For The Labourer is Worthy of His Hire
Tasmania's Window of Opportunity
Mr Chairman and delegates, thank you for the invitation
to address you this morning. Having bought a book some
ten years ago entitled "One More Nail" and accepting
the treatise it contained as compelling, I have been
delighted to meet its author and our chairman for this
session. It is also an honour to address this group
of "political troglodytes and economic lunatics". That
description was employed by the then Prime Minister,
Bob Hawke, to describe the H R Nicholls Society some
six years ago. However, that description no longer
seems appropriate. So instead, let me congratulate
the H R Nicholls Society on its input, contribution
to the intellectual debate, and re-arranging the industrial
relations agenda in this country. Many young Australians
will be thankful for the employment opportunities that
will flow as a result of your initiatives. Michael
Porter's analysis in "Arbitration in Contempt" explores
this area and has explored the reforms required, especially
for young Australians.1
My friend, Forbes Ireland, has given you a detailed
analysis of the nuts and bolts of the Tasmanian system
and I intend, with your indulgence, to spend my time
dealing with some of the broader philosophical questions
and the window of opportunity for reform that now exists
in my home State of Tasmania.
John Hyde has previously delivered a paper entitled
"The Political Barriers to Changing Centralised Industrial
Relations".2 I intend to discuss this topic from the
On February the 1st, 1992, the people of Tasmania
elected a Liberal Government with an over-whelming
majority. It replaced the Green/Labor Accord and its
It was an election which very properly concentrated
on the issue of jobs and the stagnation present in
the Tasmanian economy. The Liberal Party adopted the
theme "Jobs. Security. Solutions". It was a basic campaign
with no electronic advertising. Neither political party
was endowed with substantial resources. The campaign
was low-key and grass roots oriented. The strategy
was to create a media opportunity each day for a 30
to 60 second grab on the television evening news. Hardly
the sort of campaign which allowed considered and detailed
The Liberals return to power in Tasmania was seen
by many as the "proper thing" and the two and a half
years of Labor/Green rule as "an aberration". That
mentality is an interesting reflection on the metamorphosis
that has occurred in the Tasmanian political landscape.
Prior to 1969, Tasmania had never had the opportunity
of experiencing a Liberal government. In 1969 the Liberal
Party formed government in coalition with one Kevin
Lyons. That government had many of the weaknesses experienced
by the Green/Labor accord other than the leadership
of Sir Angus Bethune far exceeded Michael Field's in
That government lasted some two and a half years and
Labor was returned to its "rightful role" of government.
It took the Liberals in excess of another decade before
winning office again, and this time in their own right,
under Robin Gray, a leader of strength and determination.
A leader who very capably was able to build on the
federal electoral successes of 1975, 1977 and 1980.
Prior to 1972, the Liberal Party only held one federal
House of Representatives seat. In 1972 it held not
a single seat. 1975 reversed that scenario completely
and we won every House of Representatives seat. The
solid Labor electorates of Braddon, Lyons, Bass and
Franklin, fell under the Liberal onslaught.
Today the one seat that used to be Liberal, Denison,
is now the only Labor seat.
The electorate of Braddon, where the ALP won 5 seats
to the Liberals 2 in 1972, returned the compliment
against Labor in 1992, with the Liberals winning 5
seats, Labor 1 and the Greens 1.3 To achieve 5 seats
requires in excess of 60% of the vote.
From a professional Opposition with minimal success
to becoming the dominant party, a very real and fundamental
metamorphosis took place. From the losing caterpillar,
the Liberal Party turned into a winning butterfly.
The Party was no longer restricted by the cocoon of
Opposition. Through its transformation, it flew from
its cocoon into the larger world, which included victory
There had been a restrictive mentality within the
Party which did not enable us to break out and explore
the requirements for government. Under Mr Gray the
Liberal Party obtained a leader who wanted to grow
wings. And grow wings he did and flew into government
with a vigour and vitality not before witnessed in
The victory was largely achieved by thousands of former
Labor-voting blue collar workers turning to vote for
the Liberal Party. Mr Gray had a rapport with the miners,
forest workers, factory and process workers. Mr. Gray's
continuing personal popularity in his electorate is
based on that empathy.
During the Gray era there was a sense of achievement,
growth and stability. Achieved by new projects and
unashamed support for development. Jobs were secure.
