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John Passant

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June 2011



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My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. (0)

My interview Razor Sharp 11 February 2014
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Me on 4 February 2014 on Razor Sharp with Sharon Firebrace. (0)

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O’Farrell attacks unions and wages: bring Tahrir Square to Sydney

The newly elected O’Farrell conservative Coalition government in New South Wales is removing unions from the public sector pay negotiating framework and imposing public sector wage cuts by limiting funding for pay increases to 2.5 percent.

Governments across Australia have been cutting public sector wages. Here in the ACT the local Labor Government imposed a 2.5 percent pay limit on its own employees. The Community and Public Sector Union leadership huffed and puffed for a little while before surrendering completely.

Federally the Gillard Labor Government has imposed an effective 3 percent per annum pay limit on its employees in negotiations over pay rises for the next 3 years.

And you guessed it, the CPSU leadership is huffing and puffing right now but you can be confident they will do nothing to fight their ‘own’ Government.  Commonwealth public servants are stuffed, unless they organise in their workplaces and across Departments to fight Gillard Labor for real pay increases.

You see, 2.5 percent and 3 percent per annum are real wage cuts. According to the Reserve Bank of Australia inflation in Australia for the year ended 31 March 2011 was 3.3 percent.  Removing ‘volatile’ items like fruit and veggies reduces that to 2.6 percent and even on that ‘unlived’ figure – most of us do in fact eat fruit and veggies – 2.5 percent wage rises are wage cuts.

But that is not the end of the story. The RBA noted in a meeting of 3 May this year that ‘if economic conditions continued to evolve as expected, higher interest rates were likely to be required at some point if inflation was to remain consistent with the medium-term target.’  The target is 2 to 3 percent.

In other words the RBA fears that inflation may increase above that 3 percent figure in the longer term because, basically, of the resources boom.

Historically wage rises for public sector workers are lower than for private sector workers. That at least has been the experience over the last few years as some private sector wages are boosted by the resources boom. However the spread is very uneven.

What Labor federally and in the ACT have done or are attempting to do is to cut real wages both to reduce government spending and make workers pay through cuts and further inefficiencies in public services like hospitals, schools and public transport.

But this is also about Labor trying to send a  message to private sector employers – don’t increase wages. Tell that to a company desparate for skilled workers.

There’s the rub. The mining boom has created a demand for specific skills, so much that the average mine worker, according to the Australian Bureau of Statistics, now earns $117,500 a year, well above the national average wage of $68000. 

The failure of government neoliberalism to adequately fund education, training and skilling for the current and foreseeable future workforce, the cuts to immigration and the xenophobia that both major parties encourage for base political reasons, means that some workers are in an extremely good bargaining position.

For example, according to the same ABS report, mining employers make over $600000 per mining employee. They are for that reason prepared to pay over the odds to secure skilled workers and exploit them. The mining industry has the highest profit rate of any in Australia – over 33 percent.

Barry O’Farrell and his conservative Coalition were elected in New South Wales in March this year after 16 years of Labor rule. His first piece of legislation removes the power of the New South Wales Industrial Commission to set wages and conditions and gives it to the Government. This takes Labor’s attacks on public sector employees like nurses and teachers and firefighters much further than Labor was or is prepared to countenance.

Whereas Labor’s approach has been to use the trade union leadership to control the workforce and oversee an historic shift in gross national income to capital at the expense of labour, O’Farrell is about removing unions altogether from the wage fixing process. 

O’Farrell has gone much further by removing arbitration, having the government set conditions as well as wages and removing any way for union bureaucrats to meaningfully act as negotiators between labour and capital within the system.

What happens in the public sector then has the potential to flow on to the private sector.

This is a fundamental attack on workers’ rights. It is positioning the ruling class for the future when it knows it will have to viciously attack all workers’ living standards to restore profit rates.

It is positioning those employers now who are on the slow track of the economy – the non-mining sector essentially – to do the same by attacking jobs, wages and conditions. 

O’Farrell will limit funding for public sector pay increases to 2.5 percent. Any pay increase above that must be paid for out of ‘savings’.  ‘Savings’ mean job losses – less nurses, less teachers, less firefighters, less transport workers.

The real question is will the union bureaucracy and workers fight for a role for unions in wage negotiations and for more pay without ‘savings’ . Or will they accept the abolition of any role for unions and real wage cuts and job losses?

The union leadership looks as if it will argue for some sort of advertising and information campaign, some demonstrations and a useless ‘vote Labor’ approach.  That is a 4 or more likely 8 or 12 year strategy. Waiting doesn’t feed the kids or pay the other bills.

All around the world workers and others have taken direct action to fight dictatorships, austerity programs and defend union rights. From Egypt to Wisconsin to Spain workers and young people have shown their strength and fought against a global ruling class and its local equivalents intent on making workers pay for the crises of capitalism.

Is there a way to beat O’Farrell’s attacks on union rights and living standards?

Yes. Bring Tahrir Square to Sydney, and in the words of Egyptian blogger and socialist Hossam el-Hamalawy then take ‘Tahrir to the factories, the universities, the workplaces.’

Some unions and members have mentioned strikes. There are 350,000 NSW public sector workers whose pay, conditions and jobs Barry O’Farrell is attacking.  Teachers, nurses and firefighters could shut down the schools, hospitals and fire stations across New South Wales tomorrow.  That is the way to beat O’Farrell.



