A funny thing happened on the way to Macquarie St.
Before the March NSW election, Barry O’Farrell was a seemingly banal, workmanlike and mild-mannered Liberal leader who spent years rebuilding his party’s broken morale, even at the cost of reining in powerful far Right factional elements. Rather than projecting the leader he would be and the government he would lead in terms of a vision, strategy, or program, he chose a smaller-than-small-target approach, highlighting the ALP’s corruption, incompetence and mismanagement in contrast to his own non-ideological style of can-do managerialism. This image at times seemed to the Left of the ALP on social issues, such as the state’s high rates of incarceration and its shocking lack of attention to mental health services.
Yet in recent weeks O’Farrell has played quite a different hand. After initial attempts to paint the state as having a Budget black hole blew up in his face (yes, Virginia, the ALP really were deficit hawks who let public services crumble to maintain their AAA rating), he has been scorned for a series of right-wing policies: The regressive shutdown of the Solar Bonus scheme, mandatory life sentences for people convicted of killing police, publicly speculating he would sell off the entire power industry, flouting promises for greater government transparency, and now announcing the most draconian attack on workers’ rights to collectively bargain in generations.
O’Farrell wants to use legislation to cap public sector wage rises to 2.5 percent annually (apparently regardless of the inflation rate). The full 2.5 percent will only be available after workers have delivered agreed productivity gains — thereby pre-paying for their own wage rises by saving the government the money ahead of time, amounting to an effective wage cut. But if this were all that O’Farrell was doing then it would simply be a miniature version of the wage cutting that happened under the Hawke Government’s Accord in the late 1980s.
Much worse is the decision to remove the independent powers of the state’s arbitration body, the Industrial Relations Commission. This would effectively remove the right of the state’s public sector workers to bargain over wages and conditions — they would simply be set by government diktat.
At the same time O’Farrell announced changes to workplace safety laws, ending the onus of proof on employers over injuries and removing the unions’ right to prosecute. These have been softened in the Upper House, but they are still a major blow to workers’ rights against negligent bosses, and represent a win for Julia Gillard’s pro-employer “streamlining” of OH&S laws across the country.
In response to the attacks, the Public Service Association has implemented a ban on unpaid overtime, and other unions are formulating their own campaigns. Left Flank is aware that there has been serious discussion of the attacks in the fire brigades, teachers and health unions. So far the nurses union has only promised a marginal seats campaign, a pretty weak start given the massive majority the government holds. The police union has been angriest after having been given the impression by O’Farrell that there would be further sops to it under a Liberal government.
The Holy Grail of neoliberal governance
Curiously for some on the Left, O’Farrell had not previously seemed like an ideologically committed class warrior. Because his modus operandi was to depoliticise the party’s message into the narrow technocratic management-speak characteristic of the neoliberal era, he simply continued in that vein post-election, speaking soothingly of the whole thing as a technical exercise that public servants have no reason to fear. It was such language that lulled many on the Left into thinking a Coalition government couldn’t possibly be worse than the ALP’s trainwreck administration, an impression legitimised by the failure of both Labor and the Greens to articulate a serious critique of the Liberals.
To understand why the Liberals are carrying out these attacks it is necessary to look to an important material imperative — the desire by NSW capitalists to reverse their relative decline over the last two decades, mired in stagnant growth rates when compared with WA, Queensland and even Victoria, and seeing the strength of working class organisation in the public sector as holding back the kind of brutal restructuring they think will solve their problems. A prominent employer organisation has made clearer the motivations behind the attacks:
[T]he NSW Business Chamber said the changes would drag the NSW public sector out of its “1970s-style time warp”.
“For too long, successive governments have committed to wage restraint, but wage restraint was evaded by nebulous promises about productivity,” chamber chief executive Stephen Cartwright said.
Such views are not isolated. Right-wing pundit Paul Sheehan spent an entire SMH op-ed ranting that public servants were part of government “bloat” that had to be smashed, even calling the Industrial Relations Commission “expendable”. The SMH itself editorialised that “the exercise will help to break the culture of control that public sector unions have exercised over the NSW bureaucracy”.
With union density at historic lows in the private sector, the economic and political elites see breaking the relative resilience of workers’ organisation in the public sector as the Holy Grail of neoliberal governance. As Sheehan complains:
Real public sector wages in NSW increased 23 percent during the life of the government, a rate more than double the 11 percent increase in real wages in the private sector.