The Liberal Party achieved its victory largely due
to the employed Tasmanian deserting Labor and embracing
the Liberal Party. The Trade Union movement, of course,
did not abandon Labor. However, the Liberal Party considered
it owed a lot to the employed Tasmanians who had changed
their traditional voting patterns and no-one would
argue with that. Unfortunately though, the trade union
movement was able to exert an influence on the government
because of its reliance on the vote of the people who
were allegedly represented by the trade union movement.
The fact that the call of the trade union movement
to vote Labor had been ignored by the bulk of its membership,
did not convince the government that it should similarly
ignore the trade union movement. Instead, some would
suggest that the government listened too closely to
it. I don't wish to comment on that criticism.
During the Liberal Party's time in opposition between
1989 and 1992 the issues of the day were stability,
the Royal Commission and then a period of leadership
instability. Within a fortnight of obtaining the leadership,
Ray Groom was fighting an election campaign. The topic
of industrial relations did not rate highly as an issue.
During the campaign, the Liberals, quite properly,
from a political stance, took the approach of promising
as little as possible other than emphasizing the need
for jobs, security and solutions. Industrial relations
was not an election issue. Indeed, it did not rate
a mention in the media. The Tasmanian Trades and Labour
Council (TTLC) tried desperately to make it an issue
In the booklet entitled "1992 State Election---
Liberal Party Policy Statements" the Liberals summarised
all commitments made by its leader, Ray Groom, and
its spokespeople. The booklet contains 180 pages. Two
and a half pages are devoted to industrial relations
and the heading of the section is most telling. It
is entitled "Industrial Relations---Policy Statement"
and sub-titled "Answers to TTLC Questionnaire".4 So,
the Party went into the campaign without an industrial
relations policy and only addressed the issue when
requested to do so by the TTLC. The intellectual giants
of the TTLC (undoubtedly on overtime) were able to
develop a comprehensive and in-depth questionnaire.
It contained three questions. The question with which
we ought concern ourselves is Question 3. The question
Question 3---"Will you give a commitment not to
introduce industrial relations legislation in any way
similar to the recent New Zealand and New South Wales
Acts and as proposed by the federal Liberal Party?"
Answer:---"There is no present intention of a
State Liberal Government implementing any special new
form of industrial legislation. Any need for change
that emerges would be subject to full consultation
with you at all stages.
The Maritime Council formed by the former Liberal
government worked well and similar industrial relations
methods will be adopted again.
The enterprise bargaining principle adopted by the
TTLC is supported and your executive can be assured
a formal arrangement of consultation with the TTLC
will be implemented."
The answer was brilliant "political speak" leaving
the door open in the event that "a need for change
On February the 1st, 1992 the people of Tasmania swept
Ray Groom into the Premiership and the Liberals into
The background I have provided is designed to
give you an understanding of how the Liberal Party
in Tasmania shed its professional Opposition status
to become the dominant political force. It relied
heavily on Tasmanians shedding their Labor allegiance
Ä an allegiance which had often been in the family
from the foundation of the Labor Party. The trade unions
were perceived as being potentially capable of undermining
the electoral success of the Liberal Government. Undoubtedly,
the Industrial Relations Club also advised the government
not to rock the boat. Industrial relations was not
a major issue. No noteworthy reforms were introduced
during the two terms of Liberal government other
than the Worker's Compensation Act which many believe
was heavily influenced by the trade union movement
and our friends in the Industrial Relations Club.
In short, the Liberal Party was not keen to take on
the trade union movement, or expose rorts other than
the 17% leave loading with which I will deal later.
Well, the Liberals are in power again. And the questions
I pose are, "What are the opportunities for the Liberal
Party on having been returned to government to reform
the Tasmanian industrial relations system? What windows
of opportunity exist?"
As an introduction to that segment, I would assert
that four fundamentals for change exist:
- 1. The government has a stable, workable majority.
- 2. The Upper House (the Legislative Council) consisting
of 17 Independents, 1 ALP and 1 Liberal, would be receptive
to well considered reforms.
- 3. Most importantly, the people of Tasmania are crying
out for employment opportunities, so there is a reservoir
of goodwill amongst the people to take whatever action
may be necessary to increase employment levels. The
people of Tasmania may well indicate to the government
that a "need for change" has "emerged".
