Middle Class Welfare

Andrew Norton has a neat piece in the latest issue of Policy Magazine on “The Rise of Big Government Conservatism“, along with some really interesting graphs showing the spending patterns of the Howard Government. My favourite chart is below.

Of course, under Keating the economy was coming out of a recession, while Howard presided over a boom. But the comparison should probably still surprise many Australian commentators.

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52 Responses to Middle Class Welfare

  1. Kevin Cox says:

    This graph tells us that market economists are failing society because they are not coming up with solutions (or have not yet persuaded the policy makers) for ways of funding public goods and services or of redistributing income except through taxes. Taxes as a way of funding public infrastructure and as a way of redistributing income are blunt economically inefficient tools and make us all the poorer by poor allocation of investment funds, by the existence of poverty traps and through “welfare” to those who least need it.

  2. Patrick says:

    Which is obviously the fault of market economists.

    Reminds me of how the death of elephants was the fault of scientists who hadn’t developed convincing enough artificial ivory.

  3. Kevin Cox says:

    As an analogy it holds up if there are scientists who claim that artificial ivory is the solution to saving elephants.

    Market economists claim that the market is the best way to allocate resources yet the evidence is that they are not succeeding in convincing people that market is the best way to allocate government resources.

    Perhaps market economists might like to take a closer look at the application of their theories or at the theories themselves?

  4. Hemingway says:

    For the graph indicating significant increases in expenditure for Education, please keep in mind that a fair whack of that money is going to prop up private schools, including some well-heeled, elite institutions.

  5. The main thing driving the education spending was increased school enrolments, with about 200,000 extra in the private schools for which the Commonwealth is principally responsible and another 40,000 in government schools, to which they also make a contribution. The ‘elite’ private schools have a small percentage of total enrolments, and are in the lower funding bands, so they are not very significant in all this.

    Andrew L is quite right that the different fiscal situations of Keating and Howard are important. We would not have seen this kind of spending from Howard if the Budget had been in deficit, and indeed in the early years of the government when there were deficits spending was tight; even including a very rare budget that cut spending in real terms.

    My main point about the Howard government in the article is that it chose to spend up big even when it did not have to, when there was no pressing actual or policy need to spend.

  6. Peter Whiteford says:

    I have previously commented on some similar arguments that Andrew put up on his own blog. I’m not entirely convinced that real (inflation-adjusted) spending is the most appropriate way of looking at spending trends. I prefer looking at it as a % of GDP, but then I’m interested in international comparisons.

    However, I take the point made in his article that there are areas of spending that you wouldn’t necessarily expect to increase in line with GDP, but then there are other areas of social spending that you might expect to increase faster than prices, and some even faster than GDP.

    From Andrew’s charts in Policy, clearly the biggest single driver in terms of increased social spending in Australia has been on health care. For those who like international data look at http://www.oecd.org/dataoecd/20/51/37622205.xls

    There you will find amongst other things trends in real health spending per capita. If you take the period since 1996, then Australia has been just above the OECD average, and the difference has been marginally higher since 1996 then in the period 1992 to 1996, for example.

    But overall, Australia has been experiencing a common international trend. Per capita spending has gone up by a little less than in the USA – but from a much higher base in the US – with most of the countries with more rapid increases being lower income countries (e.g. Ireland, Poland, and Korea).

    As pointed out by a different part of the OECD: “Historically, spending on health care has risen faster than GDP and this has been the case even if adjusting for demographic change. There are a number of candidates to explain this development – not least effects of technology and relative prices which are discussed below. Another potential explanation is an increasing preference for health as income rises (i.e. health as a “superior” good) but the empirical evidence on this explanation is mixed.” http://www.oecd.org/dataoecd/19/24/37740852.pdf

    So I would conclude that in terms of health care what we have seen in Australia since 1996 or earlier is not particularly surprising (but this doesn’t mean that policies couldn’t have been better or that we don’t need to worry about the future).

    Pension spending has gone up partly because of population ageing and partly because the Howard government indexes pensions to wages as well as prices – although even here this is a continuation of a de facto Labour policy.

    Part – but certainly not all – of the explanation for higher spending on disability pensions is also due to population ageing as the share of the population between 55 and 65 has risen as the baby boom generation approaches retirement age. Indeed, Natalie Jackson, a demographer at the Uni of Tasmania, calculated that before about 1992 changes in demographic structure would have been expected to reduce spending on disability payments, everything else being equal, but since 1992, demographic composition could be expected to positively contribute to spending growth.

    The decision to index pensions to wages has and can be expected to continue to add to increased spending in real terms. However, if you are looking forward over the long term, say 30-40 years, then indexing payments to prices creates significant challenges in terms of future poverty. Basically you end up with ridiculously low and politically unsustainable benefit levels. The UK reforms to their pension system following the recent Turner report show that you can overshoot on the expenditure reduction side as well.

