Will Australia be run by three unions and a handful of big businesses?

August 10, 2016

Will Australia be run by three unions and a handful of big businesses? To ensure we have a democratic business community we need a federal ICAC now.

 

The few
Do we want a country run by the SDA, drugstore CFMEU, TWU, Wesfarmers, Woolworths, Rio Tinto, Multiplex, John Holland Group, CIMIC, Linfox, BHP and Toll Holdings plus a couple more?

 

The Situation
So our election is in limbo, more ‘odd’ independents have emerged from the woodwork, the fabulous Nick Xenophon has more power, the Greens will have a big say, the far right economic Laissez- Faire economists of the liberal party stand ready to strike, three powerful unions have control of Labor. How did this happen? Could this be a lack of confidence and trust from voters? Is this fear of the unknown that has not been assuaged by our politicians?

 

This isn’t the normal lack of trust that exists wherever there are politics but a lack of belief that we are being told the complete truth. Certainly in the world of small business there is a broad concern that a few big businesses and a very few big unions will run the country. I’m guessing people want transparency in decision making.

 

We do need a federal version of ICAC.

The examples of a lack of transparency will nearly always be based around the pursuit of money and/or power. Ideologues and greedy people are the enemy of trust and confidence as they either ‘know better’ or ‘want money’. So where are the problems?

 

Building and Construction
Money and power battles, and the corruption that goes with it, will often be found in the finance and construction sectors.  This is a world wide problem and must be dealt with. The finance sector has many, many regulators and regulations and may yet face a royal commission.  Construction is different, at the moment we have one union and three maybe four large companies that cooperate among themselves to win tenders and make sure union members are favoured with jobs and high wages.

 

This is why we need a building and construction commission – corruption will rule otherwise.

 

A very good example of this partnership between big construction and corruption is the light rail project in Canberra.  The ACT government has decided to build a light rail system between Canberra CBD and the suburbs in the north. This is quite controversial as most studies, except the ones from government, show that it will be a waste of money and the price will probably blow out beyond the projected $700m to over $1 billion. Leading up to the release of tender documents for the rail we find that the ACT (Labor) government has a secret agreement (MOU) with Unions ACT giving them access to all tender documents and the opportunity to comment positively or negatively on the tenderers.  The government is adamant this is not power of veto – if not why is there an MOU and why was it a secret?

 

The winning foreign owned company Holland Constructions has a history of working in cahoots with the construction union. So it appears that the union has basically chosen the winning tenderer who unsurprisingly will only be using union labour and indeed will not be using local contractors as the union has vetoed their use. The construction company has also agreed to pay above award wages. Is this corrupt?  The union has a secret agreement with the Labor government, the union funds the Labor Party, a company friendly with the union wins the tender.  Most people don’t want the light rail. Is that corruption?

 

Competition Policy
Last year the then Abbot government was about to announce some changes to competition policy, they were going to bring into being what is known as the ‘effects test’ that provides the competition watchdog, the ACCC, with the powers they need to ensure fair and open competition. After a great fanfare leading up to an announcement, all of a sudden they announced instead that they wouldn’t have an effects test after all.  Something obviously stunk and we found, without even a lot of investigation, that the Business Council of Australia and Wesfarmers had sent secret misleading documents to cabinet members and had threatened the government with dire repercussions if they introduced an effects test (the effects test would make it more difficult for Wesfarmers and Woolworths to hide the truth when confronting questions from the ACCC). Is this corruption? Is this abuse of power?  Eventually Scott Morrison and Kelly O’Dwyer introduced an effects test but only after staring down the bullies from Wesfarmers.

 

Sadly the ALP still lets the retail union (the SDA who are in bed with Wesfarmers and Woolworths) write their competition policy.  This is a sad indictment on Chris Bowen and Andrew Leigh who are much smarter than that decision indicates.

 

Workplace Relations
The workplace relations system is under attack from one big union and its big business partners. The SDA union (The shoppies) have managed to negotiate enterprise agreements that subsidise the wages of their members who work during the week to the detriment of weekend workers. Small business has to pay award rates on Sundays and other times while the SDA has ensured weekend workers in big business get lower than award wages. Corruption? Underhand manipulation of competition policy and workplace relations?

 

The Fair Work Ombudsman has also recently expressed dismay at the behaviour of a few large businesses.  Seven-eleven, Coles, Woolworths and others have paid below award rates or manipulated contracts so that employees of contractors are paid below award rates. Corruption or misuse of power?

 

Road Transport

There has been a push from the transport workers union (TWU) and two big businesses, Toll Holdings and Linfox, to force owner drivers off the roads of Australia.  This is through a mechanism called the Road Transport Safety Tribunal (RSRT) that has now thankfully been closed down but the union and the ALP want it reinstated. They claim it is about safety but it is only about increasing union membership through union friendly big business. No safety will be achieved by forcing owner drivers off the road.

