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PM’s insidious legacy is union restoration

11 May 2013 3,370 views No Comment

JULIA Gillard is desperately searching for a legacy to establish her place in history beyond the fact that she is the first woman to hold the prime ministership.

As matters stand, she is destined to be remembered as the Labor leader who knifed a popular but flawed leader in Kevin Rudd, lost Labor’s majority at the 2010 election and then (if current polls are any indication) led Labor to its worst ever loss at the 2013 election.
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The deterioration in the nation’s finances under Gillard’s watch and her failure to balance the budget during a period of record terms of trade will have long-term consequences.

Her failure on border protection and asylum-seeker policy will be regarded as the greatest policy failure for many decades, while a defining moment of her legacy will be the broken promise over the carbon tax and linking the carbon price to the EU carbon scheme.

Under the Gillard government the union movement has enjoyed resurgence in power and influence way beyond the demands or needs of workplaces across Australia. This has occurred because the Prime Minister needs union support to stay in power.

One of Gillard’s more insidious legacies will be her reversal of over 30 years of labour market reform and turning her back on Labor’s previous embrace of a deregulated economy.

When the Prime Minister addressed the AWU conference in February this year, assuring the audience that she was not the leader of a progressive or moderate or social democratic party but the Labor Party, what she was really saying is she views herself as the leader of the union party.

Gillard is allowing Australia to be dragged back to the industrial practices of earlier centuries in terms of the power of the unions, thus ignoring the urgent need for Australia’s labour force to be competitive in a global economy.

Unions have been under pressure for decades, as globalisation and changes in society have made their role less relevant. Ironically, the greatest decline in union membership occurred under the Hawke and Keating Labor governments from 1983 to 1996, when union coverage declined from about 50 per cent of the workforce to about 25 per cent.

At present only 13 per cent of the private sector workforce has union membership.

Former ACTU boss Bob Hawke used a series of accords to limit union wage demands, motivated by the knowledge that a wages breakout would damage the economy and drive up unemployment.

Paul Keating brought in the concept of enterprise bargaining, which further restrained the ability of militant union leaders to make exorbitant demands.

In 1996, John Howard’s government built on this legacy with the introduction of individual Australian Workplace Agreements, which enabled employers to bypass unions altogether and negotiate directly with employees on a one-to-one basis.

The successful union campaign of 2007 that helped propel Kevin Rudd into the Lodge also provided his government with a mandate to reform employment laws, with responsibility for the change being placed in Gillard’s hands. AWAs were duly scrapped and workplaces heavily re-regulated, reversing many of the reforms of the Howard, Keating and Hawke governments. Fair Work Australia was created and stacked with former union officials.

Union bosses then played a key role in the removal of Rudd, with Paul Howes, the brash young head of the AWU, boasting on television in the middle of the ambush of the role he played in bringing down a first-term prime minister.

Through their factional proxies in the Labor caucus, despite consistently poor opinion polls, union leaders remain firmly behind Gillard and are responsible for blocking the return of Rudd to the Labor leadership.

The Prime Minister has repaid that support by backing legislation that unfairly tips the balance of workplace relations in favour of the unions and with fiscally reckless policy announcements, including the use of taxpayer funds to top up salaries of aged-care and childcare workers on the condition that they join a union.

Gillard has denied the link between increased pay and union membership, but the union leaders have let the cat out of the bag with brochures for workers detailing their need to join a union to access pay rises from the federal government.

There are serious implications from Gillard’s strong support for militant union leaders – especially as militancy often leads to fewer employment opportunities for union members. In the past, mines, factories and other businesses have been bankrupted and closed due to the bloody-minded behaviour of some union bosses.

Increased union power can also entrench higher levels of unemployment, as employers are reluctant to take on more staff for fear of disruption to their business.

Unreasonable demands from unions also increase the cost of employing existing staff, thus restricting the ability of business to create further opportunities. This is where some union bosses reveal their apparent lack of interest in those who are unemployed.

Some unions can and do work constructively with employers to streamline workplace practices to boost productivity and increase profitability, thus creating an environment for increased employment.

The Prime Minister’s track record indicates that she is firmly in the camp of the most militant and disruptive unions, and there is significant danger to the economy if she continues to bow to their demands as payback for supporting her leadership.

An end to this government cannot come soon enough for those wanting a modern, flexible workplace environment that focuses equally on the needs of employers and employees.

Ross Fitzgerald’s memoir ‘My Name is Ross: An Alcoholic’s Journey’ is now available as an e-book.

The Weekend Australian, May 11-12, 2013, Inquirer p 17.