    As I commented on Andrew’s blog, however, there have been very significant real increases in family payments, and this is undoubtedly the result of conscious policy choice (although even here this has been more of a continuation of previous policies than is sometimes acknowledged).

    I must say that I get the strong impression that CIS don’t like the current system of family payments!

    I also find the CIS antipathy to the Future Fund a little surprising. It is a commonplace argument in discussions of fiscal policy in the light of population ageing that one way of dealing with the implications of future ageing is to run surpluses in advance.

  7. I don’t disagree with much of what Peter has said. There are factors that would drive up expenditure regardless of the prevailing philosophy of government, which I acknowledge in the article (and had more on in an earlier version, which I deleted because the article was too long).

    So the article wasn’t arguing against that. It had to have the material about big spending because many people believe that the Howard government is stingy, and it is hard to write about excessive spending if people don’t accept that there is any rapidly increasing spending to investigate.

    The main point of the article, as I noted in an earlier comment, was that there was discretionary spending, and that it came out of right-of-centre beliefs more than electoral considerations (though the two aren’t mutually exclusive, of course).

  8. Corin says:

    Andrew L and N, there is a great paradox going on – don’t you think – the left has a belief that economic rationalism (whatever that is) is rife and that government is not active enough, when it would seem that the size of government is actually growing rapidly. But when and where is the question? And can this continue? What can Labor do – be big G or different G?? Has Rudd misunderstood Howard with Hayek comparison (I would say certainly)

    There has to be a great article in there somewhere?? What is the paradox – why is there no consistent understanding on the direction of the Howard Government?? Is it because there is no consistency to Howard’s policies or is it something else??

    Andrew N, I thought your posts on Howard the ‘Conservative Social Democrat’ were among the best I have read on the blogs this year. For me it was moment of rare insight on a largely barren online talkfest among a few elites. It actually cut to the core – and I’ll bet it becomes part of the lexicon of Oz politics. If you don’t mind the comparison – it is the sought of thing Paul Kelly will say in a few months – and everyone will think he had found a ‘nugget of gold’.

    If you don’t finish that article – I will?? Get it published in the Oz before Kelly does.

  9. Corin says:

    Just printed off the article – will have a read.

    Can I also add that I think the similarities in the politics of new Labour in Britain and Howard’s Liberals in Australia is often greater than the differences. The use of devices like ASBO’s, control orders, so-called devolving of schools, etc, in Britain indicates that Big Government (even under a Labour brand) is not always in the traditional progressive stance.

    Both governments run hard on the ‘centre’ and squeeze the opponent of oxygen. Where new Labour is somewhat different is two elements:

    1. I think they have pushed up taxation in a manner that is now unpopular; and

    2. Iraq hurts the left more than the right.

    However the Conservatives in Britain are now a party of big Government it would appear. Big G is back in Britain that is for sure, and it is not going away for a long while.

  10. Corin – While Howard’s use of social democratic language is interesting, he could have constructed a conservative welfare state without it – in conservative terms, the support of the family as an institution, and perhaps also promoting social cohesion, would be sufficient justification for his policies, without pointing to egalitarian implications.

    My article does try to argue that Howard’s big government is *not* the same as big government on the left, and therefore there is space for alternative forms of big government on the left as well as smaller government critiques from the right.

  11. Corin says:

    Andrew. read the article – great stuff – initial impressions:

    1. I think Howard uses ‘choice’ building rebates and subsidies as a means of creating solid voter support among notional followers of the Liberal party. Whilst I accept that many if not most uses of private education are already often notional Liberal supporters – Howard uses these devices in a political sense as well as for social policy ends;

    2. Given my view above – I’m not sure that polls indicate the extent of the political dividend from them for Howard;

    3. The political dividend may be better seen when Labor starts to unpick the choice inducing mechanism – this normally scares the horses a little bit.

    In my view there are three policies which will probably dominate the next 20 years of Australian debate, but may not ever get implemented:

    1. Extending wage subsidies and wage tax trade offs at the low-mid end (i.e more carrot than stick);

    2. Offset co-payments for non-essential Medicare; and

    3. Differential vouchers for all schools across every state.

    In my view this is the best combination of smaller welfare dependence, more inducement for private insurance by those who can pay, and promotion of choice in service delivery and devolvement of power past the states and to the citizen.

    This set of policies can be the heart of a re-interpretation of Government action in service delivery – and the promotion individual responsibility in a caring society: the real centre reform position that Labor can only really implement when it is bigger than its constituency elements.

    BTW – write the article for the Oz – they would love to print a piece on ‘John Howard – the Conservative Social Democrat?’

  12. Corin – You could be right that with private schools Howard is on a winner, in that the people who are sending their kids there presumably feel strongly that they are acting in the interests of their child, and that this would be a sufficiently strong motive to punish electorally any party that tried to stop them. And indeed, Labor is not going to, though expect to see measures to curtail the growth of private schools if they win. There is a feral public school lobby in the ALP they need to placate as well.

