Paul Howes calls for “grand compact” to put more harmony into industrial relations

Paul Howes at the National Press Club in Canberra on Wednesday. AAP/Lukas Coch

The chief of the Australian Workers’ Union, Paul Howes, has called for a “grand compact” between business, unions and government to reduce conflict and pitch Australia’s industrial relations towards the long term.

Howes said he agreed with the view that “our industrial relations system is dragging us down”. This was not due to any particular piece of legislation but because there had been constant change.

He pointed out that according to the World Economic Forum, Australia rated 103rd in the world on co-operation in industrial relations.

“We have created a hyper-adversarial culture – industrial relations as a blood sport. Everything is perpetually up for grabs … pragmatic issues of detail mutate into grand ideological battles.” A specific issue about one penalty rate became a debate about whether there should be penalty rates at all.

Addressing the National Press Club, Howes said business, unions and government needed to “work out a deal that we all agree to live with for the long haul,” creating an industrial engagement around certain national goals, and providing certainty on 10 to 20 year horizons.

It would not replicate the Hawke government’s “accord” with the union movement but it would evoke the same spirit, injecting some “social capital” back into the system.

Gestures of compromise from both sides could help get things moving.

“The union side could begin by conceding that there has been a pattern of unsustainable growth in wages in some isolated parts of the economy,” he said.

“On the flip side, business could concede that on the whole, economy-wide wages growth is at the lowest level that it has ever been, and industrial disputation at record lows.

"Perhaps they might agree – penalty rates and the minimum wage are fundamental planks of our social contract and should remain.”

In conciliatory remarks about Tony Abbott, Howes said: “I don’t believe for a second that the Abbott government is unturnable on industrial relations. Despite the more cartoonist portrayals, the Prime Minister is far more a politician than he is an ideologue.”

The ALP needed to embrace the grand compact “with both hands”.

“Despite the overblown rhetoric of various megaphones in our public debate, Labor is actually in a stronger position to strengthen the role of the market in our society than the conservatives are.

"Labor has always been the party of the free market – because we ensure that the market works for all. We civilise capitalism.”

Howes said he had recently canvassed his idea with some business figures. He anticipated it would get a mixed reception among his union colleagues.

Howes had a strong message to the union movement on corruption.

“Any union official proven to be engaged in corrupt or criminal behaviour is a traitor,” he said.

“The challenge for the leadership of the modern trade union movement is this. We must not allow this treachery to define us. We must not allow the traitorous minority to usurp the meritorious majority.

"If we turn a blind eye, if we ignore any pocket of dishonesty, it will grow like a cancer. It is my job, and the job of every union leader, to cut that cancer out.

"We must be the first to identify the indiscretions. We must be the first to crack down hard before they get out of control.” A culture of “corruption resistance” had to be developed at every level.

But he opposes a royal commission into the issue.

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