The Unions and Labor

Vol. 7, No. 5

SUMMARY

The trade union movement and the Labor Party are open about their close relationship and it is well known.  The nature and extent of the relationship of the union movement with the Federal Labor Government is less well known.

Features of the relationship include:

• A strong, often decisive, influence on Government policies, one important effect of which is to prevent or delay economic reform.
• Grants by the Federal Government to the union movement of $92 million over the terms of the Hawke and Keating Governments, and now running at around $16 million per year.
• The tax-free status not only of contributions to unions (as to employer organisations) but also of income from property owned by unions.  (Unlike the grants, this is not a recently-granted privilege).
• In total, taxpayers could now be underwriting, in various ways, activities of the union movement to the tune of $130-140 million per year.
• Financial and other assistance provided to the Labor Party by the union movement.
• Appointments of unionists to government bodies which, on the face of things, exceed those that are justified.

Trade union membership is now down to 35 per cent of the workforce, and only 26 per cent of the private sector workforce;  the time has long passed when unions could claim to represent even a majority of workers.  There is certainly no longer any case for unions or their members to receive privileged treatment by the Government, if there ever was such a case.

Privileged relationships between governments of any political stripe and particular sections of the Australian community are inappropriate.  Central elements of the relationship between the union movement and the Labor Government -- when assessed against broad national interest criteria -- cross the bounds of acceptability, accountability and even propriety in some cases.  This is a matter which involves issues which are of national interest and concern.

INTRODUCTION

The trade union movement plays a special role in the Federal Labor Party and the present Federal Labor Government.  This special role gives it unprecedented influence and power as well as access to government financial assistance.

Yet the membership of trade unions is declining -- since 1990 by almost 500,000 to around 2.5 million in 1994. ⁽¹⁾  With the workforce now approaching 9 million (including 750,000 unemployed), the right of the union movement to claim to speak even for the majority of the workforce has long since ceased to exist.  Further, if unions were not given such a privileged position, and were not permitted to enforce compulsory unionism in some areas, there is no doubt that membership would be much lower than it is.

This paper examines the extensive and tightknit relationships between the current Federal Labor Government, the Australian Labor Party, and the trade union movement.  It questions the appropriateness of the relationships which have developed in many areas.  In particular, it examines the role of grants and donations between these parties, the influence exercised by intertwined appointments and by the unions' dominant role within the ALP, and just how the Australian taxpayer is footing the bill for financial arrangements which can scarcely be seen as in the national interest.

It should be emphasised at the outset that the issue being raised in this paper is not that the trade union movement has an association with the Labor Government (and the Australian Labor Party), and vice versa.  It is, rather, the appropriateness of that Government having such a close association with an outside (non-elected) organisation and whether that outside organisation has an undue influence on Government policy, and receives undue support from the Government.  The same issue would arise were a Liberal-National Government to have an unduly close association with a business group or groups, and to provide undue support to such group or groups.

BACKGROUND

It is a matter of history that the Australian Labor Party (ALP), formed just over 100 years ago, was created as the political arm of the trade unions.  Union leaders felt that one of the most effective ways to pursue their -- predominantly industrial -- agenda was through a formal role in the political system.  Hence the Australian Labor Party was created as the entrée card of the unions into the various Parliaments of the land.

The Labor Party contested the first election for the new Federal Parliament in 1901, and the first Federal Labor Government came to power in 1908 under the leadership of Andrew Fischer.  Although short-lived, lasting only 6 months and 21 days, it set a precedent for future union-sponsored Federal Labor governments.

The ALP became the main left-of-centre/socialist party in the Australian polity, in much the same fashion as its United Kingdom inspiration, the British Labour Party.

The Labor Party has continued to be the political wing of the trade union movement.  To this day, unions dominate the ALP's policy decision-making bodies and preselections.  While some moves have been made to reduce the extent of union influence at ALP Conferences, the Labor Party has taken less action than its UK counterpart to establish itself as a genuinely broad-based party.

Of course, the parliamentary party and the Labor Government itself have their own decision-making processes.  Even there, however, the unions have been able to exercise a very substantial, if not in the end always decisive, influence on the Government's policy in relation to (for example) the waterfront, privatisation of the airports, airlines, Commonwealth Bank, Telecom (no privatisation), ANL, and industrial relations, where they wield enormous influence.  There is little doubt that, through its opposition to productivity-enhancing reforms and its attempts to protect existing jobs at the expense of potential new ones, the union movement has been and remains the biggest obstacle to economic reform in Australia.

An example of this capacity to determine policy was the unions' success, after the 1993 election, in forcing Prime Minister Keating and Industrial Relations Minister Brereton into a humiliating backdown on industrial relations reform.  The unions insisted, instead, on the Industrial Relations Reform Act, containing employment-inhibiting unfair dismissal provisions and a union right to intervene in all non-union enterprise agreements in a way that can provide an effective veto, and thereby making the labour market less flexible.

The unions have also pressured the Government to introduce changes in economic and social policies, such as the compulsory employer-funded Superannuation Guarantee Charge (SGC), the (now suspended) Training Levy, and the maternity allowance contained in the 1995 Budget.  The Superannuation Guarantee arrangements have effectively required employers to fund a national superannuation scheme via a de facto payroll tax -- but the Government has avoided the odium of imposing a payroll tax itself.

The introduction of the SGC has led to the establishment of industry superannuation funds, with union representatives constituting half the board trustees.  These funds, which now cover about 30 per cent of all members of superannuation funds and hold about 4 per cent of total superannuation assets of about $190 billion, provide the union movement with the potential to influence the investment policy of funds in ways which could create difficulties for individual firms in an industry.  To date, no such problems have emerged, and such action would necessarily be constrained by other trustees and by the professional advisers who administer each fund, as well as by prudential requirements.  Even so, the concern remains.

The Accord -- now about to enter its eighth incarnation and the centrepiece of the Labor Government's wages policy -- is an extraordinary example of the influence which a group outside Parliament has been able to exert on a range of Government economic and social policies.  Particularly during the 1980s, the effect of the Accord was to inhibit industrial relations and other microeconomic reforms.  It was also a central part of the most interventionist macroeconomic policy ever pursued in Australia -- a policy which, during the 1980s, gave Australia an inflation rate twice the OECD average, the highest current account deficit in the OECD, and culminated in an enormous blow-out in foreign debt, prolonged recession and record high unemployment. ⁽²⁾

In announcing the new Accord on 1 May 1995, a joint statement by the Prime Minister, Mr Keating, and the ACTU said:  "Today the ACTU and the Government reaffirmed their Accord partnership and their joint pursuit of progressive economic, social and industrial relations reform".  Reinforcing the closeness of their relationship -- but also, perhaps unwittingly, highlighting the unjustified nature of the claim that this relationship necessarily represents the interests of the workforce as a whole -- they added:  "Partnerships between governments and the representatives of workers, and the substantial benefits that they deliver, should not be taken for granted.  What has been achieved over the last twelve years would not have come about under the Federal Coalition.  Future gains in the social wage, and fair and orderly transitions to more efficient working environments, would not be possible under the Federal Coalition".  Needless to say, no mention was made of the role of business, or of investors generally, in providing employment opportunities and in ensuring the investment without which neither the normal nor the social wage would be forthcoming.

The union influence on Labor Governments is not simply a matter of influence currently exerted from the outside;  Labor Governments are also a favoured career path of many former unionists.  Indeed, it is almost a natural progression from the union bureaucracy into the political party in some cases.  Prime Minister Keating and his predecessor Bob Hawke were both union men.  Current Ministers who emanate from unions include Treasurer Willis, Industry Minister Cook, and Employment Minister Crean, all from the Australian Council of Trade Unions (ACTU), plus Trade Minister McMullan who was a Labor Party and union official, and Parliamentary Secretaries Sherry, O'Keefe, Snowdon, and Bevis.

ACTU President Martin Ferguson's brother, Laurie, is a NSW Federal MP.  Newly-elected NSW Senators, Belinda Neil ⁽³⁾ and Michael Forshaw, and the Victorian ALP's preselected candidate to replace the late Olive Zakharov, Ms Jacinta Collins, have had careers with the Federated Ironworkers, Australian Workers Union (AWU-FIME), and the Shop, Distributive and Allied Employees Association, unions respectively.

Ms Jennie George, the ACTU assistant secretary, was also preselected for a winnable position on the Victorian ALP's Senate ticket for the next election.  However, in May she announced her withdrawal from the ticket so that she could concentrate further on her work for the trade union movement.  Leading unionist Mr George Campbell, who is a vice-president of the ACTU and national secretary of the powerful AMWU, was once accused by Mr Keating of having the jobs of 100,000 workers "around his neck" after Mr Campbell's (then) union instigated an employment-destroying wages surge in the early 1980s.  Despite this, he has been publicly supported by Prime Minister Keating for an ALP Senate ticket and reports suggest that he is likely to obtain endorsement for a safe position on that ticket.

