Australian Financial Review, Labor all talk, no action

Release Date: 
29 April 2014

Opposition Leader Bill Shorten last week outlined his vision for a modernised Labor Party in which trade unions would have diminished influence. Missing, however, was any mention of policy.

There was discussion about tweaking preselection rules and eligibility for membership. But the real tests are not the internal rules, but the daily positions the party takes. Labour could demonstrate its independence from militant trade unions today by announcing policy changes in three areas concerning union power that are currently before the Parliament.

First, Labor could change its position on the reinstalment of the Australian Building and Construction Commission. This was the tough cop on the beat in the construction industry that saw industrial disputes drop by 90 per cent. That is, before the Rudd government abolished it on the encouragement of the CFMEU. We are trying to reintroduce it, but Labor is blocking it in the Senate.

A PwC report found last year that the construction sector is an underperformer on productivity. A productivity improvement of 1 per cent would add $1.25 billion to our economy and benefit new home buyers most – that’s the kind of objective both sides of politics should do their utmost to support.

Second, Labor could accept the Registered Organisations Bill. The bill creates rules for accountability and disclosures of unions, and penalties for improper use of funds by officials. That is, just the normal rules for organisations that handle other people’s money, with the penalties on officials being similar to those faced by company directors.

Labor’s improbable reason for not supporting the bill is that it believes it would deter honest union members from taking on roles as officials. The problem with union slush funds is real, and it beggars belief that Labor continues to protect unaccountable bosses with such an outlandish argument.

Third, Labor should express support for the Royal Commission into Union Corruption. Mr Shorten alleges that this is a political exercise driven by a Prime Minister focused on discrediting the whole labour movement. Since Mr Shorten can’t deny that union corruption exists, he makes out that it is a limited problem that can be solved by the police.

Mr Shorten avoids the core of the matter: that there are indications that union corruption is systemic, which means the problem would return even if a few clear cases were referred to the police. A royal commission is needed because it can compel people to give evidence, which the police can’t. The royal commission will cut both ways, and improper behaviour by employers will be dealt with.

The objective is not to support either side in a supposed zero-sum game: it’s investment, growth and jobs that matter.

Mr Shorten may have indicated nice sentiment about Labor reform, but there is no appetite for challenging the union movement on policy. Half of all Labor MPs are ex-union officials. Unions still control 50 per cent of Labor’s peak national conference. They are Labor’s dominant source of funding.