Labour's policy is all about restoring the unions' power

By SIR WILLIAM BIRCH

Trade union domination in the governance, top policy councils and candidate selection processes of the Labour Party has become an increasingly serious threat to the future economic growth and prosperity of the nation.

In 1976, Eddie Isbey was the only Labour MP who had been a trade unionist. Today, 32 per cent of Labour MPs are people who used to hold union positions. On Labour's List for the 1999 election, 21 of the top 50 candidates (42 per cent) have held union positions.

Trade union determination to take control of the Labour Party arose in the wake of the reforms sponsored by Roger Douglas and Richard Prebble. It was greatly reinforced from 1991 by the response of working people to my Employment Contracts Act.

People were no longer forced to join unions. They could, for the first time, choose their own bargaining agent or negotiate an individual contract. Firms and staff, no longer dragooned into national awards, could agree arrangements to suit themselves.

Working people used that democratic freedom to walk away from unions in droves. I don't know what industrial democracy cost trade unions in lost subscriptions. I have heard estimates ranging all the way from $50 million to $150 million a year.

Labour's industrial relations policy is not about jobs or incomes. It is about restoring the lost power, privilege and income of the trade union movement. The unions want their power and cash back. They are using dominance of the Labour Party to get it.

What were the arguments made against the Employment Contracts Act by its Labour and union opponents? They said it would create industrial anarchy, falling wages, rising unemployment, less job security, lower productivity and a casualisation of the workforce.

Labour's Pete Hodgson talks of "reversing the worst ravages of the past nine years." In fact, under Labour from 1985 to 1990, before the act became law, the economy lost 120,000 jobs. The number of jobless rose by 110,000 and unemployment eventually peaked at 10.7 per cent.

Since the act's passing, employers have created 269,000 new jobs. The number unemployed is down by 44,000, and unemployment has fallen to 7 per cent. That is better than Ireland and Australia and far ahead of the major European countries.

The gains of the act have clarified one central fact: education, training and motivation are today central to employment. Unemployment is no longer about failure to create productive jobs, it is now about lack of marketable work skills.

Under the Employment Contracts Act, enterprise bargaining is the norm. A firm and its own staff negotiate the bargain that best suits their own local needs. Only 2 per cent of collective agreements cover more than one employer. That is the essence of the act's flexibility.

Flexibility is critical to jobless Maori and Pacific Island people. They need contracts that help them to find a toehold in the workforce.

Then they can begin to win the skills that bring promotion and rising incomes, instead of living on a benefit in perpetuity Flexibility does not, however, suit the unions. Under Labour, anybody who wants a collective agreement must join a union and must use it as their bargaining agent.

Individual contracts must have the same terms as the union's collective contract.

Unions under Labour will be given the power to force firms to negotiate on multi-employer agreements, then bring staff from the whole group out on strike to support the union position in a dispute with an individual firm that is party to the agreement.

New avenues would be opened up for extended court action by unions against employers, where court intervention rather than bargaining would set the terms of agreement, giving courts wide powers to impose anything they see fit on the parties.

That agenda is not about creating jobs or improving incomes. It is about increasing the power of trade unions. The only jobs created will be for extra trade union staff.

On the other side of the world, Britain's Labour Prime Minister Tony Blair and Germany's left-wing Chancellor Schroder, in the document Europe: The Third Way, call for more flexible labour markets as a key to growth and employment in Europe.

That successful approach is, however, no longer an option for the Labour Party in New Zealand today. Trade unions have made themselves the dominant influence in its caucus, policy-making councils, party list and the funding and management of its 1999 campaign.

When they call the tune, there is no choice. The Labour Party dances.

* Sir William Birch is the Minister of Finance.