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The New South Wales Labour Council Conference: speaking notes

I am very glad to have this opportunity to address the Conference of the NSW Labour Council. I thank my hosts, in particular Peter Sams. And, if I may, I welcome those who have come from overseas to attend the Conference.

It is an honour to be invited to address this conference. It is an honour because the Labor Council represents what I acknowledge to be the most resourceful, disciplined and tenacious opponent of the Liberal Party in the entire country, the NSW ALP Right. I foresee that when the Labor Party does return to power in Canberra, it will be in no small measure due to you people.

But don't give up your day jobs just yet.

From across the political divide I can pay tribute to your movement. But I'm afraid I can't do the same for the other mob.

Thirty years ago Gough Whitlam said of the Victorian Left Certainly, the impotent are pure. Some things never change. As is so often the case, Gough's comment constitutes the last word on the subject.

Now, it would never enter my mind to describe the NSW Right as either impotent or pure. But you are pragmatic. You know where your interests and the interests of those you represent lie.

And it is for this reason that today I ask you to support the Government's changes to the industrial relations system. Because it is in the interests of you and your members.

For as long as the Coalition remains in Government, I have no doubt that Peter, Michael and I will have an enjoyable time bagging each other up hill and down dale. That's politics.

But there are some in the union movement who see their role as only politics and nothing more. Their implied contempt for the interests of the rank and file is profound. Under their motto of "A campaign a day keeps reform at bay" they are forever issuing shrill calls to rally to the barricades. They can't work out - or perhaps aren't even interested in - why the union movement is losing members at the rate of 1100 a week.

They are the pure. They are the impotent. And those unionists unfortunate enough to be represented by them will lose out as a result.

Let me put this point in another way. You know that Australia's waterfront is inefficient. You know that this inefficiency costs us dear in terms of higher costs, lost trade opportunities and ultimately jobs. You have also been called upon to lend your weight to efforts to block reform on the waterfront. But the current state of affairs only harms you and your members. So if you do support the cause of stagnation on the waterfront, you will only be perpetuating a state of affairs which harms you and your members.

And your rank and file know there is something wrong. At the 1996 election, nationwide the ALP's share of the unionists' vote declined a massive 16.3% - down from 62.3% to 46%, or just over 1.1 million workers. And the Coalition's share of the unionist vote increased by 5.8% to 35.5%, nearly 870,000 workers. There's not a lot in it.

In fact, the closer one looks at the outcome of the 1996 election, the more one is struck by the extent of the revulsion of working Australians for the ALP. In the 1993 election, in only three of the eight categories of employees ranging from labourers to managers did the Coalition out poll Labor. But in the 1996 election, the Coalition out polled Labor in all eight categories, including labourers.

It gets better or worse, depending on your perspective. Of those employees who voted Labor in the 1993 election, the following percentages changed their vote to the Coalition in 1996: 15% of professionals, 10% of para-professionals, 26% of tradesmen, 20% of plant and machine operators, 11% of clerks and 16% of labourers.

In fact, the writing had been on the wall for some time. On 4 August 1995 Leigh Hubbard was quoted in "The Age" as saying that: I think the John Howard approach to the battlers is actually starting to work. There is a lot of frustration out there in the community with Labor federally and how close they are to unions ... We have been hurt as a trade union movement by our identification with government at both a state and federal level ... How right he was. And the article concluded: Mr Hubbard did not rule out the possibility of unions one day backing a Liberal government or endorsing Liberal policy.

It is also interesting to reflect that since the beginning of the campaign preceding last year's election a common claim has been that the election of the Coalition, the passage of its industrial relations legislation and the implementation of the new system would mean the end of civilisation as we know it.

Well this hasn't happened. As a matter of fact, Newspolls taken over the past eighteen months (September 1995, January 1996, September 1996 and January 1997) indicate that in answer to the question Which of the major parties best handles industrial relations?, the Coalition's approval has stayed steady. I also know that on that question, our support amongst key swing voter groups has lifted strongly.

This Government does not take for granted the votes of these people who changed sides. We are well aware that in order to retain their vote, we have to provide jobs, support families, help small businesses and do something about the level of foreign debt we inherited from the Labor Government.

This is where the new industrial relations system and the union movement enter the picture.

I'm not here today asking you to do violence to your political convictions and collaborate with your political opponents.

I'm saying that we all know we face these problems. I'm saying that the new industrial relations system is part of the solution that the people of Australia - including 870,000 unionists - elected the Coalition to put into effect. I'm saying that the new system will benefit Australians overall and workers in particular. I'm saying that you are pragmatic enough to realise the truth of this and to judge where your interests lie.