Comment from Arthur
Time June 5, 2011 at 3:19 pm

With some luck the little blackboard monitors the political masters employ will be taking note of what you’ve written.
Will the masters give ‘em a rise in pay for providing the record of rumblings of dissent without fear or favour?
Thank you for advising me of the increasing disparity in wages in the vaunted two speed economy.
Vaunted – Yes. Some seem proud of it and intend to perpetuate it.
Mainly those apparently partisan to the mining lobby who want a political result from the two speed economy; they want a divided nation.
Meanwhile the eternal war between states and commonwealth is once again being escalated.
Like all wars there is public justification and secret agenda.
What was stamped into that belt buckle – “Gott Mit Uns” – God with us.
Wouldn’t work these days. Nor would “Carbon Begone”.

But step back, take a deep breath, then a good hard look at what is happening in Oz.
Firstly there is very much a mining ‘blitzkrieg’ happening. That war can only be sustained until the ‘materiel’ of that war gives out.
And the foot-soldiers of that war are all mercenaries paid at a rate that the ‘real’ Australian community could not contemplate.

Whatever the societal and sociological implications and outcomes of that are will soon fill volumes – but no room to start here.
But like all blitzkriegs this one diverts and expends both human and materiel resources at an unsustainably risky pace.

So once the mines give out and can no longer finance the cold wars between the states and between the states and commonwealth – then what will be left?
Certainly not enough infrastructure to meet the needs of the future population, nor commerce/industry to employ ‘stateloads’ of displaced mine workers.

Won’t that be almost as disastrous for us as being defeated in conflict?
And why should all the rest Australian workers be on rations and half pay merely to subsidise a mob of meretricious mercenaries out in the mulga?

So John has a point. It is past time to kick up a stink.
Maybe bringing Tahrir Square to Sydney would strike a chord in that more culturally diverse part of the world – but elsewhere we could call them peace marches demonstrating about the collateral damage and innocent victims of the cold wars between the states and commonwealth.
Time to get into it now before the mine veterans all come back to real Australia demanding parades and the freedom of the cities – oh and counseling and special privileges after the trauma of losing their jobs and all that lolly.

Comment from Chris M
Time June 5, 2011 at 3:36 pm

Hi John. some good points there about the larger context in which this is happening. One factual error though – BOF’s Coalition of creeps was elected in only late March THIS year. So they have been very quick to attack the public sector.

Of course their first move was to try and make out there was a big budget blackhole left by Labor. This didn’t entirely work.
Secondly they argued that the IRC had not kept wage rises within the ALP’s policy of 2.5%. Once again the evidence was slim. The third argument was to say all we are doing is to make what was the ALP’s policy work. But to do this all recourse to arbitration for the states 400,000 public sector employees has been removed. The Police have apparently been left out of this arrangement in a classic attempt at divide and rule. The Police Association had been one of the angriest public sector unions. However the police have not been left out of the legislation, but just the regulations. I suspect this is also the case for local government workers. This can be easily changed. As you say what workers in NSW are facing are real wage cuts, along with possible changes to work hours, flex time, sick leave and no doubt many other things. More work, with less resources and less remuneration. I can’t see how the unions can limit this fight to a community based and electoral strategy ala ‘Your Rights at Work’. If they do they are finished (or so close to it that it doesn’t matter). I’m not sure if this has yet sunk in. Even if the union leadership does not want to fight, does not want to call industrial action and so on, they will likely find they have little choice. Therein lies BOF folly. His electoral mandate is large, but it is also very soft – a result of his small target, soft liberal managerialist approach and the fact that it had so much to do with Labor being beyond the pale.

Comment from John
Time June 5, 2011 at 3:55 pm

Thanks Chris. I have changed it. Getting my conservative state governments – NSW and Victoria – mixed up. How could I forget NSW Labor’s slaughter at the polls in March?

Comment from Dr_Tad
Time June 5, 2011 at 6:54 pm

The politics of it are intense, but there are real cracks in the O’Farrell plan despite the union bureaucrats being slow off the mark:

Comment from John
Time June 5, 2011 at 8:52 pm

That is a great article Dr_Tad. Thanks for the link. I urge my readers to link to it.

Comment from Dr_Tad
Time June 5, 2011 at 9:09 pm

Cheers, John. As proof-read & fact-checked by Barry O’Farrell, so you know he endorses the final result.

Comment from Tony
Time June 6, 2011 at 7:59 pm

Today, it was rather surprising to hear the Portuguese have kicked out their leftist government who were not prepared to back EU/IMF austerity measures and installed a centre right government willing to sign right on up.

So, like Greece and Ireland, the Portuguese are in for at least one lost decade, with working people punished…

Is Iceland the only European nation with the official leadership AND citizens prepared to face off multinational manipulation? Why is this so?

Recently, I saw a report suggesting conditions in Iceland are improving rapidly and yet no other nation appears prepared to follow their path.

Comment from Tony
Time June 6, 2011 at 10:00 pm

Could this happen in NSW? No surprise that she was fired…

Comment from Dave
Time June 7, 2011 at 3:57 pm

‘O’Farrell has gone much further by removing arbitration, having the government set conditions as well as wages and removing any way for union bureaucrats to meaningfully act as negotiators between labour and capital within the system.’

Surely the PS union bosses will fight harder than advertisements and a ‘vote Labor’ approach if it is in fact their very own positions that are under threat?!

If not…then perhaps the Third Period analysis may have finally come into its own!

Comment from Troy
Time June 7, 2011 at 7:40 pm

Talk about a rock and a hard place. O’farrell or labor, O’farrell or labor. We’re doomed either way unless some agressive and collective action is taken. Never been more abhorent of governments in general in this country.

Pingback from En Passant » O’Farrell – the worst attacks on workers in a generation
Time June 9, 2011 at 9:28 pm

[…] Readers might also like to look at O’Farrell attacks unions and wages: bring Tahrir Square to Sydney. […]

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