Ideas & Society-Do trade unions help or harm Australia’s economy and society?

Professor John Dewer
Good evening everyone, my name’s John Dewer, I’m the Vice Chancellor of La Trobe University. It’s great to see so many of you here, a warm welcome. I’d like to acknowledge the Wurundjeri people as the traditional custodians of the land on which we meet this evening, and pay my
respects to their elders past and present. So welcome to tonight’s Ideas and Society event, “Do Trade Unions Help or Harm Australia’s Economy and Society?” Now this is the last event in this year’s
Ideas and Society series, and in fact this is the tenth year that Robert Mann, our Emeritus Professor of Politics and Vice Chancellors Fellow has presented the Ideas in Society
series, and I congratulate Rob for putting on a terrific series of debates and discussions during the course of 2019. Just to remind you what’s been going on this year, we had Hugh White and Clive Hamilton talking about how Australia should respond
to China’s rise. Tim Soutphommasane, Chelsea Bond, Tom Switzer and Tasneem Chopra, considered whether Australia still has a serious racism problem. Clementine Ford, Teela Reid and Petra Bueskens discussed “what type of feminism do we need today?”. Julian Burnside and Frank Brennan talked about refugees who come to Australia by boat, and we were joined on Skype by a Manus Island
detainee, Kurdish writer Behrouz Boochani Gillian Triggs and Greg Craven…
this was a feisty one…talked about whether Australia needs a charter of human rights. And Bob Brown, David Ritter, Amanda Cahill, and Maiysha Moin considered strategies for climate change action. Now, if by any chance you missed any of those events, you’ll be pleased to know that they’ve been broadcast on ABC Radio National’s Big Ideas program, and are therefore available as podcasts. They’re also available as a La Trobe University Clever Conversations podcast, which also includes all of our other public events including our Bold Thinking series. Now a lot of the events I’ve just described
were held under the banner of the La Trobe debates, a series of some of Australia’s most significant, yet most polarising issues. And we’ve heard from those with fundamentally
different points of view, as well as those with similar points of view but with different
ideas about strategy and tactics. Tonight’s event is part of the La Trobe debate
series, and I think, although we’ll find out as we go through, that tonight’s discussions fall in to the category of those with fundamentally different points of view. And I’ll introduce them in a moment. But first let me say something about tonight’s topic, trade unions, and I think just saying those two words is often enough of itself to spark a debate. On the one hand there’ll be those who evoke
Adam Smith’s invisible hand, and tell us that we should just leave it to the market to find
its own equilibrium, and they might argue that everyone, including workers, will be
better off if we resist interfering in the exchange of labour and capital. In the other corner, there’ll be those who
say that business owners, or perhaps even university vice chancellors, are only worried
about the bottom line, and without union advocates will have no incentive to protect workers’
rights. It’s rare that you can open a newspaper or
watch television news without hearing about comments made that let’s say a CFMEU meeting
about reports of underpayment in various sectors, I think Woollies are the latest to announce
that they’ve underpaid their workers. Or the expulsion even of union leaders from the Labor Party. Or perhaps a story on declining union membership,
or the government’s plans to introduce so-called union-busting legislation. All the while that this is happening, the
world of work is changing rapidly. Digital disruption is rendering many occupations obsolete, especially in the manufacturing sector, and we’re moving to a service economy with more
people in part time jobs. Then there are those in the so-called “gig-economy”. Women are the fastest growing sector of trade
union membership. So, given all of these trends, what role should
trade unions play? Are they a relic of the past? Or are they even more essential in an increasingly
automated but complex society? So, tonight’s discussions are extremely well
qualified to consider these questions, and it’s my great pleasure to introduce them now. I’ll start with Bill Kelty on my immediate
right, who’s had a long career in the union movement, including serving as an Industrial
Officer with the Federated Storeman and Packers Union, and as Research Officer for the Workers
Education Association in Adelaide. He had a 25-year career with the ACTU and
was its secretary from 1983 to 2000, during which time the prices and income accord was
developed. Bill has held numerous board appointments
with private and public companies, and was a Director of the Reserve Bank of Australia
and a member of the AFL Commission. His current board appointments including Linfox
Group Director, Virtual Communities Director and Lunar Park Board Director. Most importantly he has a Bachelor of Economics Degree from La Trobe University and was amongst the university’s first graduates. In fact, I think Bill probably graduated ahead of almost everyone else, he worked so hard, he completed his degree in record time. He was also a very valuable member of the
La Trobe University Council, and in 2017 was awarded an honorary doctorate from La Trobe University. Jennifer Westacott AO has served as Chief
Executive of the Business Council of Australia since 2011. She previously worked in senior leadership
positions in the New South Wales and Victorian governments, across a range of portfolios
including housing, education, infrastructure, planning and natural resources, and then became
a senior partner at KPMG. She is currently chair of the Mental Health
Council of Australia, and a nonexecutive director of Wesfarmers Limited. She is the Australian Cochair of the Australia
Canada Economic Leadership Forum, the copatron of Pride and Diversity, and Co-chair of the
Australia Sino One Hundred Year Agricultural and Food Safety Partnership. Jennifer holds a Bachelor of Arts with honours
from the University of New South Wales, who also awarded her an honorary doctorate in
2017, big year for honour doctorates. Now tonight’s moderator is La Trobe superstar
Andrea Carson, a Political Scientist and Associate Professor in the Department of Politics, Media
and Philosophy at La Trobe. She has written many articles on Australian
politics, election campaigns and digital media. She is currently working on an Australian
Research Council funded project that’s investigating the media’s role in political debate and policy
decisions. She has taught courses on journalism, political
communication, women in politics and campaigns and elections, and has worked during a very
distinguished career as a newspaper journalist, editor, broadcaster and producer. The format for tonight will be that Bill first
of all will deliver an address, followed by an address by Jennifer, and then a discussion
facilitated by Andrea, making sure that all the time that we have plenty of time for Q&A
from the audience at the end. So, it’s now my great pleasure to handover
to Andrea to get things underway, thank you. Andrea Carson
Thank you John for that very warm welcome, and welcome to you all, it’s lovely to see
so many people here when it’s such beautiful weather outside. To address the debate question of whether
trade unions help or harm Australia’s economy and society, I now invite our prized student,
Bill Kelty to make it to the podium. Bill Kelty
Thanks very much, great pleasure to be here. When I walked in to this building, I think
it’s one of the most wonderful buildings in Melbourne. The reason it’s a wonderful building, it typified
what Melbourne was and Australia was, when unionism was built in this country. The very essence of the Australian political
way was built here. It was built with a very unusual union movement,
it worked with employers, established the first minimum wage boards in the world, was
supporting women getting the vote, established the Labor Party and was so successful, working
together in this third way, had the highest living standards in the world. Which led all the revolutionaries who said
“This is a terrible system, terrible system”. Lenin had to write a little diatribe about
why the Australian way won’t work. Why Australian unions were no good. So, I always get a sense of pride about this
place. Now the one great advantage of getting old,
there’s only one great advantage I assure you, is perspective. Now what I do have is the advantage, I have
the advantage of looking at this issue from a perspective of an aspiring young person,
aspiring to do good things for this country, from being a practitioner who worked there
for 30 years, and now having worked with Lindsay Fox, not just the top bender town mate, number
three Colin Street, number three Colin Street. A [procura] 00:09:43 capital. So, I have a perspective to look at this issue
from those three sources. When I was young the four things that I hated. I hated the fact that my mother didn’t get
equal pay, doing the same job as a man, raising four kids by herself. I hated the fact that she didn’t get equal
pay. I hated the fact that healthcare for us was
marginal, if your brother or sister was sick, it just depended on how much money you had
the next day whether you could go. I love Nelson Mandela and hated apartheid. I hated apartheid and I opposed the war in
Vietnam to the very last breath. So, when I went to the trade unions and looked
at what they were doing and talked to them, no wonder I wasn’t inspired by them. I was inspired by them. Fighting for equal pay, we organised the first
antiwar rally here in Melbourne, and we got 17 people in 1964, 17 people came along. The people said you’ve got to use the unions. Six months later using the unions we got 700
people, so the union organisation for cause, so I couldn’t help to work for the unions. The thing that I wanted to do in life was
to work for the unions to make society better and to make the economy better, I just couldn’t
wait. That’s why I left university, I couldn’t wait
to work for them. When I walked in to the Storeman and Packers
Union and saw women getting $0.85 cents an hour, $0.85 cents an hour, not equal pay,
dismal wage rates, treated so badly, treated so badly that they went on maternity leave
they lost all their benefits. So progressively over the 30 years, to test
whether unions actually do make society better. It’s not some theoretical debate here, just
walk out in to the street, look at the workforce today, four weeks annual leave, 38-hour week
standards, affirmative action for women in the labour movement, began in the ACTU. We initiated that at the ACTU. Equal pay for women. Some of the really big issues, the big generational
covenants, national healthcare, national superannuation and national minimum rates. The unions did this. The unions did this, working with others,
working with the good employers, working with community groups. Did we fight for the things we believed in? We did fight for the things we believed in. We fought for Nelson Mandela, we had bans
and strikes, that this country had never seen before on any political issue. The biggest industrial political dispute in
