Normally I wouldn’t recommend anybody peruse the pages of the Rupertarian – because it simply isn’t good for you.  The below isn’t good for you either, but maybe by looking through the sort of ideological bilge served up by one of Uncle’s gargoyles you will get a clearer sense of why you should stay clear – it is unsubstantiated one-dimensional ranting from the loony toon right wing at its best.

 

So be careful, and feel free to turn away whenever the grotesqueness of it all gets too much.  Let’s take a look at something by Judith Sloan.  In this ripper of a piece she spews venom on the potential for Malcolm, who has won an election for her side of politics, to not see eye to eye with her thoughts on Australian Industrial Relations.

 

Trade unions have nothing to fear from weak Turnbull government

Judith Sloan

Contributing Economics Editor

Melbourne

http://www.theaustralian.com.au/opinion/columnists/judith-sloan/trade-unions-have-nothing-to-fear-from-weak-turnbull-government/news-story/66e489c83779c9deadec41f433bf56a3

 

Have you been wondering how trade union leaders have reacted to the election result?

 

According to the ABS the membership of trade unions in Australia has dropped to circa 15%, so you could easily assume the vast bulk of people are answering Judith’s question with a ‘huh? What’s a trade union?’ or maybe ‘nup’ or maybe even ‘nah but did you see MasterChef?’ – of course there is the slight side issue of this only being ‘trade’ unions (or unions for people who either get dirty or do something tedious for a living, and – except for aspiring ALP parliamentary representatives being groomed to appeal to the punterariat with some working class credibility – probably haven’t gone to private schools) when in fact Australia’s most powerful organisations controlling labour supply in a particular market, educational accreditation to enter an employment field, and mandatory organisation membership for a admittance to a worksite (now what is the definition of a union again?) tend to be those in the medical professional or engineering fields.

 

Most people probably wouldn’t give a rats toss about what union leaders are thinking.  Though many who aren’t union members may well be thinking it would be nice if the management prerogative they experience on a day to day basis in their increasingly casualised, short term contract workplaces were a little bit more accountable to something than the whim they seem to experience.

 

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That terrifying Union membership level is over past the far right.  Which is pretty much where the far right likes it.

Take it from me, they are perfectly content knowing the Turnbull government won’t be lifting a ­finger to disturb their privileged positions or upset their cosy relationships with big business.

 

Take it from a gargoyle festooning the world of Uncle Rupert talking about something only 15% of the public are involved with, and which she is gibberingly opposed to.  The Federal government – in a world in which industrial disputation is at multi generational lows – has other far more important issues to deal with than picking a stoush with unions.  They could start with an economic narrative which delivered quality of life outcomes for the electorate which has positioned itself to deliver a near death experience to any government wasting its time on ideological side salads when they ordered well done economy steak off the menu, for the entire life of this government.

 

Judith tosses in a line at the end there about big business – that’d be the Singapore marketing, transfer pricing, budget teat sucking natural monopoly controlling type of organisation you’d get to meet on any given day when asking about your energy, telephone, insurance or banking affairs, after you’ve made it through a few banks of phone messages being told how much your call is valued, to the point where you are being recorded for coaching purposes, and get to a peon with a script.  That peon may once have been interested in joining a union, but you could bet your bottom dollar that the 6 months contract they are on would be in danger the moment there was any whiff of any thought of discussing workplace phenomena (or conditions) with other employees, and dead certainty there’d be an examination of how many clients that peon satisfies in relation to other peons not thinking ambiently about conditions [let alone contracts, wages or socialist phenomena like health and safety].

 

Judith thinks big business may be interested in unions or that they may have a ‘cosy relationship’ with one.  That may  be true, and there would be little doubt that employees in the grocery retailing world, logistics handling union members in NSW observing the expenditure patterns of the Belan family,  or parts of the building industry, may look at their union membership in the same way other employees look at labour hire organisations.  But it is also generally true that big business will limit its cosy relationship to those individuals likely to deliver important outcomes which affect the bottom line, and we can safely assume that with labour costs not generally being all that much of a factor in the competitiveness of Australian companies (as opposed to the competitiveness of Australian capital), and with unions representing only about 15% of employees (unless they are employing medical specialist and/or engineering types) then there may not be all that much in it for the big business lobby to really get into bed with – and we could for sure identify (and possibly even Judith would agree here) that big business isn’t sentimental.

