Speech To The Brisbane Institute

ACTU Secretary, Greg Combet on the challenges facing leaders, and a number of the policy responses of the ACTU.

Since assuming the role of ACTU Secretary in February this year, I have reflected a lot on the challenges facing leaders in all areas of Australian public life. Tonight I would like to sketch for you the challenges as I see them, and a number of the policy responses of the ACTU.

 

The circumstances I face as Secretary of the ACTU in the year 2000 are quite different from those that faced my predecessor Bill Kelty, when he took office in 1983.

 

That was before the dollar was floated, and before the economy was opened to the world. It was before the deregulation of markets for many products and services, and it predated the exposure of government utilities and services to competition and privatisation.

 

It was a very different world indeed - with a centralised wage fixing system and a level of union membership which stood at 50% of the workforce.

 

None of which is to suggest that I pine for the past. Quite the contrary. For the changes of the past 15 years have brought much prosperity.

 

Over the past eight or nine years in particular, Australia has experienced a dramatic period of economic expansion and structural change. On some indicators we have out-performed the United States economy, which is recording the longest period of economic growth in its history.

 

In Australia we continue to chart an extraordinary combination of GDP growth, productivity advances, employment growth and low inflation. Gross Domestic Product grew at an annual average rate of 4.4% over the past five years.

 

Profits are strong, and private investment has increased by an average of 8.5% per year for five years.

 

Tremendous change is occurring - easily the equal in significance of the transition, many years ago, from an agricultural and resources based economy to an industrial economy - only much more rapid.

 

We are now well advanced in the transition to a service based economy. And there have been dramatic advances in technology and communications - it is instructive to bear in mind that the Internet is only nine years old. Indeed, when I arrived at the ACTU seven years ago we did not have computers.

 

Our society is also more outward looking. It has a cultural richness and social diversity of which we can be proud.

 

So there are many positive elements of the changes that are taking place.

 

But Australia is also a country where there are now, more than ever, winners and losers. We may be proud of our egalitarian values, but in reality the society is increasingly divided. Many people are not sharing in the benefits of our prosperity.

 

The divide between city and country is wider, the divide between rich and poor is worse, and opportunities in education and employment are declining for those in low-income groups and in many of the regions.

 

School retention rates in some States are actually falling. Australia's level of investment in skills for the future, as a proportion of GDP, is amongst the lowest in the OECD. Funding for research and development has fallen.

 

While the top 20% of income earners are taking home 48% of gross weekly income, the poorest 20% are left with less than 4% to take home to their families.

 

There are over 700,000 Australian children living in poverty. A shocking figure in a country that prides itself on giving everyone a fair go. And the profile of child poverty in Australia is also changing.

 

A recent study by University of Canberra's National Centre for Social and Economic Modelling "The Changing Face Of Child Poverty In Australia" suggests that one in four of the additional 100,000 Australian children who have fallen into poverty since 1995 live in families where the major source of income is not social security, but wages and salaries.

 

That's right, the fastest growing area of child poverty in Australia is amongst the children of working families.

 

This is not so surprising when you consider that almost 10% of the Australian adult workforce still earn $10 or less an hour. The gross annual salary of a full time adult worker who earns ten dollars an hour is just $19,700 a year.

 

Draw a line at just $12 an hour and more than 20% of the adult workforce fall under it. In some of the fastest growing areas of the economy like retail and hospitality the number of adults earning $12 or less an hour is higher than 35%.

 

What these figures point to is the emergence in Australia of a genuine American-style working poor.

 

This reality, this widening divide in income and opportunity, is the not so pretty side of the 'new economy'. And it all has big implications for policy makers and leaders of government, business and unions. I will speak about the union response in a moment, but first I would like to make some comments about the role of government.

 

For it is government that must take principal responsibility during times of rapid change and growth to make sure that everyone shares the benefits - that the society is guided by fair and just outcomes and that people are not left behind.

 

I see this as the key challenge for the political leadership of this country. I believe that the Australian people hold a similar view. It is a challenge that the political leadership cannot afford to ignore. Ask Jeff Kennett.

 

I think that the essential elements of a government strategy to meet this challenge must include the following:

 

 

  • The creation of a sense of community, of a common understanding of the issues we face as a nation;
  • The inclusion of the key groups in the society in the development of a strategy; and
  • The articulation of clear and shared objectives.

