Tenth Anniversary Conference

The Occasional Address

David Kemp

I am honoured to have been invited by Ray Evans to speak to this tenth anniversary dinner of the H.R. Nicholls Society. I am glad that the Society chose not to hold this conference on the first weekend in March, the weekend of the very first conference, because I was otherwise celebrating on that particular Saturday evening this year.

It is a particular pleasure tonight to welcome you for this historic occasion to the electorate of Goldstein.

I trust that the records of the Society show that I have been a member for the whole of those ten years. I have certainly claimed to be a member and have listed my membership constantly on my parliamentary declaration of interests.

It has been a particularly satisfying Society to belong to, not merely because it has had such remarkable success with its agenda of reform---though some here may think that success has so far been inadequate---but because it creates such consternation among one's political opponents when they discover that you are a member of the H.R. Nicholls Society.

In the Parliament it still causes that frisson of fear to ripple around the Labor benches.

It gives me the same thrill as barracking for Carlton in the Collingwood stand at Victoria Park.

It is hard to believe that the Society is an organisation which holds peaceful seminars and publishes papers.

After all, no seminar group could have the apparent influence, and blanch so effectively the face of any ACTU Executive member as the H.R. Nicholls Society did. And still does today. It gives me great delight to wear my H.R. Nicholls Society tie into the House of Representatives, and wave it at poor old Martin Ferguson and Simon Crean.

When the Age did profiles of some of the Opposition Shadow Ministers during the election campaign, Michelle Grattan rang twice to check whether I was a member of the HR Nicholls Society. She apparently wasn't interested in the policy I had written. She didn't want to know about my criticisms of Working Nation. No. It was my link with the .H R Nicholls Society which was apparently in her view the most important thing to know about me.

I well remember that Inaugural Seminar of the Society held at the Country Women's Association headquarters between 28 February and 2 March, 1986. It was memorable for a number of reasons. It heard papers from many notable and now even more famous people; it was virtually the coming out' of John Kerr since the dismissal; Gerard Henderson had not yet become the leader of the Keating claque, and it was the first decisive step against the appalling conclusion of the Hancock Committee of Inquiry that:

It is a mistaken view of the pluralistic society to assume that every subject' is equally dominated by the might of the state and its arms of enforcement.

Professor Hancock of course accepted that as a sound basis for policy.

It is interesting to look back through the historical record and see what various people have said about the Society.

Claude Forell bestowed upon us the honour of replacing "the ageing Mr B.A. Santamaria and his once shadowy movement as the most dreaded monster in the demonology of the Left". I have never asked Mr Santamaria how he felt about being usurped by the H.R. Nicholls Society, but if the Society can do as much for the Liberal Party as he did, then I welcome the comparison.

The Courier-Mail in Brisbane ran the headline "The New Right---A blood and guts brigade?".

In 1987, Bob Millington, in the Melbourne Age, referred to the "H.R. Puff n' stuff society".

We have been accused of being "as dry as the Simpson Desert", "an evil group of right-wing plotters", "a gang of revisionists and counter-revolutionaries". Looking around the room tonight, I can't believe they were talking about us.

In 1988, I must point out, Ray Evans was quoted as being an admirer of Paul Keating, and suspected him of being "a closet H.R. Nicholls Society supporter". Seven years later, Keating repaid the compliment by referring to the Society as "that weird specimen of extremism". Considering Keating's mastery of colourful language and political put downs, this was perhaps somewhat tame, especially compared to the infamous tag of "political troglodytes and economic lunatics" that his predecessor bestowed upon us in 1989.

However, the Society can take comfort in the words of Margaret Thatcher, when she said "If they attack one personally, it means that they have not a single political argument left".

Of course, the Society has also received its share of praise. Who could forget the 1989 NSW Labor Council document that declared that "the H.R. Nicholls Society has won the intellectual and political debate", and the storm of recriminations and denials that that caused? I do not think there is any doubt that the Society has won the intellectual debate. It is perhaps the biggest compliment of all to see our opponents embracing some of the underlying philosophies that the Society stands for. Peter Costello said in 1992, "What was heterodoxy in 1986 is orthodoxy five years later. And I feel absolutely vindicated".

In 1992, Paddy McGuinness wrote about the Society, "Those who vilified them years ago continue to do so as they concede beachhead after beachhead to them". Such has been the nature of the criticism levelled at the Society. It always came from those most annoyed that they were now espousing our philosophies---the sweetest criticisms of all.

