Saturday, August 21, 2021

Did the Accord Cause Australian Neoliberalism?

Bob Hawke and Paul Keating key architects of Australian Neoliberalism

Lisbeth Latham

Reading the publications of the Australian far-left has seen a sharp rise in the discussion of the Prices and Wages Accord and attempts to relate that experience to the contemporary Australian union movement’s attempts to respond to the double crisis of the COVID pandemic and the associated financial crisis[1]. While there is much to be criticised in the Accord experience - these left critiques tend to see the Accord as a singular process, rather than the complex dynamic interaction with the unfolding not only of the Accord itself but the broader dynamics of Australian political and economic life in the period of the 1980s and 1990s. Many of these left critiques oversimplify and overplay the level of the intentionality of the leaderships of the labour movement in the implementation of the Accord and posit it as the key mechanism by which neoliberalism was established within Australian society. In this article, I aim to outline: 
  • the circumstances that the labour movement found itself in that lead to the Accord project; 
  • the changing character of the Accord over the period of its implementation; 
  • the internal processes of control and discipline within the labour movement to enable the Accord to be implemented and maintained and the impact of these on democracy within the labour movement; 
  • the impact of the Accord on working people; and 
  • the impact of the Accord experience on the capacity of the Union movement to organise and respond to attacks from the state and capital.
Inflation and unemployment crisis
In the early 1980s the Australian economy, like other advanced capitalist economies, entered into recession. The Fraser government responded to the recession by seeking to impose wage restraint by using the centralised wage-fixing system to cut real wages. In 1981, in response, unions, most notably the Amalgamated Metal Workers and Shipwrights Union (AMWSU)[2], launched a campaign to achieve a 35-hour week with no loss in pay - in order to maintain workers’ buying power and to create jobs by reducing working hours. This campaign was partially successful, the AMWSU, operating outside the arbitration system, won a pay rise of $20 per week and a reduction in the working week to 38-hours per week in 1981, with a further pay rise to be paid in the second increase of $14 in 1982, based on projected inflation for the next six months. These gains were based on a basis of the union agreeing to no further claims for twelve months[3].

In the wake of this victory, the crisis in the Australian economy deepened as the global economic crisis intensified driving down demand for consumer and capital goods. This downturn had already begun to be felt in Australia before the wage campaign, but the AMWSU had been protected from it initially due to residual demand for skilled workers.

In response to the crisis, manufacturing employers started to rapidly shed jobs, and about 90,000 workers were sacked. In the face of this assault, the AMWSU’s leaders abided by the “no-strike” agreements and did not take industrial action to try to protect jobs. At some shops, workers tried to secure jobs by agreeing to reduce their hours to a four-day week at four days’ wages[4].

This experience is now raised by the right as demonstrating the inevitable consequence of workers achieving wage rises [5]. Whilst, that conclusion is deeply wrong, and a fundamental misreading of the situation, this experience gave greater weight to the position adopted by the ALP in 1979 supporting the creation of an agreement with the union movement aimed at maintaining living standards that avoid either a wage breakout or hyperinflation[6]. The impetus for this position within the ALP had come from the period of hyperinflation during the Whitlam government (1972-1975). This was particularly the case within the AMWSU and other unions where members of the Communist Party of Australia were part of the leadership[7].

Stated objectives of the Accord
The initial objective of the Accord was to reduce unemployment and to hold inflation in check. This would be achieved by limiting inflation by restraining wages, while at the same time improving the standard of living of working people by boosting the “social wage” via expansion of government spending particularly around healthcare (Medicare), increased family payments and childcare. A major flaw of the Accord process was that whilst the system had mechanisms that effectively restrained wages, via a centralised wage-fixing system, there were no such restraints on capital regarding the setting of prices, leaving the system open to companies covering any rise in their costs via increasing prices, or just deciding to do so to boost profits. This limitation meant that understandably groups of workers, if not whole unions, were motivated to break out of the Accord in order to defend wages[8]

Control and discipline
The process of entering the Accord sparked immediate resistance within the labour movement. Most notably this was reflected in individual far-left individuals and organisations opposing the proposal. The Socialist Party of Australia (SPA)[9], which had a number of members who were elected officials in unions, most notably the Building Workers Industrial Union{10], Waterside Workers Federation, Seamen’s Union, and the Firemen and Deckhands' Union of New South Wales[11], publicly opposed the Accord and sought to direct their members who were union officials to oppose the Accord. These members revolted against the direction, arguing that it represented an attack on union democracy, splitting away to form the Association of Communist Unity (while some officials were expelled by the SPA for their refusal to follow party discipline, others simply resigned)12. While there are a range of reasons for this refusal to abide by party discipline, one factor was undoubtedly the reliance of these officials to their collaboration and alliances with officials from the CPA and the Labor left who supported the Accord. Brown has argued that these internal processes of control and discipline impacted on individual officials who had second thoughts regarding the Accord who could expect to be disendorsed and excluded from internal tickets if they did not tow the pro-Accord line[13].