 

 

I believe that the Howard Government is failing in each of these three areas.

 

Firstly, it deliberately creates division, not a sense of community. It relies on wedge politics, rather than good policies, to maintain its political edge. The strategy towards One Nation is the most telling example. A more recent example occurred in August when the Government orchestrated a public debate about the use of IVF technology. And for what ends - to divert attention from the alternative political platform coming out of the ALP National Conference.

 

On the back of that has come the refusal to accept international scrutiny of important areas including indigenous rights, industrial relations and racial discrimination. And now John Howard doesn't want Australian women to be able to complain to the United Nations about gender discrimination.

 

As Malcolm Fraser recently pointed out, it appears that Australia ratified international treaties only so that we can apply them to the rest of the world and not have them applied to us. Fair-minded Liberals are ashamed.

 

Second, the Government favours one group over another. It does not seek to include all areas of interest in the society. To use industrial relations as an example, this is without doubt the most partisan Federal Government we have seen in this country. Unlike previous conservative governments, Howard and Reith are simply not interested in resolutions.

 

They never call on parties to negotiate and they don't want the umpire involved. They just side with the employer every time. As one member of the Industrial Relations Commission recently observed, under Peter Reith industrial relations has become "ritualised warfare where only the weak get hurt."

 

Just imagine the outcry if Labor behaved in such a partisan way.

 

Third, the Howard Government has failed to articulate a vision. It has failed to impart a sense of national direction. When you pause to reflect upon the course of the last four years it is genuinely difficult to define the ambition of the Government other than in tax reform and union busting.

 

The occasional appeals to the business community to behave in a paternalistic manner as part of some vague social coalition are hollow. I think that the message here is clear. In times of such rapid change government must articulate a clear and unequivocal commitment to creating a fair and just society. There must be a commitment to manage the process of change in a way that maintains and builds social cohesion.

 

And there must be recognition that there is more than just the economy - as important as it is. A successful society, especially one built around employment in services, requires investment in education, health care, technology and infrastructure, as well as respect for people's rights.

 

Taking education as an example, a National Information Technology and Training Task Force has estimated that Australian industry will need an additional 180,000 IT specialists in the next three years, 75% of who will need university degree or vocational training.

 

How will this be achieved? Where is the sense of community, the sense of purpose driven by government that will satisfy this demand? Where is the strategy that will ensure a fighting chance for the many regions which are at risk of further marginalisation?

 

Unions look at the current climate through this prism - conscious of the advantages and disadvantages of the changes which are taking place - and mindful of our long-standing commitment to fairness and justice.

 

Unions play a vital role in our society. Our fundamental goal is to improve living standards and the quality of life of the working people of this country. And we have a fantastic track record.

 

But economic change is exacting a substantial toll on unions in the form of diminishing membership, and a substantial toll on many working people.

 

It has demanded a reassessment of union strategy in the two most fundamental areas - union organisation, and our aspirations for improvements in pay and employment standards.

 

I will deal with each in turn. But to put the challenges for unions in some context, allow me to emphasise this - for the better part of one hundred years unions relied upon the twin pillars of tariff protection and centralised compulsory arbitration.

 

We now have a substantially open economy and a decentralised bargaining system. Coupled with these changes has been a collapse in employment in areas that traditionally had high levels of union membership.

 

These are dramatic institutional changes - changes that demand a radical shift in union thinking and the allocation of union resources.

 

More than ever, union campaigns have had to move out of the industrial tribunals and into tens of thousands of workplaces around the country. Where once we needed court room advocates we now need workplace campaigners.

 

But as ACTU Secretary let me assure you of this. We are determined to adjust to these new circumstances. We are determined to maintain and improve our strength and effectiveness. And we are determined to take our place in the debate about the future.

 

Because unions have a vital and continuing role to play in ensuring justice and fairness in the workplace and the society. And for those of you inclined to disbelief, I remind you that we represent over 1.8 million people, that we determine the wages and conditions of employment for many more, and that we retain considerable industrial and political strength. The waterfront dispute demonstrated that.

 

Last year the ACTU released a report, unions@work, that set out a program of organisational objectives so that we can meet the challenges ahead.

 

The report argues for the revitalisation of unions by focusing on four key areas:

 

Strength in the workplace - Boosting workplace organisation and union education so that workplace union representatives can play a greater role in bargaining, recruiting and union activity at the workplace.