The foregoing are only a handful of the union-trained Labor Federal politicians.  The majority of Labor members of Federal Parliament are current union members (see Attachment A).  Moreover, the staff at offices of Federal Labor Ministers and MPs are reportedly "required" to join the ALP if they are not already paid up members.

There is a symbiotic relationship between the unions and the ALP.  Success in the ALP, it would seem, is advanced by one's union affiliation.  This is not, in itself, necessarily a bad thing.  But it becomes a bad thing if one sub-set of the community is given preferred access to the favours of Government and is able to exert undue influence on public policy.

GRANTS

The most obvious aspect of the relationship between the trade unions and the Federal Labor Government is the substantial financial assistance provided, each to the other.  This is also the most visible element from the taxpayers' perspective.  The Federal Government provides significant grants to trade unions, while trade unions provide significant donations and subscriptions to the ALP.  A Federal Labor Government brings a lot of money into unions' coffers.

Over the life of the Hawke and Keating Labor Governments, the trade unions have received a very handsome $92 million in grant funding.  Table 1 (below), which outlines all the grants paid to trade unions over the life of this Labor Government, brings out the significant increase in grants over this period.  Annual funding has, in fact, risen by a massive 800 per cent over 12 years.

In 1993-94 (the last available full-year figures), ⁽⁴⁾ the Keating Labor Government handed over $16.5 million of taxpayer-funded grants to the trade union movement for one reason or another.  This is the highest amount to date to be handed over in one year.

In 1992-93 (an election year), the unions received $14 million.  In the same year, unions donated $2.2 million ⁽⁵⁾ to the ALP's re-election campaign.

This is not the full extent of Commonwealth financial support.  Unions also receive $10 million per annum from the Department of Industrial Relations to run the Trade Union Training Authority, and the Australian Electoral Commission (AEC) provides its services -- worth millions of dollars -- for union ballots free of cost.  In 1993-94, the AEC carried out 590 union elections and amalgamation ballots, at a cost of $4.8 million.

Taking account of the tax free status of union income and the value of tax deductions for contributions to unions (see below), it seems likely that taxpayers are now underwriting the activities of the union movement to the tune of $130-140 million per annum.

As Table 1 shows, grant funding to unions is provided through a number of Commonwealth departments.  The extent and level of funding is quite extraordinary.

The grants are provided for a wide variety of purposes, but always the stated purpose is legitimate public policy goals.  These include:  grants for musicians-in-residence;  grants to fund the "yes" case in union amalgamations;  grants for input into government decision-making processes;  money for advising migrant workers of the value of trade unions and their industrial relations rights;  support for overseas aid programs -- through the ACTU's overseas aid body Australian People for Health, Education and Development Abroad (APHEDA);  and grants for developing workplace bargaining arrangements, and health and safety guidelines.

Table 2 (below) provides a list of the major union recipients of grants in the last financial year, 1993-94.  The largest benefactors were:  the ACTU ($2,065,000);  APHEDA ($2,078,000);  the Construction, Forestry, Mining & Energy Union ($1,141,000);  the Maritime Union ($548,000), the Textile Clothing and Footwear Union ($565,000) and various teachers' unions ($4,852,389).  In all, 25 unions each received in excess of $100,000 for the period.

So who do the unions represent that could possibly justify this enormous amount of public funding?

As noted, ABS ⁽⁶⁾ data show that financial trade union members are now down to 2.5 million, or about 35 per cent of Australia's 6,525,800 employees aged 15 and over in August 1994. ⁽⁷⁾  These members are drawn from both the blue and white collar sectors of the economy, although in recent times the former has declined and the latter held steady.  Union membership in the private sector has fallen to a mere 26 per cent.  The total figures are boosted by the public sector, with its relatively high levels of union membership (62 per cent).  Total union membership has fallen by over 8 percentage points since 1986, and is at a record post-Second World War low.

Table 1:  Payments To Trade Unions By The Labor Government ($'000) ⁽⁸⁾

Dept	83-84	84-65	85-86	86-87	87-88	86-89	89-90	90-91	91-92	92-93	93-94	94-95	Total
DAA	-	-	12	70	10	-	-	-	-	-	-	108	200
DAG	-	-	-	-	-	-	-	-	-	9	8	-	17
DASETT	335	663	78	1,737	1,011	496	436	340	497	1,739	75	-	7,407
DAAS	-	-	-	-	-	-	-	-	-	-	522	-	522
DHHCS	63	63	122	-	116	43	351	348	797	710	342	329	3,284
DEET	1,411	535	622	282	365	711	518	631	1,110	2,470	8,212	2,360	19,227
DFAT	26	2O	28	12	-	-	47	34	43	61	58	20	349
AIDAB	180	159	469	301	726	2,197	2,863	4,253	2,638	2,473	2,610	-	18,869
D1LGEA	210	354	447	570	514	730	693	74	-	108	-	-	3,700
DIR	143	975	1,845	1,404	890	1,165	1,972	4,244	4,811	4,749	3,923	6,473	32,594
DITAC	-	-	-	-	122	-	-	255	94	660	133	126	1,390
DPI&E	-	-	-	21	183	47	64	166	106	112	-	-	699
DPM&C	-	45	45	47	1,053	18	18	31	48	86	6	91	1,488
DT&C	-	-	-	-	-	-	-	113	15O	150	581	-	994
ATO	-	-	-	-	-	-	-	-	-	540	521	507	1,568
Treasury	-	-	-	-	-	-	-	-	-	3	3	-	6
Finance	-	-	-	-	-	-	-	-	-	-	22	-	22
TOTAL	2,368	2,814	3,668	4,444	4,990	5,407	6,962	10,489	10,294	14,392	16,494	10,014	92,336

Commonwealth Department Codes:

DAA = Aboriginal Affaire (now ATSIC)

DAG = Attorney-Generals

DASETT = Arts, Sport, Environment, Tourism & Territories (now Environment, Sport & Territories)

DAAS = Administrative Services (for 1992-93 includes Arts)

DHHCS = Health, Housing & Community Servlces {from 1992-93 includes Local Government)

DEET = Employment, Education & Training

DFAT = Foreign Affairs & Trade

AIDAB = Australian International Development Assistance Bureau

DILGEA = Immigration, Local Government & Ethnic Affairs (now Immigration & Ethnic Affairs)

DIR = Industrial Relations

DITAC = Industry, Technology & Commerce

DPI&E = Primary Industries & Energy

DPM&C = Prime Minister & Cabinet

DT&C = Transport & Communications {now separate depts;  Communications now with Arts)

ATO = Australian Taxation Office

* = incomplete/partial year

The appropriateness of this extensive grant funding can be assessed by dividing the grants into two categories.

Table 2:  Major Recipients Of Grants -- 1993-94 ⁽⁹⁾

	($)
ACTU	2,065,012
Media Entertainment & Arts Alliance	121,000
APHEDA	2,077,959
Commonwealth Trade Union Council (via ACTU)	104,000
Union Research Centre on Organisation & Technology (URCOT)	507,899
Community & Public Sector Union	47,761
State Public Services Federation	30,242
Tasmanian Trades & Labour Council	468,350
Melbourne Workers Theatre	191,436
Northern Territory Trades & Labour Council	397,445
United Trades & Labour Council (SA)	217,494
Auto, Food, Metals & Engineering Union	483,596
Construction, Forestry, Mining & Energy Union	1,141,289
Liquor, Hospitality & Misc Workers Union	525,465
Textile Clothing & Footwear Union	565,516
Metal Trades Federation of Unions (NSW)	223,873
Australian Workers Union	278,200
Union of Christmas Island Workers	55,360
Health Services Union	267,172
Maritime Union	548,000
Fed Industrial Manufacturing & Engineering Union	73,274
Trades & Labour Council of WA	227,436
NSW Trades & Labour Council	101,111
Geelong Trades Hall Council	67,070
Victorian Trades Hall Council	130,428
Shop Distributive & Allied Employees	129,369
Aust Services Union	317,043
Education Union	280,000
National Union of Workers	50,000
Nursing Federation	20,000
Trades & Labour Council of Old	56,387
Disabled Workers Union	49,692
Secondary Principals Association	141,100
Teaching Council	1,315,000
Various other teachers associations & federations	3,116,289

There are those grants which go to the unions for purposes which relate to the core of the unions' own internal arrangements and representative responsibilities to their members.  Grants that fit into this category include those to assist with workplace bargaining arrangements or amalgamation campaigns.  Other Australian institutions generally pay for the services they provide to their members out of members' subscriptions.

There are also those grants that are going to trade unions for purposes which are not directly related to their role, function or responsibilities, but are, rather, a new-found way for the Labor Government to provide funding that enlarges the role and influence of the union movement with the stated aim of pursuing legitimate public ends.  Examples of these kinds of grants are those which are designated for overseas aid projects or arts and cultural funds.  Why should a trade union receive public money to fund an artist or musician in residence?  If a union, or a company for that matter, wishes to have an artist-in-residence, that is surely a matter for its members/stakeholders, not for the taxpayer.

