Industrial relations reform

Consensus is “the process of abandoning all beliefs, principles, values, and policies in search of something in which no one believes, but to which no one objects; the process of avoiding the very issues that have to be solved.”

Margaret Thatcher

The quote is from the first of the two following letters to the editor at The Australian published on May 29. Both letters are in relation to the approach being taken by The Government on industrial relations “reform”. I’ll come to those letters in a moment, but first want to mention The ACTU/ALP Accord which I spent a good deal of my working life in trying to contain its excesses. Yet the document was one of the most sensible documents ever published in Australia.

Although he would be surprised to hear me say this, I have always admired Bill Kelty and especially for having directed the writing of the background document to the Accord that became the fulcrum that IR policy was to be based on during the Labor Governmentof the 1980s under Bob Hawke. Following the Wage explosion in 1982, a union delegation had gone to Sweden and a number of other European countries where they had discussed how to raise real wages and the living standards of workers. In Sweden, the trade unions had explained that their policy had been based around doing what they could to improve business productivity, which they recognised was the only way to raise real wages while also making jobs more secure. It was why so many outstanding international brand names originated in Sweden, brands such as  H&M, Volvo and Electrolux. It was virtually the policy of the unions to foster business growth in every way they could.

It also mattered that the Labor cabinet was filled with vast amounts of sound practical good sense, from the PM, through Paul Keating to Peter Walsh and even as seen to this day from whom you can still hear its last last echoes, through Graham Richardson on Sky News. I fear that none of these could end up even on the back bench of a Labor Party Parliamentary party today.

I will also say that there was much too much dead weight in The Accord, such as the formalisation of full wage indexation (even with the “Medibank Pause”), and the Productivity Case of 1986 which led to the Superannuation Guarantee. But the recognition of the role of business as the vehicle for increasing living standards was miles ahead of the deadness from the neck up across the ACTU today. Sally McManus is the last person in the world to understand any of this or for the Government to trust. So to the letters from The Oz. First this:

Margaret Thatcher said that consensus was: “The process of abandoning all beliefs, principles, values, and policies in search of something in which no one believes, but to which no one objects; the process of avoiding the very issues that have to be solved.”

That’s what Scott Morrison’s plan to bring together unions, big business and governments will do — avoid the things that need to be done. We need significant deregulation, tax cuts and cheaper energy to encourage investment, energise small business, boost productivity and create jobs.

His proposed consensus group will lock in workplace regulations, stifle competition and siphon billions more from the productive parts of the economy to the unions.

And then this that followed next.

History shows the only chance for industrial relations reform is if it is at the initiative of a Labor government because a Labor government can count on the support of a Coalition opposition for worthwhile reforms.

Conversely, a Coalition government cannot count on the support of a Labor opposition that habitually opposes for the sake of opposing.

History also shows that Labor and the gaggle of odds and ends in the Senate will do anything to thwart a Coalition government even if it means damaging the public interest.

If the government thinks it can negotiate with the union movement without a goodly array of people from the employer side of the divide – and I especially mean people like Steve Knott of the Mines and Metals Association and others like him – then they will certainly be fleeced.

On the union side, the people who rise are those who start out inside an enterprise and at branch level, almost always because they gain the confidence of their co-workers, usually by being the most belligerent; they find themselves elected shop steward before moving higher. In this way, step by step, by gaining the confidence of their peers and coming to be noticed by those above them in the union hierarchy, they gain more power and influence. Those that eventually get to the top are, through natural talent and further training, phenomenally persuasive, ideologically committed and as tough as nails. There is no room for sentimentality in any negotiation with a union. They know what they want – MORE – and what they are willing to give up to get it – NOTHING.

The only reform I am looking for is to make unions negotiate in good faith and an industrial relations system that will make both unions and employers adhere to their agreements. For a union leader also to understand the role of productivity in creating wealth and who wish to work with employers to achieve it are rare, but it is such union leaders that are an absolute necessity if real earnings are to grow along with an economy.

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22 Responses to Industrial relations reform

  1. Hay Stockard

    Scotty from Marketing. Not the sharpest carrot in the bunch.

  2. OldOzzie

    As James Dyson says – Australian Politicians should take note

    When Dyson and I last met just after the Brexit referendum, he described his post-Brexit vision of Britain as a high-skill, low-tax Singapore-style state lying off the European continent. Nothing that has happened since has changed his mind. “As a nation we don’t value engineering and science, or businesses that try to exploit those things. We can learn from Singapore. Let’s embrace education, engineering, commerce, free up planning permission and make things again.” In fact, he thinks Britain should go further than Singapore by moving to an even lower tax business model and scrapping corporation tax. How would the ­government make up the lost revenue? “Businesses would invest more and create more wealth and employ more people who would pay more tax.”