Even Bill Hayden, who is well known for belittling his opponents, so to speak, warned of the influence of the Society, saying that "there had been radical changes in industrial relations since then, and the Society could not be left out in assessing the causes of that".

When the Society first met ten years ago, it was fighting against the status quo in political and economic circles in Australia that believed that central regulation provided the best outcomes for workers, and perhaps the economy as a whole. It was formed in the early years of the Hawke Government; a time when union power and influence over the economic debate was on the rise. Indeed the union bosses were, in effect, sitting at the Cabinet table, directing the Government's policy agenda.

The Accord then was trumpeted as one of the greatest successes of the Labor Government. A new deal, or so it was said, had been struck between the unions and the government, and workers across the country were going to be better for it. Or so the union rhetoric ran. The last decade has in fact seen a decline in real wages and record levels of unemployment. Perhaps most tellingly, although the ACTU never seemed to heed the warning, was the vast decline in union membership over the life of the Accord.

It is quite significant that the Accord was launched at a Summit' held at the old Parliament House in Canberra. This Summit effectively symbolised how under Labor, the sovereignty of the elected representatives of Parliament was abrogated to the representatives of the corporate state and the union leaders. Once the seats of the people's elected representatives were ceded to union officials, it was only a short step to Warrior Bill Kelty being one of the most powerful men in the Cabinet and any notion of responsible Government disappearing from the Australian political scene. It is actually nice to see that Martin Ferguson, having dictated Government policy and legislation affecting all our lives for six years, finally sought to be democratically elected to the Parliament, and still struggled to gain pre-selection and suffered a swing against him.

Of course, the H.R. Nicholls Society predicted and foretold of the destruction to our economy that the Accord would cause. It was often these predictions that earned the Society such derogatory press over the last decade. The central regulation and entrenchment of union influence over the lives of ordinary Australians was bound to destroy individual incentive. It ran against everything the Society stands for: freedom of the individual to decide and negotiate their own labor arrangements; freedom to decide these arrangements without interference from the State; freedom to be represented in negotiations that affect your livelihood if you desire.

In the last six years, there have been fewer than 30,000 additional full-time jobs created in the Australian economy. Unemployment has risen from 6.2% to 8.9%. And we are in the fifth year of the economic recovery! Simon Crean, ex-ACTU President, held the Employment portfolio for a couple of years. He botched it---preferring to set up hugely bureaucratic programs to hide the unemployed than to put in place a regime based on incentives and reward for enterprise. Now Martin Ferguson has been elevated straight to the front bench in the Employment portfolio. From a narrow, partisan perspective let me say: "Long may he stay there" because it will ensure that Labor has nothing constructive to contribute on the creation of real jobs, and it increases the likelihood that we hold the blue collar vote that came to the Liberal Party in the recent election.

Many would argue that the Society has been successful, although some might not. It is indisputable that the H.R. Nicholls Society has achieved success in setting the agenda for the political debate of the last ten years. The Society chose the battle ground. The Society won and is still winning many of the battles.

It must not be forgotten that the ideas and philosophies against which the Society stands, have been in existence for many centuries. Central wage regulation and unnecessary interference by the State into labor arrangements has a long history.

I would like to read a passage from the first volume of Winston Churchill's History of the English-Speaking Peoples, where he describes the plague as it swept through England in the fourteenth century.

The character of the pestilence was appalling. The disease itself, with its frightful symptoms, the swift onset, the blotches, the hardening of the glands under the armpit or in the groin, these swellings which no poultice could resolve, these tumours which, when lanced, gave no relief, the horde of violent carbuncles which followed the dread harbingers of death, the delirium, the insanity which attended its triumph, the blank spaces which opened on all sides in human society, stunned and for a time destroyed the life and faith of the world.

I hope that has not spoiled anyone's dinner! However, the Plague also led to one of the most comprehensive attempts at Government regulation of wages in history.

Churchill continues:

Nearly one-third of the population being suddenly dead, a large part of the land passed out of cultivation...At this time, when wealth-getting seemed easier and both prices and profits ran high, the available labour was reduced by nearly a half... Ploughmen and labourers found themselves in high demand, and were competed for on all sides. They in their turn sought to better themselves, or at least to keep their living equal with the rising prices.

