Heat on Labor to control militant union officials

AS the Kevin07 campaign swept Labor into power almost two years ago, Australia's economy was riding high on a commodities and property boom underpinned by cheap debt.

The people were feeling comfortable and companies were rolling in profits.

Employees had gradually given up many entitlements during the previous decade as rising wages from productivity gains had more than made up for what they lost under various reforms. Employees in many growth sectors felt empowered simply by the demand for skills. People job-hopped, loyalty to employers was discarded.

Yet despite these relatively easy conditions, the reforms introduced by John Howard had been seen as stepping too far in removing the safety net for many in the system, especially the low paid.

In hindsight, many on the conservative side of politics agreed. The Howard government had tried to do too much too quickly, without taking the people along with it.

Labor had sensed this. The union movement, already facing extinction as its membership slipped below 20 per cent of the workforce, used up the last of its financial reserves to wage a huge campaign attacking the weakest points in the Howard industrial relations system.

The result of this can now be seen.

The price of failing to introduce lasting reforms by the Liberal government has come back to haunt many in business.

Labor is heavily indebted to the union movement. The new laws reveal how much. The payback is substantial, not just handing unions power they lost a few years ago, but in some cases more power than they've had for decades.

Unions get a seat at the bargaining table more easily than ever. They get to represent by default employees who are not even members. In the new awards, superannuation funds linked to unions, which give power and jobs to unions and their officials, even become the default option requiring employers to use them.

Union officials, such as former UnionsWA secretary Dave Robinson, get jobs with the new powerful Fair Work Australia, which will govern the way the new laws are implemented.

Whether or not this will help the union movement recover remains to be seen. Through careful media manipulation, Australians thought they saw the ugly side of employers. They may soon be reminded that unions can be a whole lot worse.

Many in business believe the new laws take us back 20 years.

But Australia has moved on. We have learned as employees to better fend for ourselves and we may soon resent the lost flexibility brought on by the heavy hand of union officials trying to force themselves into a system that did perfectly well without them in most cases.

Australians are far more global. They may well be embarrassed to see strikes that cripple our internationally competitive mining sector over what flavour of ice cream is served at the mess hall.

Australians are in the middle of a recession, or as technically close as you can get. We've done better than most, but the electorate knows how tenuous this can be.

Already these new IR laws put that in jeopardy. Complicated rules, huge amounts of paperwork and inflexibility will make employing people hard again - just at the worst time. If unions get militant, that could end the economy's fragile growth prospects.

The same can be said for unfair dismissal laws that have dismayed small business, the acknowledged engine of employment growth.

That is why Deputy Prime Minister Julia Gillard, the architect of these laws, has been at pains to show that they are fair. Ms Gillard did also move to successfully water down significant concerns in the hospitality sector. Much of this is window dressing, though, if she can't keep firm control of the forces she has unleashed.

We can only hope that, somehow, sensible people on the labour side of the issue will understand that with their new power comes responsibility. Just as Howard went too far, so now could the union movement, and that could hurt us all.