Future directions for industrial relations

The messages for unions are also very significant. Our relations with traditional union companies in the union economy must be very well managed. Unions must take on companies who seek to de-unionise with the ferocity of an organisation battling for its survival. However, we must acknowledge that where we contribute to world's worst practice in terms of industrial relations this is to our own detriment. To a certain extent, the union movement must get its own house in order.

Unions must be absolutely passionate advocates for the consensus between labour and capital. A highly unionised co-operative workplace not only provides the best productivity but also the best conditions of employment and the greatest stability. Unions must passionately resist the introduction of a US-style culture of industrial relations into Australia.

The US economy has demonstrated enormous productivity. It has been by and large the most productive economy in the world ever since the Second World War. This has produced enormous wealth across a population of 280 million people. By any measure that is an extraordinary achievement, but it comes at a price. Levels of unionisation in America are very low. There is an enormous gap between rich and poor in the American economy. Indeed, it is the biggest gap between rich and poor in the OECD. If you consider all those people living in America in third-world conditions then America becomes one of the biggest third-world countries in the world.

In Australia we used to have the greatest wage equity in the OECD. Moreover, at the same time we had very high levels of unionisation. Our economy did not produce any significant numbers of real losers. However, the gap between rich and poor is now growing faster in Australia than in any other developed country. While we still rank in the middle of OECD countries we are falling down the ladder at a faster rate than anybody else. Although our productivity has improved over the last few years, the US path is not the only path to a productive economy. In fact, the most productive economy in the world today is that of France. Continental Europe is very productive – more productive than Australia. The consensus between labour and capital is as strong in Continental Europe as in Australia.

In adopting the American industrial-relations culture we would be getting the worst of both worlds. We would inherit all the down-sides of the individual, capital based US economy; namely a massive gap between rich and poor and the development of an under-class. However, we would not gain the benefits of the American economy. A US-style industrial relations culture will not give us a domestic population of 280 million people, which is critical to providing the large domestic market which makes the American economy work. Moreover, we would forego the benefits that exist in a smaller country, where macro solutions to public problems can be found. Arguably the way forward for a smaller economy like ours is for governments to play an active and leading role in our economic development.

Ultimately this is a debate between conflict and cooperation. We have in Australia a national culture of which to be proud. We sit in the new world free of the class divisions of the old while not embracing the individualistic nature of North America. We retain a caring society which regards everyone as equal. Were we to turn our backs on this culture in a simplistic rush to American public policy, which is based on an economy and a country ten times the size of our own, then we would be changing ourselves much for the worse and robbing the world of Australia's unique contribution to humanity.