From its formation in the 1890s, the ALP has consistently sought to mediate the ongoing struggle between capitalists and workers. Labor leaders have striven to confine class conflict within limits that are compatible with the long-term stability and profitability of the capitalist system.
Labor governments have posed themselves as ruling in the supposed national interest. That has repeatedly led them to line up with big business in an attempt to frustrate any push by workers for major improvements in pay and social conditions. At times, Labor has launched concerted attacks on workers’ ability to organise strike action.
For decades, Labor’s favoured mechanism for constraining workers’ ability to fight for improvements in living standards was the arbitration system. A supposedly independent umpire would arbitrate on the conflicting economic claims of workers and bosses and this, Labor claimed, would avoid the harsh necessities of prolonged strikes and lockouts.
Thoroughly unsurprisingly, the Arbitration Court judges erred very heavily in favour of the interests of big business, though they attempted to disguise their anti-worker bias with humbug about the needs of the economy or, like Labor, appealed to a classless “national interest”. At the height of the Great Depression of the 1930s, the federal Arbitration Court, with the acquiescence of the Scullin Labor government, imposed a harsh 10 percent wage cut, which served to further compound the misery of mass unemployment.
Even in times of economic expansion, the Arbitration Courts routinely sought to frustrate workers’ demands through long delays in hearings, convoluted legalese and a refusal to hear cases if workers were engaged in any form of industrial action. In the immediate post-WWII years of nearly full employment, the Chifley Labor government relied heavily on the courts and the loyalty of the top union officials to the ALP to try to hold back a tidal wave of working-class militancy.
By 1948, workers had broken through Labor’s stringent wage controls and won important gains such as the 40-hour week. However, Chifley’s and the courts’ determined delaying action served to get the Australian capitalist class through the challenging postwar reconstruction period and set up the bosses to be the prime beneficiaries of the long postwar boom.
Whenever unions stepped out of line and defied the Arbitration Court, or even had the temerity to criticise some appalling decision by the judges, they were fined, deregistered or had their officials jailed. Such harsh penalties were virtually never applied to companies that imposed illegal lockouts, such as that of the coal miners in 1929, or those which paid workers below the legal award wage. No boss was ever sent to Goulburn jail in leg irons like the militant socialist president of the miners’ union, Peter Bowling, was for leading a strike in 1909.
The ALP leaders and the more farsighted sections of the capitalist class also hoped that the arbitration system would play a vital role in taming and incorporating the unions, especially the union officials. In this they were highly successful. The full-time union officials were separated from the concerns of their members and courted and trained to become responsible managers of working-class discontent.
This was exactly the role the union bureaucracy, both its left and right wings, played under the conservative Menzies government during the boom years of the 1950s and 1960s. Menzies had introduced tougher legal penalties against strikes, and these penal powers became a convenient excuse the union officials, including Communist Party officials, used to derail calls from militants for determined action to win higher wages.
However, by the mid-1960s, intense pressure was building up from below, and the union officials could not hold the line forever. All across the Western world, workers and young people were moving into revolt, not just over living standards but also around a series of political and social issues, above all opposition to the Vietnam War.
Here in Australia, the so-called absorption battle of 1968 by metalworkers, who had emerged as a key militant section of the working class, proved a decisive turning point. The metalworkers had built up powerful shop floor rank-and-file organisation that had enabled them to win substantial improvements outside the framework of arbitration. When the court sought to rein in those gains, all hell broke loose in a wave of mass strikes in outright defiance of the court that won a decisive victory.
The metalworkers’ victory helped fuel the confidence of broader layers of workers to take on the hated penal powers and forced the union officials to act. In response to the jailing of tramways union secretary Clarrie O’Shea for contempt of court in May 1969, general strikes erupted across the country. O’Shea was hastily freed from jail, and the penal powers were turned into a dead letter.
The floodgates had opened. Over the next five years, strike after strike erupted, and union membership soared. Workers went on to win their most substantial gains in Australian history.
Between 1968 and 1974, average weekly earnings for male workers rose by 30 percent in real terms, and women workers made even bigger gains, with a 21.2 percent rise in 1974 alone as a result of the struggle for equal pay. Other gains included the 35-hour week in a range of industries, longer annual leave and improved workers’ compensation. Workers’ share of national income soared to a record level—something the bosses have spent the last 50 years relentlessly rolling back.
With the Liberals unable to contain the rising tide of struggle after 23 years in office, sections of the capitalist class, including media mogul Rupert Murdoch and mining magnate Lang Hancock, backed the election of the Whitlam Labor government in December 1972. They hoped that Labor, by granting a few long overdue reforms, could use its greater credibility with workers and its strong links to the trade union bureaucracy, to coopt the revolt.