 

Growth in new areas - Investing in the recruitment and organisation of new members in the largely under-unionised growth areas of the economy.

 

Technology for the times - Using information technology and new servicing methods such as call centres to more effectively and more efficiently communicate and meet membership service expectations.

 

A strong union voice - In the information age, competition for people's attention is fierce. To be serious about growing, to be serious about giving working people a voice, unions will need to significantly enhance their media, communication and campaigning capacities.

 

This is a strategy about building from the ground up.

 

In the months after I launched unions@work in August 1999, I travelled the country introducing and explaining the report to union members, officials and leaders. I conducted more than thirty presentations at some twenty-six unions and trades and labour councils and was overwhelmed by the commitment of my colleagues to a program of change.

 

And it's not just talk of change. Many unions around the country at both a national and state branch level are making the shift to a new way of operating in a very comprehensive fashion.

 

To give you just one example, the South Australian Branch of the Liquor, Hospitality and Miscellaneous Workers Union moved last year to adopt most of the recommendations of an operational review conducted by the ACTU.

 

This meant re-training all union staff and a high proportion of workplace delegates. It involved a complete overhaul of union expenditure to ensure that the commitment to renewal was backed up by a budget and staff.

 

A process of detailed planning in each targeted growth area has been developed, with the involvement of existing union members. The number one focus in the first twelve months of the program is not to recruit new members but to double the number of workplace delegates - developing them as workplace campaigners.

 

They have held two very large delegate's conferences to take the debate about change to members - to renew democratic participation in the union.

 

Many unions are successfully doing similar things - drawing on the unions@work report.

 

A well planned, focused and properly resourced organising strategy in Sydney and Melbourne has seen consistent net gains in union membership amongst workers in five star hotels over the past 12 months. In recent weeks there have been unprecedented rallies of hotel workers in Sydney, mostly women of non-English speaking backgrounds, all dependent on minimum wages, demanding better pay.

 

The Transport Workers Union's public campaign with long-haul owner-drivers has begun to crack an industry once considered impenetrable to union organisation.

 

Unions are experimenting with new campaign methods. We have successfully piloted an international union shareholder campaign against Rio Tinto. We are developing Internet and e-mail tactics to accompany more traditional forms of union bargaining pressure.

 

When we were overseas preparing the unions@work report we became convinced that these changes are not only necessary but that they can succeed.

 

In Britain, after many years of hard decline, the level of union membership actually grew in 1998. In 1999 there was a net increase of 50,000 union members and for the first time in 20 years an increase in the level of membership in the total workforce. Last year in the US, unions turned around a decline which stretched over the entire post-war period.

 

In both the US and Great Britain unions have pioneered new tactics for the times. It will take some time, but I know that Australian unions will also rebuild and grow.

 

But the issues for the future go beyond our own process of organisational change. We have also had to re-examine our industrial goals, and our strategy for change to the industrial laws. The change in the workplace has generated new issues for working people and these require new responses. And in the shift to a bargaining system we have found that we do not have, under the Federal laws, effective collective bargaining rights.

 

Let me mention a few of the contemporary workplace issues first.

 

For far too many people, the workplace of the twenty-first century is characterised by work intensification, unmanageable workloads, long and often unpaid working hours, job insecurity, and a growing pay gap between workers with bargaining capacity and those on minimum wages.

 

This is the backdrop for the ACTU's new industrial agenda.

 

I mentioned earlier the fact that we are developing a US-style working poor in this country.

 

This is one of the reasons the recent ACTU Congress recommitted to the concept of a Living Wage. It is our objective to establish a minimum wage for full-time work of $500 per week, or $13 per hour.

 

This will not happen overnight.

 

But in the coming years, through bargaining and through the annual ACTU Living Wage case, unions will establish a decent minimum wage for all Australian workers. And I ask you, if unions do not speak out for low paid workers and their families, who will?

 

But low pay is not the only barrier to a decent living standard for many employees.

 

27% of the Australian workforce are now casual workers. Many casuals cannot secure sufficient hours of work to make ends meet. Many are not casuals at all, but are refused access to permanent employment despite months and years of work in the same job.

 

Very few have access to sick leave, annual leave, or parental leave.

 

I don't believe that as a community we should condone a situation whereby one-quarter of the workforce has no right to basic standards of leave, or improved job security.

