Make Australia Fair Again: the Case for Employee Representation on Company Boards
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Make Australia Fair Again: the Case for Employee Representation on Company Boards The Australian way of life is premised on a basic set of assumptions: decent pay, working conditions and job security, a fair say for working women and men in our workplaces and parliaments, and a fair say in the nation’s civic life. In 2017, the Australian way is fraying. Globalisation and technological disruption, declining manufacturing and the collapse of mass unionism paired with decentralised wage determination, have combined to challenge its core ethos. Full-time jobs are declining in favour of part-time, casualised and precarious contract work. Wage theft and workplace exploitation is rife. Company profits grow apace yet annual wages growth is at record low rates, underpinning levels of inequality not seen since the 1940s. There is abundant evidence that the fruits of 26 years of continuous, record national economic growth have not been shared equally. The erosion of the Australian way is not just bad for working people but bad for the national economy and bad for our democracy, and at odds with the national interest. To address the big challenges facing our country we need to fashion a new politics of the common good. In this second John Curtin Research Centre policy essay Nick Dyrenfurth makes the case for employee representation on company boards. This vital reform to our corporate governance, he argues, is necessary to rebuild a pro-worker, pro-business economy: fostering workplace cooperation, boosting productivity, and tackling rising inequality and stagnating real wages. No less than the future of the Australian way is at stake. About the author Dr Nick Dyrenfurth is the Executive Director of the John Curtin Research Centre. He is an academic, former Labor advisor and the author or editor of seven books, including A Little History of the Australian Labor Party (2011, with Frank Bongiorno), Mateship: A Very Australian History (2015), ‘A powerful influence on Australian affairs’: A new history of the AWU (2017), Heroes and Villains: the Rise and Fall of the Early Australian Labor Party (2011), and All That’s Left: What Labor Should Stand For (2010, co-edited with Tim Soutphommasane). Nick is a leading commentator, having written for The Age, The Saturday Paper, The Australian, Sydney Morning Herald, Australian Financial Review, Daily Telegraph, and The Monthly, and regularly appears on television and radio stations across Australia. Make Australia Fair Again: the Case for Employee Representation on Company Boards by Nick Dyrenfurth, John Curtin Research Centre Essay Series: No. 2, 2017. Copyright © 2017 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without prior permission in writing of the John Curtin Research Centre or as expressly permitted by law, by license, or under terms agreed with the John Curtin Research Centre. ISBN: 978-0-6481073-1-6 Editor: Nick Dyrenfurth | [email protected] www.curtinrc.org www.facebook.com/curtinrc/ twitter.com/curtin_rc Contents Introduction ‘Jack is not only as good as his master’ Part One Labourism and the Australian Way Part Two Unmaking the Australian Way? Part Three The Light on the Hill, via Germany? Part Four How employee representation can work in Australia Conclusion Towards a 21st Century Settlement 3 Introduction ‘Jack is not only as good as his master’ In his iconic account of Australia’s egalitarian national best start we can give to our children is the certainty character, the historian Russel Ward summarised the core of better conditions; the sweetest memory of us to ethos of the ‘The Australian Legend’ from the viewpoint of them the fact that we did so.4 the typical citizen: “He believes that Jack is not only as good as his master but ... probably a good deal better.”1 Rooted Two years later Spence’s party swept to power, forming in the experiences of convicts transported from Britain the world’s first majority national Labor government to the then penal colony, the struggles of itinerant rural anywhere in the world. Unions and the Labor Party workers, democrats and later unionised labour, colonial institutionalised the voice of working people in the Australians came to believe that theirs was the land of the nation’s life. Indeed, the Australian way was really the fair go. Their birthright was a fair day’s pay for a fair day’s Labor way. For example, Australia invented the concept of work and equal opportunity for all. Excessive inequalities the ‘living wage’ via the 1907 Harvester judgment of the of wealth, status and power were to have no place in a New Commonwealth Arbitration Court, a delayed response World country such as Australia. to the industrial turmoil of the previous decade, and modelled on South Australian legislation of 1894. A “fair Out of the traumatic experience of