The AMWU’s $160 billion bill

As I wrote in today’s Australian Financial Review, HR Nicholls has produced detailed costings of the Australian Manufacturing Worker’s Union’s demands to the 50th national Labor party conference beginning in Adelaide this morning.

More than 2,000 people will participate in the forum that writes the platform the government is meant to govern by. The AMWU has published a “blueprint for action”: over thirty pages describing themselves as “a working-class instruction to the government”.

This email sets out what we found.

Somewhere between the demand to nationalise the nation’s energy infrastructure and the call to strip the Union Jack from the flag, you realise this is less a policy platform than a séance. The ghosts of 1975 have been summoned to the bargaining table, and they have brought an invoice.

Consider what the AMWU is asking taxpayers to fund.

This is a long list.

Nationalisation of “strategic infrastructure”, energy, supply chains, key manufacturing platform; Aged care returned entirely to public ownership; A state-owned bank; A public sector job guarantee for every citizen “ready, willing, and able to work”; Free healthcare with no out-of-pocket costs, dental and pharmaceuticals included; Free university and TAFE, with every dollar of remaining HELP debt wiped; A pension benchmarked at 35 per cent of male full-time earnings; Retirement at 60 for manual workers; A shorter working week on full pay; Fifteen days of personal leave; The abolition of what remains of negative gearing; A legal mandate forcing supermarkets to run “Australian Made” aisles and to accept cash.

The organising principle is simple enough - if it moves, nationalise it; if it stands still, give it a tripartite council. There is even a demand to resurrect the Trade Union Training Authority, complete with a “brick-and-mortar” national college teaching the history of the movement’s strikes, “the victories and the defeats”.

The housing chapter deserves its own mention. The blueprint declares the housing market “a class war” and proposes to win it by moving construction off building sites and into factories staffed by a fully unionised workforce.

They make no mistake in explaining the rational. Scattered worksites are hard to organise, whereas factories, can be organised “overnight”, “bringing thousands of workers under the banner of a strong, unified union”.

When the blueprint lists the benefits of factory-built housing as, “union power and better jobs” first then affordability second you know what the priority is.

Converting home-building from construction sites into manufacturing factories converts the home-building workforce into manufacturing workers. It is perhaps unnecessary to note which union covers manufacturing.

The Bill

Nobody at the AMWU bothered to cost any of this. So we have.

Run the demands against published costings of comparable proposals - Parliamentary Budget Office modelling, the government’s own welfare-adequacy modelling, The Grattan and Australia Institute’s estimates, official baselines - and the recurring bill lands between $120 billion and $160 billion a year gross.

The blueprint does gesture at paying for itself: a wealth tax, an inheritance tax, a new top rate above $500,000, corporate integrity measures and resource tax reform.

Assessed generously and these measures may generate $20 billion to $50 billion a year.

The problem with wealth taxes is that they rarely yield what their designers promise.

The blueprints revenue raising measures are so reliably doubtful that when the Parliamentary Budget Office costed a comparable proposal it assumed half the theoretical revenue lost to avoidance in the first year, rising to 80 per cent within five.

One offset has largely evaporated before the conference even opens: the May budget already restricted negative gearing to new builds and replaced the capital gains discount with indexation, leaving the union perhaps $2 billion of incremental claim and proving, incidentally, that these demands do not stay on conference floors.

Therefore, our modelling found that the net recurring gap sits at $125 billion a year.

The entire federal deficit is $31.5 billion. This is not a rounding error on the deficit; it is the deficit, quadrupled. Every year. Forever.

This is before the large capital expenditure and one-off spending they propose. Wiping the remaining $65 billion-plus of HELP debt at a stroke of a pen, then buying the national energy grid, the aged care sector and assorted “critical supply chains” at fair value.

This could cost in the order of $250 billion to $450 billion. All of it borrowed.

The decade ahead

Projected out over 10 years at Treasury’s own 4.8 per cent bond assumption and the deficits settle permanently around four and a half per cent of GDP - roughly $220 billion a year by 2036-37, against a current baseline that the budget reaches surplus.

