A new kind of union muscle
One thing this week's ACTU Congress should remind all Australian's is that the union movement is a big and impressive organisation - and combative. Delegates at the 500 strong congress booed and hissed the Deputy Prime Minister Julia Gillard when she appeared on stage at the gathering, for not agreeing to an early shutting down of the construction industry watchdog, the Australian Building and Construction Commission (ABCC).
They were strong in applause for the Prime Minister, Kevin Rudd, however, who declared that the Fair Work Act would stand for decades as a Labor icon, a legacy of the stature of Medicare and compulsory superannuation.
ACTU President, Sharan Burrow's Congress speech ranged across a huge spectrum of economic, social, political, and environmental matters.
Unions destroyed the Howard government, she declared. Let the coalition parties forever tremble in fear at the political might of the union movement she warned.
She turned on "unrestrained financial markets, the fraud of self-regulation...the greed and stupidity of bankers and businesses...casino capitalism...and the dark side of private equity". These, she says, are the cause of the global financial calamity. She's in no doubt that "the corporate world has lost its moral compass". She named the CEOs of ANZ and Pacific Brands as "shameful".
And more! Unions will protect jobs by seeking a "green new deal". She insisted that "major economic and social reform" is needed. She said it's a "crime" when employers fail to secure 100 per cent of worker entitlements when businesses fail. Employee entitlements should be above secured creditors, "that is, the big banks," she said, in cases of insolvencies.
Burrow called for workers to be on eight or nine day fortnights when businesses downsize due to a collapse in demand. ‘Down days' are to be used for retooling and re-skilling. She wants a European style "reinvention of the social insurance base".
In the same way the evils of business have wrecked the economy, "unsustainable economic development" has created a path to "environmental catastrophe" (climate change).
She turned on the coalition for opposing government debt saying that debt at around 14 per cent (of GDP) for around 15 years is "an extraordinarily good deal".
Agree or disagree with Burrow's assessments, the power of the union movement has to be recognised. But it's a different power from the past.
With less than 14 per cent of the private sector being unionised it's industrial muscle is isolated to small pockets. But with 41 per cent of the public sector unionised it has high relevance in public service delivery. And with some 2 million members, its direct annual revenue easily exceeds $1 billion.
However it's real financial muscle lies in its close connection to the 70 or so industry superannuation funds managing around a quarter of Australia's $1.2 trillion superannuation sector. These funds are ordinarily controlled by trustees appointed by both unions and industry associations creating common business interest. The consequence is that the broad Labor movement has serious influence over the direction of funds management in Australia.
There's nothing wrong with this, as funds are managed according to strict prudential requirements. But it demonstrates the new union reality of high level, sophisticated, executive management. Unions have become capitalists. They have intentionally become the very thing they so often appear to chastise. Beware the marketing spin!
In this context, this week's ACTU Congress was really a re-branding exercise -Burrow's was relaunching the unions' post-Your Rights at Work campaign.
And even though Julia Gillard was booed, she was assisting. Gillard said "Like me, I am sure you were appalled to read of dangerous car chases across Melbourne involving carloads of balaclava-wearing people, criminal damages to vehicles resulting in arrests...(this) must be unreservedly condemned..." She was referring to Melbourne's Westgate Bridge dispute which Business Spectator first exposed on April 6.
The modern union movement is eager to suppress this behaviour. In the protracted wharves dispute, the violence may have added to union mythology but Howard won the following election. Unions know the real prize is Labor controlling government. Union violence that results in media exposure damages that objective.
There's a new union game in town. It involves political, social and business activism run by a sophisticated, well resourced union marketing operation. And they're very good at what they do.