CHAPTER 8
The prime victims of Australia's rigid centralised wage system are those groups and individuals who are least able to help themselves -- the poorly educated, youth, newly-arrived migrants, and Aborigines. Minimum wages handed down by Australia's industrial tribunals (and sanctified by members of the Industrial Relations Club) have the unintended consequence of forcing the lower end of the labour market onto the dole queues. The plight of Aborigines in northern Australia provides a traumatic example of the devastating social consequences that result from determining wage levels irrespective of the capacity and willingness of individual industries and enterprises to pay.
Successive Australian governments have bemoaned the truly appalling level of Aboriginal unemployment -- now running at about 60 per cent. The Minister for Employment and Industrial Relations, Mr Ralph Willis, has described the Aboriginal unemployment rate as "disastrous". And the Secretary of the Department of Aboriginal Affairs, Mr Charles Perkins, has said that "black unemployment is tragic; to be black, unskilled and unemployed is the lot of most of our people". According to Mr Perkins "in some specific locations Aboriginal unemployment is as high as 100 per cent". The response of ministers and bureaucrats is invariably to call for more and more reports and studies, to propose further government-funded employment studies, to propose further government-funded employment schemes and to urge the private sector to employ Aborigines. The level of Aboriginal wages as a factor in Aboriginal unemployment is seldom even mentioned. It is simply assumed that the award rates handed down by the Holy Industrial Grail are appropriate. But there is clear evidence that the decisions of the Conciliation and Arbitration Commission have been directly responsible for significantly increasing Aboriginal unemployment -- especially in the Northern Territory and the north-west of Western Australia.
On 21 January 1965 the North Australia Workers' Union (NAWU) applied to the Conciliation and Arbitration Commission to vary the Cattle Station Industry (Northern Territory) Award with respect to Aboriginal employees. At this time the award specifically excluded Aboriginal workers. Aborigines lived on the cattle stations within their own communities. The Northern Territory Administration determined a minimum wage for Aborigines (which was significantly below the award wage). Under a Northern Territory ordinance, station owners were also obliged to provide a clothing allowance plus rations and accommodation for Aboriginal workers and their immediate families.
This arrangement worked well enough for many years. Aboriginal stockmen made an important contribution to the running of pastoral stations. According to historian Dr Ann McGrath "stockwork was a far cry from plantation slavery, as it allowed a certain mobility and sense of freedom". Aborigines valued the work and "they succeeded in living according to Aboriginal law and lifeways". (1) In other words, Aboriginal stockmen were attractive workers at the going rate determined by the Northern Territory Administration. What's more, the working arrangement provided for station owners to supply food and shelter for workers and their families.
It was not Utopia. But it worked well enough. And then along came the Conciliation and Arbitration Commission.
The application to bring Aborigines under the Cattle Station Award came from the white officials of the North Australian Workers' Union. Up until 1962 the NAWU had actually banned Aborigines from taking out union membership. So it can be safely assumed that the union was not motivated by an altruistic concern for Aboriginal welfare. Its position was simple. Aboriginal employees should come under the award and receive award rates and conditions. The union pulled no punches in its submission to the Commission. It asserted that there was only one way to deal with the matter and that was throw both the Aborigines and their white employers "into the water and let them learn to swim". (2) Regrettably, the Aborigines sank.
The NAWU submission was broadly supported by the Menzies Liberal government. The government's only major disagreement with the union was over timing. The NAWU wanted the water-immersion experiment to start almost immediately. The government argued that any decision to place Aborigines under the award should be phased in over a period of years. The union presented no evidence whatsoever in support of its case. The Commonwealth produced only one witness -- a public servant.
The employers were represented before the Commission by John Kerr QC who appeared on behalf of the Northern Territory Cattle Producers' Council. The NTCPC did not oppose the application of the award to skilled Aborigines. But it wanted pay rates to reflect varying working skills -- in particular the capacity to perform work and to work without supervision. The employers maintained that about 25 per cent of their Aboriginal employees were worth the award rate. The Commission conceded that another 25 per cent "were unable or unwilling to do more than nominal work for a few hours a day". Whilst these employees "might be unhappy to have their present way of life interfered with, an industrial tribunal cannot be over-concerned with such people who are not employees in any real sense." The issue, then, turned on what was to happen to the remaining 50 per cent who were neither particularly good nor bad workers. Obviously the Commission felt itself able to be concerned with this group.