    I don’ t think vouchers are the top priority issue in schools. There is little point in changing the demand side unless the supply side can change as well, and that means creating far more autonomy among publicly owned schools.

  13. Corin says:

    Andrew N – more autonomy – great – bring it on: exactly what is needed. Having said that, a single regulatory environment for all schools would also require private schools to accept more regulation on criteria for selecting students: though they could elect not to be a part of the voucher scheme. I’m not so sceptical on differential vouchers – I think the next Prime Minister (probably Costello) will want an emblemic issue to part company with the Howard era and re-energise the Government. My concern as someone from the centre (notionally left of) is that a Conservative voucher scheme would not put sufficient differential in the system to make it work for the great majority. Having said that – the GST package indicates that the Libs view compensation in the same way as they view spending – if it is needed they will do it. Anyway enough on that topic.

    I can’t stress enough that if Costello is next PM and doesn’t seek his own agenda, he will be a historic footnote: for all Costello’s failings – I think he is far more ambitious than that. Post Howard will be very interesting – whether Costello or Rudd or someone else.

  14. Chris Curtis says:

    Publicly owned schools do not need more autonomy – they need less. The changes in Victoria between 1992 and 1999 under the principle of more local autonomy for schools were a fraud. The autonomy was in fact an increase in power for the principal, not the school community, which ended up with less power. The principal thus gained more opportunities to bully and victimise some staff while rewarding the more sycophantic ones.

    The system as a whole became much less efficient because the advantages of economies of scale were lost. The whole process of filling jobs is but one example. Each of the 1600 schools would develop its own job descriptions and key selection criteria, meaning countless hours of pointless effort within the school and even more countless hours of pointless effort by applicants who had to do quite different applications for essentially the same job because each school insisted on describing it differently.

    Not one child has been better taught because of the changes made in the 1990s.

  15. Sinclair Davidson says:

    The autonomy was in fact an increase in power for the principal, not the school community, which ended up with less power.

    If we read “school community” as being the education union, then yes that statement is entirely correct. Local autonomy removes the ‘one-size-fits-all’ approach that Chris describes and lauds in his post, and allows the parents through their agent – the principal – to set criteria for education. All good. The unions are the only loser – even better. I have never understood how a trade unionist can be committed to improving standards in education. Unions are a solution to the ‘lemons problem’ – if an individual was any good at their job they wouldn’t need to join a union. But I digress.

    My own bitter experience of ‘workplace bullying’ consists of me requesting staff to arrive at their lectures on time, to finish on time, to provide adequate feedback to students, to maintain reasonable office hours (or be available for appointments), to mark test papers within a week of the test and other such outrageous requests – only to accused of bullying. I don’t doubt that some terrible things happen, but from my own experience ‘anti-bullying’ procedures exist to protect those bone-idle and work-shy individuals who believe the education sector owes them a living.

  16. Chris Curtis says:


    I don’t know why you can’t understand why a trade unionist can be committed to improving education. I am a trade unionist. I am committed to improving education. There are tens of thousands, perhaps hundreds of thousands, like me. We have argued for generations to make improvements in the education system; e.g., for the people standing in front of classes to actually have educational qualifications, for smaller classes to allow individual attention and to stop teachers burning out from the onerous workload, for the resources needed to do our jobs. Even when we argue against the huge pay cuts teachers have suffered over the past thirty years, which we obviously have a personal interest in, we are also arguing to encourage able people to go into and remain in teaching.

    As a former senior teacher, advanced teacher level 3, leading teacher and acting vice principal, who has held leadership positions in schools for 28 years, I guess other people have thought that I was good at my job – and I can say the same thing about other teacher unionists. The AEU fought and won decent conditions for me and other teachers (something it can no longer do because many newer teachers do not have any understanding of or commitment to the profession as a whole). It has also assisted me in taking on the bullies that I have had to deal with in my time in teaching.

    You do digress with your attack on unions, but I am happy to digress with you. The past strength of the Australian union movement is one of the reasons Australia is a better place to live than the USA. The eight-hour day, the conciliation and arbitration system, a minimum wage at double the US one and health and safety laws are all partly due to unions. It is now fashionable to attack unions, yet they are in fact weaker than they have ever been. Unionism creates strength from those easily exploited on an individual basis. In one sense, the victories of the union movement have been its undoing: we don’t have the widespread brutality and abuse of the past in our workplaces, so fewer people see the need to join. Nonetheless, the decline of unionism still has negative consequences for working people: they just are not as extreme as in the past.

    By “school community”, I did not mean the education union. I meant the parents, teachers and students of the school, each of whom has a particular contribution to make in the running of a school. In my experience, the schools that have worked best have been those in which teachers have had the greatest say, while those that were the most ineffective were those in which principals acted as dictators. The collegiate judgment of members of the teaching profession will know more than the lone individual who has reached the top (often through compliance with the latest fads of the system).

