Stormy Waters for Wharf Reform

There has been more than some argument about the legal rights of the various parties on the Australian waterfront but there exists a more fundamental set of rights, human rights or civil liberties.  Unfortunately, these are not well defined and objectivity is neither easily come by nor readily accepted.

The Australian waterfront is bedevilled by two monopolies -- that of the Maritime Union of Australia which exercises rigid control over the supply of labour and that of the stevedoring companies Patrick and P&O Ports which control the supply of services to ship-owners.  The one is maintained by the Federal award system; the other by MUA dominated closed shop and by State governments which have leased the available wharf space for ridiculously long terms.  The several statutes, awards and leases are the law, but their relationship to justice and efficiency is problematical.  As is always and often the case, wherever what is lawful offends justice or efficiency, the law is broken, bent and avoided, and sophistry commands a premium.

Although not my favourite document, the Universal Declaration of Human Rights, adopted by the United Nations and ratified by Australia is the best criterion of what might be regarded as the relevant inherent rights that I can think of.  It is subject to too many conflicting interpretations;  specifies several "rights" that can be no more than good intentions because they can neither be held against all the world nor against identifiable persons; and it is so given to waffle that it needs to state that no right may be interpreted as allowing acts destroying any of the other rights.  Nevertheless it is on the side of justice, and most ambiguities can be avoided by preferring the more specific requirements to the more general.

Article 3 appears in some form in most Bills of Rights.  That "Everyone has the right to ... security of person" is not controversial.  The consequent obligation is clear;  and it does constrain "all the world".  It is thus a genuine civil liberty that obliges everyone (alleged scab or MUA stalwart) not to injure or threaten to injure anyone (alleged scab or MUA stalwart).

Nevertheless, Patrick senior staff claim to fear physical retribution.  Further, I am told of a conversation that took place far from the picket lines between a Patrick executive and a stevedore who is an MUA member.  The executive told the stevedore that there was job for him if he wanted it only to be told in reply that the (ex)employee dare not take the job because not only he but his wife children would not be safe.  Of course, I cannot swear by this story but its source is such that I have little doubt about its veracity.  It also matches others that came my way in my political days, including one (involving another union) in which threats were carried out.  If people really do fear that their persons and those of their families are not secure, then Article 3 is breached.

Article 7 reads "All are ... entitled to equal protection of the law". Here the relevant obligation is upon those who administer and enforce it, but practical difficulties arise where the laws conflict, are too complex to be understand or the authorities are reluctant to commit the necessary resources.  What should be done if police numbers are insufficient to give protection?  Calling on the armed services, as Hawke did in the pilots' strike, has a high attendant price.  The Australian Competition and Consumer Commission is obliged to investigate the MUA for attempting to restrain trade by, among other things, colluding with the International Transport Federation.  It is also obliged to investigate Patrick and P&O over an alleged agreement not to poach each other's custom during the dispute and it is currently investigating the Patrick lease to the farmers' companies.  In what order does it use its limited resources?  What should happen when the courts place orders on parties who do not have financial resources to carry them out?  The complexities emphasise the limitations of declarations of "rights", nevertheless, Article 7 expresses a principle that it would be very wrong to ignore.

Article 20(1) says:  "Everyone has the right to freedom of peaceful assembly and association".  Is an assembly that shouts abuse peaceful?  Probably.  But one that offers credible threats and blockades places of lawful business is surely not.  There can be little doubt, however, that the Declaration intends to protect picketers' rights to advise, admonish, chant and wave placards while not obstructing.  I believe Justice Beach, therefore, erred in terms of the UDHR when he ordered even MUA picketers not to protest on the footpaths near the container terminals.  This Article protects people's right to join a union of their choice, but so does the Workplace Relations Act and, in spite of the posturing, freedom of association is an issue only because the MUA will not let its members sign individual contracts or work alongside non-members.

Article 20(2) affirms that "Nobody may be compelled to belong to an organisation".  At one level the dispute is about just this:  the rights of waterfront workers not to join the MUA.  In this the Howard Government is not blameless.  Had it not caved in to the Democrats by breaking its election undertaking to repeal the "conveniently belong to" rule that requires workers to be represented by their assigned union, the monopoly status of the MUA would have been much reduced.  Both the conveniently-belong-to rule and the aggressive behaviour of the MUA would seem to offend this Article and also 23(4) which states that "Everyone has the right to form ... trade unions". Literally, workers in Australia do have the right to form unions but there is little point when only the officially sanctioned unions are officially recognised.