While there had been attempts in the past to control wages, the Statute of Labourers passed in 1351 was all encompassing. It pegged wages at pre-plague rates and insisted that all landless of sixty years and under must accept employment at those rates.

Reapers, mowers and other workers were forbidden to leave their masters.

The law was enforced vigorously and between 1351 and 1377 nine thousand cases were tried. Those who attempted to enforce the laws were attacked. "Unrest spread wide and deep" wrote Churchill.

There were many cases of labourers refusing to work. Crops were not reaped, manors and monasteries were destroyed, and there were instances of tenants deliberately flooding their landlords' fields.

The Statute fuelled the Peasant's Revolt of 1381. In the course of the revolt in June, the Treasurer, Sir Robert Hales, was dragged from the Tower of London and beheaded. He was not as clever a Treasurer as Ralph Willis. Ralph would have produced his own letter of pardon and insisted it was not a forgery. King Richard II confronted the rebels and gave in to their demands for labour services on the basis of free contract.

Then a fourteen year old, King Richard already had a highly developed sense of political pragmatism. After committing himself to pardon those who returned peaceably to their homes, he nonetheless had 150 of the rebel leaders executed.

Of course, as the learned author of the relevant volume of the Oxford History of England concludes:

... in the long run, the intention of the statute was defeated, partly by the great landlords who discovered that it hampered them in the competition for labour and partly by the refusal of the labourers themselves to accept its limitations.

The turmoil of the Plague and the Peasants' revolt effectively created the conditions of the dissolution of feudalism in England.

Of course, Australia has its own history of central regulation, against which the H.R. Nicholls Society is proudly founded. It was Ray Evans, I believe, who pointed out the essentially medieval character of this regulation and its central concepts.

In 1906, Alfred Deakin introduced the Excise Tariff Act which provided that duties would be imposed on agricultural machinery manufactured in Australia except where the conditions of remuneration of labour were declared to be fair and reasonable'.

The following year, 1907, was an auspicious year in Australian history. Carlton and United Breweries Ltd was established in Melbourne following the amalgamation of six breweries. Members of the Federal Parliament voted themselves their first pay increase of 50%, from 400 pounds to 600 pounds. I am not sure if this payrise was a coincidence, or was directly related to the establishment of CUB. Carlton defeated South Melbourne to win the 1907 VFL premiership.

1907 also witnessed the now famous Harvester Case. H.V. McKay of Sunshine Harvesters (so named because his factory was in Sunshine) sought exemption from Deakin's tariff on the basis that he was paying fair and reasonable wages.

On 8 November, 1907, the father of arbitration, Justice Henry Bourne Higgins of the Arbitration Court found that McKay was not paying fair and reasonable wages and subsequently set a minimum wage adequate for the normal needs of the average employee. He declared that fair and reasonable' was not what could be gained by the bargaining between the employer and the employee but rather what was appropriate for a human being living in a civilised community.'

Appropriately, the Age declared the decision manifestly sound and just'.

Although the Act was declared invalid by the High Court in the following year, the principle of the basic wage remained.

However, I must admit that I am in two minds about Justice Higgins. On the one hand, there was the contempt of court charge against our the courageous editor who gave his name to our Society, Henry Richard Nicholls. But on the other hand, Higgins made a truly great contribution to the Australian way of life in the important post of President of the Carlton Football Club. It is interesting to speculate whether Higgins would include the admission fee to Optus Oval to watch the Blues as part of the minimum wage.

So the attitudes and philosophies that the H.R. Nicholls Society stands against have been held by certain interest groups and powerful people for centuries. However, within a span of ten short years, the debate has been significantly influenced in our direction. Within the next two weeks, we are going to see the most comprehensive reform of industrial relations at the federal level being introduced into the Parliament in the form of the Reith Bill.

I know that there are some here tonight who have been critical of aspects of the approach that the Coalition is taking on industrial relations reform. This morning's first speaker addressed the impact of the Reith Bill, and I will be interested to read what was said. I am sure that over the next few months, there will be intense scrutiny of our reforms, and that is to be welcomed. That is the role of the H.R. Nicholls Society.

Without wishing to delve too deeply into the arguments, for obvious reasons, I would like to make a couple of observations.

The Government and the H.R. Nicholls Society both want workers to have a choice about union membership. We both want individuals to be able to negotiate their own labor arrangements with their employer, free from interference by the State or by the unions. We both want the regulatory burden and confounding red tape removed from the system. We both want a fairer deal for workers and employers. We both want a system that promotes higher productivity.