    Principals are not agents of the parents. Parents have some say in their appointment (in Victoria at least), but only some, and the principal answers to the Department of Education, not to the parents of the school. In my first two and a half years in my current school, it had seven principals. That is not conducive to being an agent of parents or to being educationally effective in any way. Schools I have known can function well with a hands-off principal if the other senior members of staff are good at their jobs. A hands-on principal who micromanages beyond his or her ability is far worse for a school.

    Competitive anecdotes are not proof, but my experience is that principals need to be tightly constrained in the exercise of power because many of them use what they have in an exploitative and abusive way. I have seen many examples of this. It is unfortunate that the Labor Government did not use its 1999 victory in Victoria to open up the promotions system so that better quality candidates could replace the bullies and jargon-spinners so advantaged by the previous government. Even good principals are bogged down in busywork because of the autonomy supposedly granted to schools. There is a mountain of accountability requirements, none of which has led to a single child in the state being better taught. There are also tasks which were once done centrally but which now take the principal’s time away from educational leadership.

    Some private schools run autonomously. Others are part of the Catholic system. Government schools are part of a system, and being part of a system gives economies of scale.

    Each government school should have a set schedule of promotion positions, with set statewide criteria, with perhaps room for one additional school-based criterion. This would save tens of thousands of person-hours of effort in schools and for applicants.

    Conditions of work should be the same in all schools, not good in some schools and poor in others because of local negotiation. I would define good as those which applied for three years in my school (while I was timetabler): a maximum teaching load of 21 48-minute periods, plus a daily ten-minute home group and an extra once a fortnight, and classes capped at 25 students. These conditions were the best in the state. They got worse as a direct result of the last EBA when a weakened AEU surrendered in its 40-year campaign to the state government.

    I don’t know any “bone-idle work-shy individuals who believe the education sector owes them a living”, but I know that fact has not stopped such comments being made about teachers for almost the entire time I have been in the profession.

  17. Sinclair Davidson says:

    Chris – I hear what you say, and I have heard it before. I don’t believe it. I do believe what Ludwig von Mises (Socialism first published in 1922) had to say about unions.

    The cornerstone of trade unionism is compulsory membership. The workers refuse to work with men who belong to an organization not recognized by themselves. They exclude the non-union men by threatening to strike or, ultimately, by striking. Those who refuse to join the union are sometimes compelled to do so by rough handling.

    And further

    The weapon of the trade union is the strike. It must be borne in mind that every strike is an act of coercion, a form of extortion, a measure of violence directed against all who might act in opposition to the strikers’ intentions. For the purpose of the strike would be defeated if the entrepreneur were able to employ others to do the work of the strikers, or if only a section of the workers joined the strike. The long and the short of trade union rights is in fact the right to proceed against the strike-breaker with primitive violence, and this right the workers have successfully maintained.

    To be blunt, this characterisation of unions (which in my opinion and experience, is entirely correct) is utterly incompatible with educational values.

    So how do I explain your comment that the union has worked hard to improve standards for teachers? Again, I refer to von Mises

    The fundamental problem for the appreciation of the economic and social consequences of the trade unionism is the question whether labour can succeed, within a market economy, by association and by collective bargaining, in getting high wages lastingly and for all workers. To this question, economic theory—both the classic (including its Marxist wing), and the modern (including its socialist wing too)—answers categorically in the negative. … It is true that this fundamental point has been entirely misunderstood by many thousands of worthy labour leaders, who have devoted their life work to the organization of trade unions, and by many eminent philanthropists who have advocated trade unionism as the cornerstone of future society.

    Your argument is an optical illusion – in any event few Australians today work an eight-hour day.

    Getting to education, it is my belief that productivity has fallen not increased over the past years. Teachers spend less time in the classroom and more time ‘preparing’ and the like, while the educational outcomes have fallen. Kevin Donnolly is in the Australian (almost) every week highlighting yet another education disaster. To be fair, today he argues that even the AEU has opposed some of the antics of the WA education department. To take just one example, our host (sorry Andrew for derailing the thread) has shown that class size doesn’t matter much.

    I understand that you and I are pitting our own individual experiences against each other and anecdotes are not data. Yet while there are many, many hard working teachers and academics, their union membership (in my experience) is, at best unrelated to their work ethic and often negativily related to their work ethic. i have yet to meet a work-shy bone-idle individual (in the education sector) who was not a unionist. You point, however, is well made – I accept there may be some unonists who are not work-shy and bone-idle. I should also point out Hayek’s argument about unions is that the pendulum had swung from one extreme to the other.

  18. Russell says:

    “I have never understood how a trade unionist can be committed to improving standards in education ….. i have yet to meet a work-shy bone-idle individual (in the education sector) who was not a unionist”

    Sinclair this is laughable, but also insulting. A lot of professional people belong to unions (many of my colleagues belong just because membership includes insurance which covers you going to and from work) who never think about ‘unionism’, but think a lot about constantly raising their professional standards. It’s the satisfaction they get from their professional work which is important to them.

