Tuesday, 26 June 2012

Abbott's chance to redefine the oversight of unions

Last week there was a lot of talk about 'dirt' files, and then former Labor attorney-general Robert McClelland got one from his bottom drawer and started talking about Julia Gillard in the Parliament under privilege.

Throwing dirt at political opponents is standard practice and is fair enough, provided that there is a public interest in the material being used. It is all a matter of definition and context.

Needless to say, the public find the practice abhorrent, but knowing your opponent is part of the contest, and not just in political warfare.

Most of the media have turned a blind eye to the McClelland story, so I expect that the story will die down again as it did last year. Whether it will resurface will probably depend on the existence or otherwise of any new information.

Elections are normally about hip-pocket issues, general economic management, and specifics like health and education, not some vague allegation.

The better way to think of the issue is to look at the broader policy issues. In this case, the broader issues are the role and management of unions. These are real issues for both sides; for Labor, because the unions run that party; and for the Coalition, because a better system would improve productivity and boost living standards.

For Labor, corruption in the union movement is a risk. This is why Bill Shorten recently introduced legislation to deal with the HSU scandal, in which rank and file union members have been ripped off by the union hierarchy.

For the Coalition, the HSU saga is an opportunity to canvass the wider issues. So far, Tony Abbott has proposed higher penalties for failure to meet compliance standards and a shift of supervision of the legal requirements from Fair Work Australia to the Fair Work Ombudsman.

This shift is just moving the chairs on the Titanic. Former registrar Doug Williams has proposed that the function be switched to ASIC so that there is a real change in the culture of this function and so that unions are treated the same as small businesses.

Abbott's position so far is OK but he needs to go further. He needs a narrative to better describe what is happening across the labour market. For example, widespread corruption and exploitation in the building and construction sector needs to be cleaned up.

Abbott has a policy to bring back the ABCC but he needs to link this good idea with other reforms. The unions now represent 13 per cent of the private sector workforce, but they have been given huge leverage over parts of the economy by policies like superannuation which puts union leaders in the box seat of major investments.

The union hierarchy get superannuation board positions for which they have no expertise, and they have a system of default contributions which deny rank and file members' real choice.

Abbott has said he will support increases in the superannuation levy. Personally, I think this is a poor decision on his part, but he could show he means business by saying that his support for the increases in the levy will depend on the passage of legislation to impose real choice for union members on superannuation and genuine transparency on how union superannuation is managed. He could force union super funds to have expert directors who know about superannuation.

He should also announce that the Coalition will repeal the "conveniently belong" provisions of the Fair Work Act. The Coalition wanted to remove this clause back in 1996. It should be Coalition policy now because the existing provision denies workers the choice of the union that represents them.

The lack of competition is not in itself corrupt but it is contrary to the principles of competition that apply elsewhere in the economy and should apply to unions. Competition might make some union bosses realise that they can't afford to take their members for granted as happened in the HSU.

Governments can be slow to react to changing circumstances but because they have a lot of resources, when an issue needs to be addressed, they can take control.

People used to say about John Hewson that he wasn't political enough, but actually he had two particular strengths. The first was that he was an expert on how to run a modern economy and he was strong intellectually. His other quality was his ability to set the political agenda.

The best example of this was his campaign 'Fightback!' which set the political agenda for at least 10 years (when the GST was finally adopted). He had the political instinct to know when to go on the front foot. He knew that by being quick off the mark he could set the political agenda.

One of Hewson's favourite means of doing so (which should be remembered by Abbott who then worked for Hewson) was that he would often put out long treatises, dressed up as press releases, on Sundays. I think his record for one Sunday was seven press releases.

The relevance of this point is that today Minister Shorten is trying to control the union corruption agenda by introducing his legislation to make it look as if he is cleaning up the HSU mess. In response, Kathy Jackson said he is more like Dracula in charge of the blood bank.

For the Coalition, unless they can paint a much broader picture of what needs to be done to really clean up corruption, then they will be largely leaving the issue to Shorten.

The Coalition should not let him get away with it; it would be a big mistake and a lost opportunity not to challenge his approach.

The promise to increase penalties is fine but it is only one element of what is needed. The Coalition needs to demonstrate a strategic approach. It needs to get around and talk to all the interested parties, and work up a comprehensive policy and a timeline for implementation.

It should be putting that policy out soon, not three weeks before the next election. It needs its strategic response to be part of its answer to the Thomson affair and any other union scandal, old or new, that might come along in the meantime.

The HSU issue has highlighted a huge vulnerability for Labor; it is time the Coalition got on the front foot and made the most of the policy opportunities now presented.

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