More generally, it should be asked to what extent union membership generally, as distinct from union bureaucracy, benefits from this and other assistance.  It is certainly the case that the other 65 per cent of the workforce, although taxed to pay for it, does not do so.  Further, it is at least arguable that, through the protection provided to existing jobholders in highly unionised occupations, the unemployed suffer.

A.P.H.E.D.A.

One of the more "interesting" avenues for grant funding is that which is provided through the Commonwealth's overseas aid body, formerly AIDAB and recently renamed AusAid, to the ACTU's overseas aid body Australian People for Health, Education and Development Abroad (APHEDA).

APHEDA was established in 1984 by the ACTU to support fellow unionists overseas.  It is chaired by former ACTU President, Cliff Dolan, and current ACTU President, Martin Ferguson, is the Vice-Chairman.  This body has its headquarters at the New South Wales Trades Hall in Sydney.  In the last financial year, 1993-94, APHEDA received more grant funding than any single union, $2,077,959.

APHEDA prides itself on the promotion of bourgeois left agendas in the developing countries.  One of its key targets at the moment is women workers.  It has a history of supporting revolutionary -- often violent -- groups, such as the ANC and the South African Communist Party in the 1980s, Palestinian groups in Israel, and Kanak separatists against New Caledonia (France).  It is also currently attempting to organise/unionise workers in the Philippines, Cambodia and Vietnam, action which scarcely constitutes "foreign aid".

While some of APHEDA's work in health care and training may be of benefit to its recipients, the Government should not hide behind APHEDA in promoting agendas which are often contrary to the wishes of foreign nations and/or the best interests of their citizens, and the Australian people.

UNION ASSISTANCE TO THE LABOR PARTY

The grants paid to the unions by the Labor Government effectively fund union activities and, as a consequence, free up other union financial resources for political purposes.  The Labor Government pays money to the unions.  The unions pay money to the Labor Party.  At the last election, for example, unions directly donated $2.2 million to the ALP's re-election campaign.

As Table 3 (below) illustrates, there is a high correlation between unions that donate to the ALP and unions that receive grants in either the year of the election donation (1992-93) or the preceding year.  This effective cycling of taxpayer funds from the Labor Government to the unions and then back to the Labor Party could in some cases be a gross misuse of taxpayers' money.  It is additional to the substantial public funding ⁽¹⁰⁾ which is provided to all political parties, the ALP included.

Table 3:  Union Donations To The ALP vs Government Grants To Unions ⁽¹¹⁾

Union *	Union Donations ($)	Grants To Unions ($)
	1992-93	1992-93	1991-92
LHMWU	254,151	575,048	222,169
AMIEU	10,040	122,163	57,000
PTU	38,500	40,499	170,000
CWU/EPU	140,648	100,000	8,869
CFMEU	314,150	1,153,682	541,774
AMEU	306,764	1,253,948	1,070,759
PKIU	44,000	100,000	75,000
NUW	266,598	1,219,518	558,928
SDAEA	446,760	65,000	25,000
TWU	76,200	-	67,681
BBEU	2,000	-	-
FSU	8,575	-	100,000
AWU	56,061	270,000	325,919
ASU	83,875	470,000	320,000
HCSU	45,912	50,000	46,500
MU	84,850	-	140,000
Tas TLC	30,000	225,548	135,130
Rockhampton TLC	2,000	-	-
TOTAL	$2,211,084	$5,655,406	$3,864,729

• See Attachment B for full name of union or association.

As affiliated members of the Labor Party the unions also contribute membership fees.  While a detailed breakdown of national membership contributions is not publicly available, Table 4 shows that subscriptions (both from unions and individuals) collected by the ALP in the year to 30 June 1994 provided 37 percent of total revenue.  Trade unions would be by far the major contributors to these membership fees.

A recent report on the financial problems confronting the New South Wales branch of the Labor Party stated that there were 700,000 affiliated union members (compared to only 15,000 ordinary members) who through their union paid $2.25 each in annual membership subscriptions. ⁽¹²⁾  This sums to $1,575,000 per year.  It was also reported that these members may be subjected to a $1 increase in their fees to help repay the branch's significant debt.  This would increase union members' fees to $2,275,000, and underline the trade unions' significance to the Labor Party's financial position.  In New South Wales, unions' membership fees will be contributing over 50 per cent of the division's funds.  To this can be added whatever donations the unions make to the division. ⁽¹³⁾  It is not difficult to see from this just how much the ALP branches rely on the trade unions for their (financial) existence.

Table 4:  Membership Subscriptions to the Australian Labor Party -- 1993-94 ⁽¹⁴⁾

Branch	Subscriptions ($)	Total Revenue *($)	Subs as % of Total
National	506,682	2,838,122	18
New South Wales	1,511,454	3,586,451	42
Victoria	1,551,628	1,989,154	78
South Australia	468,058	2,146,908	22
Queensland	1,188,930	3,505,570	34
Western Australia	574,250	979,132	59
Tasmania	57,318	198,811	29
ACT	70,397	556,921	13
Northern Territory	13,705	355,144	4
Total	5,942,422	16,156,213	37

* Includes amounts received from donations, asset sales, and goods & services sales

Apart from this significant financial support, there can be added the substantial manpower provided by unions during election campaigns, and the separate political campaigns waged by unions themselves.  The ACTU reportedly spent $1.3 million on its own election campaign against the Coalition in the 1993 Federal election campaign.  That year the ACTU received $1.2 million in Federal Government grants.

APPOINTMENTS

The second major source of trade union influence and favour is reflected in the exercise by the Labor Government of appointments patronage.  Important decision-making positions on government bodies are frequently allocated to trade union activists.  These appointments do not always appear to take into account the candidate's suitability for the particular position.

Table 5 (below) contains a sample list of government bodies to which notable trade union members have been appointed.  It is far from complete, as the Commonwealth Directory neither reveals all appointments, nor all the appointees' associations or union affiliation.

Victorian Liberal Senator Jim Short, who has followed the issue of financial support to trade unions closely through the Senate Estimates process, found that in 1990 the ACTU was represented on at least 50 Commonwealth boards or advisory committees. ⁽¹⁵⁾  He also ascertained that over half of these positions carried remuneration in the form of sitting fees and/or travelling allowance.  And that was for the ACTU alone.

Close analysis of Table 5 also shows the strong representation afforded the ACTU, and in particular Messrs Kelty and Ferguson and Ms George.

The Secretary of the ACTU, Bill Kelty, is on the Reserve Bank board, National Labor Consultative Council, Economic Planning Advisory Council, chairs the Commonwealth Regional Development Taskforce, is on NETTFORCE and the National Petroleum Advisory Council.  His close relationship with the Prime Minister, particularly negotiating the various Accords with the Labor Government, has been well documented in the media and found perhaps its high point in his participation as a witness to the secret (at the time) "Kirribilli Compact" between Mr Keating and his predecessor as Prime Minister, Mr Bob Hawke.

Table 5:  Trade Union Appointees On Government Bodies

* Council for the Order of Australia	Ms J. George
* IRC	For example, Ross, Boulton, Riordan, Munro, Marsh, MacBean, Coleman, Watson, Sweeney, Nolan, Grimshaw, Lewin, Harrison, Foggo, Blair, Maher, Acton, Hodder, & Stevens, all with union backgrounds
* Administrative Review Council	Mr T. Pallas (ACTU)
* Telstra	Mr B. Mansfield (ACTU)
* ABC	Mr L. Hingley (FSU)
* Australia Council	Ms D. Whelan (ACTU)
* Defence Industry Committee	Mr B.W Fraser (Metalworkers Union), & Mr V. Falconer (AWU-FIME)
* Aust National Training Authority	Mr B. Mansfield (ACTU)
* National Board of Employment, Education & Training	Mr L. Carmichael
* Employment and Skills Formation Council	Messrs L. Carmichael, B. Mansfield
* Commonwealth Superannuation Board of Trustees No 1	Z ACTU reps
* Commonwealth Superannuation Board of Trustees No 2	3 ACTU reps
* National Council for the International Year of the Family	Ms J. George
* Aust Korea Foundation	Mr B. Mansfield (ACTU)
* Trade Policy Advisory Council	Mr M. Ferguson (Deputy Chair)
* National Health & Medical Research Council	Ms P. Staunton (Nurses Assoc)
* TUTA -- Chairman	Ms J. George
* Joint Council ot the Aus Public Service	ACTU rep, AFMEU rep, CPSU rep
* National Labour Consultative Council	8 ACTU reps (including M. Ferguson, J. George, W. Kelty, B. Mansfield), (note:  also 6 ACCI reps, 1 MTIA & 1 ACM)
* National Occupational Health and Safety Commission	3 ACTU reps (inc. J George)
* Safety, Rehabilitation and Compensation Commission	Mr E. Alford (CWU), Ms D. Whelan (ACTU)
* Stevedoring Industry Finance Council	Mr J. Coombs (MUA)
* Construction Forecasting Committee	ACTU rep
* Telecommunications Industry Development Authority	Mr G. Campbell (AMEWU)
* Murray-Darling Basin Community Advisory Committee	ACTU rep
* National Petroleum Advisory Council	Mr W. Kelty
* Social Security Advisory Council	Ms D. Whelan (ACTU)
* Aust Tourist Commission	Mr S. Harrison (FIME)
* Tourism Advisory Council	LHMWU rep
* Tourism Forecasting Council	ACTU rep
* Maritime Services Advisory Committees	Maritime Officers Union rep, MUA rep
* Reserve Bank of Aust	Mr W. Kelty

Source:  Commonwealth Government Directory, December 1994-February 1995.