this country, two of them, were over Medicare, to establish Medicare. So, when you look at this accretion of what
this society has done, the unions have been part of it. Not by themselves, not just simply by themselves,
with good people working for good cause. Now you’re therefore asking me why? I transitioned from Secretary of the ACTU
to working with Lindsay Fox, a good friend, a source of great capital, big companies. I haven’t lost for one moment, not for one
moment have I lost my love for unions, not for a second. Although I work with very, very rich people,
and the thing I believe in. I never believed Australia was a class-based
society, I never believed it was a contest between capital and labour. I never believed that Marxian nonsense. I believe that what makes societies better,
is improving the living standards of working people. You do that by working with the best of the
employers. You’re working by making sure the capital
works effectively for them and with them. So, I don’t in any sense say that is a transitional
class. But what have unions been? From the outside looking in, not the inside
looking out? I see a union movement that fought so hard
to keep the minimum wage system and work choices. They fought so hard and they won, and they
won. I saw a union movement that work proudly with
the gay and lesbian movement, working to ensure that women and men who had a sexual preference,
were treated honourably. Not leading it, but as part of that community. I have worked at Linfox, a highly unionised
employer, never once have we had a dispute about unionism. We’ve had disputes with unions, but never
a dispute about unionism. The union has worked productively and capably
with Linfox, as it has grown to Australia’s largest owned transport company. Australia’s largest, very profitable, very,
very wealthy, but the living standards of all the drivers have improved. The living standards of all the employees
have improved. Not working against unions, but working for
unions and with unions, about the thing that counts, their members and the employees. The same people, not different people, and
about that there’s a commonality of interest. I worked at the AFL as a Commissioner, the
longest serving AFL Commissioner, and it was a contest about sport. The contest was very simple, let it be a professional
show and pay the stars a lot of money. Rugby league went that way, we went the other
way. We said let’s work with the union, let’s look
after all of the players, and all of the coaches and all of the umpires. Let’s look after the collective welfare of
the people who are involved. Now was it the best set of negotiation, Andrew
Demetri ever had, when the employer walked in and offered a 26 per cent wage increase
to start with? It wasn’t a bad start. But we worked with the players association
to better the game. You look at the divergence between rugby league
and AFL, it began in that period, on that premise. We looked after the whole of the community,
rugby league went their way, they went looking after the stars, we went looking after the
players. So, I see unions can work productively and
capably with employers. Wealth is created for all of us and not just
some of us. The most important thing about unions, I’ll
conclude to this. People discount it, but they are the generational
transitions, they transition you from one generation to another. So, if you want to make a wage claim, and
convert it in to superannuation, and go to a workplace and say you’ve got a choice, wages
or super today, most people just for their own interest, for that day will choose wages. But when you say “We are asking you to make
a generational decision, what is best for your retirement, and what is best for your
children” trade unions put their hand up, for a generational change. Why didn’t Australian unions follow US model,
about healthcare? They didn’t want corporate healthcare, they
wanted collective national healthcare. We could have got healthcare on a corporate
basis, like the United States unions for 10 or 15 per cent of the workforce, we could
have made their life actually a bit better. We negotiated it, it took us one week in the
oil industry, and we broke the back there, but we never wanted it. We wanted national healthcare, we wanted a
generational social change, and the unions put up their hands for it, and they were the
transitioning agent for it. As they are the transitioning agent for superannuation. You need people who aren’t just there for
that day or that week. If you want reform in a country, you’ve got
to negotiate with agencies of change, which carry you from one set of years to another
set of years. Unions are capable of doing it, and they have
done it over the very biggest issues. The final thing I think unions are just wonderful
for, is they are key elements of a social democratic plural society. That’s what they are. I’ve never once argued against the employer
organisations, not once in my entire life. I might argue with them about an issue, but
not over the right to exist. They are fundamental to our plurality of democracy. It’s a different form of democracy, it’s a
plurality of democracy, a plurality of ideas, a plurality of organisations. It is an essential part, and that is why when
you pass the history books and do the economic assessment, you’ll find societies written
as great societies. The 1880s to 1900 England, great society,
and one of the things they always say “A great society which liberated the right of people
to join unions”. Australia, went the third way, as I said at
the outset. Tony Blair once saw us with Paul Keating,
and Tony Blair went on and on and on and on about the third way, and he’s prattling on. Paul Keating, after listening to Blair for
basically 45 minutes giving a lecture about the third way, said “Tony, I think we went
the third way in the 1980s mate, so that’s enough, we’ve heard enough, we’ve heard enough”. Roosevelts great USA, making a great society
as one of its components. A pluralist democratic union recognition. You don’t have to be genius to work out that
after the war, an essential ingredient on making Japan a more democratic society and
Germany a more democratic society, was in fact the recognition of unions and integration
of them in the model Unions are not perfect, but they have made
this country and continue to make this country a better place and a better economy. A better place and a better economy. There’s always two points that people raise
in this debate, and I’m not saying you will raise it. Is it all doesn’t matter, that’s the past,
“Bill, you’re living in the past”. You’re living in the past. Well I’ll just refer you to two texts, not
radical extreme left wingers, not looney tunes, not Jeremy Corbinites, not some crazy people
who can’t spell Marx. Two people, Piketty’s capital, capital in
the 21st century, a great wonderful French economist of enormous intellect, and the other
one is Lord Adair Turner, an old Tory converted to a social reformer. So, what he says about the future world is
this, “Capital is increasing at a faster rate than labor input”. Adair Turner says “that with artificial intelligence,
what’s happening is the workforce is fundamentally changed”. Fundamentally changed, you get some higher
paid jobs, some lower paid jobs and a huge increase in service industries and service
jobs. Productivity is diffused or irrelevant. Now these are two observers of what they think
the world is like. Now in that they say one thing is important,
is distribution, is distribution. And I agree with them, and unions are agents
of distribution, they are. Essentially, they’re there to help distribute
the goods effectively and fairly. The second thing, people always used to say
to me, “The problem with you Bill as a union official, you don’t understand this. You don’t understand unions do not create
wealth. Unions do not create wealth”. Well I’m interested to note that the five
biggest financial organisations in 30 years’ time, will have been created in the back room
of the ACTU, we created them. Every industry fund we created, ISPT, we created
it, along with other people. We created financial institutions out of super. Now it is not unions job to create wealth,
but it is unions job to understand how wealth is created and be involved in that creation
[unclear] 00:23:12. Now somebody said “This will all be class,
this will be class based examination, of you representing labour, and other people representing
capital, but that’s the Enid Blyton view of society”. Because in 30 years’ time the biggest owners
of capital, the biggest capital reform ever in the history of this country, will be working
people. Will actually be working people. The contest is not about unions, not about
employer organisations, is about how you work together in a dynamic economy, to increase
growth and share it effectively, that’s the test. And about that, there is no better partner
than unions. No better force in a pluralist democracy then
unions. No greater pressure for working people to
be represented by than unions. Thank you very much. Andrea Carson
Thank you Bill, in the spirit of the contest of ideas, I now invite Jennifer to the podium. Jennifer Westacott
Well I think you’re going to be very disappointed if you thought we were going to have a conflict,
I agree with everything Bill just said. Can I acknowledge him and his great contribution
to Australia? I think all of us in this room tonight share
a vision to build a better country. I doubt there are many ambitions for the country
that Bill and I don’t agree on. We want people to have a good job, a better
job, a good job for life. We want Australians to have a good home, good
health and have the skills and training they need to get ahead. We want Australia to be able to compete and
succeed in a very dynamic world. We want Australians to be safe, to be secure,
and we want to be able to manage the enormous technological transition underway in our workplaces. We want systems and institutions that protect
the most vulnerable people, after all what’s the points of societies? How do you measure a society? You measure it and their success on how they
treat the most vulnerable people, not the strongest people. I’m sure, Bill and I agree on these things,
and that most of us in this room agree on these things. So, I think tonight, it’s not about having
a debate, but a discussion in the way Bill just left it, about the way unions and capital,
work together to achieve those ambitions for our country. I think it’s true that Australians have got
conflict fatigue, so let’s draw the line under combativeness, and get on with some stuff. Let me start with this, I fundamentally believe
that unions have a huge role in building that stronger Australia. I was a member of a union, right up until
the time I left the public service, including when I was a departmental secretary. If I didn’t believe in unions, I wouldn’t
have been a member of one. Unions have been fundamental to the wellbeing
of our society, so my starting point tonight, is that I have a passionate belief, that unions
have, will and will always have a vital role to play in our economy and in the better society. In my experience, people often have very fixed
views of unions and of business. In terms of perceptions of the Australian
union movement, I’d say most people who have a view on the matter, fall in to one of sort