 

Certainly, a Shorten victory would have been sweet, but Malcolm Turnbull’s narrow win suits them nearly as well.

 

Would a Shorten victory have been sweet for unions?  Maybe for a night or so, but ultimately the ALP failure in the federal election removes the embarrassing possibility that they could be bitterly disappointed by someone they had helped into office, rather than impotently appalled by a PM who would be trying to recollect what they do, and how they could influence anything he may be interested in.

 

We all know the Prime Minister doesn’t really take any interest in industrial relations and shies away from a fight the minute there is any sign of conflict. Ignore any temporary chest-beating on the subject by Turnbull; industrial relations is not his thing.

 

This’d be the same Turnbull who took on the UK establishment on behalf of the later Peter Wright, or who made Kerry Francis Bullmore Packer blanche at the prospect of what could happen to those standing between Turnbull and something he wanted?  Judith may have missed the point here – Unions aren’t that important for Turnbull because they aren’t that important for about 85% of Australians (notwithstanding the AMA – on behalf of whom there would be an awful lot of nicely dressed people in the outer office ensuring that the PM was at his cordial and loquacious best in dealing with, and for whom the ‘Mediscare’ event may mean there is a backlit iconostasis of key identities for him to worship at in his own office).  They possibly are important for more Australians than realise that – but Malcolm probably doesn’t want to run the risk of the electorate becoming aware.  The PM, has bigger issues to deal with than dwindling organisations being quieter than they have in generations – unless he needs a feeble excuse for another election he doesn’t need to mention during the campaign, maybe.   When all is said and done, when was there last a Prime Minister (or even a Minister, and particularly on the conservative side of Australian politics) for whom Industrial Relations was their thing?

 

With his hold on power so tenuous, the trade unions have almost nothing to fear across the next three years. Indeed, they can spend the time amassing more resources and train up more union members to engage in effective grassroots campaigning to secure a Labor victory next time.

 

Well at this point a reader could ask themselves if they thought it important for a PM with a slim hold on parliament to want to inspire fear in anyone, especially given his predecessors did such a superb job on ‘fear and surprise’ of the Monty Python variety, let alone organisations being quieter than they have been in generations, with dwindling memberships etc.  That said, unions do have memberships and it would appear that membership of political parties in Australia has also taken something of a dive – the Liberal party in particular – and maybe some of that grassroots campaigning she suspects unions of may come in handy.  Like, politicians may even meet some people and become aware of what they are thinking and what their concerns are (though that’s possibly a little too socialist for Judith to contemplate).

 

It is clear that unless several Senate crossbenchers can be persuaded to support the re-establishment of the Australian Building and Construction Commis­sion, this bill is dead in the water. The vision that the combined number of Coalition parliamentarians would allow the bill to sail through is in tatters.

 

The ABCC, for anyone wondering, was the excuse for the election we have just had – that sort of got lost in the 8 weeks of tedium.  The reason the Senate (and the electorate and most members of the government) couldn’t give a shit about the ABCC is because it is about unions in the building sector – and anywhere you go on the planet the building sector is pretty corrupt – and in Australia anyone thinking about the building sector is probably thinking it is booming or that the non-unionised tradies parking on the nature strip and listening to loud commercial radio of the hits and memories variety could do with some behaviour modification, but that a Prime Ministerial coshing for these seems a trifle over the top.

 

Whether the government will bother to put up the less controversial registered organisations bill is uncertain. And given that the government is committed to implementing virtually all of the recommendations of the Heydon royal commission into trade union governance and corruption, a decision may be taken to wait until these can be incorporated into a redrafted RO bill. But let’s face it, establishing whether “corrupting payments” by an employer to a trade union have been made will be a very difficult task.