Mr Kelty's assistant Secretary, Jennie George, is on the Council for Aboriginal Reconciliation, chairs the Trade Union Training Authority (TUTA), and is on the Council for the Order of Australia, National Council for the International Year of the Family, National Labour Consultative Council, and the National Occupational Health and Safety Commission.

Meanwhile, the ACTU President, Martin Ferguson, also has a good share of influential appointments including:  Economic Planning Advisory Council, Agri Food Council, Construction Industry Development Agency, Trade Policy Advisory Council, and the National Labour Consultative Council.  He is also a director of John Curtin House (the former ALP building), APHEDA, the Advance Australia Foundation, and the Australian Centre for Best Practice Ltd.

The totality of such positions gives the ACTU and the other unions a disproportionate influence on a wide range of Australian Government policies.  But it is not simply a matter of the influence which the positions themselves bring.  As indicated by Mr Kelty's role in negotiating successive Accords, informal relationships can be even more influential.  The unions' tentacles are long and far-reaching.  Again, the issue is not that unions should be excluded from positions on government bodies;  rather, it is a matter of the extent of the appointments.

A recent example of the unions' extensive influence over government decision-making bodies was contained in an article by Mr Andrew McIntyre for the Review entitled "No ticket, No research". ⁽¹⁶⁾  This article explained how the unions were able to veto grants by Worksafe Australia, an arm of the National Health and Safety Commission, unless the proposed research was acceptable to the relevant union.  Mr McIntyre's article exposed an incident where the AWU successfully managed to scuttle an approved research project because the union did not like the possible outcome of the research, namely "to convince our membership that no radiation hazards exist in the industry (mineral sands mining)".

TAX-FREE STATUS

The trade unions enjoy special tax status.  They are treated as favourably as accredited non-profit charities or established churches.  While these concessions are not recently-granted privileges, they are nevertheless significant, particularly as the Government is increasing taxes and tightening deductions on virtually every other sector of the economy.

Under Section 23(f) of the Income Tax Assessment Act, trade unions (and employer associations) are exempt from income tax.  Contributions to unions -- often compulsory in nature -- are fully tax-deductible under Section 73 or 51(1), as are employer contributions to their associations.

Trade unions are also not subject to capital gains tax on any asset sales -- even though they advocated the introduction of that tax in 1985.

These tax exemptions extend to activities undertaken by the unions which are not related directly to representing their members.  Some union business activities and investments are consequently also exempt from income (and other) tax.

An example of this exemption being exploited involved the sale, a few years back, by the ALP of its national headquarters ⁽¹⁷⁾ (John Curtin House) to the ACTU.  The ACTU is now able to gain rent from that building which is tax-free.  When it was in the ALP's hands, the rent was subject to tax.  This tax advantage makes an enormous competitive difference in the rental market, as unions can undercut commercial rents while still maintaining above-market after-tax rental returns.  This is one of the reasons why so many unions own extensive tracts of real estate in the major capital cities.

In overall financial terms, the unions have an estimated annual income from membership subscriptions of around $500 million, ⁽¹⁸⁾ all free of tax.  At a conservative tax rate of 20 cents in the $, this is worth about $100 million per annum in tax savings to contributors, and therefore in forgone tax revenue.  Unions have net assets of around $400 million, ⁽¹⁹⁾ from which the income generated is also generally tax free.  Even if earnings amount to an average rate of only 4 per cent, the saving in tax would be around $5-6 million per annum.  All this gives them considerable financial strength -- the envy of virtually every other participant in the political environment.  Indeed, sufficient resources to encourage Bill Kelty to promote a proposal for the unions to establish their own airline, at a cost of over $40 million.

CONCLUSION

The H.V. Evatt Foundation (a research body established by the Labor movement which has been given specific tax-free status and which receives an annual recurring Federal Government grant -- currently $257,000 -- as well as grants for "special" projects) in a recent report funded with $66,000 of taxpayers' money, Unions 2001 -- a blueprint for trade union activism, was highly critical of the performance of trade unions.  This report canned union amalgamations -- although not the taxpayer grants which funded the "yes" cases for such amalgamations.  It found that union members were disappointed and disaffected, and felt ignored by the super union bureaucracies.  The recent disaffiliation of the Transport Workers Union from the ACTU indicates that this disaffection extends right up to the highest level in the union movement.

Ms Glennis Hanley, in a study for the Deakin University Economics Department, also found that most union members were dissatisfied with union amalgamations and believed their unions were distant and remote.  Many had joined simply because of a perception that it was compulsory.  The study found two in five members had "significant levels of dissatisfaction with the amalgamation process".  The survey described only 13 per cent of unionists as "committed to the movement".

Union members have been voting with their feet and abandoning the unions, and their leadership, in droves.  While the role for unions in the internationally competitive economy which Australia must eventually become is something for them to work out, the time for the taxpayer to continue to subsidise this highly unrepresentative movement is surely over.

Can $16 million a year be better spent (or saved)?

No one questions the unions' right to represent their members' interests in public policy debates or forums.  But they should not be seen as representing the interests of the great bulk of the Australian workforce and, least of all, the unemployed.

All Australians, and their representative bodies, have a right to be heard in our political system.  However, it follows that, if all are to be heard, none should enjoy special status.

Under the Hawke and Keating Labor Governments, the unions have enjoyed a very privileged position.  They are at the core of policy decision-making.  Ex-unionists make up a substantial portion of the Labor members of Parliament.  In return they contribute substantial financial and manpower resources to the Labor Party and its campaign efforts.

This paper explains the relationship.  The unions do not just have a fair say;  often they are recompensed with patronage, privileged laws and substantial public funds for their contributions to the Labor Party.

Central elements of the relationship -- when assessed against broad national interest criteria -- across the bounds of acceptability and accountability in some cases.  They represent at best a misuse, and at worst a flagrant abuse, of taxpayer funds and the power of Commonwealth Government office.

The relationship which now exists between the Labor Government and the trade union movement is, at least arguably, dangerous.  It leaves the Federal Labor Government open to allegations of improper use of office.  The relationship therefore should be fully explained to the Australian public for the undemocratic and inappropriate arrangement that it is.

The issues raised in this paper do not simply reflect my concerns.  They are widely felt, in one way or another, in the community at large.  In particular, there is a long history of concerns expressed in public opinion polls about the extent of power and influence exercised by the trade union movement.  Unions have a legitimate role in representing the interests of those in the workforce who wish to be represented by such bodies.  But the role of unions in practice has extended, and continues to extend, well beyond such a function.  With the clear evidence that now exists of the declining membership (and the even greater decline which would occur if membership was genuinely voluntary) the time has surely come for present "arrangements" to be changed.  This is partly an internal matter for the Labor Party itself.  But, given the two (major) party political system, it is also a matter which is of national interest and on which others have a right to express views and suggest changes.

Note:  nothing in this paper should be taken to imply that the Federal Government, the Australian Labor Party, the trade union movement (or any of its constituent parts) has acted outside the law.