of five categories, and that category depends on their beliefs and obviously their position
in the workforce. These categories are first of all the tribal
loyalists, those who have a philosophical commitment to unionism, a belief in solidarity
and the natural distrust of employers. The pragmatic consumers, the individuals who
choose to join unions if the service is good. They are happy to be part of the team, but
are not philosophically rostered on. The insurance policy holders, people who treat
union membership like insurance, they don’t take much interest in it, but pay for it in
case they need it one day. The sceptical realists, those who see unions
in the way many people see banks that aren’t necessarily like them, but understand that
we need them and they’ll always have a role to play. And finally, what I call the antiunion fetishists,
generally these are not found in positions in business which actually deal with real
people and manage real workforces. They exist in the political and philosophic
realms, and largely operate in the abstract. I think the extent of their size and influence
is often overstated by unions themselves. So, if I think about those categories, I want
to explore why I do have concerns that the traditional positive role of the union movement
is in some areas diminishing. I do wonder whether the union movement is
the same one that existed in Bill’s day? I wonder whether we developed a disproportionate
focus on campaigning for regime change, versus the long-term interest of the country, which
in turn serves the long-term interest of workers. A single focus on regime change will be the
union movement at its worst. The greatest risk of short-term campaigning
focus, is of course the risk of overstatement or misrepresentation of trends. For example, the claim that the workforce
is now excessively casualised, is simply not true. The level of casualisation hasn’t changed
for about 20 years, that’s the Productivity Commission saying that, not me. But there are important issues concerning
underemployment, the so called gig economy, the rise of part time work, and these issues
are worthy of discussion, so let’s have that debate about those issues, and let’s do that
by getting the facts on the table. The issue of wage decline in Australia is
a serious one, and we must join forces to improve productivity and increase wages, which
I’ll return to later. But to characterise that wage decline as an
antibusiness agenda, as a kind of them and us debate does not allow us to solve it. I believe unions are at their worst when they
not only fail to evolve with the times, but instead act like ideological obstructionists. Standing in the way of crucial reforms that
will create more jobs and better services for the sake of it, is not the way to build
prosperity. Take for example the complete rejection of
the concept of free trade agreements, versus the legitimate debate about skilled migration
and the need to grow our skills in Australia. Or take the example of painting technological
transition, as a scare campaign, versus ensuring workers have access to the skills and training
they need to keep pace with that change, and that employers have the capacity to adapt
and be agile, so they can stay in business. Finally, unions are at their worst when they
see a cultural of bullying and intimidation as a badge of honour, it is not. It is shameful cowardice, it is a turn off
to the community, it unleashes the antiunion fetishists and it cripples the enterprise
agreement system, which has at its core, the principle of good faith bargaining. This is why the governments integrity bills
should pass the senate. Unions are at their best when they are collaborating
to solve a problem, acting in the interests of their members and making a contribution
to society. Unions are at their best when they’re fighting
for safety in our workplaces. Today Australian companies, in collaboration
with unions, can deliver a masterclass about managing safety, particularly on large projects. Of course, collectively, we should never take
our eye off that. Unions are at their best when they campaign
for equal wages for men and women. Unions are at their best when they’re working
for outcomes in the interest of Australia over the long term, as they did under Bill,
Martin Ferguson, Simon Crean and Bob Hawke. To return to my five topologies, back in Bill’s
day, that was when there was a drive for consensus, we could have added a sixth category to our
list, that of collaborative modernisers. That could be found in both business and unions,
they understood economic realities, they genuinely believed in shared benefits through collaboration. They realised that unions, just like businesses,
had to adapt to new realities. The basis of this collaboration was an understanding
of the importance of economic growth. Some of the achievements of that collaboration
were the wage restraint of the 1980s and 1990s to defeat inflation, the introduction of enterprise
bargaining and the support for the reduction in tariffs. Now let me turn to the role of business. We cannot afford for either business or unions
to be burdens on society and we must work together. It would be wrong of me not to reflect on
the strengths and weaknesses of business. But let me make it clear, I’m always amazed
that the interest of business are somehow seen as at odds with the interest of the community. Businesses are people, they’re the 11 million
people who work in a business. They’re the people who own shares, which is
overwhelmingly tied up in superannuation. They are the customers, the contractors, the
suppliers, that’s who is the business. Business is at its best when it’s creating
a job for someone, when it’s creating a return for someone. When it’s building something in a community
and when it gives good services to its customers. Business is at its worst, when it has a short-term
single focus on financial return only, often at the expense of its customers. I’ve said this before and I’ll say it again,
acting ethically, acting in the interests of your customers is not at odds with acting
in the interests of your shareholders, because you are going to create long term value. I believe both business and unions are vital
parts of our economic and social fabric. We both need to be at our best, to confront
the challenges Australia faces. It’s paramount that we address our stagnant
productivity, improving productivity will always be a key ingredient to delivering higher
wages. This requires a joint effort on competitiveness,
on investment and skills, we should be natural allies on competitiveness, because it is what
creates more jobs. And of course, by productivity I don’t mean
working harder for less, I mean doing things better, working smarter so the benefits can
be passed on to workers through higher pay and better conditions. We should do everything together, to make
sure that businesses invest and stay in this country. This brings me to how workplaces operate,
today I call again for a meeting between employers and the union movement, to sit down and save
the enterprise bargaining system. We must work together to address the system
which is slowly collapsing in front of our eyes. That system was borne out of that era of consensus,
it drove higher productivity, it drove higher wages. The next big challenge to address is our failing
skill system. Our failing vet system, collapsing in front
of us. Together unions and business must find a way
of getting existing workers to access the retraining, so they can keep pace with technological
change and stay in work. Our research shows there will not be massive
job destruction, but tasks within jobs will change. It must be business working cooperatively
with unions to own that transition, but we need a skill system and an industrial system
to make that easier. We need a fair and just transition in our
workplaces. I’m particularly concerned about people in
small and medium sized business, who may be vulnerable to gradual dislocation because
they cannot retrain and reskill. The government is making some progress on
this with the Skills Commission and a careers institute, but this is an area of natural
alliance between unions and employers. Perhaps it might also be important and appropriate
that we revisit a Bill Kelty era concept, of a training compact, to better enable us
to reskill Australian workers. And there are of course other areas where
we can and should join forces in the national interest. Why shouldn’t unions and business work together
to act on energy and the environment. We cannot afford a situation where certain
policy choices create limited job opportunities. We cannot afford a situation where no policy
choices create uncertainty, no investment and limited job opportunities. So, let’s break the impasse and drive the
transition to a clean energy future, that ensures affordable and reliable energy, that
keeps us competitive, that creates new industry, new jobs and drives technology change in existing
sectors. I believe we’ve got a collective responsibility
to make sure Australians retire well, they retire with money in their pockets and they
retire with dignity. And importantly that the retirement and superannuation
system comes to terms with the fact that people are going to work much longer. Finally, there are some social challenges
where a combined effort gives great effect to change for Australians who need it most. Let’s work on inequality, but the problem
must be accurately described, it is a problem of deep rooted and entrenched disadvantage. I’m always disappointed that the union movement
has never supported my call for a productivity commission inquiry in to entrenched disadvantage. We should I believe work together to address
the issue of low paid workers, especially women. We need to place more value on the caring
professions, especially childcare, aged care, and not stand in the way of reforms to improve
the education and human services system. But make no mistake, a return to the 1970s
conflict driven system of pattern bargaining is not solution to dealing with the conditions
of low paid workers. So now is not the time for a debate about
the usefulness of business or unions, now is the time for collective action from business
and unions. Our door is open, we want to work together,
to make our country stronger, to make our country more competitive, so we can create
more jobs, create better jobs with higher skilled people, so we can give people the
ability to work longer if they choose and we can pay them more. That is our collective responsibility, that
is our collective objective, that should be what we all focus on. Thank you. Andrea Carson
Thank you Jennifer and Bill, there’s a lot of themes there obviously that we will be
unpacking in the next hour. I want to take you to the time when we had
the modernisation of the Australian economy, which you’ve both touched on in your opening
addresses. That was something that you showed great leadership
in Bill, with the prices and income accord, between the ACTU and the Hawke and Keating
governments, that repaired and renovated an ailing economy. Through trade-offs on both sides, including
moderation of wage demands in exchange for improvements to the social wage. It set up a very prosperous time that most
of us here have enjoyed, right up until the GFC. Although we haven’t technically gone in to