    Many voters in the UK and US, especially young voters, have recently embraced left-wing policy platforms put forward by the likes of ­Jeremy Corbyn and Bernie Sanders. Both have declared that “every billionaire is a policy failure”. How does it feel to be branded a human “mistake”?

    “That’s the privilege of being young, isn’t it? But it is also troubling because they’re not seeing the value of wealth creation,” he says. “You need entrepreneurs – people who make technological progress, drive things forward, create wealth for the country and employ lots of people. We’re not using government money here in Wiltshire. It’s not a government directive that we produce hand dryers, hairdryers, vacuum cleaners or air filters that use a tenth of the energy of most others and are, therefore, cheaper to run and better for the planet. We’re doing it because we believe it’s the right thing to do, because we don’t mind taking risks, don’t mind losing our money – risking our whole lives and wealth on enterprise.” Gesturing around the vast hangars of the former RAF base Hullavington, he says: “We’ve restored life to this place. These are the things that wealth creators can do.”

    Will young voters change their views? “Maybe as they get a bit older.
    They have not understood how businesses are created, how old businesses die and new ones spring up, why exporting is important. Globalisation is not a dirty word. Developing technology is so expensive, you have to be able to sell all over the world.”

  3. Entropy

    A quibble

    On the union side, the people who rise are those who start out inside an enterprise and at branch level, almost always because they gain the confidence of their co-workers, usually by being the most belligerent; they find themselves elected shop steward before moving higher. In this way, step by step, by gaining the confidence of their peers and coming to be noticed by those above them in the union hierarchy, they gain more power and influence. Those that eventually get to the top are, through natural talent and further training, phenomenally persuasive, ideologically committed and as tough as nails. There is no room for sentimentality in any negotiation with a union. They know what they want – MORE – and what they are willing to give up to get it – NOTHING.

    That might be how it was up until 20 years ago, and maybe in the more militant unions still a bit. I would say more recently it is student union young labor activist>factional alignment>appointment to a union office by factional leader>Stand in unwinnable seats for ALP> gifted safe council/sate/federal ALP seat by factional leadership.

    The ones that end up in union leadership roles are too useless for the factional leaders to be sent to parliament.

  4. Entropy

    , why exporting is important. Globalisation is not a dirty word. Developing technology is so expensive, you have to be able to sell all over the world.”

    The problem is that globalisation ramen quite a different things to someone like Dyson and someone like Christian’s Figueres.

  5. Ed Case

    All Government ”reform” is to be feared.
    1. The hook to catch the unwary is the promise of permanent employment after a 12 month qualifying period.
    Since many workers are Labour Hire Company employees, that will result in an Elect [read unionists]
    becoming permanent employees and the rest getting the odd day here and there until they near the dread
    220 days [12 months] when the phone stops ringing forever.
    2. Employer made a mistake in your pay of 10c?
    That employer gets a massive fine and goes on a Government Blacklist ensuring that it can never be even a supplier to any company bidding on a Government contract.
    That will lead to consolidation across all industries.
    The Government’s role is to look after the interests of it’s citizens, the vast majority of whom are or were Labour of some kind.
    Capital is big enough and resourceful enough to look after it’s own interests.
    The con that successive Coalition Governments since Fraser have tried on is that they can act as an honest broker between Labor and Capital.
    Australia won’t fall for that so it’s Goodbye Scotty.

  6. Leo G

    Consensus is “the process of abandoning all beliefs, principles, values, and policies in search of something in which no one believes, but to which no one objects; the process of avoiding the very issues that have to be solved.”

    Thatcher’s definition reads like the goal of any parliamentary election.

  7. Penguinite

    The consensus is “the process of abandoning all beliefs, principles, values, and policies in search of something in which no one believes, but to which no one objects; the process of avoiding the very issues that have to be solved.” Margaret Thatcher
    Sounds a lot like Climate Alarmism!

  8. OldOzzie

    Here’s 23 Questions Joe Biden Needs To Answer About China

    Will Biden disavow his decades of support for China’s rise and follow Trump’s lead?

    Communist China poses a greater threat to America and our interests abroad than any other nation in the world.

    If it wasn’t clear prior to the spread of the Chinese coronavirus, resulting largely from the Chinese Communist Party’s Chernobyl-like response, the subsequent threats should crystallize this point. It has acted malevolently toward the U.S., our European and Anglosphere allies, Hong Kong, Taiwan, and India, and across the South China Sea.

    Countering the CCP is essential to preserving American life, limb, and liberty. The public deserves to know what presumptive Democratic presidential nominee Joe Biden’s approach to China would be.

