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Commentary on Recent Events

5th July 2011
by Brian Boyd, VTHC Secretary

1. Who actually makes the wealth?

The employers and many politicians complain when workers and unions campaign for improved wages and conditions. There is the usual hue and cry that such claims will ‘hurt the economy’ or ‘cause inflation to rise’. Apparently when the economy is booming or not, there is never a good time for workers to improve their standard of living.

Recently there was a little publicity but not much, that highlighted what is happening in the mining resources sector, in terms of productivity.

The Australian Bureau of Statistics (ABS) reported that during the Global Financial Crisis (GFC) the output from workers was generating very healthy returns to their employers. Other sectors weren’t too bad either. See following table:

Time Frame	Skill	Sales value generated (av) per year	Wages earned (av) per year
2009-10	Mining Worker	$1.1 million	$118,000
2009-10	Manufacturing worker	$400,000	$57,000
2009-10	Retail worker	$275,000	$29,400

Food for thought. Definitely no worker should feel guilty about putting their hand up for a pay rise.

2. WikiLeaks and Smoking!

The WikiLeaks revelations during 2010 caused a storm, particularly the leaked cables that revealed virtually all of the US’s embassy staff abroad are ‘spies’ of one sort or another. They gather information on everything and interfere wherever they can in any country’s business. Probably no surprises there, at the end of the day.

Recently the federal government has taken a stand on the public health vs. smoking issue; insisting that the tobacco industry adopt plain cigarette packaging.

Members of the US Congress have written to the Australian government saying they are not happy with the implications of plain packaging proposed, in terms of Australia’s free trade commitments.

But this interference pales when we learn that one of the US’s most experienced ‘trade negotiators” has contacted Malaysia asking it to ‘persuade’ Australia not to proceed to impose plain packaging on the tobacco industry.

It is no accident that Malaysia was brought into the play, as Australia is in very sensitive negotiations over the handling of the refugee/people smuggling issue. Who said the US was a straight shooter!

3. Talking about Asylum Seekers

We have been told for years refugees arriving by boat on our northern shores have to stay locked up for months, even years because they need to have security checks. ASIO had carriage of this totally unacceptable process.

Suddenly at the end of May the bulk of security checks will now be delegated to Immigration Department staff! The Department has also said they will be able to introduce “a same day service” for such security checks!

Hold on. What’s changed!? With all the grief in recent years involving self-harm, suicides, riots and so on amongst the detained refugees, why the change?

Less than one in five may be referred to ASIO for “further checks”, with recent figures showing only 7 out of 1000 recently arrived asylum seekers attracting a “red flag” status – whatever that is.

While the new fast tracking process will be welcome, the public deserves an explanation of how ASIO or whoever, allowed the extremely damaging events of the last few years to occur and tarnish this country’s international image.

4. Don’t let conservatives dictate IR debate

There is no outbreak of industrial strife in Australia. Various rounds of enterprise bargaining negotiations have started. Associated short bursts of industrial action have been sporadic in a few areas. There have been verbal stoushes between the industrial parties in the media. It’s the usual argy-bargy.

But this hasn’t stopped the conservatives calling for new legislation to curtail the very limited workplace rights workers and their unions have. In turn unions are finding that WorkChoices type restrictions and worse, still exist in Gillard’s Fair Work Act.

Under the cover of the need for “economic reform” and the alleged need for “flexible workplaces”, the ruling class ideologies want to take advantage of the unstable, minority Federal Government.

It is an article of faith of the conservatives that their new definition of labour market freedom is no workers rights just employer rights.

We have Peter Reith being touted as the new national Liberal Party President. It was Reith in the 1990’s that promoted a series of legislative experiments that led to WorkChoices by 2005. It was Reith and his attack dog Ian Hanke who lined up the dirty work for the infamous 1998 waterfront dispute. Hanke is now head of the reactionary HR Nicholls Society. Both now use the media to call for a return to a more regulated labour market in favour of the employer.