Outside the industrial relations arena, the Government is already delivering benefits to the battlers. Our submission to the Living Wage Case would deliver a real wage increase to low income earners. Interest rates have come down sharply. We are putting in place a new system of traineeships which will expand training opportunities.

In the industrial relations arena, the new legislation has only been in effect for a matter of weeks. But already there are some indications of the changes it will bring to Australian workplaces.

One change has been to the number of unfair dismissal claims being lodged in the Federal jurisdiction.

From 31 December to 14 February, a total of 611 unfair dismissal claims were lodged, compared with 1735 in the same period in 1996. This is a reduction of 64.8%.

Whilst the new system cannot be judged on the basis of seven weeks operation, these early signs are positive and encouraging. Reasons for the decline in applications may include the unfamiliarity of the new system. The introduction of a filing fee and the possibility of costs being awarded against a frivolous claim may be deterring some applicants, more applicants are pursuing their claims through state systems and the exclusion from the new system of some categories of employees such as casuals, fixed-term and fixed-task employees.

The previous unfair dismissal system was a disaster. Bob Carr knew it; nearly two years ago he pointed out that it was costing jobs, in particular it was preventing kids from getting a job. Our new system still provides protection against unfair dismissal, but it is a balanced system based on the well-established principle of a "Fair Go All Round", which you have had here in NSW for some time.

Another feature of the new legislation will be the introduction of Australian Workplace Agreements (AWAs). AWAs will provide new opportunities for employers and employees to pursue at the workplace level the flexibility and simplicity, the higher productivity and higher wages inherent in the new legislation.

The AWA provision of the new legislation will commence on 12 March. From that date the Office of the Employment Advocate will be open for business. From 12 March employers will be able to offer AWAs either to their existing or to prospective employees (for new employees, the requisite period is 5 days). Existing employees will have at least 14 days in which to decide whether to sign the agreement. Once signed, these can be lodged with the Advocate for approval. The effect of this time-table is that the earliest possible date for lodging AWAs is 18 March.

And the office of the Employment Advocate is set to discharge its responsibilities. It will have substantial facilities. These will include Internet access, initially through the Department of Industrial Relations home page, whose address is http:\\\dir.

This address will carry an information kit, available from 12 March, which will include the form which, if properly completed, will provide all the information necessary for the Employment Advocate to process an application. The kit will also be available in hard copy and a national telephone enquiry service with a national 1300 number will be established.

The Employment Advocate will also be writing to all employees who have signed an AWA at their homes to ensure that they have genuinely consented to it. This will give them the opportunity to raise privately with the Advocate any concerns they may have about the process, including allegations of duress before the Employment Advocate approves them.

Of all the elements of the new legislation, it was AWAs that attracted the most criticism from the ACTU. They regarded the concept of non-union enterprise agreements as an abomination, conveniently forgetting that the ACTU had acquiesced to non-union Enterprise Flexibility Agreements in the Brereton legislation.

And by voting in Parliament last year against our provisions for non-union collective Certified Agreements, Bob McMullan has signalled the ALP's intention to withdraw non-union collective agreements from Labor's industrial relations policy. This in a context where more than two-thirds of the workforce are no longer in unions, or as Reforming Australia's Unions puts it. In fact the (Brereton) Act simply recognised that there was an Australian industrial relations (system) already getting by without unions, and it might be the future.Clearly, Gareth Evans' relevance deprivation syndrome is catching.

But other, more pragmatic elements within the labour movement are moving to take advantage of the opportunities offered by AWAs. Because the fact is that unions are not excluded from AWAs, rather the legislation offers ample scope for their participation not as parties but as bargaining agents. APESMA has announced its intention to act as a bargaining agent in the negotiation of AWAs and I understand that the AWU is also giving favourable consideration to providing its members with the same service. As Steve Harrison said in "The Hobart Mercury" on Wednesday, unions would be ostriches if they boycotted AWA's.

Another important aspect of the legislation is the introduction of genuine freedom of association.

In particular, the legislation protects the right of all employees to choose whether or not to join a union. Preference clauses and closed shops are prohibited.

In some people's eyes, this is "anti-union". However, they are very much mistaken.

Closed shops, and other forms of compulsory unionism are bad for unions - and they are certainly bad for union members, and in the long run, they are bad for unions themselves.

In the short term, compulsory union membership may keep the membership subscriptions flowing in. However, it does so at a very high price.

Don't just take my word for it.

In a paper published in January this year by the ANU, Dr David Peetz outlined some very interesting research findings on the impact of compulsory unionism on the performance of unions and the attitude of employees to unions.