Between September 1997 and June last year, real public sector wages in NSW increased 10.6 percent more than real private sector wages.
This also outstripped real public sector wages in other states by 6.9 percent.
For some in the ALP, the fantasy of freeing the party’s parliamentary wing completely from accountability from its link with the workers’ movement has been at the heart of this project. Ross Gittins summarised it well during Iemma and Costa’s campaign to privatise electricity:
No one wants to say it but the strongest reason for privatising electricity is so the electricity unions can’t use political pressure to get at their employers.
The lack of an arms-length relationship between highly unionised public sector workers and a Labor government is one of the great obstacles to greater public efficiency at state level.
Why do you think the unions and their Labor mates are fighting so furiously to block privatisation? Because they’re desperately afraid they’ll lose their soft cop.
Confirming this worldview, Costa’s hysterical polemic in the Australian Literary Review last December was centred on the premise that “NSW Labor is fearful of confronting entrenched public-sector union power”.
The only conclusion to draw from these opinions, then, is that the real problem with NSW Labor was not its corrupt dealings with developers, its obsession with rolling out disastrous public-private partnerships, its conscious decision to preside over the slow-motion collapse of infrastructure (especially public transport), its nepotistic embrace of big end of town, or its scandalous running down of the health system. No, it was its inability to pummel public servants’ wages and working conditions in the name of “efficiency”.
The Limits of O’Farrellism
Free of any direct connections to the union movement, and more than a little drunk on claims of a mandate to do whatever he wants (whether he announced it before the election or not), O’Farrell seems to think he can do the job Labor couldn’t because its hands were tied. Yet he faces problems that he cannot wish away.
The very strengths of O’Farrell’s pre-election strategy leave him with limited room to manoeuvre. He rode to power on a wave of revulsion against a Labor Party that sold itself to the worst of modern capitalism, but to do so he had to promise a kinder, gentler future. In other words, he had to forget about gaining office with anything akin to a political program. Yet despite presenting an unthreatening blank slate where Conservative ideology was supposed to sit, a poll just before the election showed that only 24 percent of voters thought the Coalition deserved to win. This helps explain how quickly his honeymoon has evaporated despite the sheer humiliation Labor received. Entering into a major industrial battle without having prepared the ideological ground risks disrupting his claims on office even further.
His attack on public servants faces three other important hurdles. Firstly, the fact that the government directly employs almost 400,000 workers makes it the biggest employer in the state, accounting for some 11 percent of all employees (60 percent of them in health and education), and to take on a workforce so large and diverse risks opening battles on a number of fronts simultaneously and thereby rapidly generalising opposition. Attacking the police union in this context seems especially foolish, since they will also be called on to control any militant protests against the reforms.
Secondly, a number of the unions involved have bucked the trend of retreat and demoralisation and won important, if partial, victories over the last 15 years. Some of them are dominated by more militant leaderships, in particular the teachers and fire fighters. Even the electricity unions were willing to bring the Iemma government to its knees despite their intimate ties to the ALP.
Finally, for even the most craven union bureaucrats, the threat to arbitration and therefore collective bargaining may prove a step too far. After all, if there is no bargaining, just managerial prerogative, what purpose is there for trade unions at all? O’Farrell’s seemingly non-ideological and technical solution is in fact to propose the elimination of the process of negotiation, which lies at the heart of union leaders’ social role. Because O’Farrell is staking so much on crashing through, it will be hard for those union bureaucrats to find a compromise position (their preferred outcome) that doesn’t render them irrelevant, short of forcing him into a significant and humiliating backdown.
None of this is to say that the outcome of any struggle over the public sector reforms is predetermined. The political problems suffered by the working class are legion after 30 years of retreat and quiescence. But the foundations for any elite offensive are at least as shaky, worsened by the failure of the neoliberal project to resolve long-run structural weaknesses in Australian (and NSW) capitalism, and exacerbated by more recent fears of unsustainable domestic imbalances and the knock-on effects of a global crisis still wreaking havoc across the rich nations of Europe and North America.
In describing likely outcomes of the hung parliament in the immediate aftermath of the 2010 federal election, Overland editor Jeff Sparrow presciently suggested that whoever formed government would be “nasty but weak”. It is a sign of the depth of crisis faced by the entire political class that a Premier with one of the biggest electoral margins in Australian history could well be described that way also.