The unions are back in town
24 August 2022
Following the 2022 election, there are already signs of an increase in union influence, with Labor’s planned closure of the Building and Construction Commission, review of the Fair Work Commission rules, and support for unsustainable pay rises. As immigration builds again, there are also moves by the Australian Workers Union to introduce compulsory membership for new arrivals wishing to obtain work.
There are other ominous signs, the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU) Victorian boss, notorious John Setka, has engineered a takeover of South Australia CFMEU to add to his authority over Tasmania. Former CFMEU official, Alex Bukarica has been appointed adviser to the Prime Minister. The recent Hospital workers union-engineered strikes recently helped to bring down the South Australian coalition government, whilst hospital services were infinitely worse, without strikes, in Labor controlled states such as Victoria. The aborted dock strikes of late 2021 are back on the agenda and the Maritime Union, which was inexplicably allowed to merge with the CFMEU, is threatening strike action.
In Australia, the early unions were formed in the 1830s and by 1870 around 400 had been established. In 1901 there were an estimated 100,000 unionists out of a population of over 3 million and in 1905 the world’s first stable Labor government was elected before, in 1910, a majority Labor government. The Australian unions became an increasing political force as their numbers grew, reaching 1.7 million by 1956. Legislative changes of The Accord under the Hawke Labor government in 1983, resulted in the amalgamation of over 200 unions to 20 ‘super’ unions.
The Australian Bureau of Statistics showed union membership peaked about 1990 at around 2.5 million (40 per cent of the working population) and had fallen to 1.4 million (10 per cent of total) by 2020. This constituted 18 per cent of the public sector, in particular in health and education (Roy Morgan Polling), and 9 per cent of the private sector. The 1983 ACTU-Labor Accord, and subsequent establishment of the Fair Work Commission (FWC) by the Labor government in 2009, resulted in the number of industrial disputes falling by around 95 per cent.
The $46 million Royal Commission into Trade Unions in 2014 revealed that many union bosses are often more interested in their own financial and political aims than the requirements of their workers. Nine unions were accused of illegality with over 50 breaches identified. Inexplicably, the Coalition failed to introduce new legislation and as such there was no reduction in this behaviour. Allegations of corruption and misconduct were flagged during the process, and criminal charges were recommended, but most charges were, for no obvious reason, dropped and only one conviction recorded.
Despite the decline in union membership, there has been no loss of political authority, while the unions maintain a financial relationship with the Labor party. In the election year 2016, $33 million in union donations to Labor were recorded by the Australian Electoral Commission. Some of this money came from union subscriptions but an increasing amount comes from government Super Funds, with ex-union members as directors, returning their payments to the unions. The book Rivers of gold, how the trade union movement is funded by industry super by Breheny and Begg, reported a transfer of over $18 million in 2017. An attempt at disclosure of all payments, belatedly introduced by the Coalition, has already been aborted; new Labor legislation has been introduced to cancel these requirements.
The dinosaur approach remains the strike weapon, with continued use of an axe in a digital world, it serves as the standard approach of militant unions. Whereas the Maritime Union, now in the deadly embrace of the CFMEU, boasts of its high productivity, an ACCC report showed that Sydney and Melbourne Docks are in the world’s lowest, at 15 per cent, for efficiency. The former MUA demands the right to recruit family members to the docks, along with numerous restrictive practices; having failed to block the amalgamation, the Coalition government belatedly attempted to address these archaic practices with a Productivity Commission inquiry in 2020-21. Under the more benign Labor regime, they are now pushing to have continuation of their unaffordable restrictive practices, adding to the costs of imports and exports.
The Australian Building and Construction Commission (ABCC) set up to deal with lawlessness on building sites, is under increasing pressure. The CFMEU is in an expensive and ongoing battle with this organisation and continually applies pressure to shut it down. Their activities have resulted in fines of $14.8 million since 2016, with $2.17 this financial year. Unions can afford to ignore the fines as they receive payments from industry super funds, last financial year totalling over $6 million. The mining branch of the union has tried, so far unsuccessfully, to escape the clutches of the ABCC, the manufacturing branch also wants independence. The new Labor state government of SA, unlike the federal government, has realised its association is unacceptable to the public, severing ties with the CFMEU and returning its donations.
The federal government has at least ignored some of the more bizarre taxation demands of the ACTU, demands which would undermine what’s left of the economic carcass. Whether the ACTU fades into insignificance in its original role depends on how it adapts to the challenges of technology, as robotics and artificial intelligence (AI) affect the workplace. The latest national figures show that there were 5,800 bank branches in 2020, down by over 600 in 3 years, with 290 closures in the last year since the pandemic commenced. The mining companies are switching to driverless trucks and trains, and driverless cars and trucks are likely to become the norm with drivers’ jobs gone. The building site will be affected by automatic bricklaying, road building has already been automated in Japan, where farmers are using satellite navigation to plough fields and find tagged livestock. Even tech companies can be affected, Telstra has shed 8,000 jobs in 5 years.
The Labor Party is funded directly by union donations, and indirectly by contributions from Industry superannuation funds, (while contributions to the right are limited by legislation). The increasing concern is that a small number of Union Leaders, representing a shrinking percentage of the workforce, will have increasing power over the party and, potentially, government.
There is a popular economists’ joke: ‘The factory of the future will have only two employees, a man, and a dog. The man will be there to feed the dog and the dog will be there to keep the man from touching the equipment.’ If the unions are to have a place in the future, they should be planning for workplace changes, instead of a return to dinosaur industrial confrontation.