February 26th 2000

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Articles from this issue:

COVER STORY: Power, strikes and privatisation


EDITORIAL: The end of General Wiranto?

NATIONAL AFFAIRS: Kernot's leadership ambitions: unfinished business?

RURAL: Major debt crisis in rural Queensland

OBITUARY: William G. Smith SJ

FAMILY: The family strikes back

AUSTRIA: Haider: a warning rather than a threat

KOSOVO: They have made a desert and called it peace

ECONOMICS: Managing countries, managing companies

ASIA: Taiwan's poll a rowdy, close run thing

HEALTH: Treatable diseases rampant through Africa

BOOKS: Rabbi's defence of the Judeo-Christian culture, Rabbi Daniel Lapin

CANBERRA OBSERVED: Bush tells Canberra it won't be cajoled

Privatised power

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COVER STORY: Power, strikes and privatisation

by NCC

News Weekly, February 26, 2000

Since the beginning of the year, major industrial disputes - of a type not seen in Australia for about 20 years - have erupted, causing widespread fears that Australia is returning to the 'bad old days' of the 1970s, when industrial warfare was a feature of Australian life, causing damage to many industries.

Many people, including drnior Federal Government members, thought that the weakening of union power through the growth of unemployment, substantial decline in union membership, and changes to the Industrial Relations Act, made such a development impossible.

In fact, a convergence of factors has made an upsurge of strike action almost inevitable.

In the 1998 Federal Election, the Liberal/NP Coalition was returned to office, but its majority was cut from 44 to just 13. Perhaps more significantly, the percentage of the total vote received by the Coalition in 1998 was slightly less than that received by the Labor Party.

The fact is that the Federal Coalition is on a knife-edge, and only a relatively small swing would put it into opposition.
The Coalition campaigned on the introduction of a broad-based goods and services tax, and has spent much of the past 18 months preparing for its introduction. The new tax would always have been hard to sell to a sceptical electorate; but the anomalies created by the 'deal' which secured the support of the Democrats will make the new tax a nightmare - particularly for small businesses and consumers.

Government members, particularly those in marginal seats, are understandably extremely nervous.

Another factor is the massive building boom, much of it focused on the forthcoming Olympic Games in Sydney, which has given the building industry union, the CFMEU, unprecedented power.

Falling unemployment levels, accompanied by shortages of skilled labour, have given unions the whip-hand, particularly in time-critical areas of building and manufacturing.

By selective use of industrial muscle, the CFMEUhas extracted a 36-hour week from two large builders in Melbourne, Transfield and Baulderstone Hornibrook, on the massive Docklands Stadium, which is supposed to be finished in time for the current football season, and used later for some Olympic events.

This campaign is now being extended throughout the building industry, and has led to the cancellation of a multi-million dollar residential development at Melbourne's Docklands, and threats of retaliatory lockouts by some 300 contractors and employers in the building industry.

The union campaign for a shorter working week and a 24 per cent wage increase has been fuelled by exorbitant executive 'perks', including the massive $13 million payout to the discarded former AMP boss, George Trumbull.

Data from management consultants Mercer Cullen suggest that payments to company CEOs has grown at around 8 per cent a year over the past decade - about three times the rate of ordinary employees. Among high-fliers, it is even worse.

A Financial Review survey conducted in 1999 showed that the salaries of CEOs of Australia's top 100 companies were rising by 14 per cent a year, not counting share options and other arrangements.

Politicians's pay
Last December, the Remuneration Tribunal recommended a 10 per pay rise for politicians, and a 14 per cent rise for Ministers. The pay rise, their first for three years, was endorsed by leaders of both major parties.

The Victorian building industry dispute comes on top of the conflict between BHP and mining unions over individual contracts in its WA iron ore operations and its Queensland coal mines; on-going trouble in the privatised Victorian power industry, where Yallourn Energy, having paid over $2 billion for its power station, has now decided to slash further its workforce.

Union resistance to a proposed new enterprise agreement led to a lockout of workers, and power restrictions imposed a fortnight ago, which ended only when the Bracks Labor Government invoked the state's essential services legislation, to force the unions back to work.

The dispute, however, is not finally resolved.

Latest developments
The latest development is that other Victorian unions, notably the Electrical Union and the Manufacturing Workers Union - both of which were part of the extreme left in the union movement up to the time of the collapse of the Soviet Union in 1990 - have now committed themselves to Campaign 2000, a bid to return to industry-wide bargaining, in place of the enterprise agreements which have become widely established since the effective demise of the arbitration system.

Victorian unions have signed a large number of enterprise agreements with an expiry date of June 30 this year, so that they can all be renegotiated at the same time; and metal unions in New South Wales have begun to sign enterprise agreements with an expiry date of June 30, 2001.

The unions' strategy is to replace enterprise agreements with centralised industry-wide collective bargaining.
Despite the erosion of union influence and strength over the past 15 years - much of it due to the ALP-ACTU 'Accord' of the 1980s, followed by the strategy of union amalgamations - left-wing unions are now flexing their industrial muscle in ways not seen for many years.

The outcome may well determine the future of unionism in Australia.

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