 

One of the concerning issues is the way the RSRT commissioners treated owner drivers during their tribunal hearings.  They showed no respect for the people involved, talked at them like they were criminals and yet treated union and big business representatives with kid gloves and as though were victims.  Manipulation by the few at the expense of the many.

 

Superannuation
Superannuation is an area where the unions and big business associations (many mentioned above) run nearly all the industry superannuation funds in Australia. Between them they are Directors of financial institutions that have over $1 trillion of workers’ retirement funds.  Unions and big business associations make money from being involved in these funds. The system is being rorted.

 

The best example of how the industry funds are compromised (and the investments of their members are therefore also compromised) is the big retail industry fund REST.  REST has directors from the shoppies union (the SDA) and from Coles, Woolworths, Myer and the Retail Council.  It is a closed shop of representatives from the union and the big businesses they partner. The enterprise agreements negotiated by the SDA with Woolworths and Coles makes it compulsory for employees to put their superannuation payments into REST. 

Basically the organisations represented on the board of REST negotiated among themselves to make sure that REST benefited from the enterprise agreements.  Is that corruption? Why do the employees not have choice in where their future savings are invested?

 

New South Wales et al
You only have to look at the newspapers and on line news sites of the last twenty years to know that NSW is a state that has some major problems with corruption in construction and planning. We have seen from the recent Royal Commission that some unions and big businesses believe they are a law unto themselves.  This often extends into other states and jurisdictions and now into the ACT. Corruption? In NSW’s case the corruption has been proven. Is anything going to be done?

 

Taxation
It is now well documented that some (not all) big businesses manage to dodge their tax obligations.  While all political parties have said they will confront this issue we need to make sure they do, we need transparency, we need to know that there is no excuse for dodging obligations.

 

State of the Parties
So how are the major parties, and indeed the minor parties, holding up? Are they resisting, ignoring or supporting the corrupt and powerful?

 

Labor has rolled over and is at the beck and call of a few unions – the SDA, the CFMEU and the TWU.  We know that Labor let the SDA write their competition policy and we know that the TWU writes their transport safety policy. The CFMEU writes a lot of their policies on workplace relations and construction. That is wrong, policy should be what is best for Australia not what is best for one or two unions particularly those in partnership with just a few big businesses.

 

The Liberals? Well normally they would tug their forelocks to Wesfarmers and the BCA as well as to mining companies, banks and big landlords.  That has changed.  The fact that the Libs under Turnbull stood up for an effects test shows they could indeed resist threats (and probably bribes of one form or another) and they could see that the information provided by big business and their associations will be either wrong or manipulated. We also saw the introduction of changes to contract law by the Abbott/ Turnbull government that provided much better fairness for smaller businesses. This was in direct opposition to the needs of the Franchise Council and the Shopping Centre Council, powerful vested interests. The changes went through anyway.

 

The Nationals have been a key part of this right wing resistance to far right wing vested interests. They pushed hard for the effects test and contract changes. They fight hard for small business people and for community.

 

The Greens have been a surprise.  They support an effects test, they also not just supported changes in contract law but they pushed the threshold for changes to come into force from $100k to $300k, a significant change that made a profound effect on mental health of small business people and on retail diversity. They also support better health focus on small business people, a focus that is mostly ignored. They have many excellent policies for small business. It appears they have stared down unions and big business lobbyists (except in the area of penalty rates where they have been scammed by the SDA).

 

So far we have the Liberals turning a corner and focusing on all not just a wealthy few.  Will that continue? Can they resist money, threats and influence?

 

The other group that the Liberals need to bring under control are the economic and social ideologues, the

right wing extremists who ignore reality and consult text books and religious tomes for their opinions.  Laissez-faire economic rationalists have pushed our productivity downwards and the religious right create fear and antipathy where none exists or where we have too much fear already.  This fear will create a lack of confidence in the economy (see Brexit) and must be confronted.

 

We still need to confront problems in workplace relations, particularly those around penalty rates where it is the unions that have pushed rates below awards for their members but demand that small business pay higher rates. We do need lower rates but we must also have equal rates across businesses in each industry sector.

 

The way to foster confidence and trust is to be transparent.  Parties and their leaders need to be believed and to do that they have to send a message to the biggest unions and businesses – “it’s not about you”. While Labor condemn big business and the Coalition condemn unions the reality is they both should be condemning the few big businesses AND big unions that scam Australia. The smaller unions are fine. Small business innovators are our future so let’s make room for them to innovate.

 

Innovation

An Australian Innovation System report from 2014 shows that Australian SMEs were ranked 5th most innovative in the world by the OECD while our large and big businesses were ranked 21st. We however perform poorly on New to Market innovation and that is because the focus on a few big unions and the domination by very few big businesses holds back new products.

 

Let’s support the many not the powerful and wealthy few. Let’s create transparency with a Federal ICAC.  The only people that should fear this are the dishonest, the vested, the greedy and the ethically challenged.  Thank you.

 

 

 

 

 

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