens) its in some ways worse than a straightforward shakedown for money.

    And just like the old Bruce Willis movie..

    “I see circumlocutory people, everywhere, and the worst thing is, they dont know they are circumlocutory”..
    These people think they are doing good, are highly paid and exercise their powers almost completely in a negative fashion.

    Its a class/education corruption, where earning a degree in fucking people around is well paid.

  8. Bruce of Newcastle

    Why are we beholden to one sixth of the workforce – or even less since many of those people have no choice but sign up for the union?

    And of the private sector only 12% are in a union.

    Yet they run everything.

    Business also wants RET gone. If Abbott can’t fix one he can fix the other. Both would have a huge benefit to our economy and the livelihoods of millions.

  9. Old School Conservative

    Intimidated? I think not. One must support one’s fellow unionists.
    Not only the cops on the street – their superiors in the chain of command and their political masters are also accountable for refusing to apply the law.

  10. H B Bear

    The Minister for Thai Hand Relief, Albasleazy gave a good example of what is allowed to happen when he acted as proxy for the MUA in drafting Australia’s domestic maritime shipping laws.

    Labor wouldn’t recognise Australia’s national interest if they tripped over it on the way home from a Craig Thomson shout at the National Congress (no pun intended).

  11. struth

    OH@S and other red tape and bullshit applied to business by public servants we pay for doesn’t get enough recognition for the killing of Australia.
    Grow the private sector by dealing with these issues and unions will be relegated to a small public ser ice.
    They are an issue and a bad thing but our biggest problems lie in the public sector and compliance.
    Ultimately it’s all work for lawyers and caused by the very same.

    IMHO.

  12. nerblnob

    Frolicking mole says it better than I possibly could.

    Australia has gone very Third World but people don’t see it because the corruption is legally sanctioned and even admired because it’s clothed in green and compassion.

    Yet again I had to submit an anti bribery policy to be considered for an Australian contract, something I normally only have to do for third world countries – and Italy. Just a small example but a telling one.
    Transparency International needs to take another look at Australia.

  13. Des Deskperson

    The Commonwealth public sector unions are very upset that the wages increase proposed by many agencies in the latest round of enterprise bargaining don’t keep pace with inflation. They are also incensed that some agencies have tied pay rises to a marginal increase in work hours.

    What’s interesting about this is not the union position – it’s what you would expect – but rather that the unions are no longer even giving lip service to the principle that public service wage increases ought to be tied in some way to productivity increases and reforms. This principle was introduced by the Hawke government in the late eighties and used to have bilateral support, at least up to September 1013,

    Productivity is, of course, very difficult to measure in the public sector, at least in the short term (and I’m not sure that arbitrarily increasing hours of work will help). I doubt if the taxpayer got value for money from productivity-based wage increases over the last two decades, but at least it made the unions jump through a few heaps.

    However, the idea that public service wages have to keep pace with inflation, with no account to be taken of productivity or the labour market, takes us back to the days when the public sector salaries were almost a sort of welfare payment and when the sector operated in a sort of industrial silo with wages and conditions set by a sort of stuff-the-taxpayer management/union club.

    Of course, the Coalition will resist this, but some Labor people now seem to be supporting it.

  14. Des Deskperson

    should have been ‘jump through a few hoops’, although ‘heaps’ is not entirely inapposite!

  15. should have been ‘jump through a few hoops’, although ‘heaps’ is not entirely inapposite!

    1013 is not entirely inappropriate either, considering the ancient work practices they demand!

  16. John Comnenus

    Unions look after the little guy …. Who almost always seems to be someone in the Union hierarchy.

    It is beyond me why workers pay for this level of Union self service to the members cash.

  17. Infidel Tiger

    Unions look after the little guy …

    Craig Thomson’s penis?

  18. MAGB

    Let’s hope Mr Abbott is smart enough to do the unions slowly, and properly. Doing them slowly will get maximum publicity and hopefully bring along public opinion with him.

  19. Dianne


    In American cop shows, standover tactics were invariably conducted by mafia types. In Australia they’re called “unions”.

    Yes & when those mafia types have had enough of the high life, they retire to Miami. Here the mongrels go into our Parliament & we have to support the fuckers for the rest of their lives!

  20. PoliticoNT

    Just a quick note on Boral. The unions may be a bad lot, especially in Victoria, but it’s interesting that the head of Boral Victoria has been for months trying to secure a meeting with the state planning minister Matthew Guy. Guy has refused the meeting, but recently agreed to send along a junior adviser. The head of Boral Victoria turned up to the meeting, the junior adviser didn’t.

    At least with Labor and the unions you know you’re dealing with thugs and economic vandals. The Liberals on the other hand appear content to wander off into oblivion.

