The Changing Paradigm: Freedom, Jobs, Prosperity
Remarks to the HR Nicholls Society
The Hon. Peter Reith
I am genuinely honoured to receive the Charles Copeman Medal
for 2002 and I express my thanks to the Society for its hospitality
tonight. I also thank John Stone for his kind words. I worked
in the parliament with John and for quite a time we were on the
front-bench together. He is a person of remarkable talent but
also has a lot of commonsense and I admire him greatly.
Julie also appreciates the invitation to be here. In some ways,
wives of people in public life are the silent sufferers because
they cop the barbs and certainly feel them as much if not more
than the direct recipient, but never have the chance to reply
to the critics.
There have been some famous recipients of this Medal but I
also pay tribute to the thousands of employers and employees who
have fought their own battles for a better deal at work. As a
Minister I was lucky to meet a lot of them.
I should say that to the extent that the reform of the waterfront
was taken into account by the Society in deciding to make this
award, then the efforts of Mr Chris Corrigan should be mentioned.
He is a person of exceptional character and ability and to him
must go a lot of the credit for the huge improvements in productivity
and reliability in the performance of Patrick Stevedores and the
Like many reformers, he has had to wear a lot of vindictive
and personal criticism. He was described in 1998 (when Lang's
share price was $2.05) by the Fairfax press as "Australia's
most reviled employer". I won't repeat what some unionists
said about him. He has many fine personal characteristics and
two should be mentioned. He is unpretentious. He once said "If
you have some huge office with magnificent views over the city
you tend to think there is something special about you."
I went to his office once and he is true to his word, it was nothing
special. Secondly, he has a healthy skepticism of governments
and once said that "We ascribe to the government a role as
benefactor which I think really has its roots in socialist ideas".
Consistent with that view, he is a strong supporter of deregulation
and privatization and, like many of us, he believes that the benefits
of economically rational policies are irrefutable. He likes competition,
which is a trait that marks him out from some business leaders.
It is good also to give my first speech in Australia since
leaving federal politics at the last election. It was time for
me to move on and so I have no regrets. I feel that I was lucky
to have the chance to be involved in so many things that were
worth doing. Of course I had my ups and downs, but who doesn't?
If you are just a time-server then you won't get into any trouble,
but then again you won't achieve anything either.
Now I speak as an ordinary citizen. I will be able to say what
I really think of politicians. And sling off at pollies for their
inadequacies. The ALP ones will keep me busy for a while so I
will try to avoid doing a "Malcolm'.
In his press release for this conference, Ray Evans said the
press was disgraceful in the waterfront dispute. Some were, some
weren't. Having been through Wapping, it was surprising that the
Murdoch press were not more on side. I have never commented a
lot about the media and I have never sued or gone off to the Press
Council. I have known that if you comment adversely on journalistic
standards, your comments will be disregarded and instead you will
be painted as sour and bitter.
I like the work of some journalists but not of others. They
are certainly not all independent. Many of them make up "facts"
or put a slant on a story because they have been told to do so.
No-one in newspapers takes responsibility for false headlines.
The press expects politicians to apologise or own up to mistakes,
but securing an apology from an editor is harder than winning
Tatts. I know, I have tried both. In a free society, there is
nothing anybody can or should do about it but it is the reason
that many people hold journalists in lower esteem than politicians.
In some cases, that judgment is well deserved.
It is now no longer compulsory for me to read the papers or
listen to "A.M." I now fetch my own cup of tea at functions.
We have a grey car not a white one. I check my own telephone accounts
and I am fast becoming computer literate. I have taught myself
even to receive and print my own e-mails---with or without attached
photos. Despite these distractions of a more normal existence,
I still feel strongly about things that need to be done.
The need for public advocacy for labor market reform is as
great as ever. That is not in anyway downplaying the benefits
of the reforms already introduced, but rather to emphasize that
reform is not a thing you do once and then forget. Reform is more
like footy training. You need to do it three times a week but
if you stop then you will soon be so out of condition that your
team will not win another game in the season and then it will
be relegated from the competition altogether.
The most persuasive and most comprehensive presentation of
the case for a more flexible labor market was put by Des Moore
in a paper he prepared for the Labor Ministers Council. That paper
should be updated. Not for the reason that its arguments have
been somehow made less persuasive by the passage of time, in fact
the contrary is the case, but rather to demonstrate how relevant
they remain and how feeble has been the intellectual response
to the paper's first edition.
I don't think that the opponents of reform could put up a respectable
response even if they tried, but this issue is so important that
I believe reform should be promoted for public debate as much
as possible. Des would relish the challenge and perhaps with a
series of public meetings and opportunities for public consultation
then the national benefit of more reform would be more widely
We still have a lot of reform ahead of us in Australia. One
reason the government was returned at the last election was its
strong economic performance. The latest GDP figures are testament
to the dividends of an economic reform programme. Whether you
call it 'Fightback' or something else, the bottom line is a simple
political message, namely, good reform equals higher living standards,
more jobs and a much better deal for low-income earners.
Only in the last week or so, the economic commentators have
been making the point that economic reforms, including enterprise
bargaining, had lowered the natural rate of unemployment and in
recent times Australia has not had the old problem of wage inflation.