Dr Peetz found that union members in closed shops had a significantly lower opinion of whether their union listened to them, and took account of their problems, than those union members who worked in workplaces where union membership was voluntary.

In fact even non union members in workplaces with voluntary membership had a higher opinion of union responsiveness than union members working in closed shops.

Union members in closed shops were also less likely to believe that their union was doing a good job in obtaining a safe and comfortable working environment.

Dr Peetz also found that employee participation in decision making in the workplace was weaker amongst employees in compulsorily unionised jobs than amongst other employees.

The evidence is overwhelming - unions enjoying the protection of compulsory unionism do a worse job in looking after their members than where they have to persuade employees to join.

Compulsory unionism is a lot like the protection we used to give the manufacturing industry in this country. While in the short run it may help those it protects, in this case trade unions, in the long run it weakens them by encouraging complacency and inefficiency.

As Dr Peetz concluded - compulsory unionism is not in the union movement's own long term interest because of the negative effect it has on union performance and employee support for unions.

Another aspect of the new legislation of interest to the Labor Council are the provisions for the disamalgamation of unions. In Reforming Australia's Unions Peter has described Bill Kelty's policy of amalgamation as fundamentally flawed and Mark Hearn puts it rather more strongly: the benefits of shotgun weddings are, at the very least, debateable. The super union strategy was indeed one of the more disastrous policies of the ACTU.

The theory was of course that larger unions would be more powerful, and more capable of devoting resources to recruiting new members.

The reality was that a lot of smaller unions, with loyal members, were swallowed up into large bureaucratic organisations to whom very few ordinary union members felt any degree of attachment.

The result was that a lot of people simply resigned from union membership altogether.

I know that many union officials, including those from the Labor Council, were highly sceptical about the super union strategy. However, as we would all recall, during those not to be forgotten years of the Accord, when Bill Kelty got an idea in his head a lot of people - including the then Federal Government - jumped.

The result was of course that many of the amalgamations that took place were entered into under a high degree of pressure, facilitated to quote Michael Costa by legislative imperative, threats and government support.

The legislative imperative included the forcible amalgamation of small unions - something that was later held by the ILO to be in breach of ILO Conventions. The threats included using section 118A of the Act to exclude recalcitrant unions from coverage.

Particularly in this context, it is a perfectly reasonable proposition that there should be scope for the membership of amalgamated unions to disamalgamate on a fair and democratic basis.

This is what the Workplace Relations Act provides.

Because they know how unpopular their "super union" policy was, the Federal ALP was careful not to oppose these provisions of the Act outright.

However, they sought to amend the legislation in a manner - again to quote Michael Costa - designed to ensure there will be no disamalgamations.

Fortunately, the Government was able to defeat the ALP amendments - not I might note with the support of the Democrats, but with that of Senator Harradine.

Now let's look at the track record of the ACTU leadership, who so vigorously oppose these reforms.

They're the mob who have presided over the slump in union membership.

Their great achievement is the failed union amalgamation process.

They demanded and got Laurie's disastrous unfair dismissal system.

They presided over declines in real wages.

They promised industrial warfare if the Coalition won the election.

They were a material factor in the defeat of the Keating government.

They remain totally oblivious to the Parliament House Riot, denying even partial responsibility for one of the worst acts of political vandalism in recent times.

They continue to dictate antique industrial relations policies to the ALP.

And their reaction to this dismal record?

In the first place, they just carry on as if nothing had happened. Wednesday's "The Age" reported that the ACTU executive had passed resolutions on Mabo, Wik and the Republic and quoted Jenni George as likening the native title issue to the Vietnam War protest campaign. The nostalgia for the 60's is a dead give away. These are all worthy issues, but at a time of plummeting membership, couldn't the ACTU Executive think of something of more direct relevance to their members? They remain wedded to the fallacy that they are a state within a state.

And the next thing they do is that they stand for re-election.

They just can't see that they've got a problem. They act as if the last election simply didn't happen. But they do have a problem. The rank and file has a problem. And the ALP has a problem.

The last word on this issue must go to Reforming Australia's Union. Mark Hearn says The Accord extended considerable political power to the ACTU, personified in the querulous form of the de-facto Minister for Industrial Relations, Bill Kelty. Yet this power at the top was not matched by shoring up the foundations of the pyramid.

The warning influence of the peak union body disturbs me not at all. But it does pose a challenge for Labour Council.

What I am suggesting is that one way you can adapt to the situation is to take up the opportunities afforded by the new legislation to provide better services to members.

For further information:

Peter Richards, 0419 422 650, 03 9650 0177