  21. johanna

    Re the Mafia references, the Teamsters (truckdrivers’) Union in the US was hand in glove with the Mafia, to name just one example.

    The CFMEU uses people who are well known crime figures to help to “resolve” disputes.

    Corruption on the heavily unionised waterfront, a sine qua non of drug importation, must involve dealings with criminals who are not just petty thieves.

    Cleaning up unions is not just a matter of improving productivity, but also very much one of attacking organised crime. Extortion, money laundering, and drug importation are just some examples of activities which often depend on co-operation from unions.

  22. Ant

    Unions should be abolished. There are amble laws in existence to take care of workers “rights”.

    The public sector in particular, and the taxpayers who fund it, would be much better off for starters.

    And the bottom line is this: If you’re not happy with your job then get off your bloody arse and find something else.

  23. john constantine

    there is no organised crime in australia, if there was, we would have heard about it on the abc.

    the only ‘hits’ worth the abc worrying about are inflicted by shearers on sheep.

  24. tomix

    The issue is a loser for the Gov’t. There are more people who are paid union rates or would like to be, than there are people who have to pay union rates.

  25. Bear Necessities

    Unions back in the 60′s and 70′s used to strike to flex their muscle when they approximately made up 40%/50% of the workforce. Now that they only make up 12% of the private sector workforce they don’t have the influence to effect change through industrial action. Now they assert influence through taking over the ALP and are starting to influence the Greens. They need legislative protection now to keep their numbers.

  26. Matt

    What about a class action against the ACCC for being off watch on this?

  27. tomix

    Plenty of industries have disappeared. Look at the transport chokepoints- airports and ports. The numbers might be smaller, but the coverage and the potential threat hasn’t lessened.

  28. blogstrop

    Boral’s refusal to join the CFMEU’s conspiracy led to the union “persuading” other firms to choose alternative suppliers.

    This is what business is up against, and the Gillard IR reforms strengthened the union hand, but Grace Collier seems to want to bag business for “co-operating”.

  29. Habib

    The P&Ds were merely more obvious about it, the AWU, MUA, and CFMEU not far behind, and the rest mere dilettantes. Rather than piss around with a few Lebs and Samoans with infantile patches and twocked Harleys, state governments (and the federales for that matter) should be sinking the slipper into the real gang bangers that’ve been extorting business and taxpayers for decades. Start with making these hoons subject to taxation. Even if these pathetic weasels did summon the gonads to take on this scum, they wouldn’t touch the most militant and extortionate of the lot of these venal swine, the AMA.

  30. Jessie

    The B20 Anti-Corruption Working Group (ACWG) group state

    If corruption were an industry, it would be the world’s third largest, worth more than $3 trillion and 5 percent of global GDP. According to the OECD, corruption is a major obstacle to sustainable economic, political and social development:

    If not an industry what is it then?

    Report from the Anti Corruption Working Group delivers eight recommendations, summarised here

    The business community is united in its view that combating corruption, both supply and demand, requires a coordinated effort across governments to harmonise regulation, incentivise corporate responsibility, and enable consistent enforcement.

    I don’t recall any of the B20 major business partners speaking up on the fraud and corruption of the science behind CAGW and associated schemes. Cabals of Unionised science types, drip fed of wages and protected from scrutiny. That funding came not from the poor, but government, and possibly industry grants, via the taxpayers.

  31. outsider

    Fine article, Alan. It sometimes feels like we are up against it, but the hard yards need to be made. The union movement is a handbrake applied to the Aust economy – everyone knows it and the LNP must be reminded constantly. Their performance thus far is uninspiring but we will see. The productivity angle is the most persuasive, and if you want to be known as the infrastructure PM, you cannot afford the CFMEU…it will soon be time to man up.

  32. outsider

    As a insider, Grace understands the weaknesses and rightly calls out the ‘employer unions’ who were simply nowhere to be seen during the RuddGillard disaster, so they are complicit to a good degree. It’s cultural too, where business sees even egregious union deals as a long established ‘on cost’ to operations – the cost of doing business.

    We can only hope the TURC is ultimately strong enough but we still need Abbott and Brandis to be prepared to act decisively on recommendations – who could be confident? The Vic cops are as quiet as a church mouse.

  33. tomix

    Big Unions are part of Australia’s Beltway. “Act decisively” there and look out.

  34. Mark

    As a side argument, the unions no longer need membership when they have control of the real “Rivers of Gold” promised to them by Paul Keating. Industry Super!

  35. Diogenes

    The same thing happens, to a lesser degree, with regards to extortion of business by green NGO’s.

    And similar by the indigenous” industry” (see the link to The Black Steam Train” . At school at the moment it is the tail wagging the dog.

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