Efforts to tie the movement to the Accord only intensified as the process continued. The Accord was posed as a necessary protection against the threat to the movement by the “new right” - in the form of the members of the Institute of Public Affairs and the HR Nicholls Society. This meant that those unions which sought to break from the Accord, were not just seen as revolting from the Accord, but risking the protection that the Accord was seen as offering the movement. So those unions that did revolt, such as the Confectionary workers[14], Builders Labourers Federation[15], and the Airline Pilots, not only faced aggressive and hostile employers, which included deregistration processes, strike-breaking, and the initiation of civil damages suits, but also were isolated, vilified, and raided by their “comrades” in rest of the union movement, including the Hawke Labour Government. Most notable was the deregistration of the BLF in the ACT, in NSW, and in Victoria[16].

How the Accord changed over the course of the process 
As much as it is tempting to discuss the Accord as a singular process, it changed considerably over the course of the 13 years it was in effect - with eight different Accords negotiated (although Accord Mark VIII was never actually implemented)[17]. Whilst the early Accords had wage-fixing aimed at addressing specific macroeconomic issues, such as inflation and unemployment, Accord Mark III, in 1987, introduced the concept of two-tier wage rises - with all workers automatically receiving the first tier of wage increases, and the second tier only being received subject to improvements in structural efficiency[18]. This shift both resulted in extremely uneven timing of when the second wage-rise was received, it marked a significant shift in the conceptualisation of the basis on which wage increases would occur, that they should be tied to demonstrated productivity increases beginning a process of Award restructuring.

As the Accord proceeded, a major justification for the need to maintain the Accord process, was to both hold off the introduction of enterprise bargaining (which was seen as a project of the new right) and to maintain the ALP government to prevent anti-union attacks that had been implemented by conservative governments globally – Peetz as argued that one of the major achievements of the Accord was precisely this delay. However, with the introduction of the Accord Mark VII in 1991, enterprise bargaining, that is negotiations on a company by company basis, rather than industry-wide arbitration and conciliation, was introduced[19]. While bargaining had always occurred within the Australian Industrial Relations system this process had always had a complex and integral relationship with the centralised systems around the Award System. The 1991 process, enshrined in the Industrial Relations Act, began to unravel this relationship. A process which has been deepened with the 1996 Workplace Relations Act, 2005 WorkChoices Act, and the 2008 Fair Work Act. Historically improvements achieved by militant unions in their better organised and more industrially strategic “hot shops”, most notably the AMWU, at the enterprise level could be leveraged and incorporated into the Awards via the state and federal industrial commissions. Enterprise bargaining began a process of severing this connection - which meant that militant unions and their members could only bargain for themselves in their local workplaces (albeit they have attempted to work around this via pattern bargaining which is now legally banned), rather than their actions to improve conditions serving as pacesetters for the conditions of all workers reinforcing individualism and breaking social solidarity between workers, which is such a central drive of the neoliberal project[20]. This process led to a tiering of working conditions based on the extent to which workers had access to enterprise bargaining, with those works reliant on the awards not only falling substantially behind on wages but in their broader working conditions through a combination of the successive award stripping by the Howard government and the achievements by workers and their unions within the EA system in adding and improving conditions.

Peetz has argued that the Accord process provided important protections to Australian unions in delaying conservative governments and their full-frontal assault on unions in Australia similar to what occurred in New Zealand as a consequence of the Bolger government’s attacks[21]. It is also arguable that the Accord process rather than protecting unions instead left them more vulnerable to the attacks when they came[22]. Whilst comparisons can be made to New Zealand and the devastation wreaked on the labour movement. A counter comparison can be made to the experience of the French labour movement which via ongoing resistance, including splits within the labour movement over responding to attacks by employers and governments[23]. This response meant that while the French movement, like the working class globally over the past forty years, suffered defeats in the wake of government attacks it was able to limit these defeats. In raising the example of France it is not to say that that course was necessarily open to the Australian movement, or would have been easy to pursue if it was but to make it clear that there are and were always multiple responses to challenges confronting movements, and that accepting one as the only alternative path to disaster can unnecessarily close off other alternative paths which may pose the possibility of a more positive outcome.

Over the course of the Accord, it delivered less and less on its promised objectives. Whilst there was an expansion in the social wage, real wages declined[24]. This decline was not simply problematic due to the stress it put on households but because real wages only failed to decline further as a consequence of increased productivity, i.e. as a consequence of work intensification and the reduction in broader working conditions - which were at the core of Accord Mark III and all subsequent Accords. This normalisation of wage rises to increases to productivity rather than maintaining and improving living standards is now embedded in what is left of Australia’s wage-fixing system under the Fair Work Act[25].

