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Union boss, John Setka

Grattan on Friday: Who would have thought John Setka could be such a unifying force?

You didn’t need Nostradamus to predict the Labor and union blasts when the government released its industrial relations reforms this week.

But who – except the few in the know – would have foreseen the government-union-Labor unity ticket to land a massive “hit” on very bad boy John Setka?

The legislative rush to pass the bill allowing parts of unions – by which we mean divisions of the Construction, Forestry, Maritime, Mining And Energy Union – to leave the mother ship was remarkable. There was tripartite agreement on getting this done instantly.

Setka, Victorian boss of the union’s construction division, has over the years been a bane for the Labor Party, the ACTU and others in his own union. He’s been an industrial rogue and the union has caused endless trouble; as well, his private life was in the public domain, with a conviction for harassing his wife.

After a battle, Anthony Albanese finally forced Setka to resign from the Labor Party last year. ACTU secretary Sally McManus was not as successful when she tried to get him to step down from his union position. No way, Setka said, and his loyal union mates backed him 100 percent.

The Setka forces in the construction division were making life hell for the union’s president, Tony Maher, who heads the mining division, and national secretary Michael O'Connor, chief of the manufacturing division. Eventually, both resigned their national posts.

Then came the fightback. Maher hatched a plot with an unlikely new friend, Industrial Relations Minister Christian Porter, for the demerger legislation.

The workplace implications of COVID had brought Porter and Maher together, as it did Porter and McManus.

Porter was delighted to dance – the government had been after the construction union for years, but had been thwarted.

To get the deed done this week (and without a Senate inquiry into the bill), Albanese’s support was needed, and given. When caucus discussed the legislation on Tuesday, there were a couple of questions, but no one opposed. It’s worth remembering that Michael O'Connor is the brother of Labor frontbencher Brendan O'Connor, so there’s a lot of knowledge within Labor about the CFMMEU’s “internals”.

On Wednesday, Porter introduced the bill at 9.34am; it passed the House of Representatives at 10.16am. At 4.38pm it went into the Senate; it was done by 5.15pm.

Read more: Government set for quick passage of bill to facilitate CFMMEU breakup, with Labor support

Next year Maher’s mining division will be heading out of the CFMMEU; the manufacturing division may follow. Setka will still be around and is unlikely to change his ways. The union will be weakened, but its escapees will be able to get on with more ordinary industrial lives.

The “fix” to deal with the CFMMEU had been extremely quick (at least at the end) and supremely united. In contrast, bedding down the government’s industrial relations changes will be an extended and argumentative process.

The government’s omnibus bill covers wide ground, including: treatment of casuals and the transition to permanent employment; changes to enterprise bargaining; part-time flexible working conditions; stronger penalties for wage theft and underpayment; and new arrangements for greenfield sites.

The initial big flashpoint is the plan to streamline and loosen the Better Off Overall Test (BOOT). The BOOT considers whether workers would be better off if a proposed agreement applied rather than the relevant award.

The existing legislation allows the BOOT to be put aside if there are “exceptional circumstances” (that’s been there since 2009 and seldom used, and then overwhelmingly in relation to non-wage conditions).

The change effectively makes COVID an “exceptional circumstance” for two years before the clause “sunsets”. The safeguards are that the Fair Work Commission would have to consider the extent of support for a proposed agreement from workers and employers, as well as the public interest.

The unions and Labor say COVID has affected businesses so broadly that this would be a pathway to general wage-cutting. Porter argues it would be used only on a “small handful” of occasions. He declares it is “absolutely absurd” to think a business could apply when it was doing well.

Importantly, Porter has flagged he’s open to compromise on the BOOT and other measures in the bill.

The government insists its ambitions on industrial relations are modest. Asked on 6PR what the reforms were trying to achieve, Porter said: “this isn’t about changing the fundamentals of the system; it’s about fixing problems”.

The omnibus bill won’t be voted on until February-March. Although the government is anxious to deliver some reform, it does not want an acrimonious debate to drag on deep into 2021. Scott Morrison likes to play politics on his ground and his terms, and industrial relations is very rocky terrain for the Coalition. It’s always good for a Labor scare campaign, with WorkChoices still within sharp political memory and the union movement with backup resources.

While the government is willing to compromise to minimise Labor’s scope to make IR a major election issue, Albanese is desperate to stoke the conflict. For the opposition leader, the omnibus bill is manna.

Albanese is ending the year in a bad place. His problems go beyond COVID putting a restraint on the opposition. There is substantial questioning of his leadership among his colleagues, and it has grown recently. He can’t any longer be sure he’ll lead the party to the election and this uncertainty feeds back into his performance.

The other issue Labor will be looking to early next year is the future of the superannuation guarantee.

It’s obvious the government would like to overturn the legislated rise, set for July, from 9.5% to 10% (and progressively to 12%). There is a strong lobby, including in the Liberal Party, trying to stop the increases.

But politically this would be tricky, and that’s apart from the need to get Senate support. The argument that without the rise wages would be higher is disputed by critics.

If the government devised a trade-off – for example, letting people use some of their super for a first home – that might be an attractive middle course.

In political terms, Labor will be hoping the government simply attempts to stop further increases because, like the industrial relations debate, this would be a useful campaign issue.

Both sides know many of the legacies of COVID will last a very long time. But if we remain relatively virus-free, politics in 2021 should become more normal than in 2020. And that will affect strategies on both sides.

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