    I was a union delegate (mainly because no one else could be bothered and you had to have a union rep for the EBA negotiations) for many years in a large organisation, so I had the membership list: 50% unionised (quite high) but membership was absolutely no indicator of work performance. Probably my most remembered remark at an EBA meeting was that I had never known so many to produce so little for so few, as my colleagues did – that was because of incompetent and gutless management. I left that organisation because I couldn’t stand the frustration of being prevented from doing really good work.

  19. Sinclair Davidson says:

    Russell, Chris, as I say ou have your anecdotal evidence, I have mine. This is a testable hypothesis – although I don’t know of data at the individual level. (I do note Russell’s comment “I couldn’t stand the frustration of being prevented from doing really good work”. Combine hat with 50% unionism and poor management {perhaps a reasonable overlap with the union members?} and my view is supported). I suspect an inverse relationship between innovation and/or productivity and union membership at an industry level. Those areas of the economy that are more dynamic will have fewer union members than those that are less dynamic. As an opening gambit, let me point the government sector (by definition less dynamic – that’s not an implied insult, I expect this result for good reason) is more highly unionised than the private sector. The mining sector both highly dynamic and with dangerous working conditions is less unionised than other parts of the economy.

  20. Russell says:

    Sinclair – it’s hard to compare isn’t it, since the senior appointments in private enterprise presumably aren’t political appointments. Changes everything …..

  21. Sinclair Davidson says:

    Yes. But that’s why we’re debating. The evidence isn’t as conclusive as, at least, one of us would like.

  22. Chris Curtis says:


    Unionism is no longer compulsory in law or fact. The right to strike was won in the nineteenth century being simply the right to withdraw labour (for which the penalty is not getting paid). I realise that under the hypocritical IR laws, secret ballots of employees can be required to endorse strikes, but no secret ballots of shareholders are required to endorse lockouts or stand-downs by management. Elected union bodies are now held not to be representative of those who elected them, but indirectly appointed managements are held to be representative of the owners of businesses.

    To stand up for yourself is one lesson education should teach, so going on strike is utterly compatible with educational values.

    There is empirically no doubt that union efforts have won improved conditions for teachers in Victoria. Union action more widely speaking helps increase the share of the cake that goes to employees, rather than shareholders.

    Kevin Donnelly is not “in the Australian (almost) every week highlighting yet another education disaster”. He highlights the same “disaster” almost every week.

    The question of “productivity “ in education is not the same as in a physical process. I dispute your claim that “Teachers spend less time in the classroom and more time ‘preparing’ and the like, while the educational outcomes have fallen”. We need to be clear about the time period we are talking about.

    Surely you can upgrade the “some” in “some unionists…are not work-shy and bone-idle” to “most”.

    I agree that the government sector is less dynamic, but I do not think that is because of its higher rate of unionism. It is because it has to operate in a bureaucratic rules-based way, perhaps as a result of the long march to take power from the monarch.

    It amazes me that mining, which used to be so strongly unionised, no longer is. Perhaps that is because mining has become so much safer and the pay and formal conditions are now so good the miners no longer see the need for unions. That would be another example of the unions’ success putting them out of business.

    I do not know about an inverse relationship between innovation and unionism. It is certainly not the case in my field, where union members in schools have been effective innovators, while non-unionists tend, with exceptions, to parrot the fad of the month.

    As far as classroom performance goes, in my experience, the non-unionists have been as good as the unionists, though the unionists are naturally the ones with the greater commitment to the profession as a whole. Unionists and non-unionists do their jobs, but more often than not it is the unionists that make things better, probably because to belong to a union you have to take a stand, to risk something against authority, so you are likely to be more confident in yourself.

  23. Sinclair Davidson says:

    the unionists are naturally the ones with the greater commitment to the profession as a whole.

    My point exactly, they are supposed to be committed to the students, not the (self-defined) “profession”.

    We’re going to have to agree to disagree, I’m afraid. If people wish to ‘withdraw’ their labour, as they have the right to do, they should also resign their jobs and allow the employer to immediately re-hire individuals who want to work.

  24. Sacha Blumen says:

    Sinclair, I have to disagree about your chracterisation of unions. I am a member of one partially because it is effectively payment for them acting on my behalf in condition of employment negotiations.

    The idea that people in trade unions are unwilling to work with those not in trade unions is far from reality.

  25. Sinclair Davidson says:

    The idea that people in trade unions are unwilling to work with those not in trade unions is far from reality.

    Not from my reality. If you want to join a union to negotiate your working conditions that’s your choice. I don’t want to join a union AND I don’t want them to negotiate my conditions. I would have thought that the Approx 80% of the working population don’t want unions to negotiate their conditions either.

  26. Sacha Blumen says:

    In how many workplaces would it be the case that members of unions are unwilling to work with people who aren’t members of unions?