There are many reasons for this, including more product-market
competition, but there can be no doubt that the workplace reforms
of the Howard Government have been a big factor in our improved
performance. Now we need more reform if the government is to be
re-elected at the next election.
Of course, the government, so far, has faced blind opposition
in the Senate. For the whole of the Howard Government's second
term, the Labor- and Democrat-controlled Senate prevented the
implementation of the policy announced at the 1998 election. This
was the most obstructionist Senate on workplace relations since
the 1950s.Their stated reason was explained in the slogan "Just
say No". This must go down in political history in Australia
as one of the dumbest, most nonsensical policy positions ever
advanced. Their attitude was that no matter how beneficial for
workers or anybody else, it was better (and presumably in the
national interest) to say "no" regardless. No wonder
Kim lost the 2001 election.
Hopefully, even an ex-ACTU boss can see that this sort of mindless
opposition is not in his political interest, let alone the national
interest. How many people would be out of work today if our reforms
had not passed the Senate? And how many disadvantaged job-seekers
is Labor prepared to sacrifice just to keep the ACTU leadership
My guess is that Simon Crean is only likely to be half-sensible
if there is a lot of public pressure on him for more reform. In
this regard the business community has an important role.
The Business Council of Australia has a place in this debate.
Compared to the Business Roundtable in New Zealand, the BCA does
not have an activist record. There is a lot of unjustified complacency
in the business community. There are many firms who have taken
up the reforms now available under the Workplace Relations
Act. But there are also a lot of firms hiding in the IR systems---both
the federal system as well as the archaic State systems.
These systems need to be simplified further to lower transaction
costs. There are too many firms that let the system "manage"
their workplace relations and the community pays a price in poorer
productivity because these firms rely too heavily on the crutches
built into the old system. Workers lose in this situation as well.
I noted the other day that the BCA outlined its priorities
for the year ahead and it left out not just fiscal policy but
also workplace relations. I looked at their Website under the
title "New Directions". I was disappointed to find that
the new directions had been kept to a paltry five generalities.
Ever optimistic, I turned to the separate page on workplace relations.
According to the site as at last Wednesday, no member CEO of the
BCA was prepared to chair the committee, and worse still, throughout
the whole of calendar year 2001, despite numerous important debates
raging about workplace relations, the BCA could not find one issue
of such importance to their members that they felt compelled to
issue a press release, make a submission or publish a paper. The
last speech on the subject was nearly two years earlier in July
Maybe this reflects well on the Government but the BCA would
surely not want the government to do everything for it!
What a contrast! Bill Shorten, a more progressive union leader,
can see there is an argument for a national system. The unions
want to re-regulate under the banner of harmonization and Simon
Crean will do their bidding---but at least they are thinking about
I was grateful that the BCA showed a little interest in the
discussion papers on the use of the corporations power. But it
needs to do a lot more. Of course the Democrats could sink the
concept by demanding a re-regulation of the labour market as the
price of their support for a national system. That could not be
acceptable to the Coalition. And it is hard to talk to the Democrats
because, with the exception of Andrew Murray, they know basically
nothing about workplace relations, and so you can't discuss anything
with them because they can only respond in meaningless generalities.
Maybe the new Senator John Cherry could pursue the issue. There
are a lot of benefits for genuinely disadvantaged low-income workers
in having a better system. Whatever the difficulties of dealing
with the Democrats, a genuine effort needs to be made and the
BCA should be taking a lead instead of pretending that workplace
relations are not relevant to members of the Council.
I could not sit down without reference to the waterfront dispute.
Four points are worth making.
First, the central objective behind the government's policy
was simple: higher productivity. And it came very quickly. Based
on Patrick figures released publicly in September 1998, the productivity
improvements from just before the dispute (that is, in 1997) to
just after (that is, in September 1998) were huge. For example,
in Melbourne, moves per man per shift went from 9.3 to 20.5. This
was an increase of 120 per cent. The figure for Fremantle was
65 per cent, Brisbane 113 per cent and Sydney 140 per cent.
The work practices would never have been tolerated in any other
industry in Australia and the over-manning was infamous. All that
has gone and crane rate records have been consistently broken
in the time since.
The MUA will never admit it but I know that privately a lot
of the members knew that the old system could not last because
it was indefensible. And many who took the package know they got
a very good deal. I have been playing a bit of golf. On one course
recently I was to play on my own but the professional asked me
to join a threesome ahead of me. They were three good blokes and
one said "I am now retired. I took the package in '98 and
it was the best thing I have ever done".
Second, if I had my time again, there is very little I would
do differently. It is easy to be wise after the event but as I
think back to the issues I faced at the time I have no regrets
about any of the decisions I took then.
Of course it was difficult, but does anyone seriously think
you could support and achieve reform without a lot of flak? The
MUA yelled conspiracy every time their monopoly was threatened.
They always took industrial action at the drop of a hat. Every
problem on the waterfront was the employers' fault.