recession in Australia, we have seen a slowing in growth. But the settings have now changed since those
times. Back then the problem was inflation that was
in double figures, it was interest rates with double figures, and now we have the reverse
of that, we have suppressed wages and we have suppressed inflation. So, what is the solution now? What will work now? What it the answer for today’s problem of
low wage growth that you’ve both spoken about, underemployment? For some people overemployment, and a low
growth economy? Now I know they’re big questions, not easy
to answer, so please – Bill Kelty
Before you do that, I’d just like for historical record, for the true role of Simon Crean and
I to be identified. Bert Evans said that “Bill Kelty and Simon,
they come over as lovely people, they’re so kind and they’re so concerned, like we agreed
nearly with everything you say. But here’s a list of all the industrial disputes
they’re involved with in terms of getting superannuation. Here’s 787 industrial disputes they’re involved
in, this is what they did fighting us. They were animals mate, they were truly animals. They would close down the factories on Friday,
for some group of workers and for others they would make sure that nobody could work, so
the people got all their money on overtime”. He said “They’re completely”, well you can
guess the adjective, we’re told not to say bad words, so I’ve got to be careful. He said “They are lovely people, but they
fought like animals”. Like John [Sedgar] 00:40:12 has had a dispute
every day for every day for the rest of his life, wouldn’t even get on to the first page
mate. So, we fought really hard for the things we
believed in, really, really hard and we had lots of disputes, but we did have dispute
for cause. What we realised very quickly, was this. We realised earlier than this, that if you
want a long-term gain, not short-term victory, a pyrrhic victory, then you’ve got to have
the people who produce the wealth on side. Once they agreed on super and they’re onside,
they have been onside ever since. So, we played the long game, but did we play
it hard? We were so tough, I got to tell you, we were
just so tough, I got involved in more industrial disputes in my life, than all the union officials
today combined, by myself. By myself I got involved in more disputes,
but we were fighting for cause. We did realise this, and I learnt it at a
very early age, I’ll just tell you this as a history, why I have these views. It’s we’re fighting to get equal pay for women
in a brush makers award, the women are getting $32 a week, and we sat down with this old
bloke, he must have been about 75, and he said “Bill, I actually support equal pay”
he said “but I can’t pay equal pay unless the community pays equal pay, because I actually
can’t do it by myself. I actually can’t raise the rate of women’s
wages, I just can’t do it. But I do absolutely support equal pay”, and
I said “Well, I think you’re right”. So, I knew then it wasn’t a monopoly of goodness,
you know when you’re young, you only think that you’ve got the monopoly of goodness,
you think you’re the person fighting for goodness. But he was a very, very good employer, who
employed people, wanted to pay more, and did he put his hand up for equal pay? He did put his hand up for equal pay in industrial
tribunals. He went along, he said “I support equal pay. A society should not pay women differently
than men, and I support it, I just can’t pay it alone”. So, we got the good employers on the side,
and half the employers are really good, half the employers in that stage weren’t really
good and we love fighting them, I mean I really enjoyed it. So this idea of a consensus, get your values
right, we care for passionately care for the same things, so you work with good people
about good causes, no matter who they are and that’s what you try to get the coalition
of interest for. If you’re looking now in terms of wage rates,
we had unemployment of over 10 per cent, we had inflation of 11 per cent, we had the manufacturing
industry decimated. So, do you think this is a hard problem do
you? Wage rates instead of growing at three and
a half or four, growing at two and a half, god that’s a hard problem. That is not a hard problem to fix, that is
a hard problem which is fixed by the minimum rate being adjusted faster, sitting down and
talking to employers, and say “We want to increase wage rates”. We would like to see the Enterprise Bargaining
back in system, putting a three and four per cent in front of people’s wage rate, as we
make sure we’ve got the adjustment process. That is union’s bargaining to get three or
four per cent. We don’t have to get 10 per cent, but at least
get three or four per cent, and get the wages award system, that is not a hard task. If a nation can’t get its wages adjusted,
from two and a half to three and a half or four, well give the game away mate. It’s not such a hard thing to do, and what
we have is society says “That’s a very hard thing to do”. We have the Reserve Bank say “Don’t worry,
when unemployment reaches four and a half, it’ll come to pass”, it won’t come to pass. Because the Reserve Bank – I sat on the show
for a long time, it doesn’t make the wealth. Workers working with unions, working with
businesses saying “We want to get the wage rates up, we want to get equal pay, here’s
an agreement that we can make about things about which we agree, and then put the economic
capacity to implement them”. Andrea Carson
Jennifer I see you nodding, if there was one policy setting that the BCA would like to
prioritise to change first, what would that be? Jennifer Westacott
Can I have two? Andrea Carson
Yeah, have two. Jennifer Westacott
Look, I totally agree with Bill, I think we’ve got to sit down and say, first of all how
do we get the economy to grow faster? Because to get wages to grow faster we need
the economy to grow faster, and you’ve got to think about our economy is grown at three
point five per cent over the last 40 years, is now under two. That’s just not growing faster enough. So one thing that we have got to do is come
to terms with business investment, now we obviously fought hard for a company tax change,
but if we’re not going to do that, we’ve got do to something else, and at the same time
we’ve got to, and Bill’s made this point publicly, lower that top marginal tax rate. Because it is an investment detractor, it’s
an investment sucker. Now part of the conversation you’d like to
be having in a room is that we’re not going to have an ideological conversation, we’re
not going to have a “we hate the top end of town, and therefore you buggers are getting
nothing” conversation, that can’t be the starting point. Then the second thing, if I could change anything,
I would change that skill system. Because we are not ready to equip people with
the skills they need to actually stay working, stay working all their lives, get these new
jobs, get these new opportunities. This kind of polarisation of vet and higher
education, which treats VET as a second-class citizen that says “Anyone that’s gone to a
VET, well that’s what the dumb kids do, and the smart kids go to Uni”. We’ve got to change that as a country and
look at things like the German system, where you’ve got dual track qualifications, you’ve
got employers and employees, embedded in the training system together, working out how
those skills are going to work. We’ve got to modernise that system very quickly. Andrea Carson
So hearing those comments from you, were you heartened by the words of the opposition leader
yesterday, who’s hit the reset button on policy, Anthony Albanese, when he said and I quote
“One understands that unions and business have a common goal, and that labor will develop
a new national organisation called Jobs and Skills Australia, to drive improved outcomes
in the vocational education training sector and strengthen workplace planning”. Is that what you want to see more of? Jennifer Westacott
Yeah, I mean I think what he said was terrific, what we now need to do is get beyond that
and say “What does that actually look like”? It can’t just be more money in to systems,
we know that’s not always the answer to things. We need a common information platform between
VET and higher education. Because if you’re an existing worker or a
young person trying to work out what you should do, good luck, in trying to find out how much
you’re going to pay for your course, what your job prospects are likely to be, what’s
your loan repayments. Good luck finding that info across both sectors. I want us to have a lifelong skills account
for every Australian, so if I need to retrain and reskill, it’s not up to my employer to
give me that opportunity. I want to see a lifelong skills account which
is an income contingent loan, a subsidy and an employer contribution, that allows me to
stay working, get a micro credential, get a module of training so I can stay in the
workforce. So, I want to see the next layer of what he
wants to do, and he and I have had some very good conversations about it. But I was really heartened with his kind of
acceptance to Bill’s point. It’s business and unions working together
that’s going to make the country stronger, not a polarised view. Andrea Carson
Bill, did you want to add to that? Bill Kelty
I agree with those suggestions, it’s good to see them have an idea, that’s refreshing. Andrea Carson
Well in that speech he also made the point that Australians now need to accept workplace
casualisation, which means? Bill Kelty
There’s always – I’ll just interrupt, Australia’s had a very high rate to casualisation, very
flexible labour force for a very, very long time. Even when the employers used to say “we don’t
have a very flexible workforce”, all the reports said we had to have a very flexible workforce. Joe Isaac who recently died, did a report
and said “I don’t know what you’re talking about, we have a very, very flexible, highly
casualised part time workforce for a long time, for a very long time”. So, the question is, it can work sometimes
and it can work to your disadvantage sometimes. We know it in terms of Linfox, we prefer actually
to have drivers for longer haul, because you’ve got high levels of skill, high levels of commitment,
high levels of safety, so we prefer long term job security and low levels of casual and
part time work, and actually better for the enterprise. Sometimes you’re competing with just low cost
casualised part time people. Now notwithstanding it all, Linfox are very,
very high – higher payer, more security, has done better than most of the companies, because
of that reason. So, I still think there is an issue of security
that we need to address, it’s a matter of sitting down, working out what people want,
what companies want and work it out effectively. The labour force has changed dramatically
over the period. Now you can do that, but you’ve got to understand
young people find it really hard. People pick on young people, they go in to
the labour force, paying their bloody HECS, and now brought it forward to 28,000. They’re paying their HECS, they’ve got part-time
jobs, they’ve got casual jobs, they’re not getting fulltime employment now to 25, 26,
they’ve got all these imposts upon them. They’ve got a marginal tax rate of 40, at
40,000 they’ve got a marginal tax rate of 32.5 per cent, they’re paying back the HECS