    I only know about how this might have been in the past indirectly and so can understand if a different attitude previously has led someone to the view that unionists only wanted to work with unionists, but it’s certainly not a view I share and I’d be extremely surprised if anything other than a tiny tiny fraction of people now think like this.

    I will say that in one enterprise bargain I’ve been part of (as an employee), some long-term union reps were quite antagonistic to some of my suggestions, such as performance pay (“how would you do that?”) and being able to choose your own super fund (“the cost of employing someone to administer this might reduce the amount of money available for a pay-rise”). Most staff did want to have the choice of super fund which was then put in the list of things staff wanted to achieve.

  27. Russell says:

    Part of the problem in this discussion is the generalisation – Rafe is probably thinking of outfits like the CFMEU, which are nothing like public sector unions.

    I loved the EBA meetings when the ‘misso’s’ union rep turned up – very big bloke, leather jacket, tattoed across the knuckles of left hand LOVE, of the right hand HATE. We all listened respectfully.

  28. Russell says:

    Sorry, Sinclair, not Rafe.

  29. Sinclair Davidson says:

    My experience of unions is the NTEU, although I also see the actions of many others. What does “no ticket, no start” mean? What is the precise meaning of a picket line?

  30. Sacha Blumen says:

    But isn’t “no ticket, no start” illegal now? (as it should be)

  31. Sinclair Davidson says:

    I still see the stickers. And what of the threat of violence inherent in a picket line?

  32. Russell says:

    Sinclair – but why single out those fairly rare union tactics. We’re using the word unions, but that covers everything from what are really staff associations, professional associations …. does the AMA use threats of violence ? I can’t remember the CPSU ever being acused of it.

    What about the good things unions do? They quite often help members who have become the victims of stupid and incompetent management. They give a voice to people who want their ideas expressed but don’t, individually, have the ability to create a forum to do that. And in a democracy, it’s healthy to have a range of organisations putting forward different views.

  33. Sinclair Davidson says:

    why single out those fairly rare union tactics

    Don’t buy this argument. I once heard (read?) that US slavery wasn’t so bad because the slaves weren’t actually flogged very often. Yes, well – that’s a poor argument and so too is the argument that unions don’t have to resort to violence very often, or the mafia to killing very often, and so on. The professional associations are more subtle in their threats – they pretend to be concerned with quality. I was very hopeful that Woldridge (sp?) was going to take them on a few years ago.

    What about the good things unions do?

    Name them.

    the victims of stupid and incompetent management

    What does this mean? If management commits a crime vis-a-vis the employee, the criminal justice system (or civil justice system) is the appropriate forum for redress. But all too often, its simply a case of employees thinking they can do a better job running the organisation as can management. This may even be true. Management jobs are contestable. Small business’ are contestable too.

    give a voice to people

    Again, what does this mean? Most good managers listen to their staff and implement good ideas. But be responsive to each and every idea, or just any idea, is not necessarily good management. In any event, if the employee thinks management is ignoring his good idea, then see my previous comment.

    And in a democracy

    We do not live in an industrial democracy, we live in a political democracy. We have political parties that provide ‘voice’ and ‘views’. We have the media, we have think tanks and NGOs for views. Not to mention blogs. These organisations all operate in the market for ideas, and have to persuade individuals. Unions have IMHO no role to play in the political arena per se. So too churches, mosques, and synagogues.

    Where the confusion comes in, I think, is people not separating the political environment from the work environment. Politically we are all equal, in the workforce we are not. Most working environments, more or less, have a clear hierarchy and it is not unreasonable to expect individuals to obey the (lawful) instructions of management. In the political environment, we try to eliminate hierachy as far as possible.

  34. Sacha Blumen says:

    Sinclair, I’m trying to understand where you’re coming from – and I always try to approach things with an open mind, so forgive me if what I’m about to say is not correct. It seems to me that you’re referring to particular union activities that are almost (if not completely) nonexistent nowdays (except for some well-known appalling examples, such as the masked raid on the office of a labour firm in Melbourne in the 90s (?)) to say that unions, per se, have nothing really to offer. Is that correct?

    Unions are just associations of employees. I don’t see anything intrinsically wrong with employees forming associations. One can argue about the activities of those organisations and their influence, but their activities are a different kettle of fish to the existence of those organisations.

    About picket lines – the only direct experience I have of a picket line was a very minor one at Sydney Uni when the NTEU or general staff union was holding a picket line during some wage negotiations.

    I was going to uni campus to do my thesis in my office as I did every day for many years – the person on the picket line attempted to dissuade me from going to my office, using arguments such as “the library will be closed” (I didn’t need to use the library), and that I should support the general staff’s claims (I didn’t know what the claims were nor was given information as to whether they were worth supporting). There was no response to my question as to whether the general staff would do my thesis for me to make up for the 10 odd hours lost to observing the picket line, and of course, they couldn’t.