I spent hours with the MUA well before the dispute and their
claim was that productivity was as good as it gets. I had meeting
after meeting with Messrs Coombs and Combet and it was like talking
to a brick wall. We had agendas, papers were prepared and minutes
were kept. I toured the docks and talked to the workers, partly
because John Coombs said that my calls for reform were ill-informed
and that I needed to see firsthand what was happening.
Employers had tried talking to the MUA for years. The talks
were never fair dinkum. P&O had even introduced a productivity
employment plan (known as PEP) which resulted in no improvements
in productivity but instead an increase in labour costs of 37
According to the MUA (AFR, 27 April 1998) a crane rate
of 25 lifts per hour was "unattainable". They had an
academic from the ANU, Dr Clive Hamilton, produce a report that
concluded that Australian terminals were very close to international
benchmarks and in the case of Adelaide and Fremantle were significantly
ahead of a realistic benchmark. I would be interested to hear
that explained today. It should be the last public comment on
this subject from the embarrassed Dr Hamilton. In fact I think
the press should stop quoting this person altogether. Today he
is quoted on John Howard's leadership. If Dr Hamilton is so "expert"
I know a lot of people who are entitled to equal space.
The "egg on your face" award should also be shared
by the editorial writers at the Financial Review. They
slammed the settlement of the dispute "as another great lost
opportunity to fundamentally reform Australia's wharves".
The AFR published a series of articles on the dispute,
all of which seemed intent on portraying the Government in the
worst possible light, so there was no surprise in the tone of
their editorial opinion.
Third, various accusations levelled against the Government
and me were brought to the courts and came to nought.
The media reports of the legal proceedings were often confused
or just inexcusably wrong. Perhaps it was just ignorance that
prevented the media from running the other big story in the dispute,
namely, the failure of the Victorian Police to enforce the law,
although that is a separate subject for another day.
The media reports were written as if the Government was a party
to the interlocutory proceedings when we were not. The Government
lost not one case. In fact, it won two later cases. Mr Justice
North saw it another way according to the one public comment he
has ever made (to my knowledge) on his role in the dispute. He
gave an interview to The Australian newspaper. It was published
on 7 April 1999. He put the case for the courts to be more open
to the media. Let me give you a full quote so you can make of
it as you will. It reads:
It just seems so obvious that we should open our courts."
He said he was happy to do more---but has had no other request
from the media. He recalls two reactions to last year's television
exposure, one from a man who sold him a set of tyres. "The
fellow was giving me quotes and he looked at me and said 'You
know you look just like the judge that decided the Patrick's
case 'and I said 'Yes I am'. The other he rates as far more significant:
an Asian judge he had met at a conference who wrote to him during
the docks dispute and said he had seen the decision on CNN. 'He
was impressed that in Australia judges could make decisions against
the government's interests without fear or favour.'
You will not be surprised to hear that I did not see things
the same way as His Honour. He would have been thrilled to have
received an even more effusive letter from his judicial colleague
after the Tampa ruling.
The interim judgments were all portrayed as "losses"
for the Government when, in reality, in the end the High Court
gave leave to appeal and crucially varied a key aspect of the
judgment at first instance. All this was far too complicated for
the media, many of whom relish being judge and jury without worrying
too much about the facts.
There were no findings or decisions against the Commonwealth.
The only time legal issues came before the courts in a substantial
way was when the ex-NFF workers initiated claims in the Federal
Court separately in Melbourne and Brisbane. In two judgments by
two different judges the claims against me and the Commonwealth
were struck out or dismissed and the applicants were required
to pay the Commonwealth's costs.
One claim of negligence was described by a judge as "wholly
disjointed". Another judge, in referring to the pleadings
of the applicants, said "Although the shadow of a conspiracy
is cast by references to 'strategies', 'objectives' and agreements
to implement them, it is nowhere suggested that the Minister took
part in plans for the Dubai representations".
In layman's language, when the issues were litigated, it seems
that the claims were so without foundation that they did not even
get to first base. Basically these two judgments were ignored
by the press. Why spoil the impression of a good conspiracy claim
which was repeated regularly in the press for months and for which
one reporter got a Walkley award? No-one in the media could see
the point of reporting that such a conspiracy claim was thrown
out of court by a real judge after giving the applicants the right
to present their best case.
The last point to be made is that no-one should rest on their
laurels. There is still a duopoly, employers are entitled to act
rationally and the union will always try to claw back the reforms.
I also think that, in the past, P&O were part of the problem,
so I don't think the government should take its eye off the waterfront.
When PEP was introduced P&O was rumoured to have tried to
obtain agreement for a benchmark of 28 lifts an hour. Benchmarks
for productivity, safety, reliability etc., are all important
and they should be regularly updated. The reform process should
I could say more and there were times when I wanted to give
a more detailed statement of what happened. But the Commonwealth's
lawyers advised against further comments whilst legal proceedings
were afoot. One book was written on the subject and I thought
there was a certain justice in the fact that the publishers agreed
to it being shredded for reasons unrelated to the dispute. Now
it is all history and life has moved on for all the participants.
So it is not my current intention to write a book on the issue.
I prefer to look forward not back. It is a chapter now closed
but I will hang the Charles Copeman medal on my wall with pride.