fees, they’re paying the GST, they can’t save a dollar, let alone buy a house. Get off their back. Give them more security in terms of employment. I was always in favour, the employers came
to me and said “look, what we’ll do is have longer periods of employment for people”,
I said “Fine”. “We’re going to press less in terms of the
penalty rates for the short-term aberration, because you’re investing in the people, we
will therefore try to respond with you accordingly”. Now we had a lot of good agreements from employers,
but they say they can’t compete if the safety nets of society are too low, because it does
go to the bottom. Whether we like it or not, all employers aren’t
good employers, they will pay the lowest possible miserable wage rates that they can. So, we’ve got to lift it up, work together
with good employers to lift it up. Andrea Carson
Jennifer you mentioned that there’s a need to lower the corporate tax rate as a driver
for business. But what about the point that Bill’s just
mentioned if you’ve got casualisation, and I know with my students and probably many
of the people here tonight that have more than one job, or two jobs or three casual
jobs. The tax system is not all that conducive to
having those multiple jobs. What do you think needs to happen at the lower
end? Jennifer Westacott
Yeah, I mean company tax changes is one part of fixing a tax system, but the effective
marginal tax rates that hit people at each stage of change, those things are very poor
for incentives. That’s why I am quite a big supporter of what
the governments trying to do, which is to get everyone to basically one tax rate. Now the question then is that tax rate too
high? But you know, I think you can’t just have
an ideological view on the top tax rate for example, because it can take too long to get
there and it’s a big deterrent. So, I don’t think there’s any one thing, and
I think this is the problem with reform in Australia these days, you say tax reform,
everyone said immediately, goes to GST and then whoop, that conversations got to finish. There’s lots of tax reform we could do that
does not involve the GST and we’ve got to sort of – we’ve really got to be lowering
people’s tax burden. That should be the objective, and we have
to lower the tax burden on businesses, because we are competing with countries that have
got a tax rate of 21 per cent. I mean did anyone find it strange that our
prime minster was opening Visy’s plant in the United States, employing 3000 Americans,
not 3000 Australians, because they’ve got a 21 per cent company tax rate, they’ve got
lower regulation. Does anyone think, “Sorry that doesn’t seem
right?” I bet the people in Townsville would have
loved 3000 jobs. So, I think it’s about a more comprehensive
view of tax, and I’m always disappointed that the unions and business aren’t allies in the
competitiveness agenda, because the end product will be better jobs. Bill? Bill Kelty
Look, as long as Malcom Turnbull’s running around the corporate tax coat, the Labor Party
was a shoe in mate, an absolute shoe in, because that’s not the essential problem. The essential problem is not in Australia
corporate tax rate, because your corporate tax, you only hold your tax in the corporate
and you put it out, and you put it out through imputation credit. We have a very unusual system, which rewards
productive capacity not speculative prices, therefore we have an imputation system. So once the money gets out it gets to the
shareholders, the real problem is in the Australian tax system, you’ve got a top marginal tax
rate of 47, and you’ve got people on $40,000 getting a marginal tax rate effectively, an
effective tax rate if you add all these other things that they have to pay at $40,000. That tax system is a crazy tax system, in
a world in which capital increases, in which capital is increasing. There’s a huge shift to property in terms
of wealth creation, because that’s where you return it, the tax system is not the best
tax system for a society. That is the tax rates under capital and property
have to be increased, but the marginal tax rates that people pay have to be reduced. That means you reduce it at all levels including
the top marginal tax rate. Because it’s crazy to have a tax system which
says “I’m rich” and I actually do know a lot of rich people you’d probably guess, is “I’m
rich, I won’t convert my money in to income, I’ll convert it in to capital, because my
maximum tax rate I’m going to pay is 23 per cent”. Well my daughters paying 32.5 per cent, and
people are paying 47 per cent, it’s a crazy tax system for the next generation. It doesn’t work. It’s not conducive to the allocation of resources. You’ve got to get the tax system reformed. You don’t need a GST, just reform that, but
do it sensibly, because you’ve got capital plans, you’ve got plans. We did superannuation, we fundamentally reformed
the whole capital society, the biggest capital reform in the history of the country, we put
it in the hands of employees, we see you’ve got employees, you’ve got a total system in
which your money goes in to account and it accumulates. But there was a defined benefit system which
existed, so we didn’t say “By the way you’re on a defined benefit, and next week you’re
under our system”, because we could have got murdered. They would have ripped us apart. They would have just destroyed us. So, we said you know what “You live with your
system, you can have your system, it’s a nice system, I understand it’s a really, really
good system for you. But don’t stop us changing the whole system
for everybody else. Don’t you sit there with your very, very good
system, stop us changing the whole of the superannuation system for the future. So, we’ll preserve your benefit, that’s fine,
you plan for it. If you do the same with tax, don’t destroy
what people have got, move to the next generation”. And I don’t have a pure view, it’s not an
ideological view, like a Labor Party supporter, and I’ve been a Labor Party all my life, since
I was 16, supporting a top rate marginal tax rate. You may find that unusual, but the truth is
that the last great reformer of the income tax system, we got the top marginal tax rate
down from 60 to 46, happened to be Paul Keating. That is the Labor Party have owned the bottom
and they have owned the top, and they’ve done it for those reasons. It was a terrible tax system, people didn’t
pay the 60 unless they were public servant, they had to pay the bloody 60. A building worker earning $100,000 paying
marginal tax rate of 60, you must have been joking. Andrea Carson
And yet what you’re saying is at odds with where the election was fought in May, particularly
the labor position which was wanting to scrap franking credits, and was – Bill Kelty
No there’s franking credits, what are frank? Andrea Carson
And was holding off on reducing the top tax rate? Bill Kelty
They didn’t want to scrap franking credits, they didn’t say that, they want to keep franking
credits. They didn’t want to give franking credits
to people who didn’t pay tax. We introduced the system, we said “This is
an offset for tax paying”. John Howard, we transferred super, the LAW
tax cuts went to payment for the three per cent super as we went from nine to 15, that
was the election commitment. John Howard knocked it off, knocked of the
LAW tax cuts, he knocked the LAW tax cuts off, we didn’t, Labor Party didn’t, he knocked
it off. Then he used it to fund changes to the superannuation
system, we had 15 per cent in, 15 per cent out, you could pay no tax if you put it in
to annuity. You don’t pay any tax on exit, and he gave
this benefit called imputation credits to people who didn’t pay tax, now that’s all
right, he did it. That was for his people, got away with it,
that’s fine. So, the Labor Party went to the last election
saying “You shouldn’t have the imputation credits for people who don’t pay tax”. That’s what they – they weren’t not to change
imputation credits. Labor Party has got a much chance of changing
imputation credit while Keating’s alive, as I have of completing a 100 metres race in
9.5 seconds. There is no chance we will change the imputation
credit, because he created the stuff, and you want to take on Keating? Not even me at the bravest would dare take
on Keating. Not – never take him on about imputation credits,
so that was the system. The Labor Party got their tax package wrong
because they didn’t have a tax package. They had a tax reform and they therefore decided
to spend the money, that’s not tax reform, it’s a very simple proposition. Tax reform equals tax cuts, I now it upsets
some people paying big, changing the tax system at the top end of town, but if you want tax
reform, like Keating got tax reform, that’s what you do if you believe in tax reform. If you don’t believe in it, just don’t do
it. Andrea Carson
Now I think it’s incumbent upon me to find some points of difference here, and so I want
to go to superannuation and one is how quickly we should be moving as a nation to go to 12
per cent, which at the moment is under review. Josh Frydenberg announced a review last month,
of September it was scheduled to go at 2025. I believe Bill you called the former Treasurer
Wayne Swan a miserable bastard for not lifting in the Finn Review last week, not lifting
the superannuation guarantee by more than point five per cent, in the time that labor
was last in. Jennifer when would you like to see the superannuation
increase, if at all? Jennifer Westacott
Look, I think the governments made it very clear they’re not going to walk away from
the increase, and we’re not going to encourage them to do that. I think the issue for the inquiry is not that,
and it shouldn’t be that, it should be a couple of things. It should be is the system working? So, will that increase actually kind of go
to increasing people’s retirement incomes? I think the inquiries got to look at a more
complex system, which is imagining a world where someone’s going to work, they’re going
to have a bit of a part pension and they’re going to draw down on their super, and how
does the tax system work for that kind of retirement income system? So that’s the point of the inquiry. So, we’re not going to be pushing the government
on the 12 per cent. I would like to be confident having Karen
Chester’s review, having some of the concerns that people have got about the efficiency
of the superannuation funds, the efficiency of the default system. I think people have to be confident that that
extra contribution is going straight to the bottom lines of people’s retirement incomes. That’s the question, let’s not have now another
false debate about the 12 per cent, let’s have a debate about how do we make sure that
the system is making sure that money is adding to people’s retirement incomes. Andrea Carson
Bill? Bill Kelty
The government gave a commitment, both political parties in the parliament of this country
gave a commitment to introduce the superannuation and to increase it to 12 per cent. They can walk away from it. But if parliaments continuously walk away
from commitments they give people, then they pay prices for it. You pay price, leave it alone, that’s the
commitment you gave, just leave it alone. Do what you say you’re going to do. Dan Andrews won an election, he said I’m going
to do this and did it. If you say you’re going to have super, and