 

Well right at this moment the government is probably wondering about which pieces of legislation to expend its precious political capital on – and possibly even prioritising those in favour of the ones likely to contribute to meaningful step towards an electorally desirable outcome rather than those just a waste of ideological time, which an already peeved electorate may see as an example of ideological bullshit.  After cogitating on that for a moment Judith may want to consider if there is some way of distinguishing ‘corrupting payments’ by an employer to a trade union from ‘corrupting payments’ to a lawyer to set up a subsidiary in Panama, ‘corrupting payments’ for marketing work in low taxation nations, ‘corrupting payments’ to accountants to reduce any tax paid in Australia or ‘corrupting payments’ to politicians who either do or don’t take up board positions (particularly on companies providing services to government).  There is prima facie evidence to suggest that a bill identifying ‘corrupting payments’ and outlining public disclosure and punishment for these may in fact be a very good idea – though one does wonder if it is only a narrow definition of ‘corrupting payments’ – to dwindling organisations representing 15% of employees demonstrating multi generationally low levels of activity – that Judith has in mind.

 

I’m not sure that too many trade union officials will be losing sleep over the new governance arrangements, particularly as the government squibbed on the one recommendation that could really make a difference, the prospect of jail for union officials. Evidently it is fine for company directors to face jail terms in the event of being found guilty of criminal corporate malfeasance, but trade union officials must be spared.

 

Judith morphs into a union official sleep therapist, but possibly misses the conceptual point that jail for union officials could be a concept expanded by an electorate which has shown irritability with its politicians (and with an enthusiastic interest in the unearthing’s of guys like Artie Sinodinos, and former members of the NSW parliament amongst others).  She relates the idea of ‘criminal corporate malfeasance’ to union officials, without even sniffing at the question of whether the sums involving union officials would go within a bulls roar of some of the acts of criminal corporate malfeasance which have been essentially unpunished, against the backdrop of an economy where the tide has been going out for some time, and which would appear to be going out further than anyone who has a frame of reference largely based on the last 25 years may consider normal (and may expose other acts of criminal corporate malfeasance).  As they say out Port Lincoln way, once there is blood in the water the electorate will bite whatever it can get its teeth into, and if the economy looks like taking on water it could be those controlling the ship getting wet.

 

At this point you may be wondering why I haven’t mentioned the weak position in which trade unions find themselves in terms of falling membership. On the latest figures, only 17 per cent of workers belong to a trade union, with the proportion in the private sector only 12 per cent. Union density has been in free fall for more than 30 years. But what often is overlooked when these figures are trotted out is the high level of union membership in the public sector, more than 40 per cent.

And the industries with the highest rate of unionisation are education and train­ing, and public administration.

 

Judith comes up with some interesting stats about where union membership is high (if we don’t consider fields like engineering or medicine where it is 100% and nobody gets to practice unless they are members).  She neglects to note that the high intensity union loving environment of the Commonwealth Public Service has hardly been a hotbed of radical industrial activity despite the bulk of it not having had an agreement in place for about 3 years, and being in a notified bargaining period in which they can undertake protected industrial action.

 

unionmembsindustry

workforce unions

It is important to bear this in mind when thinking about the parties’ policies. While “Mediscare” may have looked like outright tawdry politics, for the relevant trade union it achieved the objective of ruling out the outsourcing of the payments function of Medicare. The fact Turnbull quickly caved on this issue was a victory for the union before we had even got to polling day.

 

She has a point, not outsourcing those payments type public servants at Medicare will protect union (CPSU) jobs.  It will however, also protect the public from having another natural monopoly outsourced (see Rod Sims and the ACCC and how they are feeling about outsourcing those) to leave them facing the prospect of a privatised provider of payment services sucking on the Medicare teat for as much as they can rip out of the budget while limbering up to skin payment recipients for a ‘handling charge’ every time they get their money back from Medicare.  Once that baby is outsourced then we can look forward to the three operators on the line in Manila being very busy while you get told how much your call is valued and get recorded for coaching purposes every time you have a question.   But on the subject of IR in the public service (at least the Commonwealth public service) there is the not inconsiderable issue of the employees of the Department of Human services, the Australian tax Office and the Department of Defence not having had a pay increase for three years and having twice voted down proposed agreements of their managements – and the implications that that particular dynamic would be starting to have for those organisations.

