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Issue #1604      July 31, 2013

Rudd plays class collaboration card

Last week the Australian Council of Trade Unions (ACTU) was in discussions with the government and Business Council of Australia (BCA) around Prime Minister Kevin Rudd’s proposed new productivity package. All three parties have called for higher productivity with a return to the approach adopted by the Hawke/Keating government in the 1980s, under the Prices and Incomes Accord between the ACTU and government.

“Unions held back from doing their core work of bargaining with employers for better wages and conditions, and some forgot how to organise and are still paying the price.” (Photo: Josephine Donnolley)

Prime Minister Kevin Rudd had outlined the package to the National Press Club on July 11, in a speech titled: “The Australian Economy in Transition: Building a New National Competitiveness Agenda.” The main thrust of this agenda is a package of reforms to boost productivity and international competitiveness to be delivered by a co-operative trade union movement.

Under the 1980s’ Accord the trade union movement agreed to co-operate with employers, restrain wages and make no extra claims on employers. In return the government promised certain reforms, including Medibank, tax indexation, a (toothless) Price Surveillance Authority and the regular indexation of wages in line with price rises.

The theory was: wage restraint would result in higher profits, leading to new investments followed by the creation of more jobs. In practice, real wages fell and profits rose, while much of the new investment went into job-replacing technology or offshore.

Full wage indexation did not last and trade unions began the process of trading off working conditions in return for wage rises – the aim being to fund wage rises out of productivity increases. In fact employers often increased profits, following reductions in manning levels, longer working hours, loss of paid breaks and new enterprise “flexibility” measures.

While the unions co-operated, the employers never let up in their pursuit of maximising profits and drawing every extra drop of blood out of workers.

While the trade unions were pursuing “class peace”, Labor was able to push through a number of highly regressive (for workers) reforms – the OECD and IMF’s structural adjustment program of privatisation, financial deregulation, trade liberalisation (winding back tariffs) and competition policy.

The trade union movement sacrificed its independence, its right to pursue its own demands in the interests of workers. In fact, it quietly dropped its opposition to privatisation, pursuit of a 35-hour week and a number of other policy positions.

“That these changes [economic – Ed] took place in Australia in the 1980s without damaging social cohesion must be attributed to the partnership of a Labor government and working Australians,” ACTU president Ged Kearney noted, in a speech to a symposium on “The relevance of the Accord for unions today” at Macquarie University on May 31.

“It is impossible to envisage the same social stability during such a period of significant economic restructuring under a Liberal Government,” Kearney said.

“The difference was the Accord, and the important role that unions played in mitigating the impact of reforms by demanding a social trade-off for both wage restraint and continued cooperation with massive restructuring of the trade and financial system.”

Role of Accord

She is correct. The Accord was the vehicle by which the ALP delivered a compliant trade union movement during a period of significant changes that would have previously been strongly resisted by organised labour.

Kearney also referred to the sacrifices that workers made. “We frequently hear business leaders and their cheerleaders in the media calling for a return to the Accord, but where is their willingness to compromise in the same way that the labour movement did in the 1980s?

“When are they ever prepared to put aside their self-interest for the national interest? The moment any reform is floated – whether it be a resource rent levy or a price on carbon – they are quick off the mark to oppose it if it poses even the slightest threat to their bloated profits.”

Of course, the answer to that question is never. And they never will. After all they are capitalists!

Ged notes: “There were unintended consequences from that period that we are grappling with today: the growth of precarious work, skyrocketing executive salaries, the spread of sham business practices grew and insufficient attention paid to inequality, especially at the top end.”

She also acknowledges that, “Wage restraint from 1983 to 1990 meant unions held back from doing their core work of bargaining with employers for better wages and conditions, and some forgot how to organise and are still paying the price.”

Suppression of class consciousness

That is correct. But there were other serious outcomes, in particular, the dumbing down of class consciousness and the acceptance of the idea that gains could be won through sitting around a table with employers or in a court, without struggle. The Accord promoted the idea that workers and companies have common economic interests, that boosting profits somehow helps workers. Whereas every extra dollar in profits is a dollar less in wages and vice versa. The economic interests of labour and capital are diametrically opposed.

A new generation of trade union officials grew up having never blown the whistle on a job instead believing the way forward was co-operation with the boss. As Kearney correctly points out, “some forgot how to organise and are still paying the price.”

Despite recognising some of the negative outcomes of the Accord years of co-operation and wage restraint, Kearney still calls for a return to the Accord ideology. “We need tripartite dialogue and agreement in all major sectors of the economy with unions and employers talking to each other and working through the issues, with government at the table as necessary.

“The business community – and the Coalition – must get over the attitude of looking at every significant national reform proposal through the filter of their own self-interest. It needs to constructively engage rather than blocking at every step.”

She fails to acknowledge that employers will never give up their interests, never stop waging the class struggle. Trade unions can co-operate with employers and make as many sacrifices as they wish, but employers will never, for one moment, reciprocate if it hurts their profits.

In fact, the experience during the Accord years was that when workers made sacrifices employers demanded more blood.

New transition period

Rudd, in presenting his new Productivity Package to the National Press Club, refers to an Australia in transition. Big economic and social changes lie ahead.

To understand the nature of these changes – the new demands of big business – look no further than Greece, Spain or Portugal and the austerity programs there.

There is a new drive by transnational capital for a massive take-back of past gains by the working class in industrialised countries and making their businesses more internationally competitive. This includes dismantling the welfare state, corporate tax cuts, slashing wages, casualising workforces, winding back the public sector, deregulating labour markets, and extending the powers and reach of monopoly capital.

The aim of Rudd’s call for a return to class collaboration by the trade union movement is to offer employers something that the Liberals cannot: a compliant, co-operative union movement during another period of radical economic change which is not in the interests of workers.

The same policies delivered by the Liberals would be met with strong resistance by the labour movement, a point made by Kearney in relation to the 1980s. Workers, through their trade unions, are being called upon to make further sacrifices through a revamped Accord process.

If we are to halt the neo-liberal agenda of big business and defend past gains and make future gains for working people, we need a strong, united, militant trade union movement with broad community support. Trade union independence is vital, with unions free to determine their own policies, through their own democratic structures, in the interests of their members and the wider community.  

Next article – Latin America no longer “US’ backyard”

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