you’re going to increase it to 12, do it. Just do it. It’s planned to be done, do it. The parliaments met it, do it. Because otherwise what you have, is say “Well
bugger the parliament”. “Bugger the parliament, they’ve bloody changed
their mind all the time”, they deferred it once, they deferred it to enable the wage
increase and as I said, you might be wrong. You may be able to find the single employer
in Australia, I can’t. Who said – I actually can’t find this, but
you may know this single employee who said “I notice that the superannuation has been
deferred, therefore I’ve decided to increase wage rates”, I can’t find them. I know even a good employer like Linfox, we
didn’t do it, so there must be somebody out there, I’m sure there’s somebody who did it. But the best of my knowledge, nobody did it,
nobody did that, so it’s a silly thing to do. Keep the super to 12, keep the super to 12,
that was the commitment and keep it, both political parties should meet that. Andrea Carson
I agree. Lecturer
We should get over it. Now I don’t say there’s no problems with super,
see the tax system is not our preferred tax system, I actually preferred what we had,
15 per cent in, 15 per cent out, you buy an annuity. But that’s not the political reality, people
hate you changing the super all the time, hate it, so just leave it there. Do I think it’s a nice system? I think it’s the best? No, I think it’s a bit unfair at the top end,
I think the people get a benefit that I wouldn’t give them. But I don’t care, leave it there, just allow
Australians and the next generation, because they’ve got almost the best superannuation
system in the world. Almost the best superannuation system, allow
it to be what it is. Now there are issues, there are anomalous
issues about some aspects of low paid people paying the 15 per cent, it is anomalous issue
that somebody is paying 15 per cent on their super, compared with their income. If you make it compulsory that’s what you’ve
got to address. There are issues with some of the funds, but
just remember this, it is returning on average nine per cent. Nine per cent it is returning, when the rate
of increase in wages is one per cent, and the rate of interest is one per cent, the
rate of inflation is one per cent. So, if you want any proof of whether that
Lord Adair Turner’s right, and as I said an old Tory mate, an old Tory, he’s not some
bloody Labor Party henchmen. He’s right and Piketty’s right, they are demonstrably
right, because capital is increasing, the returns to capital are increasing. What we are at least lucky in this country,
if they are right, we have the best safety net that we have invented. That is part of the increased return of capital
actually goes to working people. We’ve got that system right now. Everybody else in the world will be struggling
to get their hands on such a system if those two are right, well we’ve got it. So, leave it, there’s a couple of anomalies
that need to be addressed for low paid people, and just leave it. Don’t start pretending that what we’re going
to do is give low paid people access to their bloody super and default of getting lower
and fixing up the wages system or fixing up the tax system. But if you’re so worried about low paid people,
and I am, my whole life I’ve been committed to look after low paid people. I don’t give a bugger much about the rich,
I’ve got them on my side industrially, but I only cared for and fought for low paid people,
because they needed us most. If you want to fix up their problem, fix up
the wages system, fix up the tax system, fix up the job system, and most importantly I
think is fix up the training system. You’re right about that. Andrea Carson
We’re going to go to questions in just a moment and we’ve got two people with microphones
on either side, so please put your hand up if you want to ask a question, and I do ask,
given we’ve got the experts up in front, if you make it a question rather than a statement. Just before I go to those questions, perhaps
the elephant in the room and Bill you say that you love unions, but it seems not all
Australians do. The density of union membership has fallen
quite dramatically over the last four decades, from 51 per cent now down to about 15 per
cent, and the largest membership levels are in police, nursing and education. In fact, the former assistant secretary of
the ACTU Tim Lion’s described it as “Almost impossible to overstate the crisis that is
there for the union movement, and if there isn’t change now it will very quickly die”. So, should the question really tonight be
about the relevance of unions, to be able to address some of these problems in concert
with business, given that fewer and fewer Australians are now belonging to unions? Bill Kelty
Well first of all I said “I love unions”, but so do 64 per cent of Australians love
unions, that is when you ask them “Do you like unions?” they say “Yes, we like unions”,
a 64 per cent, 65 per cent has hardly changed. That is as a belief in a pluralist society,
a belief about unions as a concept and belief, they actually do support unions and they do
love unions. So what you get is when people say “Oh the
rate of density is really low, therefore what I can do is implement an attack on minimum
wage is an attack on unions”, political parties nearly always lose, because the essential
position is the majority, overwhelming majority of Australians still belief in Australian
form of unionism. They’re still imbued in what they believe
because it’s part of the character and characteristics of this country. So as to saying I love unions, the majority
of Australians actually still love unions. What is true is that density is falling, because
unions have not been able to recruit. Now I was not always liked as a union official,
but by and large I was pretty well received when you argued your point. The worst thing, reception I ever got was
in 1985 in ACTU congress, when I said “If you look at the employment structures and
the future economy, Australia will have rate of unionisation 90 per cent by the turn of
the century, therefore you’ve got to change the structures and the way we behave and how
we operate”. Now they hated it, they got up and yelled
at me some of them, now I’m actually always like that, I’m very combative person, so I
enjoyed the fight. But the worst thing in life is being right
about something under me, that’s worse. Unions have not made, in terms of organisational
change, all the changes necessary, I think that’s true. I argue that, I argued more with unions than
anybody, I mean I’m always arguing with people in unions about trying to change and get it
done. But on the other hand, it’s a bloody hard
job, I tell you, you put up your hand, you run a university and so by the way everybody
can come here for free, most of these unions do it for free. The national wage is for free, the superannuation
is by and large for free, the healthcare fight was for free. Everything you do is for free, and enterprise
bargain, if you do the enterprise bargain, I’m not in the union, won’t get the bloody
money mate. So, unions as agents industrially, do nearly
everything for nothing. Well it’s not a very good business model,
I’ve got to tell you, Lindsay I don’t think would do it, I’ve got to say if I said to
Lindsay, “Look mate, just in the spirit of Australia, just making Australia better, don’t
charge anything for your trucks. Don’t you worry”. I think Lindsay as a great mate would say
“Bill, I’m not going to do that”. Jennifer Westacott
Look I think a starting point, first of all you want to see strong union membership, you
don’t want to see the density fall. For all the reasons Bill and I have just gone
through. I think one starting point would be to start
to work to save the EBA system. Because I think a lot of people would say
“I want to invest in that. I want to pay my fees for that. I want to be part of that”. I think that would be a big starting point,
and I think getting on some of these social issues and some of these kind of economic
issues such as skills. Again, people would say “Well I want to be
part of that”. It doesn’t matter what kind of category of
my five categories you want to go to, but the pragmatist will say “I’m going to be part
of that”. Because they know there’s a lot at stake there,
but if it’s an entity that’s about regime change all the time, well you know, people
are going to have different views about that. Andrea Carson
We’re ready to take questions, just put your hand up, there’s one in the centre there and
then we’ll take one at the front. I’d like to see lots of female voices speaking
too. Male
So it seems that it’s perhaps that the union movement hasn’t modernised enough according
to Bill, I also think that some of the fetishists that were mentioned before, probably the majority
of them seem to be in government. So, it’s a collective of the two things. But ultimately business relies on demand and
as the pressure against unions seems from a few quarters to have grown, it seems to
inevitably have meant that demand is diminished and that can’t be good for business either? Jennifer Westacott
I agree, look this is my point, we need each other. I mean if you really want to affect productivity
which is going to drive higher wages, you’ve got to do that at a workplace level and you’ve
got to have some kind of collective process to bring people together, to say “At our workplace,
how do we make our enterprise stronger? How do we make your conditions better? And how do we deliver higher wages?” You know doing that, talk about very large
companies one by one, it’s not going to happen. It is not in businesses interest to not see
a strong union movement, because we will not be able to make some of these big changes
to get on some of these big issues. You simply can’t do it, even if you kind of
forget the philosophy, just take the organising principle. But from a philosophical view, you know sure
as a society we care about the concept of a collective bargain? The concept that the people who are not able
to bargain for themselves have a representative body to do it. To me that’s a fundamental part of our pluralist
kind of fairer society. Employers want that, employers need that. We need it to be high performing, companies
need to be high performing, that’s the only way we’re going to tackle some of these issues. Andrea Carson
Thank you, question at the front and then we’ll go for one on the side. Male
Thanks Andrea, terrific speeches both Bill and Jennifer, really passionate and very persuasive. A question perhaps for Bill in the first instance,
Bill the legacy you touched on is quite remarkable, and you spoke about the unions continuing
role in terms of for distribution and also as capital holders these days via super, but
I still don’t get a sense of your conviction or optimism about the union movement really
being a part of growing the size of the pie today as it was in the ’80s. I just don’t see the unions being involved
in driving the productivity agenda and driving, increasing the size of the pie today. I wonder if you could comment further? Bill Kelty
Well it’s not personal, these things you should never have personal. I think the unions are finding it difficult
given the employer opposition, given declining membership in certain cases, because not good
declining membership for responsible outcomes. Norm Gallagher who I really like Norm, I mean
