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Public Interest or Vested Interest
Guest of Honour's Address
The Hon J W Howard
It is a very great pleasure to address this dinner
tonight. When I reconfirmed my intention of coming
here tonight I did so for a number of reasons. I have
always had a very deep and abiding interest with the
major preoccupation of your Society, and most importantly
I have, over the past few years, regarded many of the
attacks on this particular organisation as an example
of the fascist tendencies of the left in Australia.
The fact that a group of people concerned with something
as fundamentally linked with human freedom as industrial
relations reform should be periodically branded as
being right wing, extreme, even fascist (and some have
even developed worse descriptions), and some of the
intellectual and rhetorical intimidation that has been
used against the organisation, is typical of the tactics
of sections of the left in Australia and indeed sections
of the middle ground of Australian politics that ought
to know better.
So they are the reasons why I am delighted to be here
tonight to join other residents in Sydney in welcoming
the H R Nicholls Society, and for the opportunity to
address you.
One of the favourite sayings of the current Federal
Treasurer Paul Keating is, 'if you can't control wages
you can't control the Australian economy'. I think
the appropriate riposte to that is that if you don't
rethink the industrial relations system you won't have
an Australian economy worth endeavouring to control
in the future.
I have continued to regard reforming the industrial
relations system as the single most important economic
reform that needs to be undertaken in this country.
Unless it is done, and unless it is done full bloodedly,
and unless it is done in an open forthright manner,
the kind of productivity that we all agree is necessary
in order to ultimately get on top of our foreign debt
problem simply isn't going to be achieved. And it
is not an issue that one can back and fill and temporise
about, and it is not an issue where those who believe
in reform should be intimidated by those who claim
that it is all a question of evolutionary change.
The common tactic of those who would intimidate people
who believe in industrial relations reform is to raise
the bogey of a wages blowout, and in the context of
the current election campaign it is the constant refrain
of the Prime Minister, of other members of the government
and its many friends in the media that if you embrace
fully the Coalition's industrial relations policy you
will have a wages blowout. This is very central to
the economic debate of this election campaign because
of the obvious link between the level of wages and
the level of inflation. But I want to put it to you
that the world economically and industrially of 1990
is a millennium away from the world economically and
industrially of a period as recently as 1981 and 1982.
The constant refrain of Hawke and Keating and others
is that if you embrace our policy you will have a rerun
of 1974 or 1981. There are three very good reasons
why that is fundamentally flawed reasoning that ought
to be emphatically repudiated. The first is the enormous
change that has come over the legal realities that
surround industrial relations in this country. We
have one of the great personifications of that here
tonight in Fred Stauder. Those historic decisions
of the courts in the Dollar Sweets case, the Mudginberri
dispute and more recently, and the one that is in a
sense the sweetest of all because of who encouraged
the litigation, the pilots' case, represent a legal
revolution in my view as far as industrial relations
is concerned. It would not have been dreamt by most
employers in Australia in 1981 or 1982 that the sort
of legal remedies that are now plainly available would
in fact be available, and that has brought about an
enormous change in the atmospherics of industrial relations.
There is another element of the legal change, and that
is that in 1977 before I became Treasurer I was responsible
with Tony Hartnell, who is now the Chairman of the
Australian Securities Commission and was the deputy
secretary of the Department of Business and Consumer
Affairs, and my then senior secretary Paul McClintoff
for devising what ultimately became Section 45D of
the Trade Practices Act which has probably made as
big a contribution as anything else to changing the
legal balance in industrial relations.
Section 45D has turned out to be of remarkable value.
The injunctive relief you can get under 45D brings
instantaneous assistance. One of the features of industrial
relations in Australia which escaped bodies like the
Hancock Committee for so long, was the simple fact
that trade unions, and on many occasions employers,
regard industrial relations commissions and industrial
tribunals as organisations to be ignored, whereas they
are very law abiding when it comes to the ordinary
courts. When an ordinary court tells a trade union
official or a trade union to do something they normally
do it. So I make the first point that the world has
changed a lot since 1981 because of the change in the
legal balance.
The second observation I make is that there is a greater
sense of reality about Australia's economic problems
now than there has been for a long time---and
it ought to be acknowledged that the learning curve
has embraced many people in the trade union movement
as well. I think it is fair to say that in many ways
the trade union movement is infinitely better led now
than it was in the late 1970s. There are lot of trade
union leaders now who have a far greater willingness
to put the national interest ahead of the sectional
interest. There are many who recognise the need for
the trade union movement to play a major part in coming
to grips with Australia's debt and current account
problem. I think the 100,000 dead men around George
Campbell's neck---and they were the words of the
Treasurer at the 1986 ALP conference in Hobart---weigh heavily upon the thoughts and the recollections
of a lot of people. I think we will see in the months
ahead, if there is a further and sharper slowing down
in economic activity, a far greater sense of realism
on both sides of the debate and particularly in the
trade union movement than we had in 1981-82.
I think the third and even more important long-term
change that has occurred is of course the inexorable
decline of the grip of organised trade unionism on
the affections of our population. I don't think we
should underestimate this and I don't say it in any
antagonistic, belligerent or partisan sense. It is
a reality that the great bulk of people who now enter
the workforce are either married women or the young,
and they in the main---and it is always dangerous
to generalise---don't like joining trade unions.
In fact the young, and I use that term fairly loosely,
don't like joining anything these days. One of the
great cultural changes that has come over the country,
I guess something to do with the post-television generation,
is that getting people to join organisations, whether
it is a political party, a trade union, church fellowship
or sporting club, is a lot harder now than it was 20
or 30 years ago, and that applies very much to trade
unions.