These shifts have resulted in a sharp and ongoing shift in the wages share of GDP, which has helped to drive up company profits. While this shift began under the Accord, it is important to recognise that this shift has occurred across advanced capitalist countries as corporations have sought to overcome declining growth and maximise their share of income[26].

Whilst the adoption of the Accord was contested within the labour movement, and as outlined above it was not a singular experience, its character changed over time. Contrary to some claims within the left, the early phase of the Accord, whilst deeply corporatist, was not neoliberal, in particular, the expansion of the social wage was not a neoliberal project, objectives which could be seen as neoliberal objectives came later in the life of the Accord[27]. Indeed, whilst the solution via collaboration was a break with the historic approaches of many of the communist lead unions, it was not a sharp break from that of many unions, particularly those associated with the right-wing of the ALP and formations to its right, such as the Democratic Labour Party[28]. These more conservative unions had long relied on “friendly” relationships with employers and the state in order to hold their own in demarcation disputes and contests with left unions. Indeed, Peetz argues that it was the ending of these relationships which were the driver of the decline in union membership and power rather than the Accord. Unlike the claims of some on the left, such collaboration is not inherently neoliberal, if anything the experience of neoliberalism globally has been an intensification of hostilities by capital against organised labour. The primary driver of the neoliberal transformation of Australian society was the Hawke and Keating Labor governments[29]. The initial incorporation of neoliberal aspects into the Accord was justified as a necessary defensive response rather than the direct intention of those who proposed and advocated the Accord and its maintenance. While this argument may have been cynical on the part of some of its advocates, it also reflects the extent to which direct advocacy of neoliberalism would have been resisted, even if the movement, like the rest of society, having absorbed neoliberal ideas as a consequence of the hegemonic position neoliberalism[30]. 
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Footnotes
1  Glanz, D. 2020 ‘Morrison’s ‘Accord 2.0’ talks are a trap for the unions’, Solidarity, [online document] accessed 23 May 2021. https://www.solidarity.net.au/unions/morrisons-accord-2-0-talks-are-a-trap-for-the-unions/.
    O’Shea, L. 2020 ‘Beware union leaders bearing deals’, Red Flag, [online document] accessed 23 May 2021. https://redflag.org.au/node/7224.
    Boyle, P. 2020 ‘Reject the Coalition’s Accord-style JobMaker’, Green Left Weekly, [online document] accessed 23 May 2021. https://www.greenleft.org.au/content/reject-coalitions-accord-style-jobmaker.
    Knobloch, B (18 October 2020) ‘How Australia’s Labor Movement Helped Build Neoliberalism’, Jacobin, [online document] accessed 23 May 2021. https://www.jacobinmag.com/2020/10/australia-labor-party-neoliberalism-accord
2  Now the Metals Division of the Australian Manufacturing Workers Union 
    Smith, B. A. 2001a ‘Amalgamated Metal Workers & Shipwrights Union (1976 - 1983)’, Australian Trade Union Archives, [online document] accessed 16 May 2021. https://www.atua.org.au/biogs/ALE0053b.htm.
3  Latham, C. ‘Wage rises don't mean job losses’, Green Left Weekly, [online document] accessed 23 May 2021. https://www.greenleft.org.au/content/wage-rises-dont-mean-job-losses.
    Wright, C. F. 2014 ‘The Prices and Incomes Accord: Its significance, impact and legacy’, Journal of Industrial Relations, 56(2):264-272. 2014
4  Wright ibid. 
    Latham ibid.
5  Hewett, J. 2009 ‘Lost lessons of the 100,000 'dead men'’, news.com.au, [online document] accessed 23 May 2021. https://www.news.com.au/news/lost-lessons-of-the-100000-dead-men/news-story/81ef1b0ee808c0db147562597741559b?sv=927bc14851e593f17f7ed5b4ea4305c9.
6  Latham op cit.
7  Strauss, J. 2013 ‘Opposition to the Accord as a social contract’, Labour History, 105:47-62.
8  Wright op cit.
    Stilwell, F. 1991 ‘Wages policy and the Accord’, Journal of Australian Political Economy, 28:27-53.
9  Now the Communist Party of Australia, but distinct from the original CPA which was founded in 1920 and dissolved in 1991
10 Now a major component of the Construction and General Division of the Construction, Forestry, Mining, Maritime, and Energy Union (CFMMEU). 
     Smith, B. A. 2001b ‘Building Workers Industrial Union of Australia (ii) (1962 - 1991)’, Australian Trade Union Archives, [online document] accessed 16 May 2021. https://www.atua.org.au/biogs/ALE0316b.htm.