Finally, Article 23(1) asserts that "Everyone has the right to ... free choice of employment ..."  On the Australian wharves, where jobs are reserved for MUA members and then the sons of MUA members, they haven't.

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Making Sense of Apologies

In a "statement of reconciliation" last Wednesday, the Canadian government formally apologised to Canada's indigenous people for the assimilation policies of the past, including the removal of children to residential schools.  The government also promised an additional $C600 million over the next four years for a "healing fund" to assist those who suffered abuse at the schools, and for other compensation initiatives.

The apology was quickly dismissed as being too weak by four of the five indigenous leaders who were handed scrolls of the reconciliation statement at a ceremony on Parliament Hill in Ottawa.  "I refuse to accept this", said Marilyn Buffalo, the head of the Native Women's Association of Canada.  Harry Daniels, president of the Congress of Aboriginal Peoples, stated that the additional funding was not enough.

This response highlights a crucial aspect of the widespread current push for formal apologies for past injustices, such as assimilation and the "stolen generations" in Australia, or slavery in the United States.  Many of those who are most active in calling for these apologies do not seem to be particularly concerned about restoring a moral balance, or achieving social harmony.  Rather, they are engaged in political struggles over the allocation of resources, the creation of special rights for indigenous or minority groups, and the legitimacy of current states.

As the black American commentator Thomas Sowell has noted, the leaders of these struggles have little incentive to bring about a genuine reconciliation, as their position and influence usually depends on maintaining a climate of resentment.  Whenever one set of demands is addressed, either the response will be denounced as inadequate -- as has just happened in Canada -- or a new list of demands will soon take its place.

Nevertheless, the Canadian apology has increased the clamour for John Howard to make a similar gesture to Australian Aborigines.  He will be sensible to resist these calls, at least in the terms in which they are now being put.

When people apologise for actions for which they were not personally responsible, they run the risk of debasing our public moral language.  In such circumstances, apologies quickly become trivialised, an easy sop to the sentimentality of our times.  There are no obvious logical or historical limits to the actions for which apologies might be demanded.  Apologies to a particular group of aggrieved people can easily leave another group with comparable experiences justifiably angry that their suffering has not been acknowledged.

If Mr Howard were to make a specific apology to the "stolen generations", he could legitimately be asked to apologise to the thousands of non-Aboriginal children of poor or single-parent families who were unjustly removed from their parents.  Like the Aboriginal children, many of them also had appalling experiences in church and state-run institutions.

However, if the Australian government were to make a more broadly based apology for past assimilation policies which undermined the cultures and languages of Aboriginal people, then why shouldn't the descendants of those Aboriginal leaders who once passionately argued for assimilation also have to apologise?  The "stolen generations" report simply suppressed the fact that at the time when the assimilation policies were being formulated in the 1930s and early 1940s, prominent and radical Aboriginal leaders such as Jack Patten and William Ferguson were calling for Aborigines to be absorbed, both culturally and biologically, into the white world.  The authors of the report were fully aware of this, because they quoted from material taken from the same page of a book as information about these calls for assimilation was presented.

Unfortunately, while every nation and ethnic group can find praiseworthy acts in their past, virtually every people are also heir to shameful deeds as well.  Good and evil are not the exclusive properties of particular groups, however much we may falsely romanticise some peoples, and demonise others.  Demands for apologies for specific historical events tend to disguise this fact, and distract attention away from injustices that members of a formerly victimised group may now be inflicting on others.  For instance, I am conscious that Israel's treatment of Palestinians over the past fifty years leaves a great deal to be desired.  It is a leftist fantasy that a history of oppression somehow collectively ennobles a people or group.

The only circumstances in which an apology for past collective actions might be worthwhile is when there are grounds for believing that it could undermine a destructive way of thinking about people.  I would suggest that the fundamental problem which lies at the basis of all the injustices that Aborigines have suffered is that they have always been regarded as different from other Australians.  We have always had -- and continue to have -- laws and regulations in which people were treated differently simply because they were Aborigines.

