Public Interest or Vested Interest

Guest of Honour's Address

The Hon J W Howard

It is a very great pleasure to address this dinner tonight. When I reconfirmed my intention of coming here tonight I did so for a number of reasons. I have always had a very deep and abiding interest with the major preoccupation of your Society, and most importantly I have, over the past few years, regarded many of the attacks on this particular organisation as an example of the fascist tendencies of the left in Australia. The fact that a group of people concerned with something as fundamentally linked with human freedom as industrial relations reform should be periodically branded as being right wing, extreme, even fascist (and some have even developed worse descriptions), and some of the intellectual and rhetorical intimidation that has been used against the organisation, is typical of the tactics of sections of the left in Australia and indeed sections of the middle ground of Australian politics that ought to know better.

So they are the reasons why I am delighted to be here tonight to join other residents in Sydney in welcoming the H R Nicholls Society, and for the opportunity to address you.

One of the favourite sayings of the current Federal Treasurer Paul Keating is, 'if you can't control wages you can't control the Australian economy'. I think the appropriate riposte to that is that if you don't rethink the industrial relations system you won't have an Australian economy worth endeavouring to control in the future.

I have continued to regard reforming the industrial relations system as the single most important economic reform that needs to be undertaken in this country. Unless it is done, and unless it is done full bloodedly, and unless it is done in an open forthright manner, the kind of productivity that we all agree is necessary in order to ultimately get on top of our foreign debt problem simply isn't going to be achieved. And it is not an issue that one can back and fill and temporise about, and it is not an issue where those who believe in reform should be intimidated by those who claim that it is all a question of evolutionary change.

The common tactic of those who would intimidate people who believe in industrial relations reform is to raise the bogey of a wages blowout, and in the context of the current election campaign it is the constant refrain of the Prime Minister, of other members of the government and its many friends in the media that if you embrace fully the Coalition's industrial relations policy you will have a wages blowout. This is very central to the economic debate of this election campaign because of the obvious link between the level of wages and the level of inflation. But I want to put it to you that the world economically and industrially of 1990 is a millennium away from the world economically and industrially of a period as recently as 1981 and 1982. The constant refrain of Hawke and Keating and others is that if you embrace our policy you will have a rerun of 1974 or 1981. There are three very good reasons why that is fundamentally flawed reasoning that ought to be emphatically repudiated. The first is the enormous change that has come over the legal realities that surround industrial relations in this country. We have one of the great personifications of that here tonight in Fred Stauder. Those historic decisions of the courts in the Dollar Sweets case, the Mudginberri dispute and more recently, and the one that is in a sense the sweetest of all because of who encouraged the litigation, the pilots' case, represent a legal revolution in my view as far as industrial relations is concerned. It would not have been dreamt by most employers in Australia in 1981 or 1982 that the sort of legal remedies that are now plainly available would in fact be available, and that has brought about an enormous change in the atmospherics of industrial relations. There is another element of the legal change, and that is that in 1977 before I became Treasurer I was responsible with Tony Hartnell, who is now the Chairman of the Australian Securities Commission and was the deputy secretary of the Department of Business and Consumer Affairs, and my then senior secretary Paul McClintoff for devising what ultimately became Section 45D of the Trade Practices Act which has probably made as big a contribution as anything else to changing the legal balance in industrial relations.

Section 45D has turned out to be of remarkable value. The injunctive relief you can get under 45D brings instantaneous assistance. One of the features of industrial relations in Australia which escaped bodies like the Hancock Committee for so long, was the simple fact that trade unions, and on many occasions employers, regard industrial relations commissions and industrial tribunals as organisations to be ignored, whereas they are very law abiding when it comes to the ordinary courts. When an ordinary court tells a trade union official or a trade union to do something they normally do it. So I make the first point that the world has changed a lot since 1981 because of the change in the legal balance.

The second observation I make is that there is a greater sense of reality about Australia's economic problems now than there has been for a long time---and it ought to be acknowledged that the learning curve has embraced many people in the trade union movement as well. I think it is fair to say that in many ways the trade union movement is infinitely better led now than it was in the late 1970s. There are lot of trade union leaders now who have a far greater willingness to put the national interest ahead of the sectional interest. There are many who recognise the need for the trade union movement to play a major part in coming to grips with Australia's debt and current account problem. I think the 100,000 dead men around George Campbell's neck---and they were the words of the Treasurer at the 1986 ALP conference in Hobart---weigh heavily upon the thoughts and the recollections of a lot of people. I think we will see in the months ahead, if there is a further and sharper slowing down in economic activity, a far greater sense of realism on both sides of the debate and particularly in the trade union movement than we had in 1981-82.

I think the third and even more important long-term change that has occurred is of course the inexorable decline of the grip of organised trade unionism on the affections of our population. I don't think we should underestimate this and I don't say it in any antagonistic, belligerent or partisan sense. It is a reality that the great bulk of people who now enter the workforce are either married women or the young, and they in the main---and it is always dangerous to generalise---don't like joining trade unions. In fact the young, and I use that term fairly loosely, don't like joining anything these days. One of the great cultural changes that has come over the country, I guess something to do with the post-television generation, is that getting people to join organisations, whether it is a political party, a trade union, church fellowship or sporting club, is a lot harder now than it was 20 or 30 years ago, and that applies very much to trade unions.