    After all, this is a man who sat on the Senate Foreign Relations Committee for three decades. Biden ultimately chaired or served as its ranking member from 1997 on, during a career at the senior-most levels of government spanning almost the entirety of U.S.-China engagement. As a longtime senator and then vice president, Biden never once acted to scuttle the integrationist-accommodationist policy that has left America in such a perilous position.

    This is to say nothing of the disturbing appearance of corruption surrounding Biden’s tenure as vice president, in which he managed the “China portfolio,” while his son Hunter contemporaneously entered into an apparent sweetheart Chinese investment deal.

    Thus far in the 2020 presidential campaign, Biden has flippantly downplayed the threat from China, only to quickly walk back his comments when he faced backlash. He attacked the Trump administration for “xenophobia” in enacting a travel ban early in the coronavirus crisis, only later to backtrack on that too. Now, Biden is trying a new tack: Portray himself as tougher on China than Trump.

    This assertion is belied by his historical rhetoric and action, in contrast with a Trump administration that explicitly rejected the status quo by way of its national security strategy. That strategy notes the flaws of a premise to which Biden has long subscribed — that “engagement with rivals and their inclusion in international institutions and global commerce would turn them into benign actors and trustworthy partners” — and the Trump administration has acted accordingly.

    The former vice president must tell us whether his views and policy prescriptions have markedly changed, or if his presidency would represent a reversion to the status quo ante.

    Here are 23 questions the press ought to ask him but almost certainly won’t:

  9. OldOzzie

    Oops Apologies Wrong Thread

  10. jupes

    If the government thinks it can negotiate with the union movement without a goodly array of people from the employer side of the divide

    Australia’s current business leaders such as Innes Willox and Jennifer Westacott are more at home shilling for the global warming scam, than actually doing anything to increase manufacturing or in the national interest.

  11. John A

    OldOzzie #3469130, posted on May 31, 2020, at 10:21 am

    As James Dyson says – Australian Politicians should take note

    …In fact, he thinks Britain should go further than Singapore by moving to an even lower tax business model and scrapping corporation tax. How would the ­government make up the lost revenue? “Businesses would invest more and create more wealth and employ more people who would pay more tax.”

    Dear Mr Dyson, have you ever thought of pushing back on the question to ask “Why not reduce expenditure?”

  12. yarpos

    Unions seem to be somewhat over represented in almost everything these days. What % of Australian workers are truly engaged, voluntary members of a union?

  13. “Margaret Thatcher said that consensus was: “The process of abandoning all beliefs, principles, values, and policies in search of something in which no one believes, but to which no one objects; the process of avoiding the very issues that have to be solved.””

    Thank you for this great quote. I added it to the list of quotes on my climate home page.

    https://tambonthongchai.com/

  14. Ed Case

    What % of Australian workers are truly engaged, voluntary members of a union?

    It doesn’t matter.
    Anywhere there’s a choke point, like Ports, Airports, Shipping, Transport Depots, Supermarkets, you’ll find Unions.
    Being able to insert themselves exclusively into wage negotiations gave them huge graft opportunities.
    Thanks Howard.
    Getting their own Super Funds and a seat at the table at the others has been icing on the cake for 30 years

  15. Squirrel

    “History shows the only chance for industrial relations reform is if it is at the initiative of a Labor government because a Labor government can count on the support of a Coalition opposition for worthwhile reforms.”

    Probably, but at least we now have a parallel of sorts with the terms of trade crash that we faced in the 80s, and which served as an impetus for reform back then.

    The easy money from the boom of the last couple of decades means that some of the big ticket “social wage” trade-offs which could be put on the table now are already in place – e.g. the NDIS, and exponential increases in public funding for childcare and the Pharmaceutical Benefits Scheme. So the argument will need to be that we need reforms to keep paying for big public programs like those.

  16. min

    only 14% are union members si why so much say?o

  17. Faye

    Why not take the power away from the unions by having a happy work force? happy with their wages, their safe environment and their lot. People work better and harder when they know they have a goal. Their goal can be as part of the whole, working towards the firm becoming more successful and wealthier by their personal input. Open door management, recognition and management & staff meetings a priority. Every year if their goal has been reached, they receive a worthwhile $ reward. Of course bad years, no reward if they want their jobs to continue till revival.

    The absolute must for it to work, is that firms can HIRE & FIRE. A firm isn’t about to fire valuable staff.

  18. Hay Stockard

    They are from the Government and they are here to help.

  19. Colonel Bunty Golightly

    Wages too high, energy too expensive and too many freeloaders in the system. Expect nothing positive from any of this unless the warming scam is abandoned and people are willing to put in a fair day for fair pay. Easier to go on a benefit these days if you are a low paid worker, especially if you are a big breeder with all the attached benefits. Unfortunately the pot only has so much stew and no-one is adding ingredients anymore. When it is empty we all starve!

