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Labor: putting unions first

By John Slater - posted Friday, 1 July 2016


Who was Labor putting first when it created the Road Safety Remuneration Tribunal whose 'safe rates' orders threatened to drive 40,000 small business truck drivers into bankruptcy? Created by Julia Gillard at the behest of the Transport Workers Union, the tribunal's final price order would have forced owner drivers to charge sometimes more than three times the trucking heavy weights for the exactly the same trip.

A Shorten Government will restore the Road Safety Remuneration Tribunal and lay waste to tens of thousands of jobs and small businesses.

And then there's the construction sector, where anti-competitive union monopolies and lawlessness jack up building costs by billions every year. The CFMEU's negotiation tactics often involve flouting the law to secure extravagant wages and conditions while blocking out competition through handshake deals and intimidation. As a result, costs on union-run commercial building sites are between 20 per cent to 35 per cent higher than residential housing. Unskilled labourers on union wage agreements earn six figure salaries that are almost double the award rate.

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This explains a lot about why Australia pays 40% more for vital public infrastructure than the United States.

It's estimated that restoring the Australian Building and Construction Commission would alone would boost productivity by at least 9 per cent and improve consumer welfare by $7.5 billion a year. Labor has fought the bill at every stage.

The CFMEU has donated $7 million to Labor branches in the last ten years and like the shoppies, exerts considerable influence over both the Labor caucus and party organisation. Is it any surprise that Labor would put the CFMEU's construction cartel before the public's interest in cost-effective infrastructure?

As the Heydon Royal Commission laid bare, these examples are more than a few throwaways. They speak to a diseased culture defined by self-interest, rent seeking and an ingrained hostility to market competition.

It should therefore come as no surprise that the union movement has collectively railed against virtually every attempt in recent history to liberalise Australia's economy.

The Keating workplace reforms, John Howard's clean up of Australia's fractious waterfront and every attempted privatisation of Government assets in the several last decades were fought by the union movement. Unions have been the loudest voices backing billion dollar subsidies for uncompetitive industries while running fear campaigns about every free trade agreement since the end of the Keating Government.

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The Labor-Union nexus is as close as ever: half the Federal Labor caucus has previously held a paid position in a union and 19 of the 26 of the Labor National Executive are current or former union officials. A guaranteed 50 per cent delegate at Labor's national conference ensure the unions have a veto over ever policy motion.

Over the coming decades, Government's will be forced to reconcile enormous spending growth, the pressures of an aging population and our chronic infrastructure deficit with the Commonwealth's ailing budget position. Any Government equal to these challenges will have to make hardheaded decisions that put the public good before the outstretched hands of vested interests.

On this score, the union movement has been a handbrake on reform at nearly every possible turn. Until that changes, do we really want Labor and Bill Shorten at the wheel?

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About the Author

John Slater is a student and an intern at the Cato Institute.

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All articles by John Slater

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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