Speech - Unions, More Important Than Ever In Securing Inclusive Prosperity




"Unions, More Important Than Ever In Securing Inclusive Prosperity"





It’s always a privilege to address the Australian Workers Union, a union I first joined in the mid-70s. I’m proud of what  our union and our movement has achieved for working people over the past 100 years.

The Centenary of The Gallipoli Landings

I’ve always believed you have to understand our history to understand our future. And that’s why I’m pleased your agenda this week has a focus on the centenary of the Gallipoli landings. I believe there is a direct connection between the spirit of our ANZACs and the goals of our emerging union movement.

At the core of the ANZAC spirt is the timeless value of egalitarianism. Overwhelmingly, those who fought at Gallipoli and on the Western front were working Australians. And indeed many would have been members of the Australian Workers Union.

When the Australian states formed in 1901 we adapted to our conditions. Many democratic institutions and rights were drawn from other nations, particularly our federal system and Senate which were modelled on the American system. We were young, modern and progressive.

And like America we also had a central animating idea - for us it was the egalitarian notion that any person was as good as another.

In 1915 Australia was far from classless, but we were less constrained by class than most.

Our ideal was no master, no servant, just individuals bound together as equals.

In fact Australia's first two prime ministers during the First World War began their working lives as nine-year-old pit boys. The third as a labourer.

Australia discovered the truth 'that all men were created equal' through our own hard experience.

The story of Gallipoli and the even more bloody campaigns that followed in France, Belgium and Holland illustrated this rough and ready equality.

Like any founding story, that time is shrouded in myths and legends, but some facts are irrefutable. Officers and soldiers - who were both volunteers - were not treated as separate classes. A private considered himself as good as a lieutenant and a sergeant as good as a general. And our commanders valued the lives of their soldiers and spent those lives with the utmost reluctance.

Their enduring physical presence is left behind in the graves of our young men and women. These graves are more than headstones and crosses; they are a profound statement of our nation’s ideals.

These egalitarian ideals were not born at Gallipoli, just as America's ideals were not born at Gettysburg.

Australia was egalitarian from birth.

But at Gallipoli those ideals were tested - and proved their worth and our young men’s bodies still lie in obedience to these ideals.

What emerged was a moral value that rapidly established itself as our supreme national virtue - a combination of bravery, resilience, the ability to improvise, and the duty to stick together in hard times and protect your friends.

That’s what we are commemorating in the centenary of the Gallipoli landings.

A Political Earthquake and What Does It Mean? 

Four Saturdays ago Queensland experienced a political earthquake, an outcome which is still shaking the political foundations of our democracy. It has rattled our political opponents.

The removal of a State government with the biggest majority in Australian history in just one term by a Labor Party with just nine members in the house should give us great cause for optimism.

Our labour movement and those nine members faced an avalanche of tens of millions of dollars of public and private money backed by some of the largest and most powerful vested interests in the country. News Limited backed the Newman government with every fibre of its being, no surprises there. 

When the bookies had Labor at long odds the night before the election it was clear the betting market assumed the massively wealthy, who had bought the largest megaphones, would drown out the voice of the people.

The result was not just a rejection of Newman’s style, it was a rejection of the substance of his shameful program; the attack of the social safety net; on the right of unions to organise and effectively participate in our democracy and on the separation of powers

We can all take great heart from that swing four Saturdays ago, because it became clear that the substantial power of vested interests who had been threatening our egalitarian social contract can be defeated, despite the odds.

Delegates, there are no two leaders more alike in substance than Tony Abbott and Campbell Newman and consequentially it’s reasonable to conclude we are in a strong position to win back government late this year or next year. With the circus playing out in Canberra at the moment it really could be any time.

Whenever that chance comes, we must grasp it, we must win, and I believe we will win.

Collective Action

As the person the buck stopped with during the most tumultuous global conditions since the Great Depression three quarters of a century before it, I remain an optimist about our prospects.

Both as far as our society and our economy are concerned; both in the short term and the long term.

No country in the developed in the world has done a better job over the past 100 years of matching strong economic growth and income growth with social equity than Australia. The public policy building blocks which have underpinned this growth with fairness are primarily the legislative work and achievement of the labour movement and past Labor governments.

The key building blocks were; collective bargaining based on a decent minimum wage, prudent fiscal and monetary policy based on a targeted progressive tax and transfer system; a world’s-best superannuation framework that has strengthened the pension system and financial sector; and a series of reforms aimed at increasing competitiveness.

These are all under threat from the Abbott government and the powerful vested interests that run it.

As my book The Good Fight outlines Labor saved Australia from recession  guided by a determination not to repeat the mistakes of the Great Depression, when the economic orthodoxy was for harsh austerity.

