Light on the Hill: Industrial Relations Reform in Australia

Opening Address

The Hon. Sir Joh Bjelke-Petersen, KCMG, MLA

Mr John Stone, President of the H R Nicholls Society, the Honourable Lindsay Thompson, former Premier of Victoria, the Honourable Paul Clauson, Attorney-General of Queensland, Distinguished Guests and Members of the H R Nicholls Society, Ladies and Gentlemen, Friends all.

I say 'friends', because all those of us here today, who I know include people who are not members of the National Party, share a great concern, a concern which is expressed in every part of Australian society. That is, that our industrial relations institutions, inherited from the early days of Federation, are dragging Australia down.

In dragging Australia down, they are also holding Queensland down, and so I regard the Statement of Purposes of the H R Nicholls Society as of the greatest importance. Let me read them to you.

• to support the reform of Australian industrial relations with the aim of promoting the rule of law in respect of employer and employee organisations alike;
• the right of individuals to contract freely for the supply and engagement of their labour by mutual agreement, and;
• the necessity for labour relations to be conducted in such a way as to promote the economic development of Australia.

The theme of your conference is 'The Light on the Hill: Industrial Relations Reform in Australia' It is appropriate that you should come to Queensland to discuss this subject. Here in Queensland we have ensured that the lights will stay on, and our efforts at industrial relations reform are to be the subject of four papers to be delivered at your Conference. One, on the Industrial (Commercial Practices) Act, is to be delivered by my Attorney-General; another, on voluntary employment agreements, will be given by the chairman of my Party's Employment and Industrial Relations Affairs Committee; another will be given by the legal representative of Australia's first enterprise union, the Queensland Power Workers' Association; and a fourth is to be given by a distinguished Queensland public servant, Wayne Gilbert, on matters relating to the electricity industry.

The last great leader of the Federal Labor Party, the late Ben Chifley, gave your Conference its theme in two ways. First, with his observation that the practitioners of politics must not lose sight of the light on the hill.

Less directly, but perhaps more importantly, he understood that it is not sufficient in politics to relax with a warm inner glow which comes from believing one has found the light on the hill.

He understood that one must move towards that light with courage and resolution, ignoring the selfish pleas of those who have a vested interest in resisting change. Although his vision of the light on the hill was imperfect, he did not flinch from his duty to Australia as he saw it, even when that involved resisting the might of the trade union movement.

The state of our nation today owes much to the lack of the quality which he so amply displayed. When Chifley was Prime Minister, even though Australia had slipped from its pre-Federation position of having the highest standard of living in the world, it was still within the first five nations of the world.

The economic imperative of fundamental reform in our industrial relations structures was not as apparent then as it is now. But to Chifley the national interest took priority over the hang-ups of the Industrial Relations Club. What a pity his Labor successors have not held the same view.

Coming as so many of you do from other States, I am sure you still hear that far-reaching reform of the industrial relations system cannot be achieved; that it is 'industrially unrealistic'; that it will founder on the rock of trade union power.

If that is accepted, such defeatism would make the triumph of our opponents certain indeed. I turn, therefore, to history to show what has been done here as an answer to those who proclaim that there is no point in trying to wind back union power.

When I became Premier in 1968, it was as leader of a Coalition Government. At that time:

• trade unions in this State---indeed, only in this State---were by law exempt from civil liability arising from conduct in contemplation or furtherance of a trade dispute;
• membership of a trade union by State public servants was compulsory;
• the State Government collected the fees from its public servants on behalf of the unions;
• the accounts required to be prepared by trade unions for the information of their members---and the public---were totally inadequate; and
• there was no adequate provision for conscientious objection to union membership.

This state of affairs reflected not only 39 years of Labor government, broken by 3 years of non-Labor government during the depression, but also the subsequent constraints of coalition.

Since that time there has been an ongoing program of industrial relations reform. Measures taken include the following:

In 1974: the Governor-in-Council was empowered to remove the exemption from civil liability in relation to particular strikes.

In 1976: the exemption from civil liability was totally removed, thus moving Queensland at last back into line with the rest of Australia.

