Do trade unions help or harm Australia's economy?

31 October 2019


Jennifer Westacott, chief executive, Business Council of Australia


La Trobe Univeristy


6.30pm, 30 October 2019


I would like to start by acknowledging the Traditional Owners of the land we are meeting on today, the Wurundjeri people of the Kulin nation, and pay respect to their elders past and present.

May I also acknowledge our hosts tonight – Andrea Carson and the La Trobe Ideas and Society Program.

And, I would like to acknowledge one of the union movement’s most distinguished leaders, Bill Kelty.

All of us in the room tonight share a vision to build an even better nation.  

I doubt there are many ambitions for the country that Bill and I do not agree on.

We want people to have a good job, a better job, and a good job for life.

We want Australians to have a good home, good health, and have the skills and training they need to get ahead.

We want Australia to be able to compete and succeed in a very dynamic world.

We want Australians to be safe and secure, and we want to be able to manage the enormous technological transition underway in our workplaces.

We want systems and institutions that protect the most vulnerable people.

After all, that’s the point of societies – you measure their success on how well they treat their most vulnerable citizens, not their strongest.

I’m sure Bill and I agree on these things.

So, I’m hoping tonight that we are not in a debate but a discussion about the ways business, the community and the union movement can work more effectively together to achieve those ambitions for Australia.

It’s clear that Australians have conflict fatigue, so let’s draw a line under the combativeness for the good of the nation.

I believe there can be no doubt that unions have a role in building a stronger Australia.

I was a member of a union right up until the time I left the public service, including when I was a Departmental Secretary.

If I didn’t believe in unions, I wouldn’t have been a member of one.

Unions have been fundamental to the wellbeing of our society.

So, my starting point tonight is my passionate belief that unions have a very strong role to play in any economy and any society.

In my experience, people often have very fixed views of either unions or business.

In terms of the perceptions of the Australian union movement, I would say that most people who have a view on the matter fall into one of five categories.

The category will depend on their beliefs and their position in the workforce.

These categories are:

  • Tribal Loyalists: Those who have a philosophical commitment to unionism, a belief in solidarity and a natural distrust of employers.
  • Pragmatic Consumers: Individuals who will choose to join unions if the service is good. They are happy to be part of the team, but are not philosophically rusted on.
  • Insurance Policy Holders: People who treat union membership like insurance – they don’t take much of an interest but pay for it in case they need it one day.
  • Sceptical Realists: Those who see unions in the way many people see banks - they don’t necessarily like them, but understand that we need them, and they will always have a role to play.
  • And finally, Anti-union Fetishists: Generally, these aren’t found in positions in business that actually have to manage workforces and deal with real people.

They exist in the political and philosophical realms and largely operate in the abstract. The extent of their size and influence is often over-stated by unions themselves.

After going through those categories, I now want to explore why I have real concerns the traditional positive role of the union movement is, in some areas, diminishing.

I do wonder whether the trade union movement today is the same one that existed in Bill’s day.

I wonder if we have developed a disproportionate focus on campaigning and regime change versus the long-term interests of the country which in turn serves the interests of workers.

A single focus on regime change will be the union movement at its worst.

The greatest risk of a short-term campaigning focus is, of course, the risk of overstatements of important trends.

For example, the claim that the workforce is now excessively casualised is simply not true.

The level of casualisation hasn’t changed for about twenty years.

There are, however, important issues concerning underemployment, the so-called gig economy, and the rise of part time work.

All these issues are worthy of discussion.

So, let’s have a debate about those issues and let’s make sure we get the facts on the table.

The issue of wage decline in Australia is serious and we must join forces to improve productivity, which I will return to later.

But to characterise this as an anti-business agenda – as a kind of us and them debate – does not allow us to solve it.

I also believe unions are at their worst when they not only fail to evolve with the times and instead act like ideological obstructionists.

Standing in the way of crucial reforms that will create more jobs and better services for the sake of it will not build prosperity.

Take for example the complete rejection of the concept of free trade agreements versus the legitimate debate about skilled migration and the need to grow our skills base in Australia.

Or take the example of painting the technological transition in our workplaces as a scare campaign versus ensuring workers have access to the skills and training they need to keep pace with that change.

And finally, unions are at their worst when they see a culture of bullying and intimidation as a badge of honour – it is not

−          It is shameful cowardice.

−          It is a turn off to the community

−          It unleashes the anti-union fetishists

−          And, it cripples the enterprise agreement system which has at its core the principle of good faith bargaining.

This is why we need the government’s integrity bills to pass the Senate.

Unions are at their best when they are collaborating to solve a problem, acting in the interests of their members, and making a contribution to society.

Unions are at their best when they are fighting for safety in our workplaces.

Today Australian companies, in collaboration with unions, can deliver masterclasses about managing safety on particularly large projects.

But collectively we must never take our eye off this ball.