The Government will end compulsory unionism. The Government, through the Australian Workplace Agreements, will allow employees to negotiate their own employment arrangements. The Government will remove much of the regulatory nightmare presently confronting employers, and will free up the industrial relations system. The Government will provide the choice for those who do not wish to stay in the Award stream, and over time, the benefits of the non-Award stream will become obvious. The Government will ensure a climate where better and fairer deals for workers and employers will be achieved.

Think tanks have a very important role in influencing policy agendas and formulating ideas. They are not constrained by the many and varied forces that constrain political parties and particularly governments. As John Hyde expressed it---not facing frequent elections "they can afford to get much further ahead of the debate than can politicians".

In its ten years, the H. R. Nicholls Society has advanced the argument for reform in the industrial relations sector with a great deal of success. Enterprise bargaining, individual contracts, voluntary unionism, industrial relations outside the Arbitration Commission have become almost conventional wisdom in a way that would have seemed inconceivable ten years ago to most people.

It is a rare phenomenon in history that, what started as a small group of people with few resources could actually have as much influence on the public debate as the Society has had. There is obviously a number of reasons for that success, but there is one that stands out. I believe it is that the values and ideals for which the Society has stood have been amplified many, many times over because they are fundamentally the values and ideals of the great majority of the Australian people. It has been through the H.R. Nicholls Society that the silent majority of Australians have heard their authentic interests being promoted and some of their deepest beliefs expressed. The influence of the H.R. Nicholls Society is not the influence of smoke-filled rooms and corridor deals. It has fundamentally been built on people power'---on the power of rational argument in a democratic context.

The H.R. Nicholls Society has believed in the open debate which is the lifeblood of a democratic society. The many collections of papers, published and cast about to the public, which have been produced by the Society over the period of its existence are testimony to that.

Those parliamentarians who have made themselves the champions of those beliefs and ideals on the public platform have been impressed on occasion after occasion with the warm and positive public response which they have received in return. It has been the awareness of that response by those who have defended the system of privilege and elite power supported by the ACTU that has made the H.R. Nicholls Society such a fearsome and feared opponent. But even a debate where victory for one side may be written in the stars cannot be won without champions, and it has been the courage of those who founded this Society and pressed ahead with the case for freedom in the workplace, who rightly receive our praise at this tenth anniversary conference.

If you think back to the original H.R. Nicholls Society conference, held exactly ten years before the Coalition was elected to office, ask yourselves whether an industrial relations agenda such as we put to the electorate, could have been embraced by the Australian public. The answer is no. It is the work of groups like the H.R. Nicholls Society that created the climate in which such reforms become acceptable. "In short" writes John Hyde, "the think-tanks came into existence because of a weakness inherent in politics and have a definite, limited role in the democratic process".

In 1986, none of us thought that it would be a decade before the Coalition would win Government. While this decade was obviously a frustrating time for all of us, it provided the challenge of advancing our ideas in the public debate. Over time, we achieved success in influencing the silent majority in Australia and even in slowly influencing a Government that was promoting low productivity, fixed wages and strong central regulation.

Therefore, the role that I believe the Society, and other think-tanks, have now is to keep advancing their arguments in the public arena. Even the most desirable and popular of reforms cannot be implemented from the Opposition benches. The H.R. Nicholls Society, like every other participant in the democratic battle of ideas, has to win the policy debate in the public arena.

I would like to finish by quoting some words from the obituary of Henry Richard Nicholls in the Hobart Mercury, 15 August 1912. He died at the age of 83.

Mr Nicholls was a sound and brilliant writer, but he was something much more. He had a remarkably orderly and logical mind, shrewdness of judgement combined with quickness of apprehension, a horror of sham and humbug, and a fearlessness based on uprightness which forbade him any slight divergence from the strict line of duty. He had high ideals of public life and conduct, and to the day of his death was always ready to combat that cynicism and pessimism which are so much in evidence. No man more than he had the capacity for: "hearing oftentimes, The still, sad music of humanity".

No words could more aptly express the ideals of this Society: It has championed clear and logical argument, it has abhorred sham and humbug, it has been fearless in pressing the ideals and policies in which it has believed, and it has done honour to democracy by the way in which it has conducted itself in the heat of debate.