The working-class radicalisation of the late 1960s had put pressure on Labor to back the abolition of the penal powers, but Whitlam refused to do so, committing only “to put conciliation back into arbitration”. Even Labor’s industrial relations spokesperson, Clyde Cameron, who, unlike Whitlam, had a reputation as a militant unionist, declared in April 1970:
“A Labor Government would bring to the industrial arena an expertise which has been lacking for more than a generation. Labor could, and would, secure the support of organised labour in hammering out a new approach that would eliminate avoidable stoppages, develop better understanding between labour and capital, and lift production to the level that will be necessary if we are to compete with the rest of the world.”
Whitlam’s initial reforming program did play a significant role in coopting important sections of the radical social movements of that era, such as the women’s movement. However, it proved far less effective in stemming working-class struggle, which included inspiring revolts like the mass riot and nine-week strike by migrant car workers at the Ford Broadmeadows plant in Melbourne in 1973.
In the context of continuing low levels of unemployment, the number of days workers were on strike trebled from 2 million in 1972 to more than 6 million in 1974. With workers winning victory after victory on the wages front, the profit share of national income fell sharply. Whitlam tried to gain constitutional power to control wages directly via a referendum in December 1973, but was defeated by a strong union campaign.
The world economic downturn of 1974 transformed the political environment. The capitalist class launched a strident offensive demanding a crackdown on workers and tough austerity measures to restore profits. The Whitlam government quickly fell in behind this right-wing crusade. Labor ministers accused unions of irresponsible strikes and wage demands. “One man’s pay rise is another man’s job” became their right-wing mantra.
In January 1975, Whitlam declared: “You have to place the blame for inflation in Australia on wage claims. Wage claims in the past 12 months have so greatly reduced the profitability of employers that they have ceased to employ. As long as wage demands continue to cut profits, there is going to be unemployment.”
Labor introduced wage indexation in 1975, which resulted in wage cuts for some workers. Under the wage indexation system, wage increases were tied to rises in the cost-of-living index, the CPI. But increases applied only to award wages and did not cover above-award payments, which accounted for 25 to 30 percent of pay in some workplaces. Bob Hawke, who was by then president of both the ALP and the ACTU, played a key role in winning union backing for these wage-cutting measures, and the left Labor union officials went along with it.
But as far as the bosses were concerned, Labor’s attacks on the working class did not go far enough. The mainstream media threw all its weight behind new Liberal leader Malcolm Fraser’s campaign to bring down the Whitlam government, which climaxed with the Kerr coup of 11 November 1975. There was enormous working-class outrage over the coup, with strikes erupting across the country. The Labor and union leaders had to work overtime to derail this militant mass movement, with Hawke as usual playing a decisive role. Again, he enjoyed the backing of the supposedly left union officials.
Fraser’s Liberal government failed to live up to ruling class expectations, due in large part to sustained working-class hostility. Indeed, as unemployment fell with the mining boom at the end of the 1970s, workers went back on the offensive. A strike wave between 1979 and 1981 smashed wage indexation and increased average weekly earnings by 16 percent.
Fraser’s failure to break the power of the unions sparked ruling-class interest in Labor’s proposal for a Prices and Incomes Accord between the ACTU and a future Labor government. The Accord was in effect a national no-strike pledge to be imposed on rank-and-file workers by the union bureaucracy in return for, not even full wage indexation, but only “the maintenance of real wages over time”.
The Accord was backed not just by the likes of Hawke and the Labor right but also by Communist Party and left Labor union officials. Indeed, they had played a key role in devising it. These left officials tried to give the Accord a radical gloss with talk of union involvement in economic planning, improved social welfare provisions and even ludicrous claims that it was a step on the road to socialism.
Hawke had for years been hobnobbing with the movers and shakers of the big end of town, and when he took over as Labor leader just before the March 1983 election, the capitalists felt reassured. For the first time in its long history, the conservative Melbourne Herald—the voice of the elite Melbourne Club—endorsed the ALP.
The bosses’ confidence in and support for Hawke was well rewarded. Real wages fell in the 1980s despite a sustained period of economic growth. Company tax was slashed, and income inequality registered a sharp increase during the Hawke and Keating governments. Over the decade to 1994, only the top 20 percent of households received any increase in their incomes. Workers’ share of national income plunged and the profit share surged.
Labor’s Accord gutted the union movement. The union officials acted as a police force, cracking down on any initiative from rank-and-file workers. Consequently, workplace union organisation decayed and, in many industries, largely collapsed.
With the ACTU working hand in glove with the bosses and the Labor government, union membership entered a downward spiral, as the unions no longer delivered anything for their members. Membership fell from 49 percent of the workforce in 1982 to 31.3 percent when Labor lost office in 1996—at that time the lowest rate of union coverage since 1914.