don’t get me wrong, contrary to – we ended up having a fight to the death, but it was
a fight to the death, but I never not liked him, I always liked him. I was a very nice person, said to me “Bill,
I don’t want more than 8000 members because I can’t control them. I’d rather have 8000 I control rather than
20,000 I can’t control”. I think the problem if you have declining
density, what you do is you get a smaller and smaller representative group that you
have to please, because all you have to do is win the election. Winning the elections, you don’t want to create
a circumstance in which you lose the election by having more people in it. So lower density doesn’t help in terms of
bigger, better outcomes, because it prevents you. The second thing lower density doesn’t help
and what a democratic framework, you don’t have people in those industries. Unions, despite what you think, basically
reflect their membership. Teachers union officials actually behave like
bloody teachers, police behave like police, nurse behave like nurses, so they reflect
their membership. But if you have got a whole group of people
in society in terms of some of the new industries, well they’re not there, they’re not voices
to say “here’s changing”. So, it doesn’t help in terms of getting a
good democracy ticking over. But the task has been hard. Remember John Howard declared war on them,
he didn’t say “Thank you very much, none of this, nice talk”, he said “I am going straight
after you, straight after unions, straight after unionism and straight after the minimum
wage rate”. Now even me, who works with employers, understands
the role of capital I think, understands the role of profit, I’ve never objected to that. I know my grand speeches about – I’m no bloody
Marxist mate. I am a practitioner, practical person to get
a better result for working people, even me, what did we do? We said “John, if you’re going to fight us
to the death, we’re going to be in with you mate, and we’re going to try as hard as we
can to beat the daylights out of you. We’re the biggest pickets in the history of
the country down near the wharf. I won’t even tell you the other things that
we did, I won’t even tell you those, because it might actually get me in to trouble. I notice that people pick on one union official
saying you’ve got all these lists of complaints. As I said to you, if they’re his list of problems
that he created, then I think mine was much, much, much bigger. So, I won’t tell you what we actually did,
but did we fight? We fought really hard. What you needed employers to stop fighting,
we’re about this agenda, we will work together to do these things, we’ll have our differences. Democracy is really good, dissent is really
good, because we have our differences, you can have your arguments with your friends,
you can oppose people, you can have it. Like I’m always up for the argument, but I
like the argument, but I don’t proceed on the basis of arrogance, you learn more from
people with whom you’re having an argument. So, I think that’s the sense we’ve got to
get to. I think they’ve been for the most of this
century, pushed away and pushed to the side and people haven’t wanted to run an agenda,
a positive unionism. So, if the employers aren’t prepared to run
it, then what happens? People say to me “Well what do the employers
do for you Bill? What did they do for you? You know all your mates, what did they do
for you? All the friends, when bloody John Howard came,
they all bloody went to water?” It’s not true of course, because when John
Howard won, BHP did a five-year agreement, Lindsay Fox did an agreement. All the people with whom we negotiated for
the past 10 years, put up their hand and said “We’re not getting involved Bill. We’re going to be on your side, because you
were on our side for the last 10 years getting – making the changes, we’re on your side”. So, he could never touch that top 10 per cent,
because we had them together. Andrea Carson
Just on that point, Jennifer did you say in your opening remarks that you will be supporting
the Ensuring Integrity Bill, which is already been through the lower house and is now waiting
to go through the upper house? And this is the Bill that Senator Rex Patrick
from Centre Alliance labelled as a sledgehammer to crack a nut when only a nutcracker is needed. Which gives the Federal Court, if it goes
through, the power to cancel and fine unions and their leaders? Why do you support such an overarching Bill? Jennifer Westacott
Because first of all it’s bringing registered organisations in line with what a company
has to do, for people who disobey the law, they can be taken off a board, they get penalties,
this is about a kind of common sense, bringing that in line, and it’s a court that’s making
the decision, not a minister, a court. So, to me this is like bringing in line with
what a company is required to do, the responsibilities on directors. I simply don’t understand why that is seen
in that way, and to your question, which is a very important one, the enterprise agreement
system has to be focused on making the country grow faster. And that is about the two entities sitting
down together, at the enterprise level, with the fundamental philosophy we want the enterprise
to succeed, we want it to grow and grow stronger, so that people, the employers and the employees
share the benefits of that. That is the system that Bill created, that
is the system that served us well. That cannot work if there is no integrity
in the system, and that’s why we support the Bill, it’s a bigger issue for us. It’s about saving the EBA system, it’s not
just a philosophical view about that. It’s about if that system continues to decline,
the very thing you’ve raised, how do we make the country more prosperous? That is going to be done through that enterprise
system, and through the minimum wage system, which I agree with Bill. The BCA has never opposed the minimum wage
system, we’ve always supported it. I think it could be set differently, I think
it could be set more fairly, but we’ve never opposed that system. So, unless we get the wage setting and the
EBA process working, and unless our common objective is to make the country better off,
and to grow the size of the pie, to use the jargon. Then we will just be running around in circles,
but meantime back at the ranch, the economy will just be floating along the bottom, and
people’s wages won’t go up. Andrea Carson
Let’s get some more questions, we’ve got one coming through here, then we’re going to this
side of the room, then we’ll come back to the front here? Female
Hi, thank you both so much for your contributions tonight and your contributions to making our
society better. I think it’s really wonderful to be able to
see two people engage in good faith in the way that you have tonight, and talk about
working together. I think it’s undeniable that as Bill was saying
earlier, the union movement has advanced women’s rights and entitlements in this country in
an enormous way. But it was striking to me tonight, to notice
that it was the union leader on the stage who was continually interrupting the moderator,
and his fellow speaker. And it was the business council leader who
when she was asked for a response said, “Can I have two please?” I need to make this a question, so I think
the question is maybe we should broaden it, because I’m just making that observation. But the question might be, does the union
movement need to update its culture in certain ways in order to modernise and to be more
attractive, to particularly women, but I think perhaps to young people who expect different
things from the way work places operate? Thank you. Bill Kelty
Majority of union members are now women, the growth in the union movement has been with
women. The best unions in this country, some of them
represent predominantly women, in terms of nurses. The nurses is about as good a union in the
whole of the world. The two leaders of the ACT are women, so I
don’t think that – and they have been an active agent. In some cases, a single most important active
agent have been unions fighting for women’s rights, and women unionists fighting for women’s
rights. Affirmative action strategy that the ACT initiated
was initiated by Jenny George, who said “Not good enough”, and we want affirmative action
strategy in the ACTU. And that affirmative action strategy then
was adopted by the Labor Party. So, I do think that the unions have come a
long, long way in terms of women, a long way. Now as to what they do in respect to other
issues is always an issue, but I don’t think it could be said generally of the union movement,
in the last 30 years that they have not been proactive. They’ve implemented all their charters, they’ve
been active and they’ve been one of the leading organisations representing women in terms
of this country. So, I think that’s a truth, that’s a truth
of the matter. Andrea Carson
Jennifer did you want to make a comment about how business stacks up here with female CEOs? Jennifer Westacott
Look, I mean this is a huge challenge for the corporate sector, I’m not going to pretend
that we don’t have a huge problem here. Andrea Carson
I think the figures were seven per cent last year, it’s fallen to six per cent this year? Jennifer Westacott
Yeah, and we’ve got to fix this, and we’ve got to fix this through right down to young
girls doing STEM at school, and making sure that they can do some of the qualifications. I mean people don’t like me saying this, but
I’m going to say it, you cannot be a chief executive if you have not run the P&L of a
company. If you have not run the operational side. Andrea Carson
So there’s a pipeline issue perhaps? Jennifer Westacott
Absolutely and do not keep putting women in to the HR pipeline, not that there’s anything
wrong with HR, human remains I used to describe it when I was a public servant. But you cannot be a chief executive of a corporation
if you have not run – come up through the line of the business. That is just the simple reality. Now there’ll be very different views on that,
but I think I know a lot about this. So, I think we’ve got to get the pipeline
right, companies that are doing this really well, we put out a report with McKinsey a
couple of years ago, are doing things like really actively managing that pipeline. Really taking a risk on some women in those
P&L jobs, making sure that they support people with the training, the qualifications, so
that they’re successful in their roles. We’ve got a long way to go on this, I don’t
think [quotas] 01:23:42 is the answer to that, but we may end up there if we don’t make progress. Targets certainly are and I encourage companies
to set targets, but I think this has got to be a long-term serious endeavour by the business
community to get women in to those leadership positions. But it’s not a question of just plucking them
in, it’s a question of developing so that they are successful as well. What I hated in that discussion about AMP,
was this awful conversation “Well that’s what happened when you put women on boards”, my
god, that was just such a shocking conversation. As opposed to there were very systemic issues
in that company. We’ve got to make sure women are successful
in leadership positions, not simply that they’re sitting in a seat. Male
Thank you both for speaking, my name’s Paul I’m a Generalist at The Age, Jennifer two