As this graph shows, despite the headwinds of the Great Recession over the six years from 2007, the Australian economy grew by fifteen per cent – a spectacular result.

And while there’s been increasing concentration of wealth at the top, income growth during this period among low and middle income earners in Australia was higher than just about any other developed economy. Middle income households are more than 50 percent better off than they were in 1995 while there has been no gains for middle incomes in the US.

But to me the real indicator of the health of an economy and a society is the degree of social mobility and the clear expectation that irrespective, of your background or place of birth, you have the capacity to succeed.

This graph shows the extent to which a father’s income is a predictor of what his son will earn.

The graph shows that economic mobility is twice as great in Australia as it is in the US and the UK.

The Social Compact Under Threat

Our single greatest achievement in office, despite the global recession was the creation of almost a million new jobs within the framework of the Fair Work Act.

Until January last year, for ten years, Australia’s unemployment rate sat below 6 percent despite the global recession.

The Abbott Government’s damaging rhetoric of budget crisis and unsustainable debt has sunk consumer and business confidence and pushed up unemployment. Its decision to push car manufacturing out of the country and outsource defence manufacturing has left investors stunned and local communities traumatised.

Even now, despite the clear evidence to the contrary Abbott government ministers continue to argue that we would have been better experiencing the cleansing power of massive unemployment and recession rather than intervening with substantial fiscal and monetary stimulus during the great recession.

If there was ever a time in our history a Labor government really mattered it was during the Great Recession. As Glenn Stevens, said of the Global Recession: “Had it gone on, we can be sure that tens of millions more people would be unemployed. But it didn’t go on. It was arrested…. As a result, we talk about the Great Recession, but we don’t talk about the Great Depression Mark II… We might not like the politics but the alternative was worse.”

As much as anything else that’s why Australia’s handling of the Global Financial Crisis will always matter. Because if we accept Abbott and Hockey’s narrative – a fundamentally and demonstrably false narrative that laissez-faire would have seen us through the crisis – then the next economic crisis (and there is always a next economic crisis) will result in mass bankruptcies, mass unemployment and mass human misery.

This trickledown approach lies at the heart of the Abbott Government’s economic failure and its inability to deal with emerging economic challenges such as the future of our manufacturing industry.

Industrial Policy

In the aftermath of the Great Recession through the later period of office we faced a chronically overvalued Australian dollar despite lower interest rates and lower terms of trade.

This put enormous pressure on the profitability of industry but in particular on our manufacturing sector. As a Labor government we responded with a comprehensive plan for Australian jobs, the centre piece of which would have driven innovation and invested in skills. This was largely junked by the incoming Abbot government.

We knew then as we know now that we needed to get a bigger slice of exports in our growing region and that required sustained productivity growth. We also took practical steps including targeted support for particular firms such as Bluescope when they were blindsided by a perfect storm of low prices and a high Australian dollar.

We understand that industry in general but in particular the manufacturing sector continues to face seismic technological changes and difficulty attracting long term capital investment. This means that government can’t stick its head in the sand and stand idly by as large slabs of manufacturing industry confront punishing gas prices that torpedo all the competitive gains won back through a lower dollar and our longer term investment in skills and technology.

The increase in gas supply that industry claimed would be forthcoming to solve this emerging problem has failed to materialise. Extraordinary circumstances require a practical and immediate response and I think the Union’s suggestion of a Gas Reservation policy ought to be on the table for serious discussion and implementation.

In saying this we need to be practical and find the middle path through the doctrines of passive free market economics on the one hand and a lurch to protectionism on the other. 

Surely as a gas producing nation we could impose some national interest guidelines to ensure our firms reap the benefit of our own natural endowment

If we want to maintain public support for an open market economy we need to address public concerns, promote competition and long-term investment and make sure markets like energy (you could also include banking!) work  better for consumers and businesses alike.

The Importance of Unions

All of this is a reminder of how important unions are.

You are the last line of defence against inequality, when government policies and private interests seek to push the profit share unreasonably higher at the expense of labour. Unions are an even more important organization when governments retreat from legislating fair frameworks for minimum wages and bargaining, and begin to withdraw from a civilized social safety net.

Unions are the feet in the street, the champions for fairness, the voice of the powerless, the organisers of labour, the rope that forms the safety net.

We in this room know that when trade union membership declines, inequality increases. There are numerous international studies which support what we know in our hearts. The widening income differences now evident internationally are a reflection of top income growing faster than other income levels in society.

It’s clear that the combination of active unions within a fair bargaining framework has given the Australian workforce good income growth over the last 30 years. Add to this, high quality and affordable health and education services which have made us one of the most socially mobile developed countries in the world.