In July 1965 the matter came before a Full Bench of the Conciliation and Arbitration Commission comprising the Chief Judge, Sir Richard Kirby, Deputy President John Moore and Senior Commissioner Jim Taylor. Eight months later a judgment was delivered -- but only after the Commission had undertaken detailed inspections of cattle stations and settlements throughout the Territory lasting six months. According to his biographer, Blanche d'Alpuget, Kirby found the experience a guilt-inducing one. He constantly recalled his experiences with Ginny, an Aboriginal servant who was attached to the Kirby household when the young Richard lived in Cairns. Kirby subsequently related that he talked about Ginny and his boyhood so much "that the rest of the team got sick of me". (3) Ms d'Alpuget does not record whether Sir Richard advised his fellow Commissioners that Ginny's employment with the Kirbys was not covered by an arbitrated award.
The Commission's decision in the Cattle Station Industry Award was staggeringly irresponsible. Sir Richard Kirby has since stated that the employers produced "a magnificently well presented case". The NAWU's submission, on the other hand, was so bad that the Commission "had to do a lot of thinking for the union". (4) In the event the Full Bench virtually accepted the thrust of the employers' case -- but then ruled in favour of the union:
From the wealth of material presented to us by pastoralists, both in oral and written evidence, we concluded that at least a significant proportion of the Aborigines employed on cattle stations in the Northern Territory is retarded by tribal and cultural reasons from appreciating in full the concept of work. The great majority are unable to work in a way which employers would expect of white employees. (5)
The Full Bench considered that both the NAWU and the Commonwealth government had taken "a somewhat unreal view of the problems which pastoralists face when dealing with stockmen who neither read, write or count".
In the final analysis, however, these considerations were esoteric. The Full Bench decided to introduce award coverage for Aborigines with effect from 1 December 1968. The learned members of the Bench conceded that "disemployment of some degree" would occur if Aborigines were paid full award wages but claimed that it was "difficult to forecast with any precision what is likely to be the result of our decision". It brought down a judgment nevertheless. After all, high principles were involved:
We agree with the pastoralists that there are many Aborigines on cattle stations who for cultural reasons and through lack of education are unable to perform work in a way normally required in our economic society. We agree that the problem of assimilating or integrating these Aborigines into our society is a difficult one with many facets. Our task, however, is a limited one. The guiding principle must be to apply to Aborigines the standards which the Commission applies to all others unless there are overwhelming reasons why this should not be done. The pastoralists have openly and sincerely explained their problems and future intentions. However they have not discharged the heavy burden of persuading us that we should depart from standards and principles which have been part of the Australian arbitration system since its inception. We do not flinch from the results of this decision which we consider is the only proper one to be made at this point in Australia's history. There must be one industrial law, similarly applied, to all Australians, Aboriginal or not.
And so it came to pass. Aboriginal unemployment was to rise so that the one, true, holy industrial law -- as determined by the Commission -- should prevail. The Full Bench was quite magnanimous in the concessions to realism which it was prepared to make in its judgment:
There may be some disemployment, there may be some movement into missions and settlements and some camps on stations may go out of existence. When the award applies to them, Aborigines will cease to be covered by the ordinances which now deal with rates of pay, accommodations and rations, and which make provision for members of employees' families ... the Aborigines will need guidance to understand and appreciate the implications of moving from a semi-protected situation to an exposed industrial situation whereby they have to care for themselves and their families out of their wages.
But these disturbing admissions did not lead the Commission to resile from its self-ordained task of dispensing what it termed "industrial justice". After all, if everything fell apart there was always the Commonwealth government to pick up the tab and "mould a policy of social welfare":
If any problems of native welfare, whether of employees or their dependants, arise as a result of this decision the Commonwealth Government has made clear its intention to deal with them. This is not why we have come to our conclusion but it means we know that any welfare problems which arise will be dealt with by those most competent to deal with them.