In 1984: compulsory union membership in the State Public Service was terminated, although preference in employment at point of engagement was substituted; the Industrial (Commercial Practices) Act, mirroring sections 45D and 45E of the Commonwealth Trade Practices Act, but applying also to intrastate trade engaged in by individuals and secondary boycotts directed to individuals, was enacted; and legislation to curtail the more abusive forms of union-controlled superannuation was enacted.

In 1985: the Industrial (Commercial Practices) Act was amended to make unlawful primary boycotts in aid of demarcation disputes and preference to unionists, and strikes called without 7 days' notice; industrial action in the electricity industry was prohibited and contract employment in that industry authorised; and the right of individuals not to join a union, or to resign from one, was enhanced.

In 1986: the accounting requirements for trade unions were brought substantially into line with those applicable to companies.

In 1987: the Industrial (Commercial Practices) Act was further amended to make unlawful primary boycotts in relation to export industries or research development activity; a Bill for legislation to permit voluntary employment agreements between employees and employers in an enterprise was introduced and will be dealt with by the Parliament in August; the subject of preference in employment in the State Public Service was referred to the Public Service Board for a report to the Government; and a general review of the Industrial Conciliation and Arbitration Act (including consideration of preference provisions in the private sector) was announced.

Taken as a whole, these and related measures represent the most substantial program of legislative change in the industrial relations area implemented in Australia since the turn of the century.

In our endeavours, we have not been wholly alone. The Thatcher Government in 1979 inherited a like situation of union privilege, including immunity from civil action, which it is slowly redressing in favour of the principle that all should be equal before the law.

Unlike my Government, the Thatcher Administration has not yet wholly eliminated union immunity from civil action in the context of industrial disputes. It has moved, rather, on a step-by-step basis in removing it from particular activities, at the same time taking other initiatives directed to trade union reform.

Whether a more fundamental reform program implemented at the commencement of her Government's term of office would have been more successful, is a matter which cannot now be conclusively decided one way or the other. What is beyond doubt is that her industrial relations reforms have been a major factor in the recovery of the former 'sick man of Europe'.

Whilst we have gone far, we have not been able to go either as far, or as fast, as we would like. We have constantly been threatened that the Commonwealth Conciliation and Arbitration Commission will seek to intervene in State industrial relations.

The Hawke Government, with the help of the Senate Democrats, has even legislated to deny the Queensland Electricity Authorities the right to argue defences available to other respondents before the Commonwealth Commission---a move later held to be unconstitutional by a 5-1 majority of the High Court.

These threats must be assessed against the background that whilst the State industrial system has some unsatisfactory features it has a very much better record of resolving disputes than the Commonwealth system.

That is demonstrated by the fact that whilst 64 per cent of Queensland employees are subject to State awards, as opposed to 24 per cent subject to Federal awards, over 60 per cent of man days lost through strikes in 1986 occurred in employment subject to Federal awards.

In industrial relations issues, as in economic ones, the problems we see in Queensland cannot be solved by State action alone. It is critical for Queensland that the next Federal government creates an environment in which real industrial relations reform can occur.

This applies even more to the other States, where our reforms have not been implemented and some of whose governments are actively conniving at the enhancement of union power.

The need for such reform has been documented already in many papers and articles, and not least in the publications of the H R Nicholls Society. Our own research, not surprisingly, confirms these needs.

To whom does one look for the creation of that necessary environment for reform?

Clearly, not to the Hawke Government. It obviously takes pride in the role ascribed to it in its various accords with the ACTU, the executive arm of the trade union movement.

Those accords required it to deliver more power and less accountability to the trade unions. The Hawke Government attempted to formalise, by introducing the Industrial Relations Bill, the abdication of power by the elected government to the ACTU. As well, it was to set the seal upon the emergence of a corporate state in Australia.

In almost every respect, that Bill, if enacted, would have been a change for the worse. The monopoly position of trade unions was to be preserved and entrenched. The few rights now left to business proprietors to manage their businesses would have been taken away. And most damaging of all, rights enjoyed by all Australians for hundreds of years would have been summarily destroyed.

