The government is flagging a royal commission into union corruption. The announcement comes in the wake of revelations of shakedowns in the construction industry, driven by outlaw motorcycle gangs and rogue factions of the Construction, Forestry Mining and Energy Union.
The accusations, which stem from a joint investigation by the ABC and Fairfax’s crack investigative reporters Richard Baker and Nick McKenzie, include lurid reports of “bribery, extortion and threats of violence” in which underworld crime figures feature prominently.
One CFMEU official, Danny Berardi, has already resigned, apparently in response to reports he received free renovation work in return for ensuring certain labour hire companies were granted access to work sites in Melbourne.
The allegations revolve around a practice long rumoured in the construction industry, particularly in Victoria, in which construction companies pay kickbacks to union officials. “In return,” Baker and McKenzie write, “the CFMEU officials have used their influence to help the companies win contracts to supply labour and other services on major private and government projects.”
It’s a bad look for the CFMEU, and indeed trade unions more widely. With former Labor MP Craig Thomson currently on trial for defrauding the Health Services Union, and a Victorian police investigation into the so-called AWU affair still ongoing, union malpractice is all over the news.
The fresh allegations couldn't have come at a better time for Tony Abbott, who promptly foreshadowed a royal commission into union malfeasance. “We made a commitment pre-election that there would be a judicial inquiry into union slush funds, and a royal commission is in fact a judicial inquiry,” he told journalists in a press conference on Tuesday.
The inquiry could drag many prominent unions through the courts for years, tying up their energies and draining their coffers in legal fees. Many will be unsympathetic, arguing that certain sectors of the union movement have brought this on themselves. The power of the CFMEU to maintain unionised construction sites in Melbourne is well known, a fact of life long accepted by prominent construction companies eager to keep the peace and stay on deadline.
Whether certain rogue elements of the union have gone further, and started working with labour hire companies run by organised crime figures, is something that will no doubt be investigated. But will voters care?
The age-old hatreds of Australian politics ensure that trade unions will always be a juicy target during periods of conservative government. During the Howard years, for instance, the Coalition established the Cole royal commission into corruption in the building and construction industry. The inquiry was motivated by exactly the sort of allegations that have come to light in recent days: standover tactics, union kickbacks, and tacit deals between construction companies and union bosses to drive up wages in return for industrial peace.
Despite spending two years and over $60 million – making it one of the most expensive in Australian history – the Cole inquiry did not result in a single prosecution. Nor did the Howard government’s “tough cop on the beat”, the Australian Building and Construction and Commission, prove itself particularly effective at reforming the supposedly corruption-prone industry. The ABCC was pretty successful in its prosecutions record, but most of its actions were for minor breaches of employment law, such as unlawful industrial action. It did not uncover systematic illegality or entrenched corruption.
There’s no doubt that Australian building sites could sometimes be managed more efficiently. But there is little evidence that unions are the primary cause of current inefficiencies. And there is no sign of any “wage explosion”, as Employment Minister Eric Abetz was warning this week in a speech to the Sydney Institute.
As the chart below shows, wages in the construction sector have mirrored those in the broader economy in recent years.
For conservatives, unions are ever the bogeymen of Australian politics. Many libertarians flatly deny the right of workers to organise collectively, equating it with a form of labour monopoly. For others, it is simply an ingrained loathing for unions as the key political force underpinning the ALP itself. So any time union misconduct rears its head, conservatives are apt to leap on the allegations.
But any balanced analysis of trade unions in Australian public life suggests that they are not generally corrupt, and that the majority of union officials spend their time doing exactly what they’re meant to: representing their members.
The real value of attacking trade unions for the Abbott government is tactical. By attacking powerful unions like the CFMEU, the government can go after the funding base that supports much of Australia’s progressive politics. It can also link union misconduct directly to senior ALP figures, many of whom are of course factionally aligned to the CFMEU, such as Victorian Opposition Leader Daniel Andrews, or the AWU, such as federal ALP leader Bill Shorten.
But whether the general public really cares about any of this remains to be seen. There’s a phrase in the politics called “the IR club”. It’s a club few want to join. Industrial relations is generally a pretty dry and tedious corner of public policy; ordinary voters generally don’t care unless it directly affects them. The people who really get worked up about industrial relations laws, and unions more generally, are the owners of capital – in other words, big business and bosses, not to mention the right-wing sections of the political spectrum that line up with them, like the Sydney Institute.
When voters do pay attention to industrial relations, for instance during the bitter WorkChoices debate of the final term of the Howard government, it is clear that most Australians line up alongside the union movement, in favour of protecting pay and conditions. That’s not surprising. Most Australian voters are employees, not bosses.
There’s a lesson for the Abbott government here. Like many other aspects of the Coalition’s reheated culture wars, the government is far to the right of the general public on industrial relations. Reminding voters of this may not necessarily be to the government’s advantage.
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