very quick questions for you. Firstly, Bill made a point about stimulating
demand being an easy, if companies granted wage growth with a figure of three or four
before the per cent mark. Would that be something you support, companies
being more generous? And I’ll just ask the next one very quickly,
the Woolworths CEO today talked about a simplification of the IR system, being able to potentially
avoid situations of wage theft, would that be something you would push for? Jennifer Westacott
Well, let’s take them in tandem. First of all, to get higher wages you’ve got
to have higher productivity. Now I think if you looked at the big corporations,
you’d see those three percents in their EBA, so people who use the EBA system, overwhelmingly
are higher paid, and we should do that. You can’t simply just pay people more if the
demand isn’t growing, if the business isn’t growing, if the productivity isn’t growing. Because it has to be found somewhere else,
you either reduce your take to shareholders, you increase your prices, you reduce the number
of people working, so this has got to be a carefully calibrated thing, and that’s what
the EBA process was there to do, and that’s why it breaks my heart to see it falling apart. On the Woolworths stuff, and clearly the company
has rightly apologised today, they found it, they are going to fix it, they have apologised. We do need to make sure though, that we are
not creating a system that is so complex, so 122 awards, multiple agreements, multiple
clauses, so that it is vulnerable to inadvertent payroll mistakes. But we have supported as the BCA, the penalties
for purposeful wage theft, we think it’s a very serious issue that should be cracked
down on as hard as we can, at the same time, let’s not make the system so complicated,
particularly for SMEs, particularly for SMEs. Where you might find a small business that’s
got eight or 15 awards that they’re managing in their payroll system, got to get that balance
right. Bill Kelty
Productivity has increased since the GFC by eight per cent, eight per cent, wages have
increased in real terms by one per cent, by one per cent. Superannuation has been increased, and I was
actually wrong with Swan, it was actually only increased by point two five, increased
by half a per cent. So, what you’ve had since the GFC is a fundamental
shift and change in the Australian economy as you had in the world economy, in which
productivity is actually not being distributed. It’s actually not being distributed because
the bargaining system is not working effectively, that’s the cause. Bargaining system is not working effectively
for the reasons perhaps have been outlined. But that’s the truth of the matter, that’s
the truth of the matter. Now I’ve heard from day one as a union official,
employers say to me, “Oh the award system is very hard, very hard to work”. Well I don’t know, it seems to me it’s not
that hard, it just requires reading mainly, mainly reading and you go through the award
and you can see whether it’s enforced. Now there’s some not very good employers,
there’s a lot of bad employers, a lot of bad employers in this country who don’t want to
pay the award rate. Now the unions are necessarily and rightfully
fighting those people. There’s no pretending that that’s not the
case, now if somebody comes along “I’ve got a great solution for you, make the award simple
and we’ll actually reduce people’s entitlement, so that we actually don’t have these problems
anymore”. They’re all good cooks some of them, but perhaps
if you’re smart enough to get a recipe and make something, you’re bloody smart enough
to read the award I reckon. I don’t have a lot of excuses for these people,
if you’re committed to pay the awards you pay it. The award rates are quite high in relative
terms, and there’s some really good conditions. But that’s the Australian system, that is
the Australian system. So productivity, Hawke’s a great advocate,
the reason he was a great advocate, he said that the wages system asks for two premises,
you increase wages in accordance with prices to make sure everybody, then you share the
productivity gain in addition, so that you get an increase in real wages. That’s the share of productivity, so productivity
rises by eight per cent over a period of time, then wages should rise by eight per cent. Andrea Carson
Okay, let’s see if we can get one more question in before we finish? Female
Hi, so as a young person, as a worker and a union member, I feel that the elephant in
the room is neoliberal economic policy, and its role in I guess busting unions and decimating
the working class over say the last 30 years. If we acknowledge that union density has declined,
but productivity has continually increased over that time, then isn’t it a bit of a false
equivalence to say that it is unions role and businesses role to come together to solve
these problems that are facing young people now in the working class? When one side of that equation has a lot more
power, has a lot more lobbying power for governments, to create legislation and to impact the economy
more than the other side? Andrea Carson
Jennifer? Jennifer Westacott
Well I think people would dispute that final comment to be honest, I think people would
dispute that power change. I think at an individual level, I absolutely
agree, that’s why I’m a supporter of unions, I’m a supporter of the collective process. I mean this conversation about neoliberalism,
which is the new thing, which is basically do we support markets, do we support a low
role of government, do we support lower regulation? What’s the alternative to that? I mean that’s my concern when people say let’s
get rid of whatever their version of neoliberalism is. That is not going to solve the ambition of
young people today, and that’s what the election told us, that people had ambition for the
country, that they wanted to get ahead. I’ve been out talking to people in the regions
for the last two years. I rarely, in fact never, when I go out in
to the country regions, hear people talking about an antibusiness agenda. You go to Adelaide, people say there’s only
one thing wrong with big business in Adelaide, we don’t have any. They want business investing, they want businesses
to be there putting money in, creating a job for a young person, where unemployment for
young people is very high. I just don’t know what the alternative is,
but to work together to create that future that you want and that I want. That people can have a good job, a better
job, a good job for their life. If we, the employers and the unions do not
work together, I do not know what the alternative is. Andrea Carson
Bill? Bill Kelty
Look I don’t think we have a neoliberal society and we’ve never had it, we’ve never had it. I’m not in to those slogans. We have a system, we’ve got national healthcare,
the most socialist policy a country can have is looking after is people healthcare. We have a national superannuation system,
we have the highest minimum award rates in total structure in the world. This is not neoliberalism, this is a form
of old-fashioned socialism, which says that everybody in our society should be protected. We have an education system which gives people
more opportunities than the many. So, I’ve never accepted that view, I have
never been in that camp, I’ve always been in the camp that let us be a productive nation,
high levels of productivity, but share that to make sure everybody gets it. Jennifer Westacott
Exactly. Bill Kelty
So I’m an old fashioned socialist and a modern [unclear] 01:32:22, so that’s Hawke, that’s
Keating, that’s labor. What the point you make is this however, should
not be ignored and should not be dismissed by that ideology that I’ve just said. What has happened to the GFC, since the GFC
is this. Is the ability to bargain is less, the ability
to bargain, because the labor government did a terrible job when Gillard and Rudd was there,
in fixing the right to bargain. They did a terrible job. I’ve got to be frank about it, I love the
Labor Party, but if that’s the best they can do to ensure that unions have a proper right
to bargain, that was a terrible job that they did, and that was what the ACT was saying. Perhaps they shouldn’t have – because they’re
trying to be nice to people, their own people, they didn’t say “Why do we want to change
the rules? Because the rules we want to change is that
the system wasn’t good enough to make bargaining work effectively, it’s too complicated”, and
about that you are absolutely right. The bargaining system is not a fair bargaining
system for unions, and about that you are absolutely right. Because what you can see is that you can see
it in its [trajecture] 01:33:34, real wages improve through bargaining, really well in
this country. Minimum rates struggle but they at least keep
there, we implement even the SGC, we’re still implementing it, living standards are rising,
not at the rate of productivity, but at least they’re rising dramatically and there’s a
huge improvement in the living standards of workers. The GFC hits, then workers don’t bargain,
they can’t bargain, the minimum rates continues to rise as a protection, maybe through super. So, part of your argument is absolutely right,
that is you’ve got to change the bargaining system, to make sure it’s more effective. But in the end, it is bargaining – it’s two
things. Bargaining against bad employers who don’t
pay the rate, bargain constructively with good employers who wants to increase productivity. The bargaining system’s got to be both, it’s
got to incorporate both of those things. What is happening to society is workers are
being left behind in that process, they are being left behind. The other thing that’s happening, is if you
are a really good bargainer and certain workers are getting huge wage increases while others
are not. So, I think Australia’s a very unusual society,
it’s a very unusual society and has been for a long time, we rejected the third way, we
rejected the free market, we’re not subject to the same neoliberal forces. We’ve got those national institutions that
work, but where are the trends going? I think you’re right, where you’ve got to
divert them, is divert back to where we were going, that is be more productive, more cooperative,
make sure that the bad employers are beaten up, given unions – unions got better rights
to bargain but use it constructively. Andrea Carson
We’re now running in to over time. Bill Kelty
Australia will be better off as a nation. Andrea Carson
We’re running in to double time and I think we all know what that means from a work perspective. I would like you – I apologise to those that
still had questions, we have come up to the top of the clock. Please join me in thanking our eminent guests,
Bill Kelty and Jennifer Westacott. Thank you also to you for a lively discussion,
and to the La Trobe staff that have organised this series, and just a reminder that the
next La Trobe event as part of the Bold Thinking series, is on Thursday the 21st of November,
with the question “Is Body Tech the New Frontier of Humans?” Thank you very much for coming out tonight,
and I can see that we had a very rich discussion, we didn’t even get on to climate change and
moral leadership, but we had a fine discussion with our two eminent speakers, thank you.

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