The Full Bench's decision was discussed at a conference held at Monash University in May 1966. Some of those who addressed the seminar predicted that the ruling would lead to increased Aboriginal unemployment. The economist Fred Gruen argued that "it must be admitted ... that a substantial increase in the wages payable to Aboriginals is likely to lead to displacement of Aboriginal labour". (6) The Catholic Bishop of Darwin, Dr J.P. O'Laughlin, conceded that it was "unlikely that the Missions could afford to pay all their workers the basic wage". (7) And Pastor P.G. Albrecht of the Finke River Mission predicted that the only way he could "see missions paying award wages is by creating further unemployment". (8)
These predictions came true -- with a vengeance. It was not only Northern Territory Aborigines who were affected. In September 1967 Commissioner Donovan followed the Full Bench's lead and extended the Pastoral Industry Award to include other Aborigines. (9) This award applies in all States except Queensland. Aborigines in Western and South Australia came under the award as from 1 December 1968.
Almost from the date of the Commission's decision there was a dramatic decline in Aboriginal employment on cattle stations in the Northern Territory and Western Australia -- with devastating social consequences for the former employees and their dependants. Aboriginal families who had lived on stations for generations were effectively dispossessed by being forced or cajoled into moving to government-funded settlements where they became welfare recipients. The Full Bench had anticipated, and supported, this development on the highly dubious grounds that it would assist assimilation and integration "into our white economic society". Sir Richard Kirby and his learned brethren put on record their belief that "Aborigines are more likely to be assimilated or integrated readily on settlements than on cattle stations".
In October 1970 the Gorton Liberal government established a committee, under the chairmanship of Professor C.A. Gibb, to enquire into "the situation of Aborigines on pastoral properties in the Northern Territory". Its membership included Dr H.C. Coombs (then Chairman of the Council for Aboriginal Affairs) and Mr C. Roberts (an Aboriginal with experience as an employee in the pastoral industry). In December 1971 the Gibb Committee reported. Its findings were a shattering indictment of the Arbitration Commission's folly of six years previously:
In parts of Central Australia it seemed clear from information supplied to us that the introduction of Award rates of pay, together with the change in drinking laws (10 December 1964) had a serious effect on the general attitude of pastoralists towards employment of Aborigines. Some had replaced Aborigines with European stockmen and in at least one case the Aboriginal community had been "encouraged" to move off the pastoral property altogether ...
In the course of our inspection and discussion it became clear that the adoption of the Award has adversely affected the employment of Aborigines. In the North where labour is more in demand and alternative avenues of employment are becoming available, the problem is not so marked. However, both of Professor Gruen's predictions of 1966 are obviously being fulfilled: cattlemen are replacing Aborigines with white labour and station owners are investing in improvements such as trap yards and subdivisional fencing which does reduce the amount of labour needed for tracking and mustering. The very recent use of helicopters in mustering in some areas has had a marked effect on the demand for skilled Aboriginal stockmen ...
Repeatedly during our tour we were told of the unreliability of Aboriginal employees and of cultural factors limiting their usefulness and of the additional costs not recognised by the Award of providing for their medical and social care. We are persuaded that these claims are not based on racial grounds but on the experience of those concerned. Often Aborigines do not work as well or as consistently as whites and they require much more supervision. The average productivity of Aboriginal labour is below that of white labour. (10)
The findings of the Gibb Committee were confirmed by other studies. In a report to the Western Australian government, W.D. Scott demonstrated that there was a substantial decline in the number of Aboriginal pastoral workers in the Kimberley region between 1966 and 1971 -- from 1455 to 940 (i.e. 35 per cent). The Northern Territory Cattle Producers' Council (NTCPC) surveyed 17 properties in the Alice Springs area and found that there had been a decline of 32 per cent in the number of Aboriginal employees. (11) In both cases decreases in Aboriginal employment were invariably accompanied by increases in white jobs.