A system of sanctions on unlawful conduct which has worked would have been replaced by one which has already totally failed. The unions obviously told the Hawke Government to jump. Its response was to ask 'How high?'

The Hawke Government's decision not to proceed with the Bill at this time is a cynical move to disguise its special relationship with the unions until after the election.

Nor can we confidently regard the Liberal Party as the solution to the problem. Its past record, present personnel and so far stated policies disclose neither an adequate appreciation of the essential nature of the problem nor the resolution to implement the necessary corrective measures.

At the heart of the problem of Australian industrial relations lies the extraordinary power of the controllers of trade unions. This is underpinned by the extraordinary legal privileges of trade unions, as organisations, and the inability of members of unions to resign from them unless they are willing to give up their jobs.

Since time immemorial, the common law has refused to grant legal effect to agreements which prevent competition in the market place. Since 1623, the prerogative power of the Crown to grant monopolies has been non-existent. More recently, the power of trading corporations to achieve by market activity the monopoly they cannot obtain by law has been restricted by legislation such as the Trade Practices Act. Yet trade unions are guaranteed a monopoly position by Section 142 of the Commonwealth Conciliation and Arbitration Act and comparable State provisions.

These provisions are the foundation of trade union power. Preference in employment of unionists, odious as it is in principle, operates merely as a convenient means of mopping up dissenting individuals.

The cornerstone of any industrial relations policy which will be effective to wind back the power of the trade union leadership is full freedom of association.

That certainly involves individual employees not being compelled, either directly or indirectly through preference clauses, to join a union. But it also involves individual employees being permitted to join the union of their own choice, or, if they see fit, to form their own union. This concept is a major element of the legislation currently before the Queensland Parliament.

The second essential element of industrial relations policy is that it is both the right and responsibility of employers and employees to determine for themselves the employment conditions to apply. If any industrial tribunal is to interfere, it should be one locally based rather than a centralised system imposing its will upon unwilling parties.

Any policy for industrial relations which does not address these fundamental issues is simply fiddling at the edges.

Recently I released two documents. The first is the detailed policy on employment upon which National Party candidates throughout Australia will campaign. The second is a background paper on Flexibility in the labour market prepared by the Employment and Industrial Affairs Committee of my Party which demonstrates the need for real reform of labour market structures.

The essential elements of this policy are:

• the creation of genuine freedom of association by permitting employees to form their own unions or to remain outside unions;
• guaranteeing to union members effective control of union decisions affecting their lives;
• the termination of the compulsory arbitral power of the Commonwealth Conciliation and Arbitration Commission, leading to voluntary employment agreements as the principal basis of employment;
• the enactment at Commonwealth level of the principles of Queensland's Industrial (Commercial Practices) Act;
• the removal of the right of the Commonwealth Conciliation and Arbitration Commission to interfere in civil actions against unions in the real Courts of the land; and
• the removal of those privileges which elevate trade unions and their bosses above the law applicable to other Australians.

My Government and Party regard the proper role of trade unions as essential to a productive and growing society. We reject totally the vision of Australia as a low wage community in which employees have no rights.

Our country's future lies not in reducing the standard of living of its workers, but in increasing that standard through increases in productivity. Our present levels of productivity, as revealed in the background paper, are deplorably low.

The time has come for all Australians to realise that improvements in our living standards cannot come from socialist policies of soaking the rich, or from running down the capital base of our industries. We have to realise that no one gets it if there isn't any. We don't need a sweatshop mentality---but we do need a Mudginberri mentality.

We will never increase our productivity whilst our industrial relations machinery is built upon foundations of an earlier age whose structures are now irrelevant. Monopoly craft-based unionism with its attendant issues of demarcation, rigid work practices, and entrenched opposition to change is a relic of the past which will continue to drag us down unless we outgrow it.

Mr President, I was delighted and honoured to receive your Society's invitation to open this Conference. Since its foundation less than 18 months ago. your Society has played a major role in promoting public understanding of the issues to which I have referred. In doing so, it has already performed a great public service to Australia.

I know that, in the future, we will stand shoulder to shoulder in this great endeavour to restore our nation's future.

I declare this Conference open and wish you well in your deliberations.