- 4. The emerging need for change being found in the
contempt with which the arbitration system is currently
held and the realisation it is responsible for a number
of our economic woes and ills including the high level
of unemployment. But this point needs further public
airing as John Hyde said in his treatise, "The first
requirement of good industrial relations is a public
understanding of the nature of the problem".5 The
discussion during the last State election campaign,
concentrating as it did on jobs, security and solutions,
really did not address the significant underlying issue
of industrial relations, of industrial policy and the
suffocating effect of those policies on the Tasmanian
economy. Just as one aside, the cost of coastal shipping
is absolutely crippling to the State's agricultural
and other export industries. Clearly, more work needs
to be done to highlight, air, expose and educate the
public about these problems. Forums such as this are
a good start in providing greater public awareness
of the very real negative impact that the industrial
relations system has had on our economy and therefore
on the job opportunities that are available to our
So what changes are needed? In answering that question,
I seek to serve up a smorgasbord of issues which need
to be addressed as part of the solution. I do not suggest
in any way that the solutions proposed would be a complete
cure-all like the Carbolic Smoke Ball6 was said to
have been some 100 or so years ago.
The areas of reform required are as follows:
This issue is central if real reform is to be achieved.
The need for unity to ensure that a labourer is paid
an amount "worthy of his hire" has been overtaken by
unity for political and power-grabbing reasons. We
have trade unions with Jack Mundey imposing green bans.
As Jack Mundey said "It is far more noble for a union
to take action aimed at protecting the environment
than to go for another $10". We have unions seeking
to determine environment policies.
We have unions banning exports from BHP to Indonesia
in solidarity with the people of East Timor. We have
unions seeking to determine our foreign policy. The
list goes on. The Trade Union Movement's roots have
grown into a tree that seeks to cast a shadow over
every aspect of our lives. In a free liberal democratic
society, the parliament ought be determining policies.
Individual groups ought be free to have their say and
seek to persuade governments and influence them. But
to allow them to use their industrial muscle for purely
political reasons is unacceptable and should not be
tolerated. The only reason trade unions can embark
on these frolics is because they realise that their
members can't resign in protest because to do so would
be to discard themselves and their families on the
excess labour waste heap we have in this country.
The freedom to associate also by sheer force of logic
must include the freedom not to associate. And there
is no freedom if the exercise of that freedom assigns
one to the unproductive sector of one's country. If
unions had to justify their existence to their membership
they surely would concentrate on a more restricted
and more appropriate range of activities.
The genesis of the Trade Union Movement in Australia
is found in the 1800s in a world socially, economically
and technologically completely different than we experience
today some 100 years later. Education, health, transport
and communications to name a few areas of human activity
have developed beyond the expectation of any of the
founding fathers of the Trade Union Movement. I am
sure that when the Trade Union Movement was founded,
the founding fathers never had within their vision
for the Australian populace an Astor T.V., cast iron
lawn mowers, or Hills Hoists. Yet the prevailing mentality
of the 1800s appears to have been retained by the Trade
Union Movement in a completely different social and
The need for voluntary trade unionism is essential
if fundamental freedoms are to be restored in this
B---Voluntary Student Unionism
As an aside and as a trip down memory lane, allow
me to further recommend the abolition of compulsory
student unionism. In the Tasmania University Act the
Administration of the University has the power to levy
such fees as it deems appropriate. A compulsory student
union fee has been declared such a fee. The sanctions
for non-payment can only be imposed by the Administration.
So the vice-chancellors of this country are in effect
the shop stewards of the student union movement.
As students, people like Michael Kroger, Michael Yabsley
and myself, campaigned actively for its removal. I
hope that I will live to see voluntary student unionism
implemented Australia wide. The thought of compulsory
unionism at tertiary institutions---allegedly
the breeding ground for individualism and free speech
Ä is intolerable. Yet the Administrations and
other weak-kneed elements of the universities persist
with this anachronism. Compulsory student unionism
is particularly offensive and damaging because it trains
tomorrows leaders into a mind set for compulsory membership
as "appropriate". It is something they learn to live
with and accept as being part of the appropriate social
fabric. Any thought of rebellion is quickly quashed
with the reality of results being withheld as has been
threatened and practised by some Administrations.
To achieve a new mind set amongst our future leaders
we will require action. Liberal parties have been notorious
for introducing legislation to combat this evil whilst
in opposition and conveniently never getting around
to it when they are in government. This area needs
reform as well.
C---The Industrial Relations Club
The government needs to address this dinosaur and
place it with the other dinosaurs---on the extinct
list. For too long a cosy little network has systematically
destroyed this country's economic fabric and manufacturing
and export capacities.
The Trade Unions have always had their act together.
They have always been aggressive, determined, unified
and proactive. On the other hand, the employer groups,
usually the relevant chamber of industry, have sold
out the economy and the viability of their industry.