 

Then there are the superannuation changes that Scott Morrison announced in the budget and to which the government still clings. The trade union leaders couldn’t believe their luck given the close connection between industry super funds and trade unions.

 

After all, the high-income earners and wealthy retirees directly affected by the changes are not members of industry super funds. So the trade union leaders don’t really care about their fate. But the mirroring of Labor’s policy to make taxpayer contributions to the accounts of low-income superannuation members, the vast majority of whom belong to industry super funds — does it get much better than this?

 

Judith now moves on to superannuation, and the industry funds, which were originally conceived as providing unions some scope for influencing management and remain influenced by them to this day – older readers will recall the Accord era.  Sadly Judith completely omits the fact that for most employees those industry funds have delivered far better outcomes, involving fewer ordinary people being ripped off by far lesser fees than the financial sector offerings touted by well-dressed young men in Audis and Mercedes.  She also omits any mention of the possibility that for many high income earners superannuation is not actually about superannuation but about tax avoidance.

 

The death knell to the sworn enemy, self-managed superannuation funds, and billions of dollars of additional contributions to industry super funds, courtesy of the taxpayer — a combination delivered by the Coalition. Drinks all around down at Trades Hall.

 

She gets to the tax avoidance only by virtue of SMSF’s being a sworn enemy, and slips in billions of dollars from the taxpayer to industry funds who tend to pay out to a lot of taxpayers – without the ability to negatively gear into real estate speculation (costing many more billions from the federal budget)  and generally without the fees involved for ticket clippers in the finance sector.  Maybe these will join in the drinks at Trades Hall to dilute their disappointment.

 

The flip side of the trade unions’ insouciance about the election of the Coalition government will be the economic costs of the failure to make important changes to the Fair Work Act.

 

The economic costs of important changes to the Fair Work act? What were they again? Are they as important as the economic costs of completely misreading monetary policy over a decade, or of coughing up the manufacturing sector, or a widespread belief that the mining boom would last a generation? Are they as significant as the economic costs of having a taxation framework which primarily promotes real estate speculation by loss making landlords, or cultivates a path to ‘wealth’ primarily based on avoiding tax? How do they stack up against the economic costs of holding a generation to housing ransom to support mega mortgages serviced with casual employment or low paying jobs?  If Australian employees are uncompetitive are they uncompetitive because of labour practices or because they were priced out of the water by the RBA and Treasury?  And from there what is the best way to make them competitive again? Some IR neanderthalia or a clear industry policy which cultivates investment? (in something more productive than housing speculation, by organisations more committed to their employees than those minimising their taxes?)

 

When Employment Minister Michaelia Cash said before the election “there would be no lurch to the right”, she was really saying that there would be no significant changes at all.

Forget all the bluff and bluster about fixing the agreement covering the Country Fire Authority in Victoria. Turnbull and Cash will achieve nothing, in part because they have left their run too late.

In fact, there are provisions in the FWA that could have been used to disallow the push by the United Firefighters Union to control and diminish the role of volunteer firefighters. But the government took no notice of the dispute, which has been going since the beginning of last year, until it became a political issue during the election campaign.

 

Judith doesn’t ask any questions about the marginal utility for the government of making significant changes.  Sure, the Andrews government in Victoria hasn’t played the CFA dispute well, but when all is said and done is that dispute running to the economic core of Australia? Does it affect an income earning industry or a government funded emergency service?  How many other employers have a mixed force of professionals and volunteers? (and have to manage a load of complexities that go with that?).   And when all is said and done if the IR issues are of such magnitude (even if it is largely ideological magnitude) and they weren’t even brought up at the height of the Tony Abbott – Joe Hockey era of offending all Australians with cheap ideology, then how important are they?