I think the great challenge of the trade union movement of the 1990s will not be to tear up the industrial relations policy of a Coalition government, but rather to hold its members and to arrest the decline in membership. I recently read Peter Drucker's book The New Realities and he made the prediction that by the year 2010 you would have in the industrialised world about 15-20% of the total population employed in main-stream manufacturing. That of course has enormous implications not only for the structure of work patterns, but also for membership of the trade union movement.

Now those three things together---the pressures on trade unions to hold their share of the market, the reality of what had happened in 1981 and 1974 being etched on the consciousness of all of the players, and most importantly of all, the change in the legal atmosphere with its legal climate for employers---mean that whatever may be the arguments about the alternative policies of the two parties on industrial relations, with the introduction of a more deregulated system, you will not get a rerun of the wages explosion of 1981 and 1982. I think it is very important that this point be made repeatedly and emphatically by those who support the Coalition's alternative industrial relations policy because, in the long term, fixing the industrial relations system is more important than anything else. If we allow the argument to gather currency that it is better to opt for the cosy constrictions of a managed centralised industrial relations system than to strike out in favour of a freer, less regulated, more enterprise driven industrial relations system, then the long-term implications of that for our economic growth and economic development will be severe.

Nobody should imagine that there won't, in the course of introducing a new policy, be some areas of friction, some disputes and some arguments. There are plenty of those under the Accord. Those of you from Melbourne know all about that, and of course whether the metalworkers' dispute turns out to be an elaborate exercise in allowing Superman to swoop in, ring a few people up and get them all back to work remains to be seen. I think that will probably turn out to be the case but nobody who knows anything about industrial relations in Australia should pretend that any system can operate without some kind of discord and dispute on occasions. We all know that the great sword of Damocles that hangs over the Australian economy, which has been there for quite some time and is going to be with us for quite some time to come is, of course, our enormous foreign debt produced by our nagging current account problem. That is all a function of an economy and a society which is too unproductive and too uncompetitive, and it cries aloud for reform in so many areas. I think the debate about changing our industrial relations system has moved a long way over the last six or seven years (despite enormous opposition from quarters that should have known better) and I think we are finally beginning to win the argument. It still has a long way to go because, although it is comforting to say, 'Oh yes, we can have enterprise bargaining and it can all work out very nicely and it can all happen within the system', the only way you will really begin to dismantle the centralised wage fixing system in this country is to have full blooded voluntary agreements outside the Industrial Relations Commission.

If I can draw a sporting analogy, it would be to say that having a deregulated system without voluntary agreements is like sending a cricket team into the field without a captain. The key to changing the system and freeing up the labour market is undoubtedly the voluntary agreement. Those who seek to obfuscate about that by suggesting that over on the periphery and in a few years a few people with 5 or 10 employees might just have a voluntary agreement in relation to a couple of fairly irrelevant conditions of work and that will be enough, are in effect saying that we want to preserve the existing system. I believe that come the election of a Coalition government and on the assumption that the legislation goes through the Senate to allow voluntary agreements, there will be far greater resort to those voluntary agreements than many people have imagined, or than the opponents of change would suggest. The very fact that our political opponents, and if I may say so our industrial opponents---and I don't mean the trade unions there, I mean some of those on the employers' side who oppose change---are talking the language of enterprise bargaining without the substance of giving free men and women the power to make voluntary agreements is evidence of the fact that there will be a rush to voluntary agreements---once the system is changed.

This industrial debate, like so many other debates, is very much about the hopes and aspirations of power constellations. Many people say to me these days, 'John, the Labor Party has changed, it has become more right wing' and that is true. It has in many areas shifted its position closer to the Liberal Party and many elements of the National Party. I think in many ways the great philosophical difference between the two sides in politics these days is that on the one hand those in the Labor Party and those who support them, believe that essentially the future wealth of this country is to be the product of a bargain between power constellations and the government. They do not only decide the size of the cake but how it is going to be divided. The alternative view, that must always be the Liberal view, is that the future wealth of this country can only ever be the sum total of the efforts of unfettered individuals given the right incentive and the right environment.

That really encapsulates a great deal of what the industrial debate is all about. It is about deciding how the future wealth of this country is to be produced, and it is a very important debate.

I would like to conclude by paying a compliment, if I may, to the H R Nicholls Society. I well remember the inaugural dinner in Melbourne in 1986 addressed by Geoffrey Blainey, and I think I also got a guernsey and so did the National Party candidate for Fairfax---I think he was the inaugural President---and I can remember some of the hysteria that surrounded it and some people saying to me, 'John you really mustn't go, because you know it's a bit suspect, that organisation. There are very suspicious people out there.' They were terribly dangerous people at that gathering---there were four or five hundred of them. I thought they represented people who cared a great deal about the future of this country, people who weren't interested in smashing unions. They weren't interested in class conflict, they were simply interested in giving people a greater degree of industrial freedom and the idea that if you allow free men and women to make bargains about how they conduct their lives and how they run an enterprise that enterprise usually ends up being more productive and the nation benefits. I think your organisation has made a very major contribution to the industrial relations debate. I thank you for that, and I thank you for the opportunity, which I have taken with relish, of addressing this dinner, and I wish the H R Nicholls Society every success in the years ahead.