Like true reactionaries they have allowed the agenda
to be set by the Trade Union Movement, reacting to
it and then chuckling in foolish delight when they
settle a union claim for half of what was originally
demanded. Theirs has been a vision chronically affected
by the double disability of short-sightedness and astigmatism.
And the third partner---government---has
rarely had the courage or determination to involve
itself other than to administer a "quick fix". The
patron of this club is undoubtedly the Industrial Relations
Commission which allows the sweetheart deals of preference
clauses and favoured treatment of certain superannuation
policies, to identify two, to persist. Put simply,
preference clauses ought be outlawed.
The favouring of a certain superannuation scheme in
an award is indicative of the unashamed manner in which
the Industrial Relations Club stitches up business
for itself. The Tasplan Superannuation Scheme is one
such example, being a joint venture of the TTLC and
TCI and blessed by the then Liberal government. Surprisingly,
this plan is the award plan in many awards. Access
to other superannuation schemes which may well prove
to be more productive to the employee have simply been
for all intents and purposes disallowed. This area
needs urgent attention.
Another example of the Industrial Relations Club's
engineering was the Industrial Relations Amendment
Bill of 1991. Forbes Ireland has discussed certain
of its aspects in detail and I will not further comment
on its provisions. All that I would wish to say is
that it was concocted between the government, TTLC
and TCI. No consultation with the Chambers of Commerce,
no public discussion. Just another deal. A deal that
was short-sighted and had the purpose of strengthening
the moribund Industrial Relations Commission's system.
I am pleased to hear that it is not on the government's
D---The Right to Individual Representation
Before the Commission
The right to individual representation before the
commission has to be implemented. The right to justice
and the right to a fair hearing should not depend upon
membership of one or the other players in the industrial
E---17% Leave Loading
The former Liberal government was courageous and visionary
in tackling this problem and obtained a waiver for
a period of twelve months from the need to provide
this outrageous, illogical and economically debilitating
payment. Business support for this move was minimal,
if not totally non-existent. It is interesting to note
that Clyde Cameron has even disowned it and condemned
its continued existence. Yet it remains in force. And
the powers that be seem impotent to deal with it. As
a cost to business, it is considerable. As a disincentive
to employment, it is monstrous. Yet it continues.
Hopefully, this matter will be addressed by all because
on a very rough calculation, employment could be increased
by approximately 1% if it were to be abolished without
extra costs. Surely, it is worthy of consideration.
If not for the sake of business, at least for the sake
of our fellow Australians who are without a job. In
a Tasmanian context, it would mean another 300 Tasmanian
public servants could remain in employment.
In Tasmania we are in the farcical situation of borrowing
money to sack public servants. The abolition of the
17% leave loading could well obviate the need for the
redundancies and the further borrowings.
The leave loading issue would enable the government
to take the moral high ground, would be a minor issue
and one which would ultimately be achievable. But I
should add, that if this is to become a reality, the
business community will need to be more supportive
and in a proactive public way, not like its shameful
silence in the past.
In a tourist state like Tasmania, the existence of
penalty rates has seriously affected the viability
of small ventures and denied many students and others
seeking part-time work or casual work from obtaining
I still recall as a student working as a farm hand
on a poultry farm. The farmer needed seasonal work
undertaken and I as a poor student needed an influx
of funds. On the Australia Day long weekend I indicated
a desire to work on the Monday. I needed the money.
There was work to be done. But excessive and irrelevant
penalty rates applied making it commercially nonsensical
for the farmer to employ me on that day.
My offer to work for the normal rate of pay was rejected
for fear of a possible prosecution by the Department
of Labour & Industry or a union blackban. The result
was that the poor student was kept poor and the farm
which needed the input of labour was denied that input.
In short, everyone lost out. Rationality and common-sense
need to be returned.
Mr Chairman and delegates, voluntary unionism, both
industrial and at tertiary institutions, abolition
of leave loading, a realistic approach to penalty rates,
the exposure of the Industrial Relations Club as the
wrecker of our economy, are all individually major
areas of reform, all of which need to be addressed.
But they need to be addressed in a unified manner Australia
wide so that the temptation to switch to federal awards
is removed. Enterprise bargaining with its attendant
freedom for sound, sensible and rational negotiation
would be the key to achieving most of those results.
The possibility for reform is virtually endless.
The need for reform is urgent.
But is the will for reform present?
The answer will determine the future viability of
Tasmania's economy and the possibility of truly establishing
jobs and security through workable and
- 1. 'Arbitration in Contempt'-Proceedings of the
H R Nicholls Society Chapter 9.
- 2. Ibid Chapter 7.