 

Improving rights for casual workers is a key priority of the ACTU's industrial goals. The Queensland Council of Unions is on the front foot already. It will continue to be a key issue for unions generally in the months and years ahead.

 

Other issues include the need to improve the balance between work and family, and to develop reasonable limits on total working hours. In almost every major industrial dispute in the past few years work loads and working hours has been a key issue.

 

Nurses in Victoria have just last week welcomed an arbitrated settlement to their dispute with the Victorian Government. Not only because of the pay out-come, but principally because the settlement dealt with the issue of staff to patient ratios and workloads.

 

Increased workloads are at the top of the agenda for Fairfax journalists in their current dispute with management.

 

Senior management at the Commonwealth Bank have threatened the wide scale introduction of individual contracts because staff have refused to accept a proposal from management that does not address inadequate staffing levels.

 

The increasing anxiety of many workers about workloads and working hours is not surprising.

 

Consider that in 1997 an Australian Bureau of Statistics study revealed that there is one million hours of overtime being worked in Australia's finance sector every week and that more than seventy percent of this overtime is unpaid. This equates to more than 26,000 full time jobs - roughly the same number of jobs that have been 'down-sized' in the industry since the mid-1990's.

 

These are just a sample of the issues that people are saying they want unions to work on. They are of particular relevance to women and I have put them at the centre of the ACTU's work program.

 

Our other industrial priorities include protecting employee entitlements, and establishing a community standard for superannuation contributions that ensures working people have a decent and dignified standard of living in their retirement.

 

But as I mentioned a moment ago, changes to industrial laws are also squarely on our agenda. Although there are many areas requiring improvement, the fundamental problem at the moment is this - there is a decentralised bargaining system without genuine collective bargaining rights.

 

Take the Commonwealth Bank. 80% of its' workforce is unionised. They want a collective agreement negotiated through their union. But there is no legal obligation on the Bank to negotiate, to bargain in good faith, or even to meet with the union.

 

Under the Howard/Reith system, it is possible for the employer to go further and disregard the bargaining process, discriminate against union members and those wishing to collectively bargain, and impose individual contracts.

 

As a result there are now a plethora of disputes about rights - where the right to negotiate must be established through industrial and legal means before pay and conditions even get a look in.

 

This situation is unsustainable. If as a community we want decent standards of conduct in industrial relations, and if we are to have a sustainable bargaining system, there must be a fair set of bargaining rights.

 

And this brings me to some comments about the business community.

 

I have outlined some of the challenges and policy priorities facing unions, but Australian business also has it's own set of challenges in this rapidly changing world.

 

In recent years there has been too little dialogue between unions and business. Partly this is the result of an enterprise focused bargaining system. But there is less understanding now than there has been at any time over the last 20 years, of the big issues as each party sees them.

 

There has been little discussion about the competitive pressures faced by many industries, and the impact of these on employees such as I have outlined this evening.

 

There has been little discussion about the broader issues of jobs, skills, education and the legislative framework. We have allowed the rules to be set by the politics from Canberra. But governments come and go. I can tell you that unions will not go with them - we intend being around for a long time indeed.

 

The ACTU is open to a constructive process of dialogue with the business community. A dialogue that enables a better understanding of the issues, and one which focuses on policy responses in areas of common purpose. I have touched on some such issues tonight.

 

And the ACTU has a view too, about some reform needed inside the Boardrooms of this country.

 

We are one of many voices calling for greater transparency and accountability in the ways in which public companies carry on their business.

 

It is fashionable to declare that 53% of Australians directly or indirectly own shares, and that there is no longer the polarisation of interest between wage earners and shareholders that once might have been the case.

 

The corollary is that shareholders might take much more interest in corporate governance issues. Issues like the independence of Boards in reviewing management decisions, executive remuneration, how companies treat their workforce, and the impact of company decisions on the community.

 

By and large Australian institutional investors have not played an active role in corporate governance issues. It is time that these investors, representing, as they do, the retirement savings of millions of workers, required companies to adopt the highest standards in relation to how they govern themselves and how they behave towards stakeholders, including employees, customers, suppliers, the community and the environment.

 

This is an issue about which more will be heard.

 

I think that the years ahead will be exciting.

 

Unions are not by any means a homogenous group. We are as diverse as the community from which we have grown. But unions are looking forward, we do have a program for the future, and we do intend to play an active role in public life.

 

ACTU Secretary, Greg Combet