Editorial: Labouring the point on pressure

Leading members of the Government faced a stern test at the Labour Party's annual conference at the weekend. Strenuous attempts were made by unions representing Air New Zealand staff to have the Government, the airline's 80 per cent shareholder, intervene against its plans to put another branch of its operation out to contract. The Prime Minister and ministers Michael Cullen and Trevor Mallard faced pressure, in meetings with affiliated unions and remit forums with conference delegates, to protect the jobs of nearly 1700 staff.

The ministers pointed out that they had also to consider the interests of the airline's minority shareholders, which only prompted calls to buy the remaining 20 per cent and make Air New Zealand a fully state-owned enterprise.

The only satisfactory answer to this challenge - and it probably would not have satisfied Labour delegates - is a lesson in national welfare. Discouraged from demanding the Government intervene directly in Air New Zealand's contracting intentions, the conference settled for a resolution confirming the party's "commitment to a democratic society's right to choose public ownership, social goals and non-market answers to economic issues ... " This sounds like an ideological sulk.

It is also a declaration the party has no idea why a hands-off policy towards economic services is in the interests of not just the company concerned but the welfare of us all. The blame for that ignorance lies not so much with the party members as with the very ministers who had to weather the pressure at the weekend.

The party of Helen Clark, Michael Cullen and company has been led to believe they have repudiated the idea that the national welfare is ultimately best served if economic decisions are made by business managers exposed to open competitive markets.

The Clark Government considered the state-owned enterprises set up by the fourth Labour Government to be a mere precursor to privatisation and it has preferred to constitute companies such as Air New Zealand and Television New Zealand in a way that leaves them more vulnerable to political interference.

It can hardly blame the unions, therefore, for seeking such interference when they believe the airline management's decisions are rash and wrong. Last year, the Engineering, Printing and Manufacturing Union went as far as to commission an independent business plan to challenge the need for redundancies in the airline's maintenance staff and managed to save about 300 of the 500 endangered jobs.

No such agents of mercy were on hand to fight for the 470 head office jobs in sales, marketing, finance and human resources that were cut from the payroll this year. Now airport services and baggage handling at Auckland, Wellington and Christchurch are to be contracted out - a response in part to the decision of other airlines not to use Air New Zealand's terminal staff.

A few weeks ago, the EPMU and the Service and Food Workers' Union were given an opportunity to match the $20 million saving the airline can find from putting all the services out to contract. That is the challenge the unions should be pursuing instead of appealing for political help.

Dr Cullen and Mr Mallard have responded with some simple truths: company shareholders do not over-rule their appointed boards on employment issues and nor should ministers who become nominal shareholders in the national interest. Furthermore, pressures liable to be put on politicians to interfere are precisely the reason the law governing state-owned enterprises denied them the power. Labour's conference has just underlined the need for it.