I think the great challenge of the trade union movement
of the 1990s will not be to tear up the industrial
relations policy of a Coalition government, but rather
to hold its members and to arrest the decline in membership.
I recently read Peter Drucker's book The New Realities
and he made the prediction that by the year 2010 you
would have in the industrialised world about 15-20%
of the total population employed in main-stream manufacturing.
That of course has enormous implications not only for
the structure of work patterns, but also for membership
of the trade union movement.
Now those three things together---the pressures
on trade unions to hold their share of the market,
the reality of what had happened in 1981 and 1974 being
etched on the consciousness of all of the players,
and most importantly of all, the change in the legal
atmosphere with its legal climate for employers---mean that whatever may be the arguments about the alternative
policies of the two parties on industrial relations,
with the introduction of a more deregulated system,
you will not get a rerun of the wages explosion of
1981 and 1982. I think it is very important that this
point be made repeatedly and emphatically by those
who support the Coalition's alternative industrial
relations policy because, in the long term, fixing
the industrial relations system is more important than
anything else. If we allow the argument to gather
currency that it is better to opt for the cosy constrictions
of a managed centralised industrial relations system
than to strike out in favour of a freer, less regulated,
more enterprise driven industrial relations system,
then the long-term implications of that for our economic
growth and economic development will be severe.
Nobody should imagine that there won't, in the course
of introducing a new policy, be some areas of friction,
some disputes and some arguments. There are plenty
of those under the Accord. Those of you from Melbourne
know all about that, and of course whether the metalworkers'
dispute turns out to be an elaborate exercise in allowing
Superman to swoop in, ring a few people up and get
them all back to work remains to be seen. I think
that will probably turn out to be the case but nobody
who knows anything about industrial relations in Australia
should pretend that any system can operate without
some kind of discord and dispute on occasions. We
all know that the great sword of Damocles that hangs
over the Australian economy, which has been there for
quite some time and is going to be with us for quite
some time to come is, of course, our enormous foreign
debt produced by our nagging current account problem.
That is all a function of an economy and a society
which is too unproductive and too uncompetitive, and
it cries aloud for reform in so many areas. I think
the debate about changing our industrial relations
system has moved a long way over the last six or seven
years (despite enormous opposition from quarters that
should have known better) and I think we are finally
beginning to win the argument. It still has a long
way to go because, although it is comforting to say,
'Oh yes, we can have enterprise bargaining and it can
all work out very nicely and it can all happen within
the system', the only way you will really begin to
dismantle the centralised wage fixing system in this
country is to have full blooded voluntary agreements
outside the Industrial Relations Commission.
If I can draw a sporting analogy, it would be to say
that having a deregulated system without voluntary
agreements is like sending a cricket team into the
field without a captain. The key to changing the system
and freeing up the labour market is undoubtedly the
voluntary agreement. Those who seek to obfuscate about
that by suggesting that over on the periphery and in
a few years a few people with 5 or 10 employees might
just have a voluntary agreement in relation to a couple
of fairly irrelevant conditions of work and that will
be enough, are in effect saying that we want to preserve
the existing system. I believe that come the election
of a Coalition government and on the assumption that
the legislation goes through the Senate to allow voluntary
agreements, there will be far greater resort to those
voluntary agreements than many people have imagined,
or than the opponents of change would suggest. The
very fact that our political opponents, and if I may
say so our industrial opponents---and I don't
mean the trade unions there, I mean some of those on
the employers' side who oppose change---are talking
the language of enterprise bargaining without the substance
of giving free men and women the power to make voluntary
agreements is evidence of the fact that there will
be a rush to voluntary agreements---once the system
is changed.
This industrial debate, like so many other debates,
is very much about the hopes and aspirations of power
constellations. Many people say to me these days,
'John, the Labor Party has changed, it has become more
right wing' and that is true. It has in many areas
shifted its position closer to the Liberal Party and
many elements of the National Party. I think in many
ways the great philosophical difference between the
two sides in politics these days is that on the one
hand those in the Labor Party and those who support
them, believe that essentially the future wealth of
this country is to be the product of a bargain between
power constellations and the government. They do not
only decide the size of the cake but how it is going
to be divided. The alternative view, that must always
be the Liberal view, is that the future wealth of this
country can only ever be the sum total of the efforts
of unfettered individuals given the right incentive
and the right environment.
That really encapsulates a great deal of what the
industrial debate is all about. It is about deciding
how the future wealth of this country is to be produced,
and it is a very important debate.
I would like to conclude by paying a compliment, if
I may, to the H R Nicholls Society. I well remember
the inaugural dinner in Melbourne in 1986 addressed
by Geoffrey Blainey, and I think I also got a guernsey
and so did the National Party candidate for Fairfax---I think he was the inaugural President---and I can remember some of the hysteria that surrounded
it and some people saying to me, 'John you really mustn't
go, because you know it's a bit suspect, that organisation.
There are very suspicious people out there.' They
were terribly dangerous people at that gathering---there were four or five hundred of them. I thought
they represented people who cared a great deal about
the future of this country, people who weren't interested
in smashing unions. They weren't interested in class
conflict, they were simply interested in giving people
a greater degree of industrial freedom and the idea
that if you allow free men and women to make bargains
about how they conduct their lives and how they run
an enterprise that enterprise usually ends up being
more productive and the nation benefits. I think your
organisation has made a very major contribution to
the industrial relations debate. I thank you for that,
and I thank you for the opportunity, which I have taken
with relish, of addressing this dinner, and I wish
the H R Nicholls Society every success in the years
ahead.
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