As the head of a government which continues this tradition, Mr Howard can reasonably be asked to apologise for perpetuating this situation.  But those who are most insistent about the need for an apology to Aborigines for the past are committed to an even greater degree of legal and administrative distinction between Aborigines and other Australians.

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Getting those figures right

The Age reporters are continuing seriously to misinterpret the trend in unemployment in Victoria.  The latest example is Tim Colebatch's article of 4 January attributing the increase in unemployment in the three months to November 1993 compared with the same period in 1992, to the "massive retrenchments carried out by the State Government".

The fact is the increase in unemployment between the two periods is entirely a reflection of the increase in the proportion of the working age population wanting to work.  The proportion of the working age population that was employed in Victoria actually increased slightly.

This reflected the strong growth in private sector employment, which has more than absorbed the reduction in public sector employment.

The cuts in public sector employment in Victoria are an important part of the policies needed to restore the competitiveness of the state's economy that is required to reduce unemployment in the medium term.

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Nation Beats Poverty Trap

Is poverty on the rise in Australia?

According to a recent report by the OECD, the answer is no!

The report -- which defined poverty in terms of the number of persons with disposable income (after taxes and welfare transfers) below 50% of median income -- found Australia to have a poverty rate of 9.5% in 1995 -- which was 2.5 percentage points below the poverty rate in 1975.

In fact the report found Australia to be doing a better job in terms of reducing poverty than are the 10 other OECD countries included in the study.  While Australia's poverty rate is about on parr with average rate of 8.9% across all countries, its rate of poverty has declined more significantly over the last 20 years than in any other OECD nation.

How has Australia be able to reduce poverty in the face of globalisation and while spending a relatively modest proportion of national income on welfare payments?

The main reason is faster growth.  The Australian economy grew on average by 3% per year over the last 20 years, while the other OECD countries included in the study grew on averaged by only 2.5% per annum.  Faster economic growth plus a generally more flexible labour market allowed Australia to generate more jobs, than most other OECD countries (with the notable exception of the US and UK).  And as the study reconfirms, job creation is the most successful anti-poverty program.

Globalisation and technological change has lead to a wider distribution of income (before tax and transfers).  Indeed this trend has been more significant in Australia than in any of the other country studied, including the US.  However, in Australia this was trend was off-set to greater extent by a well targeted tax/transfer system.

The Australia welfare system may be small relatively to those in Europe, but it is far better targeted and effective in terms of reducing poverty.  In Australia, 58% of transfer payments go to people in the bottom level of income, whereas in the other OECD countries most transfer payments (61% on average) are paid to people who are not in poverty.  The income tax system in Australia is also more progressive, with fewer loopholes, than in the other countries.  70% of income tax revenue in Australia comes from people on high incomes while the comparable figure is as low as 54% in Sweden and averages 60% across the other countries included in the study.

Young working households (headed by under 30 year olds) also appear to be doing better in Australia than in other countries.  While the aggregate poverty rate amongst young families averages 15% in Europe and North America, it is virtually zero in Australia.  This is in apart due to them receiving higher welfare payments in Australia, but more importantly because a larger proportion of Australia's young families have one and often two members in high paying jobs.  In other words Australia is a country in which yuppies do very well.

Of course Australia can do better in terms of reducing poverty, achieving higher growth, better targeting of welfare and getting youth into high paying jobs, but we are doing better in all these areas than are most other developed countries.

This is clearly something we should be celebrate.

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Decades on, Reid's ideas are triumphant

Also published in the Adelaide Review, August 1999

The anti-globalisation policies pioneered by Alfred Deakin dominated Australian policy during most of the 20th century.

In the Free Trade versus Protectionism debates with which federal politics started, Deakin, second prime minister of Australia, the towering political figure of Melbourne, then capital of the new nation, led the Protectionist cause.

It was during Deakin's 1905-08 Ministry that the basic policy principles of the Australian Commonwealth were established.  Paul Kelly labelled them as:

• Imperial Benevolence -- that a latently hostile international environment made a Great and Powerful Friend necessary.
• White Australia -- stopping labour competition, particularly from Chinese.
• State Paternalism -- state provision to protect people from the vagaries of the market.
• Wage Arbitration -- state tribunals setting wages and conditions.
• Trade Protection -- insulating Australian manufacturers from international competition.