Gross debt lands around $3.5 trillion (near 70 per cent of GDP), or about $120,000 for every Australian, against the Parliamentary Budget Office’s baseline figure of $37,000 a head.

The annual interest bill alone, at $135 billion to $145 billion, exceeds everything the Commonwealth now spends on health.

Nor should anyone expect the difference to be grown away, because growth, as a concept, did not make the cut in their document.

The phrase “economic growth” is absent from all thirty pages. So is “competitiveness”. So is “GDP” (though in fairness, under this program there might not be much of it left to measure).

“Productivity” features repeatedly, but strictly in the past tense: something workers already created and the bosses pocketed (“this isn’t coincidence; it’s robbery”).

In this economics the national pie is never baked, merely carved. The market appears exclusively in the role of pantomime villain.

Private investment is dispatched in a single line: “history proves that private capital will not invest at the rate or scale required”. A verdict that will come as some surprise to whoever it was that financed the Pilbara.

The industrial chapter

An unrestricted right to strike, with secret ballots and ministerial intervention abolished.

Strike breakers “outlawed”; Lockouts all but banned; Bargaining reserved exclusively for unions; Arbitration on demand, with the employer’s consent deemed irrelevant.

The document rails against “the greed and violence of private capital” and declares housing “a class war”. Paul Keating spent the better part of a decade dragging the movement out of exactly this thinking. The AMWU proposes to march it straight back in.

Another figure the blueprint conspicuously never mentions is 7.9.

That, per the Bureau of Statistics, is the percentage of private sector employees who now belong to a union, down from 40 per cent of the whole workforce as recently as 1992.

The AMWU promises to “unleash the full power of our workforce”, yet the Australian workforce has spent four decades quietly unleashing itself. The blueprint’s answer to the fact that more than nine in ten private sector workers decline to join? Not persuasion, but a compulsory “bargaining service fee” levied on non-members.

Who writes the platform

Why does a wish-list from a movement this size deserve a costing at all?

Because of where it is pointed, and when. By rule, half the floor in Adelaide this week belongs to the affiliated unions. Members of those unions attend free; a member of a union that never affiliated pays $550 to observe which is the same fee charged to community organisations and foreign diplomats.

As a statement of who owns the building, the price list is hard to improve on.

The party was founded by the union movement 135 years ago and has never severed the wiring: affiliation fees fund it, union officials populate its preselections, and organisations representing 13 per cent of employees hold half the votes on the platform of the party of government.

We have been here before. Ahead of the 2018 national conference, the CFMEU sponsored a paper, Goodbye Neoliberalism, urging Labor to abolish the ABCC and the Registered Organisations Commission, permit bargaining beyond the enterprise level, define casual employment in statute, and hold a referendum on an Indigenous Voice. Dismissed at the time as a militant wish list, every one of those items and more were legislated or carried out within Labor’s first term.

The AMWU is now also focused on every cent in the $22.7 billion Future Made in Australia program: union rates in every tender, union representatives on every council and TAFE board, quotas and content rules attached to every dollar.

What to watch this week

Watch for the connective tissue “review”, “explore”, “strengthen” the drafting that converts a demand into a mandate two budgets later.

Watch the industrial relations chapter for sectoral bargaining and the “right to strike” and which ministers are prepared to say from the podium, rather than the corridor, that specific items are out of the question.

It is so dispiriting to read a manifesto that treats the 1970s as a lost golden age rather than a cautionary tale.

In areas of enormous national problems like unaffordable housing, the solution is not a federally funded factory program whose stated KPI is union coverage.

“We are not machines, we are human beings,” the blueprint declares.

Quite so.

And human beings, given a free choice, have been delivering their verdict on this brand of unionism at a rate the ABS politely records every two years.

Australian workers deserve advocates who live in 2026. On the evidence presented in this blueprint, the AMWU is still on hold to 1975, waiting for Gough to pick up.