Attachment A:  Labor Members Of Parliament -- Union Relationships *

Dick Adams	Union Organiser, Australian Meat Industries Employees Union;  LHMWU
Peter Baldwin	Federated Miscellaneous Workers Union.
Michael Beahan	Education Officer, WA Trades & Labor Council
Kim Beazley	Miscellaneous Workers Union.
David Beddall	-
Arch Bevis	Deputy General Secretary, Qld Teachers' Union;  Electrical Employees Union.
Gordon Bilney	-
Nick Bolkus	TWU/FMWU
Laurie Breretcn	Electrical Trades Union
Bob Brown	NSW Teachers Federation
Bryant Burns	Union official, Amalgamated Metal Workers Union (AFMEU)
Graeme Campbell	-
Kim Carr	President & Secretary, Technical Teachers' Union (FTUV)
Bruce Childs	Secretary, Printers Union (PKIU)
Bob Chynoweth	-
Peter Cleeland	-
John Coates	-
Bob Collins	-
Mal Colston	-
Peter Cook	Vice-President, ACTU & Secretary, WA TLC
Barney Cooney	-
Mary Crawford	-
Simon Crean	President, ACTU & Assistant General Secretary, Federated Storeman & Packers Union;  National Union of Workers.
Janice Crosio	-
Rosemary Crowley	AFUW
Barry Cunningham	-
Maggie Deahm	-
Kay Denmam	Teachers Federation
John Devereux*	National President, Electrical Trades Union (Electrical & Plumbing union)
Peter Dodd	Union official, Federation Liquor and Miscellaneous Workers Union.
Michael Duffy	-
Peter Duncan	Labor Lawyers, AJA
Mary Easson	ASU
Paul Elliott	Federated Clerks Union
Chris Evans	Industrial officer, Federated Miscellaneous Workers Union & State Secretary. Fire Brigade Union (WA)
Gareth Evans	Inaugural President, Australian Society of Labor Lawyers
Martyn Evans	ASU
Wendy Fatin	-
John Faulkner	LHMWU & NSW Teachers Federation
Laurie Ferguson	Research officer, Federated Miscellaneous Workers Union
Eric Fitzgibbon	-
Dominic Foreman	State Secretary, Vehicle Builder Employees Federation (AFMEU)
Michael Forshaw	AWU
Ross Free	NSW Teachers Federation
George Gear	-
Garrie Gibson	Qld Teachers' Union organiser;  LHMWU
Russ Gorman	MEU
Ted Grace	-
Alan Gritfin	Union organiser FCU
Alan Griffiths	Trade union official
Chriss Haviland	Delegate, Public Sector Union;  PSU
Marjorie Henzell	ASU
Clyde Holding	MWU
Colin Hollis	-
Bob Horne	-
Brian Howe	MWU
Ben Humphreys	Amalgamated Metal Workers & Shipwrights' Union
Harry Jenkins	FMWU
Gary Johns	-
Barry Jones	AJA
Gerry Jones	MWU
Paul Keating	Research officer & industrial advocate, Federated Municipal & Shire Council Employees Union.
Duncan Kerr	-
Peter Knott	NSW Teachers Federation
John Langmore	MWU
Mark Latham	FCU
Michael Lavarch	-
Carmen Lawrence	-
Michael Lee	FCU
Ted Lindsay	Federated Miscellaneous Workers Union
Jeanette McHugh	LHMWU
Jim McKiernan	Education Officer, AMWSU AMEU
Leo McLeay	FCU
Bob McMullen	Union Official
Stephen Martin	FCU
Daiyl Melham	Labor Lawyers
Allan Morris	Miscellaneous Workers Union
Peter Morris	Shop, Distributive and Allied Employees Union
Shayne Murphy	State Secretary, CFMEU (Tas) CFMEU
Belinda Neal	-
Neville Newell	-
Gavan O'Connor	-
Neil O'Keefe	Union official FCU
Roger Price	FCU
Gary Punch	FCU
Harry Quick	-
Robert Ray	-
Margaret Reynolds	Qld Nurses union
Rod Sawford	-
Chris Schacht	Federated Clerks Union
Con Sclacca	Australian Postal and Telecommunications Union
Les Scott	President, Australian Bank Employees Union;  AWU
Nick Sherry	State Secretary, Federated Liquor & Allied Industries Union (Tas)
David Simmons	ASU
Silvia Smith	-
Stephen Smith	AWU
Jim Snow	-
Warren Snowdon	Assistant Secretary, NT TLC;  NT Teachers Federation
Peter Staples	-
Wayne Swan	AWU
Lindsay Tanner	State Secretary, Federated Clerks Union
Andrew Tneophanous	-
Robert Tickner	President, NSW Society of Labor Lawyers;  Miscellaneous Workers Union
Frank Walker	Miscellaneous Workers Union
Sue West	ASU
Tom Wheelwright	n,a.
Ralph Willis	Research officer & Industrial Advocate, ACTU;  National Union of Workers
Harry Woods	-

* Includes current membership and/or past employment.

Sources:  Sanate and House of Representatives Registries of Members, Interests and Commonwealth Parliamentary Handbook 1993.

Attachment B:  Union Index

(LHMWU)	Liquor, Hospitality & Miscellaneous Workers Union
(AMIEU)	Australian Meat Industry Employees Union
(PTU)	Public Transport Union
(CWU/EPU)	Communications Workers Union
(CFMEU)	Construction Forestry Mining & Energy Union
(AMEU)	Automotive, Metals & Engineering union
(PKIU)	Printing & Kindred Industries union
(NUW)	National Union of Workers
(SDAEA)	Shop Distributive & Allied Employees Association
(TWU)	Transport Workers Union
(BBEU)	Breweries & Bottleyards Employees Union
(FSU)	Finance Sector union
(AWU)	Australian Workers union
(ASU)	Australian Services union
(HCSU)	Health & Community Services Union
(MU)	Maritime Union
(TLC)	Trades & Labor Council
(FCU)	Federated Clerks Union

---

ENDNOTES

1.  Australian Bureau of Statistics, Trade Union Statistics, as at 30 June 1994.

2.  For further analysis of the Accord, see "Industrial Relations And The Failure of the Accord:  What Should Be Done" by Des Moore in Australian Bulletin of Labour, Volume 15, June 1989.

3.  Senator Neil is also the wife of NSW ALP Secretary, John Della Bosca.

4.  Answers to Senate questions on notice.

5.  ALP Annual Returns to the Australian Electoral Commission

6.  Australian Bureau of Statistics, Trade Union Members, August 1994 (as a supplement to the Monthly Labour Force Survey).

7.  Ibid.

8.  As for footnote 4.

9.  As for footnote 4.

10.  $14.2 million at the 1993 Federal election.

11.  Australian Electoral Commission, Australian Labor Party Annual Returns 1992-93, and answers to Senate questions on notice.

12.  The Australian, 31 May 1995.

13.  In 1993-94 this was $10,000.  In 1992-93 (an election year) this amounted to $172,666.  Australian Electoral Commission, Australian Labor Party Annual Returns, 1993-94 and 1992-93.

14.  Australian Electoral Commission, Australian Labor Party Annual Returns 1993-94.

15.  Media release, 3 April 1991, "Taxpayers' funds and Government patronage swell ACTU influence".

16.  Review, Volume 47/3, 1995.

17.  Built on "free" land in Canberra given to it (and other political parties) by the taxpayer.

18.  2.5 million members multiplied by an average annual subscription of, say, $200.

19.  Research by Dr G. Griffin (Monash University) and Mr S. De Rozairo (ACTU) estimated the combined net assets of unions in 1989 was about $370 million.

No state services should be sacrosanct

Michael Salvaris (1/6) correctly criticises Premier Kennett's argument that the main purpose of privatisation is to reduce state debt.  But he exhibits a failure to understand that the real object of privatisation is to improve the efficient functioning of the economy, so adding to living standards.

That is why, as shown by recent World Bank research, there have now been some 15,000 privatisations of state-owned enterprises worldwide (most since 1990).  Most clear-cut success stories come from high or middle-income countries.

That research also shows that it is not simply a matter of establishing a competitive market structure, as proposed under the Hilmer reforms;  there are also important benefits from private ownership.

Mr Salvaris accuses the Kennett Government of pursuing privatisation for ideological reasons.  Yet in the same breath he displays an ideological fixation with maintaining a structure of government which has clearly been shown to have operated inefficiently and at considerable cost to the Victorian community.

The latest Bureau of Industry Economics analysis of the electricity industry, for example, shows that Victoria has had the worst performer among the states.  Grants Commission data shows the same picture for public transport.

There should be nothing sacrosanct about any particular level of government and proposals for changes should be judged on their merit, drawing inter alia on the expenditure of other countries.

ADVERTISEMENT

What They Don't Teach You in Australian History Classes

The Australian Nation:  Its British and Irish Roots
by Geoffrey Partington
Australian Scholarly Publishing

At last those Australians whom banana-republicanism leaves sick with fear have begun to observe that, barring for the nonce a total Rwandatype hell, our country's next war will be the culture war:  and that the need to win this war gives the tag "publish or perish" -- a whole new meaning.  We now have one more obligatory item for our knapsacks:  Geoffrey Partington's The Australian Nation.

Readers of Quadrant and the late Encounter long ago recognised Dr Partington's significance in our intellectual life.  Academics with his erudition are rare.  Academics with his intelligibility are rarer.  Academics with his erudition and intelligibility are so rare as, by rights, to belong on a World Heritage list.  Moreover, it is almost unheard-of for any Australian-born or -domiciled writer to command, as Dr Partington commands, great gifts at any prose-length.  Neither 350-page staying-power nor the 1000-word straitjacket deters him.  Some of his most devastating insights have taken the form of essays — among which his 1979 Quadrant contribution "Morton's Fork, Or Having It Both Ways" ranks particularly high — and even letters to the editor.  Here is a recent epistle of his (The Weekend Australian, 2-3 July 1994), which even in its unabridged state demolishes Malcolm Turnbull's pretensions with fewer words than it would take the average tenured Australian Trotskyite to address an envelope:

"I read with interest the article by Malcolm Turnbull alleging excessive British involvement with Australia before, during and after the enactment of the Commonwealth of Australia Constitution Act ("How Britannia Ruled Our Constitution", The Australian, 29 June).

