Flat White

Labor: Putting Unions First

30 June 2016

12:43 PM

30 June 2016

12:43 PM

Fifty-five years ago, unionist turned Labor leader Arthur Calwell lost the second-closest election in Australian history running on the mantra ‘Labor puts people first’. Sound familiar?

Like Calwell, Bill Shorten plans to subsidise uncompetitive industries and run a budget deficit to lavish more funds on health and education.

But while Labor’s policies are still rooted in the 1960s, what has changed is the nature of the workforce Bill Shorten claims to represent.

In Calwell ‘s days, putting people first meant standing strong for the 55 per cent of workers who belonged to a trade union.

But with union membership dwindling to just 17 per cent of today’s workforce, Labor’s rehashed election slogan raises an important question. As the political leader of a union movement now outnumbered by small business owners, who exactly does Bill Shorten plan on putting first?

If recent history is any reliable guide, it may not even be the members.

Labor’s largest union affiliate, the SDA or ‘Shoppies’ has come under recent fire for striking pay deals with Coles and McDonalds which slashed penalty rates for hundreds of thousands of workers of low-paid workers.

One of these agreements left an 18-year-old McDonalds casual $2500 worse off a year compared to the industry award.


Coles and McDonalds returned the favour by helping the Shoppies recruit for its 250,000 strong membership and paying exorbitant sums for ‘training courses’. This allows the Shoppies to fork out millions for Labor campaigns and boost its sway over Labor pre-selections and internal affairs. None of this is by chance: twelve members of Labor’s Federal caucus have ties with the Shoppies.

Bill Shorten himself is no stranger to enterprise agreements where fleecing workers is the price of political gain. As AWU Secretary, Bill Shorten negotiated a pay deal which cut the pay of casual cleaners from $28-$29 an hour to a meagre $18. Shorten’s quid pro quo was an arrangement that automatically signed cleaners up to the AWU, resulting in around 90 per cent of the businesses duped cleaners signing on as members.

Labor remains institutionally wedded to an organisation that has done more to cut weekend pay than any member of the Coalition. The irony for members must be biting.

Who was Labor putting first when it created the Road Safety Remuneration Tribunal whose ‘safe rates’ orders threatened to drive 40,000 small business truck drivers into bankruptcy? Created by Julia Gillard at the behest of the Transport Workers Union, the tribunal’s final price order would have forced owner drivers to charge sometimes more than three times the trucking heavyweights for the exactly the same trip.

A Shorten government will restore the Road Safety Remuneration Tribunal and lay waste to tens of thousands of jobs and small businesses.

And then there’s the construction sector, where anti-competitive union monopolies and lawlessness jack up building costs by billions every year. The CFMEU’s negotiation tactics often involve flouting the law to secure extravagant wages and conditions while blocking out competition through handshake deals and intimidation. As a result, costs on union-run commercial building sites are between 20 per cent to 35 per cent higher than residential housing. Unskilled labourers on union wage agreements earn six figure salaries that are almost double the award rate.

This explains a lot about why Australia pays 40 per cent more for vital public infrastructure than the United States.

It’s estimated that restoring the Australian Building and Construction Commission would alone would boost productivity by at least nine per cent and improve consumer welfare by $7.5 billion a year. Labor has fought the bill at every stage.

The CFMEU has donated $7 million to Labor branches in the last ten years and like the Shoppies, exerts considerable influence over both the Labor caucus and party organisation. Is it any surprise that Labor would put the CFMEU’s construction cartel before the public’s interest in cost-effective infrastructure?

As the Heydon Royal Commission laid bare, these examples are more than a few throwaways. They speak to a diseased culture defined by self-interest, rent seeking and an ingrained hostility to market competition.

It should therefore come as no surprise that the union movement has collectively railed against virtually every attempt in recent history to liberalise Australia’s economy.

The Keating workplace reforms, John Howard’s clean up of Australia’s fractious waterfront and every attempted privatisation of Government assets in the several last decades were fought by the union movement. Unions have been the loudest voices backing billion dollar subsidies for uncompetitive industries while running fear campaigns about every free trade agreement since the end of the Keating Government.

The Labor-Union nexus is as close as ever: half the Federal Labor caucus has previously held a paid position in a union and 19 of the 26 of the Labor National Executive are current or former union officials. A guaranteed 50 per cent delegate at Labor’s national conference ensures the unions have a veto over ever policy motions.

Over the coming decades, Government’s will be forced to reconcile enormous spending growth, the pressures of an aging population and our chronic infrastructure deficit with the Commonwealth’s ailing budget position. Any Government equal to these challenges will have to make hard-headed decisions that put the public good before the outstretched hands of vested interests.

On this score, the union movement has been a handbrake on reform at nearly every possible turn. Until that changes, do we really want Labor and Bill Shorten at the wheel?

John Slater is the Executive Director of the H.R. Nicholls Society

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