Unions are at their best when they are working for outcomes in the interests of Australians and Australia as they did under Bill, Martin Ferguson, Simon Crean and Bob Hawke.

To return to my five typologies, back in Bill’s day where there was a drive for consensus, we could have added a sixth category to our list, that of ‘Collaborative Modernisers’.

They could be found in both business and unions.

They understood economic realities, they genuinely believed in shared benefits through collaboration.

They realised that unions, just like businesses, had to adapt to new realities.

The basis of this collaboration was an understanding of the importance of economic growth.

Some of the achievements of this collaboration include the wage restraint of the 1980s and 90s to defeat inflation; the introduction of enterprise bargaining; and support for reductions in tariffs.

Now, I’ll turn to the role of business.

We cannot afford for either businesses or unions to be burdens on society and we must work together.

It would be wrong of me not to reflect on the strengths and weaknesses of business.

But let me make it clear, I’m always amazed the interests of business are seen as somehow at odds with the interests of the community.

Businesses are people.

They are the eleven million people who work in a business. They are the people who own shares, which is overwhelming tied up in superannuation.

They are the customers and the suppliers, that is who is a business.

Business is at its best when it creates a job for someone, creates a return for someone, builds something in a community and gives good services to its customers.

Business is at its worst when it has a short-term single focus on financial return only – often at the expense of its customers.

I’ve said this before, but it is important to say it again.

Acting ethically and acting in the interests of your customers is not at odds with acting in the interests of your shareholders because you are creating long-term value.

I believe both business and unions are vital parts of our economic and social fabric.

We both need to be at our best to confront the challenges Australia faces.

It is paramount that we address Australia’s stagnant productivity.

Improving productivity was, is, and always will be the key ingredient to delivering higher wages.

This requires a joint effort on competitiveness, investment and skills.

We should be natural allies on competitiveness because this is what creates more jobs.

By productivity I don’t mean working harder, I mean doing things better and working smarter so the benefits can be passed on to workers through higher pay and improved conditions.

We need to do everything we can together to ensure business is investing and staying here in Australia.

This brings me to how our workplaces operate.

Tonight, I call again for a meeting between employers and the union movement to sit down and save the enterprise bargaining system.

We must work together to address the EBA system which is slowly collapsing in front of us.

This is the system that was born out of the era of consensus and drove higher productivity and wage growth for decades.

The next big challenge is addressing the failing of our skills system.

Together, unions and business must find a way of getting existing workers to access to retraining to keep pace with technological change in our workplaces.

Our research shows there will not be massive job destruction but tasks within jobs will change and we need to adapt.

It is business that must lead the transition cooperatively with workers and the union movement, but we need a skills system and an industrial system which makes that easier.

We need a fair and just transition in our workplaces.

I’m concerned about people in small and medium sized businesses who may be vulnerable to gradual dislocation if they cannot retrain and reskill.

We are pleased the government is making progress on skills with the announcement of a skills commission, a careers institute, and recommendations on building a mix of qualifications from universities and vocational education.

Perhaps it may also be appropriate to revisit a Bill Kelty-era concept of a training compact, to better enable us to re-skill Australian workers.

There are, of course, other areas where we can – and should - join forces in the national interest.

Why shouldn’t unions and business work together to act on the environment and energy?

We cannot afford a situation where certain policy choices create limited job opportunities.

We cannot afford a situation where no policy choices create uncertainty, no investment and limited job opportunities.

Let’s break the impasse and drive the transition to a clean energy future that:

−          ensures affordable and reliable energy

−          that keeps us competitive

−          that creates new industries

−          new jobs

−          and drives technology change in existing sectors.

I also believe we have a collective responsibility to make sure that Australians retire well, they retire with money in their pockets, and they retire with dignity.


And, importantly that the retirement and superannuation system comes to terms with the fact that people will want to work much longer.

This is why the Business Council welcomed the government’s inquiry into superannuation.

And finally, there are social challenges where a combined effort would effect change for the Australians who need it the most.

Let’s work on inequality but the problem must be accurately described – it is a problem of deep rooted and entrenched disadvantage.

I am disappointed that the union movement has never supported my call for a Productivity Commission inquiry into entrenched disadvantage.

We should also, I believe, address the issue of low-paid workers, especially women.

We need to place more value on the caring professions, especially child care and aged care, and not stand in the way of reforms to improve the education system and human services.

But make no mistake, a return to a 1970s conflict-driven system of pattern bargaining is no solution to dealing with the conditions of low-paid workers.

Now is not the time for a debate about the usefulness of business or unions.

Now is the time for collective action from business and unions.

Our door is always open to work together:

  • To make our country stronger.
  • To make our country more competitive and productive
  • So, we can create more jobs
  • Better jobs with higher skilled people
  • So, we can give people the ability to work longer if they choose
  • And, we can pay people more

That is our collective responsibility.

That is our collective objective.

That’s what we should all focus.


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