 

A serious problem with the legislation is the difficulty of terminating uneconomic enterprise agreements that were negotiated during the mining boom. Under the act, an enterprise agreement continues to operate beyond its nominal expiry date; there is no automatic reversion to the underlying award.

So the pay and conditions that were set when commodity prices were sky-high and workers were difficult to find simply roll on unless another agreement is finalised or there is a request that the agreement is terminated.

 

Terminating uneconomic enterprise agreements is our next theme.  For anyone wondering what that means we are talking about terminating legally binding agreements made by legally empowered entities to commit to a contract.  If it is uneconomic.  Of course uneconomic for who might be a reasonable question to ask.  But essentially we are talking about walking away from a signed contract.  Given that the longest an enterprise agreement can run for under the Fair Work Act is 4 years we can assume we are dealing with nothing negotiated earlier than 2012. For those Commonwealth public servants Judith was concerned about earlier the longest is 3 years (and that’s before we get to the fact that for about 80% of the public service they haven’t been renewed in those 3 years and that those public servants haven’t had a pay increase in that time – at all).  So could it be that managements of significant numbers of employees in that time have been so profoundly wrong about the environment in which they manage their affairs as to completely price themselves out of the market?  Could they have been prompted to do that by insane commodity price or budget outlooks, or equally weird monetary policy behind the Australian dollar?  Did politicians tell parties to those agreements bullshit, or did they sit idly by and say nothing while all these agreements were bedded down? Could we terminate uneconomic entitlements for politicians or public servants who took part in those decisions?  Could we terminate uneconomic contracts allowing multinational companies to avoid paying tax in Australia? Could we terminate legislation from the past few years as well? Or maybe even the middle class welfare showered upon the babyboomers in the late Howard era?

 

But there is a load more we could terminate on grounds of being uneconomic, isn’t there? This is a precedent which may have some implications for those Australians who figure that a range of Free Trade Agreements may be uneconomic as far as they are concerned and may be worth walking away from.  But why would we stop there?  Could we terminate permission to buy Australian real estate for any foreigners who have been found to be laundering corruption proceeds in Australian real estate?  Could we terminate mortgages once they became uneconomic? Or maybe longer term electricity or gas contracts?

 

Well said Judith.  Terminating things – particularly uneconomic things – is an idea that could easily resonate with a lot of people in a land labouring more heavily under private debt than any other nation on the planet, and which is increasingly asking itself if it has been sold out by its own political class for a number of years.

 

TPPNAR

The TPP may be an agreement worth terminating seeing as it delivers Australia a worse outcome than virtually anyone else over the years to 2030.

 

At this stage there is considerable ambiguity in relation to the principles that apply to agreements being terminated. In one instance, Boom Logistics, the Fair Work Commission denied the company’s application to have its excessively generous agreement terminated.

By contrast, in the case of Griffin Coal, the company’s application for the termination of the agreement was accepted by the FWC and this decision has been upheld on appeal. There is another important test case in play covering AGL’s Loy Yang plant in Victoria. (For history buffs, think BHP mine case, 1909.)

 

Judith backs away from terminating things for some IR trivia.  Anyone wanting an example of a company (Boom Logistics) which entered into agreement making promises to its employees it couldn’t keep (circa 700 of them in Resources sites around Australia) should look here (http://www.boomlogistics.com.au/wp-content/uploads/2015/09/BOOM2015_FINAL.PDF) and note that this was after they had indulged in some slipshod IR chicanery back in 2012-2013.  Judith’s example is a classic example of a company which likes to treat employees as chattels.  The termination of the Griffin Coal agreement (which cut salaries by 43% earlier this year, and upheld last week, bringing them back to the Award for about 70 people) occurred after the nominal expiry of the Agreement in the face of the inability of the unions and management to negotiate a successor.  Also worth noting is the impact it has had on the town of Collie WA.    The Loy Yang issue is still in play, but we can assume that it is simply another example of managements wanting to walk away from agreements that they would be the first to point to employees about if it was they who wanted to walk away.