- 3. Tasmania's electoral system is based on the boundaries
of the federal electorates with each electorate returning
seven members. It is a proportional representation
system known as the Hare Clark System. There are 35
members in the House of Assembly. The Liberals hold
19 seats, the ALP II and the Greens 5.
- 4. See "Annexure "A".
- 5. 'Arbitration in Contempt'-Proceedings of the
H R Nicholls Society Page 173.
- 6. Carlill v. Carbolic Smoke Ball Company  2Q.B.484
In this case the Defendants were the proprietors of
a medical preparation called "The Carbolic Smoke Ball".
They advertised to the effect that the Carbolic Smoke
Ball was virtually a "cure all". They were successfully
sued when the Carbolic Smoke BalI failed.
INDUSTRIAL RELATIONS---POLICY STATEMENT
Answers to TTLC Questionnaire
What immediate, practical steps will your
party take to put people currently unemployed back
to work and what is your program of action for
the next four years to create and maintain employment?
- A. I agree with your question. The real issue is for
immediate jobs. We have placed emphasis on that in
our policy releases.
- Our Jobs in Forestry policy outlined $2 billion
of investment and several thousand jobs.
- The important aspect was immediate action
on the Southern Forests proposal, immediate action
on pursuing the pulp mill, and support for a lift in
- Our Jobs in Mining policy was directed at
providing an additional prospective area for the mining
industry for the same reasons.
- Our Tas Jobs for Youth policy creates over
1000 jobs over the next three years---400 in the
first year alone---for young people with subsidies
of up to $4000 a year.
- Other policies as outlined in our releases
have similar targeting with jobs and youth employment
as a priority.
Most important of all, we know, as well as you do,
that we are not going to attract the investment we
want to create genuine jobs in the construction, and
then operational phases, unless we have a majority
stable government. Worse than that, investment will
decline and jobs will actually be lost if a hung Parliament
results. The Greens won't provide that prospect and
they wish to reduce power to industry and take other
There is no immediacy in the Labor plans for jobs:
- Jobs from any gas field are at least 7 years away.
- A start on the pulp mill has been deferred
at least two years as a minimum.
- Tamar Valley and Triabunna woodchip plants
would be closed, according to Field's speech.
- Any new jobs in the Huon---the proposed
1000---would be subject to a Green veto.
- Careful tax relief to assist small business
to employ more people has been rejected outright.
Your Executive must therefore look at employment and
job creation in a broad, apolitical context, to identify
that stability is the only way to secure and attract
investment and jobs.
Do you intend further cuts in public sector jobs
or services or the sale of public assets? Please provide
a detailed specific list of your proposed actions.
- A. A Liberal Government will stop the public sector
redundancy scheme and introduce a selective natural
attrition programme. Redundancy arrangements currently
in progress will proceed to completion. The natural
attrition policy will recognise specialist and urgent
- A minimum extra 350 junior positions will be established
in the public sector in each year of office.
- There is considerable concern at the Government's
cost estimate of up to $60 million for the recently
ratified public sector award restructure. Mr Greg Vines,
TPSA, has indicated this figure is grossly exaggerated
and Mr Barker has accepted his offer of a brief on
Mr Vines return from leave early in February.
- In the event there is considerable effect on the
State budgetary position, public sector expenditure
would have to be reduced to compensate, with the possible
solution of a reduction in employee numbers. Increased
taxation is not a preferred option.
- As far as the sale of Government assets is concerned,
a Liberal Government will not be implementing a wholesale
privatisation policy. Reports of sales up to $400 million
- On winning Government a detailed assessment of the
State's financial position will be undertaken. There
are no immediate plans for privatisation except the
MAIB/TGIO proposal. This will not occur for at least
three years. The matter will first be subject to a
White Paper examination and full consultation.
- I guarantee that full consultation with TTLC and
TPSA representatives will be undertaken before any
privatisation affecting public sector employees is
- The PSA have been informed that regular quarterly
meetings with Government will be conducted.
Will you give a commitment not to introduce Industrial
Relations Legislation in any way similar to the recent
New Zealand and New South Wales Acts and as proposed
by the Federal Liberal Party?
- A. There is no present intention of a State Liberal
Government implementing any special new form of industrial
legislation. Any need for change that emerges would
be subject to full consultation with you at all stages.
- The Maritime Council formed by the former Liberal
Government worked well and similar industrial relations
methods will be adopted again.
- The enterprise bargaining principle adopted by the
TTLC is supported and your Executive can be assured
a formal arrangement of consultation with the TTLC
will be implemented.