In the first report of the Aboriginal Lands Rights Commission (which was established by the Whitlam Labor government), Mr Justice Woodward quoted with approval from the Gibb Report and generally endorsed its findings. (12) Jon Altman and John Nieuwenhuysen broadly confirmed the findings of the Gibb Committee and the Woodward Royal Commission. But they also referred to long-term structural changes in the industry and the effect of cyclical fluctuations such as drought and recession. (13) In a later study Dr Altman wrote that "there appears to have been a decline in Aboriginal employment since pastoralists have had to pay them equal wages". (14) The Canberra academic Owen Stanley studied five cattle stations in central Australia and concluded that the introduction of equal pay had reduced Aboriginal employment and training opportunities. On one station Aboriginal unemployment had increased by over 50 per cent. Owen Stanley commented that in the only case where Aborigines were given the opportunity to "nominate their own wage rate they accepted a wage substantially below the award". (15)
By the mid-1970s, then, there was overwhelming evidence that the Arbitration Commission's decision to give Aborigines "industrial justice" had dramatically increased Aboriginal unemployment in the pastoral industry. And yet around this time Sir Richard Kirby told his biographer that this case would be seen as the greatest contribution that he and other members of the Commission had made to Australian society. (16)
Over the last decade Aborigines in isolated areas have become increasingly responsible for running their own enterprises and projects. This has come about as a result of land rights legislation and other government initiatives. Many Aborigines now work for Aboriginal employers who are legally bound to act in accord with "industrial justice".
Almost two decades after the Commission's historic March 1966 decision, the wheel has turned full circle. Aboriginal as well as white employers are now bound to observe the provisions of the Cattle Station Industry and Pastoral Industry awards. The question arises as to whether Aboriginal-owned and -run enterprises should be subject to Australia's excessively centralised and rigid industrial relations system.
The problems are by no means theoretical. Mr Charles Perkins has stated that the Aboriginal Development Commission operates on the basis of "the fundamental principle of Aboriginal control of Aboriginal affairs". (17) The ADC finances and supports cattle stations, pastoral properties, community stores and fishing ventures. Are employees working on these projects receiving their full award entitlements? If not, should the Commonwealth Department of Employment and Industrial Relations be more vigilant in ensuring that Aboriginal employers are heavily into award observance?
There is evidence to suggest that a large number of Aboriginal workers are not receiving their award entitlements. There is nothing sinister in this. Rather it reflects the fact that many Aboriginal enterprises -- especially those in remote areas -- are not economically viable if award wages are paid. Moreover, Aborigines tend to have a different attitude to work compared with most whites. According to J.K. Doolan, Aborigines want to live as close to their traditional mode of life as present day conditions will permit. Consequently, economic considerations are not of overwhelming importance. (18) As Dr H.C. Coombs has put it:
It is hard to imagine another society whose values were as inappropriate to the demands of an industrialised economy. This does not mean that their values were wrong or irrational. Values of this kind are not absolute. They belong to particular environments and to particular social and economic circumstances. We must remember that we have no right to dictate how other men should live. (19)
It is regrettable that this sentiment was not prevalent in March 1966.
If one follows Dr Coombs's philosophy to its logical conclusion, then it is obvious that the Commission's March 1966 decision should be overturned. For there is no doubt that Aborigines run pastoral stations according to their own priorities. Dr Altman and Dr Nieuwenhuysen discussed this in their 1978 study:
[A]n average sized pastoral property needs (or can provide employment for) 60 man-months of labour per annum. However, the populations of stations increase rapidly when they attain Aboriginal ownership. For example, at Willowra in 1971 when the pastoral lease was bought the Aboriginal population was 130; by mid-1973 it was 167; and by mid-1975, 240. A similar population movement has been noted at Utopia Station ... It is not surprising that a station which can provide full-time employment for five people cannot support a community of 240. (20)
In other words, Aboriginal-run cattle stations are overstaffed by conventional standards. It is difficult to see how they can even approach economic viability if all workers receive their full entitlements. Yet, according to Sir Richard Kirby, there is one industrial law that must apply to all Australians. The Arbitration Commission's March 1966 decision is plainly inconsistent with Aboriginal self-determination. If the Cattle Station Industry and Pastoral Industry awards are strictly enforced there will almost certainly be another round of what the Commission euphemistically once termed "disemployment" among Aborigines in the Northern Territory and Western Australia. And yet our inflexible industrial relations system requires that all workers on cattle stations, regardless of their individual circumstances and wishes, receive the entitlements laid down by the wise men (and women) of the Arbitration Commission.
