Former PM Jim Bolger is back to revive New Zealand’s unions

The Weekend Australian, February 9, 2019

We are not in the habit of looking to New Zealand for inspiration but before long we will be hearing all about its new wage growth-­inducing, inequality-busting work­­place relations system and why we should adopt it. First, here is an interesting chain of events that provides a heartwarming ­glimpse into how, over time, some folk can confound us all and prove astonishingly malleable.

In April 2017, Radio New Zealand broadcast an interview with Jim Bolger, a former prime minister who led a conservative ­National government. Back in 1991, Bolger introduced the ­Employ­ment Contracts Act, which was a hugely controversial reform. It decentralised the wages system, ended compulsory union­ism and introduced individual contracts. Within four years, the union movement had lost more than half its membership as density plunged from 46 per cent to 21 per cent. Since that time, Bolger has been reviled by NZ unions as the right-wing architect of their ­humiliating downfall.

But in the 2017 interview, Bolger caused surprise by declaring that neoliberal policies, which he concedes he implemented, had failed. Now, he says, unions, which represent about 18 per cent of NZ workers, are too small to have the influence they should have and that they should have a stronger voice.

A few months after this, NZ Labour Prime Minister Jacinda Ardern delivered an address to the local council of trade unions. She promised several reforms ­including a system of “fair pay agreements”. Our very own ACTU chief, Sally McManus, posted the speech on Facebook, praising it and adding a comment that Ardern’s proposals “sound like industry bargaining”.

Following on from that, in June 2018 a huge workplace relations shake-up was announced. Ardern appointed a panel of 10 people to a fair pay agreement working group. Their job was to design the fair pay agreement system. Lo and behold, Labour’s star recruit was revealed: Bolger — brought out, dusted off and ­appointed as chairman.

Since that time the group has beavered away, having meetings and so on, and now it has ­released its recommendations, titled “Fair Pay Agreements supporting workers and firms to drive productivity growth and share the benefits”. Bolger has been publicly promoting the document, which recommends the ­implementation of an industry bargaining system that has struck terror into the hearts of the business sector and is the very ­opposite of the system he introduced when prime minister.

Bolger claims the explanation for his turnaround is the “simple fact” that NZ’s productivity is low and the reason for that is inadequate equipment. A shovel cannot compete with a bulldozer, he says, no matter how hard the worker digs. They must look at how they organise their workers and at the equipment used to support workers, ­because they need to lift their productivity if they are going to have wages comparable to those of other countries.

When asked how industry bargaining, with mandated wage increases across an entire sector, will help lift productivity, Bolger had no answer, other than what he thinks the agreements might do — help businesses invest in the appropriate technology or equipment to give people the tools to be productive.

The new system the group has designed will allow unions, on ­behalf of workers, to initiate bargaining with every single business (even those with just one employee) (emphasis added) across an entire industry, provided one of two very easy tests is met. In this bargaining, all the workers, whether union members or not, “should be represented by unions and ­employers may be represented by employer organisations”.

Once bargaining begins, every business in the industry must give “all workers covered” paid time off to elect their bargaining team and instruct them on what to bargain for. If people disagree with who their representative is then mediation will occur, with an ­independent third party making a determination if the mediation fails. As bargaining is happening, strikes cannot occur — unless the strikes happen to be about other matters and it all just happens to coincide with the bargaining process (wink wink, nudge nudge).

Costs for bargaining, for travel and other matters — the provision of “strategic leadership”, “high levels of inclusion and participation in the dialogue” and ­actions “supporting a transformational not trans­act­ional conversation” via trained ­facilitators — should be met by government, a levy or bargaining fees.

Bargaining fees are fees levied by unions on workers who are not in the union, and these are now ­allowed in NZ. Bolger is coy on the topic of bargaining fees and how much his plan will enrich the unions, but once unions can ­initiate and secure agreements that cover an entire industry or occupation, and charge every single worker in that industry or ­occupation bargaining fees, then that will present them with a stunning rags-to-riches scenario.

Once a union initiates bargaining in a sector, for the sector not making an agreement is not an option. If all goes well and everyone agrees, then the deal will be ratified, according to a vote. However, if no agreement is reached, the matter will be ­referred to the regulator, who will make a binding determination and apply it with the force of law to every single employer and every single worker, including contractors and labour-hire staff. Appeals against this determination are only to be allowed on limited procedural grounds.

Don’t think what happens in NZ won’t happen here. Ardern is much admired by the ALP and the pressure from unions to adopt her reforms will be enormous. The blueprint is already written — all they need now is a stool ­pigeon to sell it. (emphasis added)