The Changing Paradigm: Freedom, Jobs, Prosperity

Vote of Thanks

Stuart Wood

Speaking, tonight, after John Stone and Peter Reith, I feel like a pygmy among giants. I have some idea how the Labour/IR Ministers over the last 50 years must feel.

Reith stands as a giant compared to the IR/ Employment Ministers of the past 50 years: Holt, McMahon, Bury, Snedden, Lynch, Cameron, McClelland, Street, Peacock, Macphee, Viner, Willis, Morris, Cook and Brereton.

What did Diamond Jim McClelland, Ian Macphee or Peter Morris do on their watch? Reith's predecessor in Flinders, Phil Lynch, made such little impact during his 18-month tenure of the Labour Ministry that even his biographer fails to mention it. Even those who served a 5 year stint---Harold Holt, Billy McMahon, Tony Street and Ralph Willis---were all merely serving-time compared to Reith. Imagine what Peter Reith could have done had he possessed Tony Street's advantage of Coalition control of the Senate?

Or imagine Peter Reith in the place of Ralph Willis complementing Keating's reforms in the product and financial markets with his own reforms in the labour market. Keating certainly seems to do this---lately he has claimed credit for enterprise bargaining. This is presumably a reference to the fact that he stood silent for 10 years while the Labor Government tried to strangle enterprise bargaining. Nor did he intervene when the Australian Pilots were sacrificed for their audacity in demanding an end to the ludicrous system of centralized wage-fixing. He also argued, as late as 1993, that SPC's workers should not be able to deal directly with their employers in order to save the business. It was Reith who delivered true enterprise bargaining without union control.

Reith has turned the table on the century-old "Justice" Higgins legacy that it is better to let BHP close unprofitable mines than to pay below-award wages. We are slowly escaping the idea that fixing wages provides a better safety net than reducing unemployment. Reith's Act allows the type of deal that the SPC workers wanted, and even the reticent MUA have taken up the approach: they agreed not to take industrial action or seek wage increases as part of the deal that got their jobs back with Patrick.

Reith gave responsibility for managing back to the enterprises. And managers have taken advantage of this return of freedom. Among the big companies: Telstra, the coal mines, the waterfront employers, some airlines and the banks started to manage effectively. They allowed those employees who wanted to work to earn big money and encouraged those who weren't used to working productively to do so.

Productivity skyrocketed under Reith. In some coal mines---half the number of workers producing twice the amount of coal. On the waterfront---the 25 container lifts target achieved easily: a target previously described by the MUA as "rubbish". In Telstra, twin peaks: in productivity and service.

The freedom introduced by Reith was also responsible for driving competition in phones, mortgages and transport, as competing companies, big and small, adopted flexible employment practices. With a one-size-fits-all approach---would Virgin have entered the Australian market?

More productive and competitive companies are more profitable companies. This means that many ordinary workers in these types of enterprises now earn six figure salaries. Even Stephen Long, a writer for the Australian Financial Review, not known for his pro-Coalition sympathies, has stated, "the changes at work were instrumental in forging a stronger economy that overall has made employees better off. On average, real wages have increased." The Hawke effort, during the Accord years, was to reduce real wages. A further advantage of the Reith reforms is that wage increases tied to rising productivity have conquered inflation.

Increased profitability also reduces unemployment: from 8.9 per cent in 1995--1996 to 6.9 per cent in 1999--2000. Youth unemployment mirrors this decline over the same period: from 27.8 per cent to 22 per cent---despite having to fight the Democrats all the way to keep junior wage rates. Imagine how much further Peter Reith could have gone in tackling unemployment, had he had Tony Street's advantage of a government majority in the Senate?

There have been other important innovations. The first steps were taken to a system based on minimum conditions and not union-controlled awards. Employees now have protection of their entitlements if their employers go under. Industrial regulation in Victoria has been eliminated after 100 years of duplication. Reith also established the Office of the Employment Advocate for small business, although overall the system for small business is improved but far too complicated.

Reith's attempts to modernise the trade union movement were less successful. During the Whitlam government, Clyde Cameron introduced legislative reform directed at democratising trade unions. Scarred by years of fighting with officials of the Queensland AWU, Cameron wanted to ensure fairness in trade union elections. Reith continued this process. He passed legislation to dismantle the Kelty super-unions, tried to pass legislation requiring sensible financial reporting arrangements upon unions, but couldn't get secret ballots in trade unions past the Democrats in the Senate. Imagine if Peter Reith had had Tony Street's advantage of a government majority in the Senate.

Reith has had some failures: freedom of association has not ended the closed shop. In fact, the Construction Division of CFMEU has increased its power. Reith's "fair go all around" unfair dismissals legislation is an improvement on Brereton's mess, but it is still a mess. Another Brereton sleeper is also troublesome: equal pay for equal work. With the enterprise bargaining door slammed on the advocates of central wage-fixing, the back door of "equal pay for equal work", is tempting.

As a legislator, an innovator, a fearless reformer and risk-taker, Reith soars so high above his predecessors as to make comparison unfair. He is the person responsible for emphasizing employment as the most important safety-net, for guiding outsiders into the labour market, and for starting to make the IR system consonant with the demands of a competitive trading economy.

Comparison with Harold Holt's approach as Labour Minister makes clear Reith's transformation of Australian industrial/workplace relations. Of Holt, a contemporary wrote, " [Holt] saw politics and political problems as a matter of working with persons and fixing things with them... so often what was talked about was less the matter in dispute or the way it could be settled than who 'had pulled them out' from work and who would 'get them back' and consequently what sort of an arrangement or persuasion could be used behind the scenes with that authoritative person."

McMahon, Bury, Snedden, Lynch, Cameron, McClelland, Street, Peacock, Macphee, Viner, Willis, Morris, Cook and Brereton all followed Holt's way. Reith went the right way. The days of Australia's workplace relations being determined through dodgy deals behind the scenes at the Arbitration Commission are long gone.

If able to get his complete reform agenda through the Senate, it is possible that Reith could have taken the full advantage of strong economic growth to achieve permanently lower unemployment. Imagine, with Tony Street's control of the Senate, Reith might have been able to achieve the safety-net of full employment.

Imagining the broad sunlit uplands of workplace reform, advocating and promoting the vision of full employment, and articulating a better way are tasks for societies such as ours. It is for practical politicians to turn the vision into reality. It is not fair to criticize a policy maker for failing to make concrete our imaginations. The fair assessment, for the last Minister is to compare him to other Ministers.

And on any fair view, Peter Reith, stands head and shoulders above those who have gone before. He has been the best Labour/IR Minister of the last 50 years. We will miss him.