I had just been reading the opposite criticism from the pen of another leader of radical thought, Dr Henry Reynolds, who regrets that British governments did not intervene sufficiently in Australian internal affairs and veto land policies he considers were hostile to Aboriginal interests ...

If British governments did not intervene at all, this shows Britain's irrelevance to Australia.

If they exerted any influence at all, this shows Britain was a persistent meddler.

The British are damned if they did and damned if they didn't".

This conclusion summarises everything Dr Partington deplores in the mindless Anglophobia (as distinct from valid reproofs of specific British individuals and institutions) typifying what passes for official Australian "historiography".  To witness our "historians" gurgling with anger at monarchism and the Old Dart — "a colostomy bag on the body politic" was the characteristically vindictive, though uncharacteristically memorable, epithet chat one such genius applied to the Royal Family at a 1993 St Patrick's Day shindig — is to endure a mental climate in which the occasional differences from Der Stürmer result more from inadvertence than from conscious aspiration.  Dr Partington has created something much bigger and better than a mere pamphlet emphasising our British patrimony's virtues, commendable though that would have been.  His work is temperate in tone, extraordinarily learned, free from any discernible suppressio veri as from any outright suggestio falsi, and so useful chat only ideological rancour could (as it doubtless will) deny it inclusion in undergraduate bibliographies.

Much too scrupulous a chronicler to impose Grand Themes on his material from outside, Dr Partington nevertheless takes justified pleasure in the patterns which his material reveals of its own accord.  Most obvious among these is the power that British institutions have exercised over the imaginations not only of Britain's Australian friends, but of Britain's Australian foes.  Nineteenth-century antipodean malcontents bemoaned British rule from positions which Britain had won for them.  They shared the intellectual confusion of the New York cabbie who was immortalised in an anecdote by Anglo-Peruvian comic Michael Bentine.  On first hearing Bentine's voice the cabbie realised that his vehicle was being contaminated by the presence of a British passenger, and he snorted "Great Britain!  Hah!  What's great about it?"  Unruffled, Bentine asked "What language are you talking?"  "English", admitted the driver.  "That", responded Bentine, "is what's great about it".

Insofar as such Victorian-era republicans as John Dunmore Lang and Daniel Deniehy bordered on philosophic coherence at all, they deprecated modern Britain principally because they thought it was not being British enough.  They maintained as their ideals, not Marat's or Danton's eventful republican precepts, but Magna Carta, Hampden and Locke.  (So much for the absurd thesis, propounded at great fist-thumping length by Thomas Keneally, that Lang et al regarded themselves as being trial runs for Thomas Keneally).  As the essence of good government Australian Catholic spokesmen invoked, not Bishop Bossuet's "Le roi, Jésus Christ et l'Église:  Dieu en ces trois noms" or Metternich's Holy Alliance, but Britain's own Bill of Rights and Catholic Emancipation laws.  Cardinal Moran, Archbishop of Sydney, affirmed in 1891 that "all our interests at the present day, and for 50 years at least, point ... to a closer union with the [British] Empire".

CATHOLIC WELFARE

Between 1788 and the end of the 19th century Catholics fared, on the whole, much better under Protestant rule in Britain and Australia than they did in most nations where they formed a majority.  This is not to suggest that their treatment always warranted applause:  merely to note that their treatment elsewhere was far crueller.  Dr Partington could have made still more of this point than he has, because — even if we discount nakedly Marxist terror campaigns -- the anticlerical persecution which Catholics underwent in France, Italy, Portugal and Latin America continued well past 1900.

When the House of Savoy's troops conquered Rome in 1870, and Pius IX had good reason to fear that he would be murdered as his Prime Minister Pellegrino Rossi had been, he begged the Catholic powers to aid him.  They all offered eloquent excuses for doing nothing.  Gladstone, by contrast, despatched a man-of-war to Italy's western coast:  not only to evacuate British subjects in Rome bur to rescue, if necessary, Pius himself.  When French Prime Ministers Jules Ferry, Rene Waldeck-Rousseau and Emile Combes hounded the religious orders, it was Britain which gave many of these orders asylum.

Nor did only monks and nuns find British law, quite literally, a lifesaver.  The Catholic crowned heads whom Britain succoured in exile included Louis XVIII, Charles X, Louis-Philippe, Napoleon III, Eugenie, Louis the Prince Imperial (who fought and died for Britain in the Zulu War) and Portugal's Manuel II.  Small wonder that the Osservatore Romano commented in 1893:  "England, true to her principles of liberty, has accorded it to her Roman Catholic minority — in a way which must make many continental Catholics envy the lot of their co-religionists in England".  Small wonder, also, that Leo XIII expressed "grateful thanks ... for the justice and protection which the Catholic Church has enjoyed during the reign of Queen Victoria throughout the vast extent of her realm".

Even the darkest chapter in 19th century British history, Ireland's Great Famine, is illuminated by Dr Partington's eloquently restrained aperçu:  "It is unlikely that deaths in Ireland from the famine would have been fewer had [Irish Nationalists] John Mitchel or Charles Gavan Duffy been in charge rather than Sir Robert Peel or Lord John Russell".  British and Australian Catholic advocates of State Aid endured frequent ridicule;  they were not, however, strung from telegraph poles or shoved before firing squads, as their Mexican counterparts — well within living memory — were apt to be.  The manner in which these truths (so unpalatable to Leprechauns Anonymous and the other pressure-groups controlling Australia's education systems) are routinely suppressed illustrates the frightening parochialism of modish Australian thought:  even, or rather especially, when it makes its most laborious attempts to seem global.

ANGLOPHOBIA

Just as impressive, and just as antipathetic to rent-a-mob republicans in 1994, is the breadth of 19th- and early-20th-century Australian Anglophobes' reading.  The British heritage, as well as shaping such Anglophobes' political mentality and their notions of sport, coloured -- indeed determined -- their entire approach to literature.  Dr Partington cites The Bulletin's carpet-chewing, almost proverbial wrath at Edward VII ("Tummy ... The Fat Little Baccarat Man ... a bloated prince of parasites"), his mother ("blind and greedy as the grave ... that cold and selfish woman ... that dull and brainless woman ... that dull, yet gilded dummy") and his elder son (" 'Twere better for his comfort that the Duke of Clarence died");  since this same pubescent invective marked the journal's utterances about Oriental races, any Martian who acquired the journal's back-issues would conclude that the House of Saxe-Coburg-Gotha's main "sin" was to have been Chinese.  But even The Bulletin's own A.G. Stephens never countenanced, as Donald Horne in our own Augustan age has advocated, penalising the study of foreign authors.  Stephens lectured on Marlowe, Sheridan, Thackeray and Moliere;  in print he eulogised (with every sign of expertise) Balzac, Maupassant, Theophile Gautier and Prosper Merimee;  he once recklessly asserted that "Verhaeren [Emile Verhaeren, a then-renowned socialist scribbler] and Verlaine have far more poetical significance than the rabbits of the English warren like Kipling".  Nor did Henry Lawson -- whose successive attitudes to foreign climes resembled less an intellectual odyssey than the insensate careering of a dodgem-car — hate England enough to avoid praising Boadicea, Alfred the Great and the Virgin Queen in verse.  In addition he read, with relish, Cervantes and Captain Marryat:  hardly among the writers one first associates with blowfly-infested Australian literary jingoism.

ABORIGINALS

To enlighten those who seriously equate Australian white settlement with the Holocaust, Dr Partington points out that the colonists had only three options in their legal dealings with Aborigines.  They could adopt Aboriginal legal customs;  they could ensure that British laws and Aboriginal laws co-existed and were kept separate;  or they could ensure that British laws were "shared as far as possible with the Aborigines with whatever concessions to local custom" were mandatory.  The second of these options, which would have lumbered Australia with apartheid, was rejected.  The first option would in practice have meant postponing all legal judgments until each Governor and magistrate had acquired the requisite skill in such time-honoured indigenous punishments as mutilating genitalia and spearing villains to death.  So the third option became -- dread adjective -- inevitable.

Taxpayer-subsidised activists who acquire vast personal wealth from cynical breast-beating over the "genocidal" British "invasion" should remember how easily Australia could have been a Spanish, Dutch, Portuguese, French or Japanese colony instead.  If they continued to opine that the Australian Aborigine would have fared any better under those settlers than he did under the British, they would of course be entitled to their opinion.  The rest of us — who actually have a nodding acquaintance with what befell the Aztec, the Inca, the Xhosa, the Angolan, the Egyptian Mameluke, the Algerian and the Ainu — would be equally entitled to ask them what they were smoking.