With conservative state governments in WA, Victoria and NSW now flexing their muscles, provocations are emerging. Basic hard won wages, conditions and jobs are on the line. A new call to arms against workers has been made by the conservatives. The shaky status of the ALP federal government helps whet the appetite of the provocateurs.

During the volcanic ash problem facing QANTAS recently, with thousands of passengers stranded around the country, the airline’s Chairman Leigh Clifford made a surprising speech to the Australian Institute of Company Directors (14/6/11).

He said he didn’t want ‘to discuss volcanic ash…’ No he wanted to talk about enterprise bargaining and labour relations… “we can’t have union leaders revelling in the fact that productivity was not part of the deal”. Clifford’s line was simple: ‘forget ash, labour issues are the real threat’. Clifford is a former Rio Tinto boss.

Organised labour should be monitoring developments carefully.

5. Free Trade Obsession

The Gillard government is obsessed with trade liberalisation and Free Trade Agreements (FTA’s). To our ALP federal parliamentarians trade policy and micro-economic reform go hand in hand.

The ‘dry’ free marketeers are pushing for all its worth that the nation’s trade policy is linked to enhanced productivity and competiveness underpinned by “responsible” government fiscal guidance.

The ‘dry’ fundamentalist reformists insist that if we go down this track trade will increase the real incomes of Australians because the business community will “specialise in the things” we do best. We will export the goods and services we produce “most efficiently” and only import the

things that we cannot produce efficiently in our “small” but “high-wage economy”.

The big example used for this line of thinking is Australia’s current exports of iron ore and coal, as well as sophisticated medical, education and business services developed by Australia’s highly “educated workforce”.

In turn we use our export earnings to import high-volume labour intensive consumer goods that are made at the fraction of the cost if they were made here. The more productive our export industries the more we can import. Our exports are still a relatively small part of the national economy and the great majority of Australians are employed in services that are not internationally traded.

Yet the dry free traders acknowledge:

“All producers of internationally traded goods and services outside the mining sector are under pressure, with the least efficient manufacturers among the most vulnerable.

and

“Yet if these industries cannot stand on their own feet, they should be the first to contract [ie shrink] to make room for the expanding resources sector.”

The “dries” go further and point out:

“But the decline of manufacturing will be resisted not just by the manufacturers, but by their unions and politicians in the manufacturing regions.”

And

“…to the extent that they have a future in Australia, it will be as a result of the innovation and productivity gains that history tells us will occur only under the do-or-die pressure of foreign competition.”

Amazingly inherent in the ‘dries’ central arguments are the ingredients that defeat their rush to see Australia reduced to third world country status in a few decades.

Opening up Australia to a plethora of FTA’s is not “responsible” government fiscal guidance. It is short term unequal, narrow gain for long term broad based pain.

The ‘dries’ argue their approach will ‘increase real incomes’ for Australians. Yet their main backers – the big mining companies and other big business interests are constantly arguing for stricter IR laws to ensure lower wages and a lesser share of the cake for the wider workforce.

In fact there is no transparent mechanism in their model that allows for a flow down effect to improve wages more broadly.

The ‘dries’ also concede the mining boom exports, they so heavily rely on for their argument, is only “a relatively small part of the national economy”. What they do not concede is that the resources they are currently exporting at an unprecedented rate are finite commodities. They will not last forever. Yet this narrow focus forms the basis of a ‘dry’ economy for years to come. Where are the jobs and the high wages guaranteed in this scenario?

The ‘dries’ concede as well that the majority of goods and services created within Australia are “under pressure”, particularly the manufacturing sector. In turn they accept that if this job-rich sector cannot stand on its own feet then it should get out of the way of the expanding resources sector!

Everyone knows the resources sector is not labour intensive. Skills shortages is a subset of the expansion, but in relative terms there are not thousands of jobs on offer.

Where in the overall FTA framework, do hundreds of thousands of Australians see a future for themselves or future generations? It is time to fight for “Fair Trade” and demand that politicians are not blinded by big holes in the ground. We needs jobs in the cities as well! New jobs, emerging jobs, real jobs.