the great strikes and and reasonable” wage was premised on the “normal needs depression of the 1890s was fashioned the Australian way of the average employee regarded as a human being living of life. Some commentators term it the post-Federation in a civilized community” rather than just the dictates of ‘Australian Settlement’, a means of explaining bipartisan company profits.5 Australia earned a reputation as a ‘social support for commonwealth policies such as industrial laboratory’ during this era; innovative government policies arbitration, industry protection, so-called state paternalism were said to be creating one of the most egalitarian societies (government intervention as per the building of a welfare on earth, in stark contrast to the endemic poverty, violence state), imperial benevolence (reliance upon Britain and class privation of Old World Europe. for trade and defence) and the racially-discriminatory migration laws known as White Australia.2 This settlement Underlying these developments was a belief that Jack dominated public policymaking during the twentieth was indeed as ‘good as his master’ in determining the century. It was not merely technocratic, but spoke to the nation’s future. Neither God, nor enlightened politicians, simple human aspiration to lead a good life: decent pay, has ever gifted higher wages including penalty rates work conditions and job security, a fair say for working for working on weekends and public holidays, sick pay, women and men in our workplaces and parliaments, and annual and long-service leave, health and safety laws, in the civic life of the nation. As the unionist and Labor workers’ compensation, unfair dismissal protection and MP William Spence proclaimed in 1890: “the working man superannuation, or the small matter of weekends. These must take his proper place in the nation.”3 Two decades achievements were demanded, negotiated and won. later Spence’s 1908 book Lessons of History made a similar Then, as now, Australia was imperfectly egalitarian. In case. Only through a Laborite politics of the common good 1902 women won the right to vote; yet they were viewed could Australia remain the paradise of working people: as dependants rather than providers. Aborigines were excluded from the benefits of citizenship provided by the There is enough latent goodness and sense of settlement, presumed to be doomed to extinction. The justice in man to make life better if it is given a ‘nomad tribes’ of Ward’s account – the largely unskilled, chance by a better environment. Our hope is in the virtually homeless men of the bush and urban unskilled masses, in government by self, and by everyone self- casuals who trawled the streets for work – were the face consciously taking an active part in the ruling of the of Australian poverty, today’s precariat. Despite further collective life … We have the power if we have the depression and recessions, two world wars, a major will. Let each remember that man has failed before renovation of the Australian way after world war two, and because each carelessly left to some other the work recent dabbling in free-market economics, our way – call of the Common Good. We must reverse that. Each it the ‘fair go’ or a compact between government and the must take his or her share. With unity above all as people and between generations – was largely maintained. our watchword, the Common Good our aim, we will soon find common ground of agreement as to In 2017 it is difficult to avoid the sense that the Australian the way in which the goal should be reached. The way is fraying. Globalisation, technological disruption, 4 declining manufacturing, and the collapse of mass and business elements continue to ignore the national unionism paired with decentralised wage determination interest, we must consider innovative policies. have combined to challenge its core ethos. Full-time jobs are declining in favour of part-time, casual and fixed- Labor was the driving force behind the Australian term, precarious work. Company profits remains healthy settlement erected in the 1900s and 1910s. The golden yet annual wages growth is at record low rates and lags economic age running from the late 1940s to the 1970s behind productivity growth. Union coverage has collapsed, was the result of the post-war reconstruction work of the contributing to levels of inequality not seen since the 1940s. governments of John Curtin and Ben Chifley. Bob Hawke Living standards have grown sluggishly over the past four and Paul Keating’s modernisation agenda of the 1980s and years. There is abundant evidence that the fruits of twenty 90s built a more open, dynamic and productive economy six years of continuous growth are “To address the big challenges in tandem with a union movement not being shared equally, which is which worked constructively and bad for working people, bad for the facing our country we need collaboratively with business.