    The person on the picket line wouldn’t care about my needs (to work on the thesis) and quite honestly, didn’t appear open-minded or capable of discussing things in a rational and detached manner. Her approach was extremely bloody-minded. I went to my office and worked on my thesis.

  35. Sinclair Davidson says:

    I am saying that unions have nothing to offer productive employees. This is evidenced by the decline in union membership over time. Unions themselves are inherently violent organisations as your own post shows.

  36. Sacha Blumen says:

    The statement “Unions themselves are inherently violent organisations as your own post shows.” is unconvincing. To seriously contend this requires a great deal more reasoned analysis than shown in this thread.

  37. Russell says:

    Sinclair I had to represent union members at the Industrial Relations Commission and in every case, every case, I had the Commission agree that management had been in the wrong. It was very satisfying to hear the Commissioner express their disbelief that managers could be so ignorant of HR procedures, and procedural fairness etc.

    It was usually stuff like a manager getting in a huff with someone and putting a bad report on their file – which you can’t just do – there’s a process for performance management which involves giving warnings, setting agreed targets etc. You might think that’s not very important, but it is to the person concerned who has perhaps given 10 years good work to the organisation but has had a personality clash with a temporary, acting, inexperienced manager.

    When I said unions give a voice, a forum, I didn’t mean politically. We’ve all been through a lot of ‘reform’ and it’s much better that this is done in a consultative way – some managers can’t be bothered with that, or are too egotistical to bother. Professional workers are entitled to be consulted (no, I don’t mean make the final decision) about radical changes to the way they work. The union structure works quite well for doing that. At the moment I’m contributing to a work value case the CPSU will put forward to the government to change the way some professions are classified -an individual couldn’t really do this – the union is coordinating it across a number of agencies.

    You forget that people belong to unions are just like everybody else – I suggested more and better ways to save money (yes, actually fewer staff!) than management came up with, because I’m also a tax-payer and I don’t like to see money wasted. In EBA negotiations I thought as an employee representative, as a tax-payer, and as an employer (ie, if I were a manager would it be good for the organisation if I had the power to ….). I don’t know what in your experience could make you think that all unionists are on some bloody-minded jihad to sieze power from management and tyranise other workers, but it just isn’t so.

    You say that unions have nothing to offer productive wokers yet hundreds of thousands of workers belong to them – they don’t have to. Where I worked it was about 50% – that’s half the number of employees forking out about $400 a year to belong – they must be paying for something.

  38. Sinclair Davidson says:

    Sacha – you are choosing to be unconvinced by your own experiences.

    Russell – “I had the Commission agree that management had been in the wrong.” Unless you’re suggesting management acted illegally (as indeed they might have), this is not convincing. The IRC is not a legitimate organisaton. It is legal but not legitimate. It is an inherant part of the union orientated HR system that has evolved over the past century. I know people have the unfortunate belief that the IRC is an ‘independent umpire’, but I cannot accept that this organisation could possibly be ‘independent’ – not because the people who work there are corrupt or anything, but simply because the incentives they face to ‘make the system work’.

  39. Sacha says:

    Sinclair – the particular actions of certain unions I have seen, read about or experienced does not lead me to think that unions, per se, have certain intrinsic properties – ie it’s very difficult to generalise from the particular to the general.

    You need to be much more convincing that associations of employees have the intrinsic qualities you specify.

  40. Russell Hamilton says:

    Sinclair – if management acted illegally or whatever – what’s the difference as far as the employee is concerned. My point is that an employee with a legitimate complaint isn’t going to employ an industrial lawyer to get them to the Commission, or tell them their rights, or negotiate for them – whereas they can easily contact their union for advice and assistance. That’s why they belong to a union.

    I think your views about the IRC being legal but not legitimate are way out on the extreme fringe. As I understand it in WA half the commissioners are recommended by the employers organisation and half by the unions. Have you ever been before the IRC ? You have to do a lot of careful arguing and have good evidence, or you’ll be thrown out. Usually I was arguing against departmental officers whose job it was to be expert in just that HR area – so to win meant you had to have a good case. We always did.

    I well remember the first time I went to the Commission – the Commissioner walked into the room and said “I can’t believe we are gathered here because some librarians feel they haven’t been consulted properly – I’ve just come hearing a case because a man in the mining industry died” and glared in my direction. Two hours later the Commissioner nicely told off the management, halted their plans, told them to listen to their staff, and invited us to come back to the Commission if the organisation didn’t properly consult it’s employees before implementing drastic changes.

  41. Sinclair Davidson says:

    Russell – what you’re saying to me is that the IRC exists to second guess managements’ decisions. That is an illegitimate intrusion into private property ergo it is legal but not legitimate.

  42. Russell Hamilton says:

    Sinclair – usually our complaints were based on the existing HR policies of the organisation – which they failed to honour. People do have agreed rights at work. Employees are not slaves.