In short:  everyone afraid of what Greg Sheridan once called "the lies we teach our children" should read Dr Partington's volume.  Alas, for about the 58th time in recent literary history, a laudable Australian book has been disfigured by subediting which is not so much lax as nonexistent.  The Eleusinian mysteries of computers' spell-check and grammar-check functions appear never to have been profaned by Australian Scholarly Publishing's keystroke operator:  our PM from 1941 to 1945 is described as "Jhon Curtin" (p. xiii);  early 19th-century NSW is said to have "consituted" a scene of oppression for Catholics (p. 75);  Sir Henry Parkes is quoted as urging a Melbourne audience to "Make yauorselfs [sic] a united people" (p. 112);  the Christian name of artist Grinling Gibbons is spelt "Grindling" on p. 131, which also misspells Henry Grattan's surname as "Gratton";  Sydney University's first Professor of Science is quoted as affirming that the university's purpose is "not necessarily to give any large amoung of information" (p. 171);  the Lawson poems that Chapter 8 discusses include "paeons" (paeans, presumably) to Cromwell (p. 224);  p. 286 speaks of "South African" where the grammatical context necessitates "South Africa".  In other passages there are either too many or too few words for sense to prevail:  "he would have a done a work as disastrous", we are told on p. 133;  Lawson, p. 220 informs us, "was the son of Norwegian sailor".  Elsewhere the problem is mere editorial carelessness.  Elizabeth Barrett Browning is described (p. 141) as being "among the living" in 1877, though she had died in 1861.  The source (p. 340) to footnote 82 is given, tantalisingly, as "pp. XXXX".  And Henry Vlll is credited (p. 29) with having received from Leo XII the title "Defender of the Faith":  no mean feat, since Leo was not even born until 213 years after Henry expired.  Retaining so many mistakes in a finished product reveals scant courtesy to any author;  it is worse when the imprint, by its very choice of name, purports to rise above philistinism.

A Personal Touch

Elisabeth Murdoch, Two Lives.
by John Monks
MacMillan, Australia

Dame Elisabeth Murdoch speaks of her "two lives".  The first is of youth:  prior to her marriage to Keith Murdoch and their years together.  The second is of age, following his death in 1952.  In this she is far too modest.  She was no ordinary girl, nor wife, nor widow.  In actuality, there have been many "lives", and the biography, by John Monks, provides a splendid introduction to them and to her.  She is gardener, traveller, patroness — and matriarch of a remarkable and far-flung clan.  She is friend to many, a famed (and witty) conversationalist, and in her many years of public service has given to Melbourne, her own city, more than most of us would be able to give in the course of a dozen lifetimes.

At the age of 85 she might well have become an author, but was sensible, I think, to allow John Monks to interpret, following the clues as it were, through hours of conversation.  The alternative, a narrative (like that of her great friend Joan Lindsay in Time without Clocks) would have been worth the reading, but conversation seems very much her own natural medium.  It is in the far-reaching talk -- of gardening, family and friendships — that we learn the most about her and much else beside.  More than once she speaks of "the personal touch", a quality she found throughout her years of work for the Royal Children's Hospital:  "I do think that the great joy for me in my time at the hospital was this close contact with everyone from cleaners to surgeons to management" (p. 127).  Sir Keith Murdoch felt the same way, at The Herald.  It is the loss of this human quality, the personal touch, which she regrets most in the indifference and haste of modern life.

EDWARDIAN

Born in 1909, Elisabeth Greene, as she was, qualifies comfortably as an Edwardian.  This tells us much.  She is anything but indifferent and recollects in her life the ingeniousness and easy grace of her elder contemporaries in that remarkable period.  There are few like her now.

Yet she is not so easily "placed".  A child of an age, she is not fully of it -- then neither is she immediately recognised amongst the succeeding "Georgian" generation, among whom, lingering respectability contended with the opportunities produced from expanding freedoms.  She tells of how, newly-married, she was introduced to George Lambert, who slapped her jovially on the back and insisted that he do her portrait.  Plainly, he had no idea whom he was dealing with and nothing more was ever heard of it.  She is yet to forgive him for the vulgarity.  Much closer to the spirit of Elisabeth Murdoch than any Lambert painting are Rupert Bunny's 1930s' ladies — strong and self-possessed.  Bunny rightly saw a new type of young woman, one very much her own self, but lighter in her gravity;  modern, yet traditionally-minded;  adventurous, but by no means in sympathy with the ephemeral changes of a turbulent age.

Reflecting on an imagined portrait takes us further into the lives, for it was Keith Murdoch, an undoubted connoisseur, who saw a coming-out photograph of Elisabeth in Table Talk and immediately fell in love with her.  She was 18, he 42.  He promptly wrangled an invitation to a dance where she was to be present — and proceeded to sweep her off her feet;  or perhaps it was the other way around.  What resulted is quite tactfully under-played by John Monks, but told in a most charming way.  For surely it is one of the great Australian love stories and one hidden until now from all but a few.  Matches of this kind, spanning nearly a full generation, were unusual then and rarer now, They offend conformist morality.  Murdoch was a millionaire and a distinguished public man, Elisabeth Greene's family was genteel but in reduced circumstances.  Her father was given a hard time at his club and Dame Nellie Melba fell from the heights upon Elisabeth herself.  To little avail.  The couple persevered and much happiness came to them.

ANGLO-IRISH

What was it that he saw?  Really, we will never fully know.  Her Anglo-Irish ancestry may have had something to do with it.  On both sides she comes from Anglo-Irish families with deep roots in Leinster.  The Anglo-Irish occupied a curious position, mistrusted by the native Irish and the English alike.  They formed a close caste and a tangled cousinhood.  Over the centuries they proved to be a people who constantly threw up genius, illuminating the qualities of both nations.  A stubborn independence is on one side, a soaring imagination on the other.  There is formality, civility -- and not a little mischief.  Lady Gregory, W.B. Yeats and George Bernard Shaw were of this stock;  in politics there is Edmund Burke.  They are not a predictable people unless in the capacity to startle.  In his young bride, Murdoch found a woman able to walk with confidence in the spirit of her own times and who yet stood a little removed, always sure of her own way.  One thing is quite certain:  in time, as she gave more of herself to public life, more and more people were to experience the genius Keith Murdoch saw from the first, for she brings it to everything she undertakes.

PUBLIC SERVICE

Very late in the book, Dame Elisabeth says of herself:  "I don't think of myself as being young, but I can never relate exactly to what being 85 means.  I can't really accept that I'm really old.  I like to imagine I'm ageless" (p. 300).  A sense of belonging to both youth and age is perhaps the most potent quality she has brought to public life.

After her marriage she was summoned, as ladies were, to the respectability of good charitable works.  Lady Latham invited her onto the Committee of Management of the Royal Children's Hospital, something that might have earned her no more than a historical footnote but for the fact that she saw her work through the light of her genius.  It was what she wanted to do.  It was less a task than a way of life.  The Hospital's standing as the great institution it is now, owes a great deal to her.  She had an intuitive eye for every contingency and always thought ahead.  Again, it is in the small, personal touches we see her best at work.  In the result she gave over 60 years to it.  A simple example may tell.  The Royal Children's Hospital has been for years the favourite charity of ordinary Victorians.  In pubs, for example, it is the major collection and fundraiser all the year round.  That prominence owes much to her efforts.  She brought the Hospital to the people.  She was among the first to seize the possibilities presented by the new media, radio then television, in expanding the range of the Good Friday Appeal.  She also managed to extract a lot of money out of the State Government, essentially by staring down Sir Henry Bolte across a table, no mean feat.  He once told her not to ask for any more money for five years.  We are not told whether she kept her side of the bargain or not.

Dame Elisabeth's interests grew and continue to grow to this day.  She was a founding trustee of the Noah's Ark Toy Library, bringing toys to handicapped children.  Again, it sounds elementary;  but the toys needed to be both simple and hard to break:  really a matter of some thought and care.  Likewise, she has become a patron of the Victorian Tapestry Workshop.  As she says, without sure patronage, tapestry, the Cinderella of the arts, would not survive in this country at all.

Lastly, there is the great work of her own imagination, the gardens of Cruden Farm.  Keith Murdoch presented her with the Farm, at Langwarrin, as a wedding-gift.  With it came the talents of Edna Walling, who laid out the gardens.  The long carriage-drive of lemon-scented gums, now famous, is very much in Edna Walling's style.  But that is about all.  Dame Elisabeth was never happy with the plans and almost at once began to change and adapt them to her own designs.  Quite rightly so.  Edna Walling was at home working on hillside terraces.  She was especially a cottage gardener.  Cruden Farm is a park and required a much broader conception.  Gertrude Jekyll's imagination comes to mind, but comparisons are hardly the point.

As with Lambert and Melba, so with Edna Walling.  Elisabeth Murdoch always declined the solicitations of conventional taste.  Rather, she has followed her own genius and in her garden has composed a tapestry, a conversation, her own single and enduring work of fine art.  It is ungallant to conclude upon a criticism and yet I must record one.  For there is far too little in this book about the gardens of Cruden Farm.  They require a study in their own right.  Is it too much to hope that at the age of 85 and full of honours and projects, Dame Elisabeth Murdoch may yet give us this second book?