 

Then we have the anomalous situation in which the federal government has handed over close to $50 million as a “loan” to the beleaguered Arrium miner and steelworks even though the union has refused to agree to a 12 per cent pay reduction called for by the administrator. (The administrator originally wanted a 17 per cent cut.) A sensible government might have waited to see how flexible the unions would be in terms of saving the company before handing over a cheque from the taxpayer that might never be repaid.

 

A little bit more IR to round things out comes from Arrium where the Turnbull government was more concerned about the speed with which it could keep it alive than the circumstances with which it was handing over 50 million.  Certainly we can be sure that the unions involved are presumably playing hard ball (that is their job and no doubt the example of Dick Smith going down with employee entitlements on board was fresh in everyone’s minds).  From there comes the question of whether the bigger contributor to the issues faced by Arrium is the labour agreements negotiated by management and employees or a range of other strategic blunders with regard to the iron ore and steel market (which have been replicated across much of the sector – despite everyone knowing what the long term price for iron ore had been, and what it would likely revert to)

 

So the bottom line is this: the trade union leaders will be putting their feet up for the next three years, comfortable in the knowledge that the Turnbull government won’t try to reform industrial relations. Their sinecures on the boards of the industry super funds are rock solid and the additional billions of dollars flowing to these funds, courtesy of government policy, will be very welcome.

 

Judith’s perception of the bottom line could do with some fleshing out.  Those union leaders may be inclined to put their feet up, but the outlook for the economy is that they will be somewhat busy negotiating industry closures (particularly carmaking and manufacturing) and wondering what sectors the next generation will be employed in (apart from part time healthcare and retail positions).  The Turnbull government is unlikely to try that much with IR reform because it has been a mainstay of conservative governments for a generation and they pretty much have what they want, along with a clear identification of what is politically feasible in the memory of WorkChoices.  The sinecures on the boards of industry super funds will presumably be well appreciated, as will sinecures on the boards of companies providing services to the government (or anticipating doing so) by former cabinet ministers, and the billions she is concerned about flowing into these funds courtesy of government policy could easily be considered alongside the billions flowing to debt laden real estate speculators, the billions coughed up through the capital gains provisions, and the even greater billions given to the wealthiest sections of society through the superannuation tax loophole – all of which are presumably very welcome for the recipients, who are presumably far less reliant on them than the average industry super contributor (at least we can be sure that these are contributing).

 

And while there will be some flashpoints with companies exposed to competitive pressures — a bit of give-and-take may even be called for — the jobs of millions of unionised public sector workers are secure. Health and education are such sensitive political issues that it is impossible to see this government undertaking any cost savings in these areas.

When it comes to industrial relations in the next three years, it will be just business as usual.

industrial disputes

Three years like the last three could be pretty soporific on the Industrial relations scene.

Those flashpoints she refers to will be the ones like Boom Logistics who want to treat employees like chattels, and presumably will not involve the preparedness to terminate any ‘Free Trade Agreements’ or even anything particularly likely to resonate with the competitive environment.  Given that about three quarters of the APS haven’t had a pay increase for three years anyway, their job security isn’t the issue, but rather the security the government has that they will not do anything which looks like it might be serious industrial action which could have electoral consequences.  Just imagine the ATO leaking the names of foreign buyers of Australian real estate who don’t have permission to buy here, or the Department of Human services deciding not to process pensions one week, or reimburse Medicare payments, and that would be before we got to the department of Defence leaking any documentation available on the decision making around $50 billion worth of submarines.

 

Judith concludes on a plausible note though.  If the next three years is simply business as usual in an IR sense then it will be because it is in the interests of the Turnbull government to keep it that way and not have a heavily indebted and globally uncompetitive nation any more alarmed about their macroeconomic backdrop by the rise of industrial disputation from its long term lows.