  43. Sinclair Davidson says:

    I agree people are not slaves. As I said right at the start breaches of the law can be a problem. People also have the right to enforce contracts. The problem I have is that many individuals use their ‘rights’ to avoid doing work and unions aid and abet this process.

  44. Russell says:

    There may be a very small area of agreement here – I think unions sometimes do aid and abet some people (don’t know about ‘many’) to maintain a non-productive role – and it used to drive me nuts. I have a theory that unions reflect the management style of the industry they’re involved with. The CPSU is very public service – not very creative, not very enthusiastic, not very dynamic – but at least, not ruthless.

    But I balance that with the good functions they serve, and so remain a member.

  45. Sinclair Davidson says:

    Russell, Sacha, Chris, it has been fun. 44 comments (excluding this one, 45) must be a record for Andrew.

  46. Russell says:

    Baby Names has 43, and if a decision hasn’t yet been made, may still come from behind …..

  47. Sinclair Davidson says:

    The result of the union between Andrew and his lovely wife would surely be worthy of a whole new post, or more.

  48. Patrick says:

    What I will never understand is that, whilst one of the primary rationales for union existence is the need to counterbalance the coercive power wielded by bosses, one so rarely hears of the need to counterbalance the coercive power wielded by the unions themselves.

    I do not think that unions are inherently evil, although I do think that they tend to be very laden with temptation for the weak of character, and I do think that they are appalling out-of-touch.

    They do still provide useful services – ‘industry’ (a misnomer now) super funds, counselling, and in some cases at least job search assistance (but this has declined now that it means actually searching and not simply telling someone they had a new employer).

    They need to basically forget about trying to run anything but themselves and worry about providing relevant services to their members for a while (Access to workplace relations lawyers and advice is, of course, such a relevant service for many employees). Basically they need to become employer-centric, and stop being union-centric.

    I suspect that a good union would not have oppposed the IR laws, but would have tried to negotiate better ‘between-job’ support. Maybe it would have been fruitless because Howard really just wanted to hurt unions, maybe not.

    I am sure they will make these changes in time – very few organisations voluntarily die out.

  49. Russell says:


    I think they’re pretty hopeless too, though I wouldn’t admit that to Sinclair. One of the problems is that a lot of public sector union activity is involved with sorting out problems within an organisation where both sides of the issue (workers and bosses) are union members, and where the union is trying to not lose any members. You need the wisdom of Solomon rather than a 2 day union training course.

  50. Patrick says:

    That is actually paradigmatic of what I see to be unionism’s key flaw today.

    They should simply provide access to appropriate advisors (or mediators, in this case) and quit trying to actually run things themselves. If they did that, and effectively, they might even find themselves with the same kind of membership overlaps in construction companies!

    What you may not agree with in my analysis, because I (deliberately) didn’t make it explicit (although it is clearly implicit) is that unions should:

    – cease to act as advocates of workers against bosses,
    – start to act as advocates of workers per se, in the community/body politic (ie lobby in favour of better ‘between-job’ services), and
    – in that spirit, become ‘facilitators’ of workers (service-providers, in English, but providers of the service of ‘facilitating’ the provision of the appropriate service (by identifying it and (perhaps) subsidising it)).

  51. Russell says:

    Hmmn, thinking about Baby Names is a lot easier than this ….

    I was reading and agreeing, and reading and agreeing, but when I got to the end I felt that all 3 cups were lifted and the pea had disappeared.

    What do we do about the fact that in any organisation the bosses do have a lot more power and many HR experts working for them, and abuses of power seem to often happen? I know it doesn’t really work for the ‘workers’ to form their own lumbering bureacracy to square off against the employers’ lumbering bureaucracy, but somehow dissolving it into a referral to ‘mediation services’ seems to leave us a little exposed.

    One of the things I wanted the union to do, which they wouldn’t, was put an ‘annotated’ copy of the award on the union website, so that the sections that were most often in dispute could have “FAQ” explanations. They preferred to spend hours on the ‘phone to people going over the same stuff again and again.

    Before I agreed to your minimalist unions I would try to reform them so that a lot of information and procedural advice, templates of letters etc, were available to members to use themselves, then there would be a gatekeeper who/which would decide which cases were referred to industrial lawyers, or perhaps mediators.

  52. Patrick says:

    but when I got to the end I felt that all 3 cups were lifted and the pea had disappeared. ‘ – this is why I had left my conclusion implicit. But I did well to elaborate because in fact I feel we are much closer than I might have imagined.

    I am not sure that your ‘reformed’ union is very different to my ‘minimalist’ union. Mainly, mine is not ‘minimalist’ except with relation to ‘class-conflict’ advocacy. I would see what you describe as part and parcel of facilitating the provision of services, for example.

    Your suggestion sounds eminently sensible, and it reflects quite poorly on your union that they didn’t follow it up. Disappointing but not, equally disappointingly, surprising 🙂

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