It is not only Aborigines on cattle stations who are at risk if the industrial relations zealots are let off the leash. Some government schemes could be placed at risk. Take the Community Development Employment Project (CDEP) for example. In 1977 the Fraser Liberal government, at the request of Aboriginal communities, initiated the CDEP scheme under which unemployment benefits to Aborigines in remote areas are pooled and paid to community leaders -- together with a small supplementary grant. Work (e.g., basic housing, agriculture, fencing) is allocated and individuals are paid according to their performance. Workers might receive slightly more or less than the dole. But whatever the amount determined there is little doubt that the payments are substantially less than the going award rate (i.e., where an award applies). In other words, the CDEP scheme violates Sir Richard Kirby's concept of "industrial justice". Yet the Aborigines want the scheme in preference to receiving outright welfare handouts. What justice is there in forcing individuals to receive "sit down money" in preference to being rewarded for tasks undertaken? What is the point of having "one industrial law" if it prevents isolated communities from doing what they want to do? If, for example, the residents of remote Mornington Island wish to participate in the CDEP scheme why should its community run the risk of prosecution for breaching awards which virtually no one has ever heard of? When it is widely recognised that high Aboriginal unemployment promotes alcoholism, drug taking, crime and poor race relations why should we continue to tolerate an industrial relations system whose very inflexibility literally drives the least well off in our society on to the dole queues? Why indeed?
Thomas Sowell has demonstrated that minimum wages in the United States have also led to increasing unemployment among poorly educated American blacks. But the Australian wages system is far more rigid and centralised. And Australian Aborigines have lower educational standards than American Negroes. Not surprisingly the effect of minimum wages in Australia has been even more traumatic. Perhaps the last word should go to Dr Sowell:
Many people think it's wonderful to raise people's salaries, but you can't raise their salaries. All you do is prevent them from working below a certain wage level, and if the employer doesn't agree to pay that level, they simply lose their jobs, and you're not making them better off; you're making them worse off. (21)
The costs of "industrial justice" are heavy indeed.
ENDNOTES
1. Quoted in La Trobe University Record June-July 1984, p 3.
2. Quoted in F. Stevens, Aborigines in the Northern Territory cattle industry, Canberra, Australian National University Press, Canberra, p 195.
3. B. d'Alpuget, Mediator: a biography of Sir Richard Kirby, Melbourne, Melbourne University Press, 1977, p 181.
4. Ibid, p 180.
5. The case is reported at 113 CAR 651.
6. F.H. Gruen, "Aborigines and the Northern Territory cattle industry -- an economist's view" in I.G. Sharp and C.M. Tatz (eds), Aborigines in the economy: employment, wages and training, Brisbane, Jacaranda Press, 1966, p 204.
7. J.P. O'Loughlin, "Effects of raising Aboriginal wages on the mission economy", in ibid. p 178.
8. P.G. Albrecht, "The effects of raising Aboriginal wages on Aborigines", in ibid. p 191.
9. The case is reported at 121 CAR 454. Initially this award covered only employees who were members of the NAWU. Since most Aborigines were not members of the union, theoretically the award did not apply to them. In fact employers treated Aborigines as if they were covered by the award. Eventually formal award coverage was extended to all employees whether or not they were members of the union.
10. The situation of Aborigines on pastoral properties in the Northern Territory, Report of Committee of Review, December 1971, pp 6-10.
11. Both the Scott and NTCPC studies are quoted in J. Altman and J. Nieuwenhuysen, The economic status of Australian Aborigines, Cambridge, Cambridge University Press, 1979, p 66.
12. Aboriginal Land Rights Commission: First Report, July 1973, paragraphs 74-93.
13. Altman and Nieuwenhuysen, op. cit. p 67.
14. J. Altman, The Aboriginal economy, roneoed, 1978, p 18.
15. O. Stanley, "Aboriginal communities on cattle stations in Central Australia", Australian Economic Papers, vol 15 (September 1976), p 169.
16. d'Alpuget, op. cit. p 179.
17. Address by the Chairman of the Aboriginal Development Commission, Mr Charles Perkins, Canberra, 7 November 1983, p 2.
18. J.K. Doolan "Walk-off (and later return) of various Aboriginal groups from cattle stations, Victoria River District, Northern Territory" in R.M. Berndt (ed.) Aborigines and change: Australia in the 70s, Canberra, AIAS, 1977, pp 108-109.
19. H.C. Coombs "The Employment Status of Aborigines", Australian Economic Papers, Vol 11 (June 1972), p 10.
20. Altman and Nieuwenhuysen, op. cit. p 73.
21. Quoted in Manhattan Report, Vol 1 No 8, p 7.
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