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UNION FURY
AT HAWKE'S WAGE BLOW
The
Sunday Times (London) August 24 1986
by
Brian Deer, Sydney
AUSTRALIA'S
trade union movement is in turmoil this weekend after
last week's budget from the Labor government ordering
a 2% fall in real wage levels. The budget package
also includes cuts in health, social security and
education spending and is expected to worsen the
already serious unemployment problem.
Union
leaders are warning Bob Hawke, the prime minister, of
the risk of a disastrous split between his
administration and the unions over the budget, the
toughest since the depression of the 1930s. They
believe the future of the Hawke government, which so
far they have supported, is now at stake.
"Some
new wages policy will have to be worked out,"
Pat Gerraghty, secretary of the powerful seamen's
union, told The Sunday Times. "This budget means
a straight reduction in living standards and I don't
think the trade unions will stand for it any
more."
Fourteen
unions, led by the builders and the metalworkers, are
planning a protest rally outside the federal
parliament in Canberra. They are pressing the
Australian Council of Trade Unions (ACTU) to break
publicly with Hawke, who, before he entered
parliamentary politics, was its national leader. The
ACTU will convene an emergency conference of all
members in October to debate the crisis.
Tom
McDonald, secretary of the building workers' unions
and a leader of the left of the ACTU executive,
predicted a "grass-roots revolt" over the
budget. "The trade union movement will now have
to go its own way," he said.
A
split with the unions would be extremely damaging to
Hawke, who as president of the ACTU established his
national reputation some 20 years ago. He is by far
the most popular Australian politician, but he was
able to defeat Malcolm Fraser's Liberal party in
March 1983 largely because he was able to promise a
formal accord with the unions. That accord is now in
jeopardy.
Under
the deal Hawke and the ACTU struck in 1983, the
government pledged "to protect the purchasing
power of wages and salaries" and to "aim to
eliminate poverty by ensuring wage justice for low
wage earners, reducing tax on low income earners,
raising social security benefits and making other
improvements to the social wage."
In
Australia's unique pay bargaining system, incomes for
more than half the work force are determined by
rulings from a national conciliation and arbitration
commission. This body, an adjunct of the Supreme
Court, receives submissions from all sides and makes
legally binding awards.
Under
an arrangement concluded at the time of the 1983
accord, virtually all awards are settled in a single
ruling every six months and are indexed to consumer
prices. As a result of the deal, the inflation level
fell from 11.5% during the last year of Fraser's
Liberal government to 4.3% at the end of Hawke's
first year in office.
Inflation
has since risen to 8.4%, mainly because of the
devaluation of the Australian dollar, and the
government has moved away from the agreed pay
mechanism by cutting, or "discounting"
inflation-linked awards. This means recommending a
pay rise figure below inflation to the arbitration
commission.
As an
independent body, the commission is not obliged to
accept the government's figure, but it is likely to
do so. Earlier this year, a 2% discount was agreed by
the commission, and in last week's budget a further
2% was announced by the federal finance minister,
Paul Keating. He said that a similar cut may also be
needed in the new year.
These
cuts have infuriated union leaders, who believe the
accord is now under severe threat. "I'm getting
a little sick and tired of continually giving
explanations for this government," Harry Quinn,
leader of the transport workers, told The Sunday
Times.
Leftwing
trade unionists have also been angered by Hawke's
decision to resume the sale of uranium. A halt to
uranium exports was another plank of Labor's policy
programme in 1983.
Although
Hawke does not need to face an election before
December 1988, he is haunted by memories of the last
British Labour government's fate. In 1974, Harold
Wilson fought and won a general election on a
platform in which the so-called "social
contract" with the unions was a dominant
element. This was the deal that was finally buried in
the 1979 "winter of discontent".
Simon
Crean, the ACTU president, and other Hawke supporters
hope to hold the accord firm, warning that a split
would mean disaster for Labor.
Recent
by-elections have shown marked swings against Labor,
and even moderate union leaders fear it will be hard
to sell the budget to their members.
Besides
the cuts, Keating's plans, which more than halve the
government's A$7.5 billion spending deficit, also
defer pledged tax cuts.
Crean
wants the emergency conference in October to endorse
a new deal with Hawke which both sides can take to
the arbitration commission broadly accepting the 2%
wage cut. But there is growing concern that some
major ACTU affiliates may join the plumbers' union,
which has already broken away, and make independent
submissions.
Party
leaders are this weekend lobbying to avoid what they
fear could turn into a union-by-union
"unravelling" of the deal with the
government.
"This
accord needs everybody to support it to
survive," said one senior Labor source.
"Otherwise it will just disintegrate as unions
try to get a better deal for their members."
Hawke
and Keating hope to appeal over the heads of the
union leaders to what they regard as the better
nature of Australians. Opening the government
campaign shortly before his budget speech, Keating
prepared the ground, telling reporters: "This is
definitely not a budget for wimps."
| brian deer |
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Times Newspapers Ltd. All rights reserved. No portion
of this article on the Australian budget and labor
unions may be copied, retransmitted, reposted,
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