   Holland, P. and Jerrard, M. 2018 ‘Unions have a history of merging – that’s why the new ‘super union’ makes sense’, The Conversation, [online document] accessed 4 June 2021. https://theconversation.com/unions-have-a-history-of-merging-thats-why-the-new-super-union-makes-sense-93077.
11 These unions amalgamated to form the Maritime Union of Australia and are now the Maritime Division of the CFMMEU. 
     Smith, B. A. 2001c ‘Maritime Union of Australia (1993 - )’, Australian Trade Union Archives, [online document] accessed 16 May 2021. https://www.atua.org.au/biogs/ALE0595b.htm.
     Holland and Jerrard ibid.
12 Bentley, S. 2003 ‘The origins and politics of MUSAA’, Green Left Weekly, [online document] accessed 29 May 2021. https://www.greenleft.org.au/content/origins-and-politics-musaa.
     Strauss op cit.
13 Brown, T. 2004 ‘Silencing dissent to win consent: National training reform in the Accord years’, Labour & Industry, 15(1):33-51.
14 Now part of the Food and Confectionary Division of the AMWU. 
     Smith, B. A. 2001d ) ‘Confectionery Workers Union of Australia (1986 - 1992)’, Australian Trade Union Archives, [online document] accessed 16 May 2021. https://www.atua.org.au/biogs/ALE0379b.htm.
15 Now part of the Construction and General Division of the CFMMEU. 
     Smith, B. A. 2001e ‘Australian Building Construction Employees Builders Labourers Federation (ii) (1976 - 1986)’, Australian Trade Union Archives, [online document] accessed 16 May 2021. https://www.atua.org.au/biogs/ALE0134b.htm;
     Holland and Jerrard op cit.
16 Strauss op cit.
17 Stilwell op cit
     Wright op cit.
     Strauss op cit.
18 Stilwell op cit.
19 Peetz, D. 1998 Unions in a contrary world: The future of the Australian trade union movement, Cambridge University Press: Melbourne.
20 Buchanan, J. Oliver, D. and Briggs C. 2014 ‘Solidarity reconstructed: The impact of the Accord on relations within the Australian union movement’, Journal of Industrial Relations, 56(2):288–307.
21 Peetz op cit.
22 Ewer, P, Hampson, I, Lloyd, C, Rainford, J, Rix, S and Smith, M (1991) Politics and the Accord, Pluto Press: Leichhardt.
23 In 1988, the leadership of Confédération française démocratique du travail (CFDT - French Democratic Confederation of Labour) expelled workplace unions from the Confederation’s federations in health, post, and telecommunications over a series of wildcat strikes that the workplace unions had supported. These expelled workplace unions formed a new federation within Post France and France Telecom, the Solidarity, Unity Democracy PTT - which played a leading role in subsequent mass mobilisations in defence of employment conditions, pensions, and workplace rights within French society over the three decades. Their success led to further splits by the left-wing of CFDT particularly in transport, health, and government services. These make up the core of the Trade Union Solidaires which is one of the most militant and left-wing confederations within the French labour movement.  
     Damesin R. and Denis, J.-M. (2005) ‘SUD trade unions: The new organisations trying to conquer the French trade union scene’, Capital & Class, 86:17-37.
     Connolly, H. 2012 ‘Union renewal in France and Hyman’s universal dualism’, Capital & Class, 36(1):117–134.
24 Stilwell op cit.
     Wright op cit.
25 McKenzie, M. 2018 ‘The Erosion of Minimum Wage Policy in Australia and Labour’s Shrinking Share of Total Income’, Journal of Australian Political Economy, 81:52-77.
26 Lapavitsas, C. Kaltenbrunner, A. Labrinidis, G. Lindo, D. Meadway, J. Michell, J. Painceira, J. P. Pires, E. Powell, J. Stenfors, A. Teles, N. and Vatikotis, L. 2012 Crisis in the Eurozone, Verso: London.
27 Humprys, E. 2018 How Labour Built Neoliberalism: Australia’s Accord, the Labour Movement and the Neoliberal Project, Brill: Leiden.
     Stilwell op cit.
28 Peetz op cit.
     Peetz, D. and Australian National University, Centre for Economic Policy Research 1997 The Accord, compulsory unionism and the paradigm shift in Australian union membership, Centre for Economic Policy Research, Australian National University Canberra.
29 Peetz op cit.
     Hillier, B. 2020 ‘Sally McManus is a neoliberal’, Red Flag, [online document] accessed 23 May 2021. https://redflag.org.au/node/7340
     Harvey, D. 2005 A Brief History of Neoliberalism, Oxford University Press: Oxford.
     Quiggin, J. 1999 ‘Globalisation, neoliberalism and inequality in Australia’, The Economic and Labour Relations Review, 10(2):240—59.
30 Mirowski, P (2013) Never let a serious crisis go to waste: How neoliberalism survived the financial meltdown, Verso: London.

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