  20. OldOzzie

    Pay rises generate more jobs, economic modelling shows

    YONI BASHAN
    NSW POLITICAL CORRESPONDENT

    The decision to freeze salaries across the NSW public sector will deprive the state’s economy of more than 1100 jobs, according to newly released economic modelling that says a rise in pay packets will generate more jobs than spending on construction projects.

    The data, obtained exclusively by The Australian, was released as NSW Premier Gladys Berejiklian announced a backdown on her government’s $810 million upgrade of ANZ Stadium. Ms Berejiklian said she would scrap the project and divert the funding ­towards job creation across NSW.

    With 221,400 people out of work because of the COVID-19 pandemic, the Berejiklian government has stepped up efforts to find savings and redirect funding to promote job creation.

    This includes scrapping the stadium upgrade and freezing the wages of public sector workers, which alone is expected to save $3bn over four years.

    But the policy itself remains at a deadlock, unable to proceed through parliament due to a lack of support from upper house MPs.

    Ms Berejiklian stopped short on Sunday of scrapping another ill-fated project, the Powerhouse ­Museum relocation, which she ­remains determined to deliver even though it has been roundly criticised by senior members of her cabinet.

    Treasurer Dominic Perrottet has argued repeatedly in favour of freezing wages, saying the money saved would be spent on infrastructure and would stimulate the economy more efficiently than pay increases could hope to achieve. He has not released modelling to support this assertion.

    Last night Mr Perrottet was scrambling to win support for the policy by extending a revised offer to the opposition, crossbench and union leaders: $1000 one-off payments for 200,000 frontline workers in exchange for their support to freeze wages.

    Modelling conducted by left-wing think-tank the Australia Institute challenges Mr Perrottet’s assertions, suggesting a wage freeze would rob the economy of an ­opportunity to create 1110 jobs through increased consumer ­demand.

    According to the research, about 2910 jobs would be generated if the $3bn saved from freezing wages was spent on construction; this would increase to 4020 jobs if the money were to be spent through consumption.

    About 0.97 direct jobs are generated for every $1m spent on building projects, according to ABS data. Conversely, 1.79 direct jobs are created for every $1m spent by consumers.

    The modelling suggests that freezing salaries would cut $81m in pre-tax earnings from the NSW north coast economy. Another $78m would be lost from the far west of the state. Closer to the city the numbers increased dramatically to about $1bn in pre-tax earnings in Sydney’s east, and $741m in Sydney’s west.

    “If expenditure on construction is to lead to an increase in statewide employment, the construction spending needs to be additional to, not a substitute for, other more labour-intensive areas of expenditure,” the AI says.

    NSW Labor leader Jodi McKay said the government could not rely on infrastructure investment alone to stimulate jobs.

    From the Comments

    Jonathan
    5 MINUTES AGO
    “Modelling conducted by left-wing think-tank.” Without that in the heading this is click bait.

    Grahame Oft.censored.
    8 MINUTES AGO
    Wage increases result in more people employed.
    And the punch line to this joke is:

    “Modelling conducted by left-wing think-tank the Australia Institute.”

    GEORGE
    13 MINUTES AGO
    I see. Increasing the pay of public servants, who are the only group in society to have guaranteed employment, will trickle down to the rest of the country that is unemployed

    Monty
    13 MINUTES AGO
    Wow, who would have guest that would be the outcome?
    Look at the accuracy of all the recent modelling, Covid-19 with the hundred thousand or so of projected deaths, Global warming/Climate Change with their dozens of ever changing models, all being wrong.
    Give me a break.

    pmac
    24 MINUTES AGO
    The model shows – a fantasy by the Australia Institute- the countries that had tried this have failed – Argentina , Venezuela and Zimbabwe are all accepted as once rich countries that borrowed to poverty … The two states that are pumping out many new government jobs are about to have their credit rating dropped if they persist acquiring more debt

    But the Australia Institute will not let the facts screw a good yarn designed to increase ALP voting unionists at the expense of the Non Public servants.

  21. Andre Lewis

    The award system needs to mandate that only employer groups with membership of businesses covering 50% or more of the sector workforce and only unions with a similar paid up membership of at least 50% of the sector workforce can negotiate an award.
    Fair Work Australia should have as its only role determining that those conditions have been met and the members of the employer group/sand union/s have fully canvassed their respective memberships on the award content and can show a majority vote in favour.
    Thereafter Fair Work Australia has nothing to do. Unfair dismissal cases, breach of award conditions can be dealt with in local courts.
    Unions with less than 20% of members in an industry sector – actual paid up members, not those workers unaware they are members as their employer pays the union dues – to be deregistered and/or not allowed to be party to any workplace agreements.

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