Conservatives Converted

Thinking the Unthinkable
by Richard Cockett
HarperCollins

This is the tale of how Britain, or more precisely the ruling faction in the Conservative Party, was converted from collectivism to economic liberalism between the 1930s and 1980s.  The unthinkable happened when Mrs Thatcher started implementing free-market policies which in the 1930s and for many years thereafter were widely seen as antediluvian.

For anyone interested in free-market think-tanks, of which there were apparently 166 at the last world-wide count by the Atlas Foundation, this book is a must.  Likewise, those desiring to win the hearts and minds of political parties will find Thinking the Unthinkable absorbing.  As Richard Cockett makes clear, to win over the politicians you have first to convince the opinion formers;  and to ensure the opinion formers are on side, you may have to start while they are still at school.  When Friedrich von Hayek founded the Mont Pelerin Society in 1947 he was well aware of the long-term nature of the task.

UNDERESTIMATED EVENTS

As far as the general, non-British reader is concerned the book contains much detail which may seem tedious.  Nonetheless, it raises a number of issues of wide interest.  One which never ceases to fascinate historians is the relationship between people, ideas and events.  Cockett sometimes gives the impression that circumstances were influenced overwhelmingly by people rather than vice versa.  Admittedly he occasionally acknowledges the role of events as in the following passage from Milton Friedman's 1976 Nobel Prize lecture:

"Government policy about inflation and unemployment has been at the centre of political controversy.  Ideological war has ranged over these matters.  Yet the drastic change that has occurred in economic theory has not been the result of ideological warfare.  It has not resulted from divergent political beliefs or aims.  It has responded almost entirely to the force of events;  brute experience proved far more potent than the strongest of political or ideological preferences".

On the whole, however, Cockett tends to play down the extent to which Keynesianism was a response to the depression of the 1930s and monetarism a reaction to the inflation of the 1970s.  Little matters like the two oil shocks which rocked the world economy don't rate a mention.  He is certainly entitled to give credit to the Institute of Economic Affairs for its role in predicting the inflationary outcome of Keynesian policies and working out "a coherent, intellectually satisfying alternative" so that, "when the time came for the change of tack in the mid-1970s, there was really one alternative and, by implication, one philosophical position to adopt — that of the IEA".  As the term counter-revolution suggests, however, it was essentially the product of the shortcomings of the revolution that preceded it.

COUNTER-COUNTER-REVOLUTION?

And this leads to a still broader question raised by the book.  Will the counter-revolution itself provoke a reaction?  Early on Cockett observes that British economic history over the last two centuries can be interpreted in terms of the Hegelian dialectic (of thesis giving rise to antithesis which in turn produces a synthesis) and in his epilogue he suggests that "we are now at the point where the counter-revolution against economic liberalism will start, and the Hayekian campaign of intellectual persuasion provides the modern model of how to effect the next intellectual counter-revolution".

The likelihood of any such revulsion against economic liberalism and the form it might rake are yet to be determined.  Cockett seems to feel that the failure of economic liberals in Britain to come to grips with Brussels is evidence of waning powers, but this is a somewhat parochial concern.  (A common market is anyhow nor necessarily inimical to a free market).  Already a number of possible challengers are lining up.  Cockett sees Kenneth Galbraith with his emphasis on the inherent instabilities of capitalist systems as one such challenger.  Another is the green movement with its prejudice in favour of centralist and interventionist solutions to the world's ills.  A third, as yet perhaps littie more than a vague hankering, is the growing emphasis being placed on the supposed needs of the community as opposed to those of the economy.

The coming backlash could take many forms.  It would be ironic, however, if economic liberals were destined to repeat the fundamental error of the Marxists in assuming the dialectic stopped with them and that the synthesis never gave rise to its own antithesis.  As in so many walks of life one solves one problem to create another.

For those readers of a less philosophical and more entrepreneurial bent Thinking the Unthinkable offers some interesting scope for arbitrage due to its containing a quite sensational libel.  Because the publisher has agreed to retrieve unsold copies in the UK, it is now a rare commodity there and copies (including the offending passage) are being re-exported from Australia.  They can be expected to remain at a premium until the paperback (and expurgated) edition is eventually published.

Unbreakable China

China:  The Next Economic Superpower
by William H. Overholt
Weidenfeld & Nicholson

There are 18,000 Avon ladies successfully selling Western-style cosmetics door-to-door in China's Guangdong province.  According to this relentlessly upbeat book, the Avon army is symbolic of China's march towards a golden future of dynamic capitalism, national harmony and unprecedented prosperity.

Much of China:  The Next Economic Superpower reads like an attempt to drum up investment business.  Its sales-pitch tone may not be very surprising:  William Overholt is the head of Bankers Trust in Hong Kong.  While he has a long connection with China and is the author of several books on Asia, his complex subject deserves better than the simplistic treatment it receives here.

Overholt provides plenty of statistics and examples to underline the potential of China's economy.  In examining the transition from a centrally-planned economy to a market system, he cites the success of the approach of economic liberalisation within a framework of tight political control (a lesson, he says, China learned from watching South Korea, Taiwan, Singapore and Indonesia), and the failure of trying to implement simultaneously democratisation and economic reform (as in the former Soviet Union).  He predicts that democracy of an Asian rather than Western sort will inevitably follow prosperity, as in other countries of the region.

UNTENABLE VIEWS

But there are severe problems with such a view.  China's leaders, including those who will follow Deng, have never taken the view that representative democracy in a free-enterprise economy is the ultimate goal.  Even in its authoritarian days, South Korea, by comparison, always saw democracy as essentially desirable:  the questions were when and how, not if.  But the hard men of Beijing emphasise that their system is not, nor is ever intended to be, capitalist/ democratic, but socialism with Chinese characteristics.  This always sounds like a socialist political system with enough economic liberalism to prosper materially.

Related to this are Overholt's forecasts on Hong Kong's future.  He predicts few difficulties in the 1997 transition, mainly on the grounds that Hong Kong is too golden a goose for Beijing to strangle.  Yet it may not be so easy:  the attitude of China's leaders towards Chris Patten's democratic initiatives, for instance, has been consistently antagonistic.  No worries, says Overholt;  merely rhetorical bumps on a road inexorably leading onwards and upward.  In fact, he believes that China's political and economic development would proceed even faster if there was less criticism about human rights and other distasteful matters from elsewhere, especially in the United States.

Overholt identifies the coastal regions as the engines of China's decade of explosive growth.  Each of the three powerhouses are linked to external, capitalist partners:  Guangdong/ Shenzen with Hong Kong, Fujian/ Shanghai with Taiwan, Shandong/ Tianjin with Japan and South Korea.  Wealth is slowly trickling into the hinterland, but it is a slow and inconsistent process.  Overholt believes that those at the bottom of the new economic order will be content with the crumbs that fall from the nouveau riche plates.  Maybe they will;  maybe not.  The point is that the answer, like much about China today, is not clear.  But it is a point that Overholt misses.

CENTRAL CHALLENGE

It is in the difficulties facing the central government that Overholt is most willing to gloss over China's problems, although the decentralisation of power that helped to create boom conditions in the first place is now causing major problems for Beijing.  The provincial governments, as well as fiefdoms within the administrative system, are proving reluctant to give up their new-found freedom.  The result is constant friction, such as the protracted battle between Beijing and Guangdong over taxes.

Similar problems exist elsewhere.  Fujian is essentially conducting an independent foreign policy in relation to Taiwan.  Even the People's Liberation Army (PLA) operates as an independent commercial entity, especially in the missile- and equipment-selling business, regardless of the views of Beijing.  (The Next Economic Superpower notes in passing that one of the PLA's biggest earners is the manufacture and sale of high-powered speed-boats used for smuggling).  It is no longer even certain that the PLA is politically reliable.  Another Tiananmen Square-style crackdown would, above all, be bad for PLA sales.

The crucial issue is whether Beijing's political control, already substantially frayed, can continue.  Can the centre hold?  If not, then the path forward is Far less certain and is certain to include some unpleasant twists and turns.

Overholt notes these problems only to airily dismiss them.  China has a long history, he says, and internal dissension is a constant theme.  The local chieftains will defer to the emperor in the end.  In any case, other NICs have experienced disparities in the rate of growth but have still hung together.

Can it really be that simple?  Will a combination of economic growth and historical habit suffice to keep the nation together?  Overholt, with the bottomless optimism that only a banker with his eye on a billion-consumer market can muster, has no doubt about it.  But the real world may be less agreeable.

Overholt has a good ear for an anecdote, and The Next Economic Superpower includes a wealth of interesting tips.  For example, he suggests that anyone trying to set up a factory in China should lock in local support first, gradually working upwards through the political hierarchy rather than starting at the top.  Useful advice from a successful China hand:  but it is in the Big Picture that the book fails to convince.

The book is not without value, but it should not be the only work about China on the shelf.  For a broader and more realistic view, a wise reader should also consider more analytical (if less accessible) books, such as Gerald Segal's The Fate of Hong Kong, a book which lays out a number of possibilities for China's future.  By doing so it admits that China, above all, is not a country where anything should be taken for granted.