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Tuesday, 29 November 2005
Page: 108


Senator MASON (9:35 PM) —I have only three points that I want to make tonight. First of all, I think this debate on the Workplace Relations Amendment (Work Choices) Bill 2005 needs some context and some history. In his book The End of Certainty, Paul Kelly, who is a journalist and editor at large for the Australian, says:

The ideas which constitute the Australian Settlement—

that is, the principles upon which this nation was founded—

though devoid of formal definition, may be summarised under five headings ...

He says that these are the five principles on which this country was founded:

... White Australia, Industry Protection, Wage Arbitration, State Paternalism, and Imperial Benevolence ...

This framework, he says, was ‘introspective, defensive, dependent’ and ‘is undergoing an irresistible demolition’. And it is. Fortunately, there is no more White Australia. That went in the sixties. Industry protection, tariff protection, has largely gone. As Mr Whitlam rightly said, tariff protection is a tax on the working people of Australia. That has largely gone. State paternalism has changed enormously. Today we talk about mutual obligation and welfare to work. As for imperial benevolence, we certainly no longer rely on the United Kingdom—and, indeed, not even the United States—to the extent that Australia relied on it in 1901. That leaves wage arbitration—the last of the pillars from 1901. It is the last pillar of the time of Edmund Barton and Alfred Deakin. Can that remain? Our argument is: no, it cannot.

Henry Bournes Higgins, who was a Liberal member of parliament, of course, became a High Court judge and the President of the Conciliation and Arbitration Court in 1906. In his 1922 publication, A new province for law and order, he said:

The following propositions may, I think, be taken to be established in the settlement of minimum wages by the Court.

1. One cannot conceive of industrial peace unless the employee has secured to him wages sufficient for the essentials of human existence.

The essentials of human existence is what they were talking about in 1901. Of course, as you know, the government proposes to leave the minimum wage intact. And then Justice Higgins said—and this really says it all:

The wages cannot be allowed to depend on the profits made by the individual employer, but the profits of which the industry is capable may be taken into account. If the industry is novel, and those who undertake it have to proceed economically, there may be a good case for keeping wages down, but not below the basic wage, which must be sacrosanct.

There was a belief in 1901 or 1906 that judges and lawyers could dictate wages, that somehow it was for lawyers to set wages, not the marketplace. No-one believes that in 2005—100 years later.

That brings me to my second point. It is only a strong economy that will make and save jobs. No system of industrial relations will save a job where the economy will not—not one job will be saved. Where a business is not profitable and cannot employ someone, it will not. If the conditions as set by lawyers are too high, it will not employ or it will sack. At best, a system of industrial relations will slow down or hinder the hiring and firing of staff. It does not make jobs and it does not save jobs. It is the fundamental weakness of the case put forward by the Australian Labor Party for months now in this debate. The line that the Prime Minister has been running for 20 years is right: it is only the economy and the market that will ultimately make and save jobs. There is nothing an industrial relations system can do about that.

We had one of the highest and most regulated industrial relations systems in the world during the Depression. It did not save a job. In the recession we had to have under Mr Keating, did a highly regulated industrial relations system save a job? No, it did not, because it is contrary to market mechanics and market economics. It does not work that way. All this debate about how if we somehow tinker with this industrial relations system we can make for a better world, if the economy is going south, is absolute rubbish. The Australian people deserve much better than that. It is not 1905 anymore. The Australian Labor Party, beholden to the trade union movement as they are, now know that the only thing that will save the workers of this country is increased productivity and a growing economy.

The economy has grown by more than 40 per cent in the last 10 years. That is what has given workers the highest standard of living they have ever had in this country. It is not for one second the industrial relations system. That has not given them one thing more except the level of the minimum wage, or the basic wage, as Justice Higgins called it. That, of course, is a social policy, and I accept that. We all accept that. And he is right: we need a mechanism to solve disputes, and there is the Fair Pay Commission, and I accept that as well. But there is no way you can divorce wage and salary earners from the market economy. It is over; that debate has been won and lost. Those who say that we can divorce industrial relations from the market economy are living in the 19th or early 20th century. That debate is finished. If you had to summarise the overall weakness in the Labor Party case, it is their absolute failing to understand that only a strong economy will make and save jobs and that you cannot sequester the Australian work force from the market, particularly in an era of low tariffs and deregulation.

The third point that I want to make this evening is the declining relevance of trade unions. My friends across the way will say, ‘Senator Mason is being particularly partisan, as always.’ But I am not really being partisan this time; it is rather more a reflection. When I was growing up in the 1970s, the trade union movement had a far more significant and critical role in Australia’s social, cultural and economic life.