Any union or group of workers that stepped out of line and defied the Accord faced heavy state repression, with the full backing of the ACTU. In 1985, a joint operation of the New South Wales, Victorian and federal Labor governments, the ACTU and other building unions deregistered and dismembered the Builders Labourers’ Federation, which had won substantial wage increases. In 1989-90, the Hawke government used the air force to break a pilots’ strike for higher pay, again with the backing of the ACTU.
To further undermine workers’ bargaining position, in 1993 Paul Keating, who had taken over as prime minister from Hawke, brought in an Industrial Relations Reform Act that undermined the central system of award wages in favour of enterprise bargaining, including non-union enterprise agreements. Awards were reduced to being just a minimal safety net.
Under the enterprise bargaining system, wage rises were to be obtained only via so-called productivity increases—workers trading off hard-won working conditions such as penalty rates and staffing levels. This shift was also aimed at preventing any gains made by more militant groups of workers flowing on to the rest of the working class.
The right to strike was further curtailed and allowed only within the confines of a very limited bargaining period after the enterprise agreement had expired. Workers could not legally strike over unsafe working conditions, the victimisation of union delegates, to prevent sackings or in solidarity with other workers.
John Howard won the 1996 election with talk of a “relaxed and comfortable” Australia. But this hard-right anti-working-class warrior eagerly sought to build on Labor’s attacks on workers’ rights and conditions. Howard immediately introduced harsher industrial relations laws and statutory individual contracts, but Labor and the ACTU denounced the workers who stormed Parliament House in Canberra to protest against these attacks.
However, in 2005 Howard overplayed his hand with his drastic anti-worker WorkChoices legislation. Workers were outraged at these escalating attacks on their livelihoods, and the union leaders were forced at long last to mount some serious resistance.
More than a quarter of a million workers marched in the first union rally against WorkChoices in mid-2005, and the follow-up rallies were also massive. After initially trying to duck the issue, Labor leader Kim Beazley promised to “rip up” WorkChoices but was at pains to make it clear to business leaders that he still supported industrial relations “reforms”, that is, the further undermining of workers’ rights.
Appallingly, in the lead-up to the 2007 elections, the ACTU abandoned its mass action approach and switched to a vote Labor strategy, dropping the “Your rights at work: worth fighting for” slogan in favour of “Your rights at work: worth voting for”. This was despite the fact that the new Rudd/Gillard Labor leadership had abandoned even Beazley’s minimal promises and was offering the unions virtually nothing in return for their support.
Kevin Rudd rode to victory in 2007 on the back of hostility to WorkChoices but also with the backing of most of the capitalist media, including the Murdoch press. The Rudd/Gillard government proved to be yet another highly conservative Labor government that ruled for the big end of town. It gave tax cuts to the rich and increased the age for the pension, the first time it had ever been increased. Labor introduced WorkChoices Lite, which preserved the key anti-union features of WorkChoices.
Labor maintained the Howard government’s Fair Pay Commission for fully two years after taking office and took no action to compensate low-paid workers when the commission awarded them a zero increase in June 2009. Julia Gillard went on to boast that Labor’s industrial relations laws had resulted in the lowest rate of increase in private sector wages since 1998.
Australian workers today face some of the harshest industrial relations laws anywhere in the Western world. These laws, which severely limit workers’ right to organise and take industrial action, are Labor’s laws.
Labor’s laws, along with the spinelessness of the ACTU leadership, have served the bosses incredibly well. Workers’ wages have stagnated over the last decade.
Now we have another federal Labor government that is determined to hold down wages despite workers facing the harshest attacks on their living standards in decades, and as inflation rockets upwards. On top of that, Labor Treasurer Jim Chalmers has made it abundantly clear that his upcoming October budget will be an austerity budget.
Meanwhile the bosses are absolutely raking it in. The profit share of national income reached a record high of 31.1 percent in the March quarter of this year. Yet Labor supports a further round of tax cuts for the rich.
It is not just federal Labor that is doing over workers, including the very workers who were the heroes at the forefront of the pandemic response. State Labor governments, the largest employers in the country, are holding fast to wage caps that will slash the real wages of nurses, teachers, ambulance drivers and other public sector workers.
There is a crying need for a concerted fight back. The recent strikes by New South Wales public sector workers indicate that there is plenty of anger and a willingness to take action. But, notably, the union leaders have been prepared to call action only against a Liberal state government.
If workers are to have any hope of defending their living standards in the face of soaring inflation, we need determined strike action right across the country in the coming months. That means workers organising to challenge their do-nothing union leaders who kowtow to the ALP.
But more than that, we need to build a militant socialist alternative to Labor. We need a socialist party that is prepared to organise an upfront political challenge to Labor’s pro-big business agenda—a party that is prepared to fight on every front for the rights of workers and all the oppressed.
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