The dismantling of Medicare, uncapping university fees, massive cuts to the State and Federal public sectors, outsourcing of public services will simply increase inequality and lower living standards. This is not reform.

Attacking penalty rates, lowering working wages and conditions, cutting safety net payments, cutting age pension increases all in the name of an exaggerated economic crisis are demonstrations of the Liberals commitment to trickledown economics.

That road saps demand, diminishes opportunity and hurts our poorest citizens. It is up to us to block that road.

So, Where to From Here?

As we contemplate the political battle ahead it pays to reflect on the lessons learnt from our time in office.

Lamentably, our period in office also wore the stamp and scars of powerful vested interests that fought tooth and nail against the great enablers of equal opportunity and social mobility: fair industrial relations, progressive taxation, universal health and education and a strong social safety net.

This policy battle was overlaid by a new development in the Australian political system, the Americanisation of the Right in this country. Quite plainly, they are obsessed with defending the wealthiest in our society, and sadly, sticking up for them alone has become their primary cause.

My book The Good Fight details the long and hard sustained campaign against Labor between 2007 and 2013.

My experiences have convinced me it was not the product of “politics-as-usual”, but rather the product of something alien and new to Australia. A set of bloody minded vested interests more akin to what you find in countries such as Russia or the Right wing of the US Republican Party, than to the old boys clubs that once tried to run our country from perches like the Melbourne Club. Their goal is to seek radical change through the accumulation of evermore political power in their hands. This is both a recipe for political imbalance and social inequality.

Make no mistake that it is the very same vested interests who were the principle architects of both the Commission of Audit report and the Abbott Government’s diabolical 2014 Budget.

Their intent is no more obvious than in their effort to attack and discredit institutions that deliver power to weaker and more vulnerable sections of society. Look no further than their persistent attacks on the unions, Medicare, the ABC and on the public sector more generally.

It’s also about shifting the balance towards corporations and away from working people via less corporate tax and ultimately higher GST for working people. It’s why they trumpet spending cuts to vital programs rather than removal of large tax breaks for corporates.

As the trade unionists in this room know, if Government’s retreat and don’t play an active role in securing growth with fairness, then the labour movement and the Labor Party are the last bastion defending working people against the powerful vested interests that strangle fairness in market economies.

Now smaller government may well please the plutocrats around the world, who are looking towards more unregulated markets, ripping out social safety nets and lowering taxes as their elixir for global growth.

But we know a country isn’t an investment bank and policy makers shouldn’t try to run it like one. We live in a community, not a corporation.

Some time ago, I took the opportunity to walk the High Line through New York and on the side of an old brick building was a large advertisement which read “the French Aristocracy never saw it coming either”. This is a powerful reminder of the groundswell of support for new inclusive prosperity. 

As IMF Managing Director Christine Lagarde observed earlier this year, the 85 richest people in the world control as much wealth as the poorest half of the world – that is 3.5 billion people and it is casting a dark shadow across the global economy.

Our challenge is clear. Globally inequality and wealth concentration  are now at levels not seen since the Great Depression.

Earlier this year a report from the Inclusive Prosperity Commission produced jointly by the British Labour Party and the Democratic Party in the United States concluded that increasing concentrations of wealth and income at the top are not only corrosive of social harmony and a threat to economic growth but indeed a threat to political stability in parts of the developed world.   

The report pointed to the influence of powerful vested interests shaping public policy that inevitably leads to a hollowing out of the middle class and the creation of an army of working poor.

What we do to stem the growing tide of inequality is the central economic and political challenge of our age. And that’s why inclusive prosperity must be at the heart of our ideas agenda.

From the Labor Party’s perspective there are some clear lessons for the future. We must not despair, nor let vested interests divert us from the core message. We must be courageous, stand our ground and never operate under the illusion oligarch’s operate in the national interest. They plainly don’t.

Equally, we have to stand up to the most hostile media organisations by outing their underlying intent. By never cowering when they come at us.

Most importantly, we have to work together with unity of purpose and take faith from our history of achievement for working people.

We have a proud history of achievement for working people.  We share a noble passion.  We have a vision for a fair Australia where through universal access to good health and education the son of a construction worker can become an engineer; the daughter of a shop assistant can become a lawyer; the son of a farm worker can become an accountant, and the daughter of a male psychiatric nurse can become Prime Minister.

This is the fair inclusive Australia we in the labour movement fight for.  In the streets, on social media, in conversation at the pub, in the tea room at work, in talking to our neighbours over the fence, our work for inclusive prosperity has never been more important. 

We are here and there are more of us than them. We know that equality of opportunity and fairness is the key to an optimistic and prosperous Australia.

Thank you for the opportunity to speak here today.