Senator McGauran —Bob Hawke, cultural?


Senator MASON —Mr Hawke and Mr Monk were both large figures in this country. Their successors have not been such large figures; in fact, nowhere near it. The statistics tell some of the story, but not all of it. Let me go to the statistics for a second. The Hon. John Button, the former leader of the Labor Party in the Senate and a distinguished cabinet minister, in his famous Quarterly Essay article ‘Beyond belief’ said—and this nearly says it all:

In August 2001 unions made up less than 25 per cent of the total workforce—

it is even less now—

and only 19.2 per cent of the private sector workforce. (Compare this to 1978—

when I was growing up—

when union membership made up 57 per cent of the workforce.)

It has declined by nearly two-thirds.

You have to understand that this debate is not about the Australian Labor Party believing that the industrial relations legislation will save jobs. This is not about that, because not even the Labor Party believe that any form of workplace relations legislation will save jobs. This is about saving their bacon and the cultural, social and economic relevance of an organisational framework that is declining in Australian social life. That is a fact. It is a sad fact, perhaps, but it is—


Senator Forshaw interjecting—


Senator MASON —Senator Forshaw, it is a fact. Mr Button goes on to say:

Unions affiliated with the Australian Labor Party represent less than 15 per cent of the workforce.

And it is even less today. Unions affiliated with the Australian Labor Party represent less than 15 per cent work force. That is about one in seven Australian workers—that is who the Australian Labor Party represent. And they claim to represent the Australian working people. It is a fraudulent claim. Mr Button goes on to say:

The past twenty-five years have seen no new union affiliations to the ALP in technical and professional areas. Membership of unions in the growth sectors of the economy—information technology, telecommunications, electronics, biotechnology and financial and business services—is low, sometimes tiny ... Unions have also been sidelined by the huge growth in services provided by contractors, ranging from lawn mowing and house cleaning to highly skilled technical assistance.

That is the cultural and economic change that has happened in this country since I was growing up—since I was a teenager. That is what has changed. The shape of the economy and of Australian social life has changed enormously. Trade unions simply are not as relevant. In fact, of course, there are more Australians with ABNs than there are members of Australian trade unions. Doesn’t that just say it all? Mr Latham reveals that people in Green Valley read the market wrap. This idea that somehow you can divorce outcomes for Australian workers from the economy is rubbish.

I mentioned Mark Latham. Let me quote another word from the book of Mark. On page 188 he says:

... they (the unions) hate the idea of people being owners not workers.

You see, the world has changed. It is not workers versus bosses anymore. Most of the former workers, or many of them, have their own businesses and realise there has to be a business partnership—that you simply cannot have an antagonistic relationship at all times, because that simply does not work. According to Mr Button—and this is the real nub of the change in social context—this is what has happened. He says:

Unions, of course, have had a long involvement in politics. They started the ALP and once dominated party conferences with numbers and ideas. They pumped their best-qualified members into parliament, often from self-educated and politically motivated rank and file members. Now it is the other way around. ALP factions try to capture the allegiance of unions to advance the interests of a breed of Labor professionals. These professionals do not come from the rank and file of union members, and so a gap widens between the leadership of the union and its members. Too often the members switch off politics as a result, to the long-term detriment of the ALP.

Increasingly, trade unions are the playthings of ambitious Labor politicians, and the Labor Party a severely compromised organisation tying itself to representing a dwindling proportion of Australia’s work force. Now that is the point. In this unfortunate embrace, unions and the Labor Party are strangling each other to death. The shackles of 100 years ago must be broken for the Labor Party’s own good. Do not believe me—remember the Rt Hon. Tony Blair. He knew it had to be done. I should not be saying this, colleagues, because this is good advice. The day the formal links are broken between the Australian Labor Party and the Australian trade union movement will be the day the Australian Labor Party enjoys a renaissance. Representing as they do at the moment less than one in seven members of the Australian work force is pathetic, and it is a fraud to suggest that somehow they are the party of the Australian work force.

In summary, I have three points. Firstly, the federation pillars have crumbled and wage arbitration and the form it takes must and will reform. And there is nothing the Labor Party, whether or not this bill gets through, can do to change that. Secondly, it is the economy and not industrial relations legislation that makes and that saves jobs. You cannot divorce the workplace from the economy, full stop. And finally, the declining social, cultural and economic relevance of trade unions is a fact. Perhaps it is a sad fact. But if the Labor Party do not come to terms with it their relevance, certainly to the working people of Australia, is finished.