When comparing Melbourne to Sydney, it's difficult not to appear simplistic. After all, competitive jibes between "brassy" Sydney and "elegant" Melbourne have been occurring since Federation.
But it is relevant to compare how important infrastructure and other business deals are secured in Melbourne with how they are achieved in Sydney. To compare the two cities reveals a lot about the sometimes surprising nature of Australian business culture and its necessary close relationship to the labour/ union establishment.
Sydney is a consummate deal-making town. Deals stick and operate like this. There is an intimate, almost seamless connection between Sydney unions, the Australian Labor Party and major businesses.
Sydney unions and the ALP operate almost as one, where deals and trade-offs are made inside and between the organisations, and held tight.
This affects every area of public policy, sometimes positively, sometimes negatively. For example, reform to the crumbling Sydney rail system has long been stymied because rail unions control certain factions and block reform. But when it came to running transport for the Olympics, the Labor faction system worked superbly to deliver results.
How things operate in Sydney, and in particular what new projects can occur, is always determined by internal Labor deals. The deal-making is a mystery to an outsider but has clear shape and form to insiders. Industrial relations is central to the process, "smart" Sydney businesses know this, and deals are formalised through the NSW industrial relations system.
There is nothing sinister about this. It's just a reality of politics. But for any large business to operate in Sydney, it must connect closely with the Labor deal-making processes. This is why some Sydney-based industry associations cultivate close ties with unions and why Sydney business donates much more generously to the ALP than they do to the Liberals.
One thing that can be said for this Sydney deal-making system is that once a deal is struck, businesses can be confident that for the period of any project, the deal will normally stick.
The same cannot be said of Melbourne. The relationship between Melbourne unions and any state government is always fractured and precarious. The internal Labor factional disciplines that are common in Sydney are thin at best in Melbourne, and frequently crack. This can make doing business in Melbourne awkward.
Take the deal to build the Mitcham-Frankston tollway. When the tender winner was announced, a union enterprise agreement was barely in place. The Australian Workers Union moved quickly to secure an agreement favourable to the construction project. However, the CFMEU, bristled, alleged they had been screwed, and demanded entree to the deal. The industrial agreement was renegotiated involving both the AWU and the CFMEU, but on worse terms for the builder than the AWU agreement.
Further, the CFMEU is currently active in the worker recruitment process to place its operatives in key positions during construction. It's inevitable that the builder will need to constantly placate the CFMEU during construction on hundreds of small items. Melbourne deals are like this. They appear to be settled but keep changing during the life of a project.
In Sydney, such an agreement would normally have been sealed behind the scenes at the time of the tender decision and could be expected to stick. This is not to say that Victorian governments are incompetent, it's just that they don't have the intimate and solid deal-making relationship with unions of the type that exists in Sydney.
However, the Sydney deal-making environment can also work against business. NSW has unjust work safety laws in which managers hold high personal levels of liability for work injury and deaths and which can result in heavy personal fines and even jail. Employees face none of these liabilities. In this respect, justice has been defiled in NSW -- and it occurred as a result of policy trade-offs involving unions, the Government and some industry associations. Justice was subverted to the political deal.
Victoria by comparison has introduced new work safety laws that apply liability to managers, employees and everyone in an equitable manner. The looser Victorian deal-making environment meant that good public and business policy was not rorted by factional deals.
For companies seeking to do business in either city, which system is better, or perhaps more moral, is not really a consideration.
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