View from The Hill

Howes puts in a good word for Abbott as he calls for a new industrial relations approach

Paul Howes’ grand compact has ‘the same spirit’ as the accord of the 1980s. Lukas Coch/AAP

Paul Howes wanted to create a splash with his radical proposal for a business-unions-government “grand compact” to create a less adversarial industrial relations system, but the union leader is jumping into very chilly water.

The current mood is brittle. Unions are on the defensive, deeply hostile to the Abbott government and fearing a royal commission into corruption. The government is twisting employers’ arms to get them to push back against demands in enterprise bargaining. The Fair Work Commission’s review of the award system has led to a new debate about penalty rates.

Howes, national secretary of the Australian Workers’ Union and a political player with an eye to a future parliamentary career, declared in his address to the National Press Club on Wednesday that the ALP “needs to embrace the grand compact agenda with both hands”.

Labor responded tartly to this exhortation, with workplace spokesman Brendan O'Connor saying Howes was “entitled to his views”.

“Of course employers, the government and unions should work together cooperatively. Instead of a waging a war on penalty rates, the government should outline its jobs plan. There’s no doubt that the greatest enemy of a fair industrial system and workers is Tony Abbott,” O'Connor said.

Howes anticipates hostility from some union colleagues to his reach-out and no doubt he’s right.

This is especially so given his call for the unions to concede some points as a starter, such as that “there has been a pattern of unsustainable growth in wages in some isolated parts of the economy.”

Hardly more than a statement of fact but this line prompted a call from Greens deputy leader and workplace spokesman Adam Bandt for Howes to “resign as union secretary and join the Liberal party if he is going to just parrot Tony Abbott’s attack on people’s wages.”

While he is not suggesting a return to the 1980s “accord” between the Labor government and union movement, Howes urged a revival of “the same spirit” - rather than industrial relations being a “bloodsport” involving constantly changing legislation.

His “grand compact” would have business, unions and government “all work out a deal that we all agree to live with for the long haul”. They would create “an industrial engagement pursuant to agreed national goals”, that would promote decades-long certainty and thus confidence, and make productivity a shared responsibility.

But apart from business and unions making some concessionary statements, how precisely the compact would come together and operate is unclear. Howes admits his idea is sketchy.

He said: “If we are to achieve a grand compact it will not be the detail of the new framework that is critical – it will be the trust and good faith we breathe into the new system.” The system needs “social capital”.

But it could equally be argued that the specifics would be the test.

Getting beyond the feel good aspiration and putting flesh on the plan would be extraordinarily difficult.

What tangible form would the compact take? Remember the accord was a formal agreement between the union movement and a Labor government (although Bob Hawke, newly elected, did convene a major summit, including employers, which was useful).

The decentralised nature of the modern wages system, based on bargaining, complicates any attempt at broad efforts.

The big step between an in-principle idea for a consensus approach and any hard reality can be inferred from the comment of Business Council of Australia president Tony Shepherd (who chairs the government’s Commission of Audit).

He said the BCA “looks forward to a mature conversation between government, business, and unions” but “we can only have a meaningful conversation about fixing our flawed industrial system if nothing is taken off the table”.

When it comes to industrial relations, as Howe recognises, the default position is more often confrontation rather than a search for consensus. While there might be limited room for change, too many leopards would have to change too many spots for the transformation Howe seeks.

Even though he is talking about three parties to the compact Howe wants government to step back, enabling industrial relations to be dealt with as an economic workplace issue rather than a political one. However the economics and the politics are closely interwoven.

Howes argues the government, from a more withdrawn perspective, should start fostering harmony and co-operation. It’s near impossible to see this happening when the Abbott government is urging employers to muscle up.

Howe, though, doesn’t share the view of many fellow unionists about the PM. “I don’t believe for a second that the Abbott government is un-turnable on industrial relations. Despite the more cartoonish portrayals, the Prime Minister is far more a politician than he is an ideologue.”

Howes is ambitious for profile and advancement and the compact falls into the category of a “big idea” that attracts attention. But its chances of being taken up appear remote, and Howes could find himself subject to some “bloodsport” for his trouble.

Listen to the newest episode of Politics with Michelle Grattan with Guest Paul Howes below.