White Australia and protection were explicitly anti-globalisation policies, arbitration was implicitly so.  It was the realisation that arbitration was only achievable in conjunction with protection which moved the ALP from being officially agnostic on the free trade issue to supporting protection.

The Deakinite Settlement was a reaction against the first great period of globalisation.  The long period of relative peace from 1815 to 1914 also saw advances in transport and communication technology -- steam power, railways, internal combustion engines, telegraph, telephones, wireless.  International markets in capital, goods and labour developed to an extent which we have not yet equalled in comparative terms nor, in the case of labour, in absolute terms.  The scale of movements of labour within the British Empire or to the United States alone show that the modern world is not as economically integrated in some very important senses as it was before 1914.  Passports were rarely needed -- people could move freely from country to country -- and there were no capital controls.

By 1890, Australians were the richest people on Earth, with an average income over 25 per cent higher than Americans, in part because the rents from the efficient extraction of resources from an entire continent were being distributed over a small population.

Why did we enact anti-globalisation policies? Australia, and particularly Victoria, had suffered greatly from the 1890s Depression.  Being a small resource-exporter sharing a currency with the United Kingdom made Australia vulnerable to economic shocks.  The Victorian "land boom" based on railroad-driven land speculation relying on implicit government guarantees had created a "bubble economy" whose collapse had been devastating -- particularly when a bank run was mishandled by the local authorities.  The 1890s, as a time of great economic distress, had also seen bitter industrial disputes.  Alfred Deakin, and his mentor David Syme, founder of the Age, believed government action was needed to protect people from the vagaries of the market.  The Deakinite system also represented urban elites using state power to redistribute incomes from rural-based exporters.

Throughout the twentieth century, Australian policy sought to make the Deakinite system work.  Farmers revolted against paying the costs of protection, creating the Country Party.  They were brought into the system via marketing boards and rural subsidies.  This helped lead to a highly indebted Australia (public foreign debt was over 60 per cent of GDP by 1929) being very vulnerable to the Great Depression.  But it was the Whitlam Government which fatally undermined the system, by massively increasing the welfare state and driving future governments to economic reforms in an attempt to pay for rising welfare state expenditures (from about 11 per cent of GDP in 1973 to 21 per cent).  This process of reform dismantled the Deakinite system, though arbitration still survives.

Despite nostalgic memories of the 1950s and 1960s, the Deakinite system did not serve Australia all that well.  By 1990, average American incomes were 35 per cent above Australians'.  The current international economic crisis -- after the dismantling of almost all the Deakinite sytem -- is the first such crisis in a century when Australia has done better than comparable countries:  normally, it has done significantly worse.

Globalisation is driven by people seeking mutually beneficial economic exchanges across international borders -- hence the importance of international peace in globalisation, as peace reduces the risks involved in such exchanges.  Restricting Australian's ability to engage in such exchanges, encouraging companies to base commercial strategies around lobbying Canberra for privileges and so on simply did not deliver in the long term compared to possible alternatives -- as Australia's productivity surge in the 1990s has demonstrated.  The last Deakinite survival of arbitration continues to hobble our labour market performance.

Deakin's great rival was George Reid, first leader of the Opposition, former Premier of New South Wales, fourth Prime Minister, first Australian High Commissioner to London and leader of the Free Trade cause.  The creation of the Deakinite system was a defeat for Reid's cause:  a defeat long seen as crushing and final.  But Reid has had his revenge.  The economic reform of the last 15 years has, in many ways, been a triumph of Reid's more self-confident ideas over Deakin's pessimism.  John Hewson, John Howard and Tim Fisher have all been heirs to George Reid.  Sydney's cosmopolitan optimism has won out over Melbourne's parochial pessimism.  (Which is not to deny that Melbourne is a better place to live:  a good definition of mental illness is someone who could live in Melbourne, but doesn't).

The sure-fire way to stop globalisation, of course, is war between the great powers:  and it was the experience of two World Wars which helped give the Deakinite system a much-increased lease of life.  Australia has tried opposing globalisation, with very mediocre results.  We should instead concentrate on reaping its advantages.  George Reid was right.