#nswisconsin: How the age of austerity came to NSW & what can be done about it

by · June 5, 2011

Lest you thought the warnings raised on this blog about the “Age of Austerity” currently ravaging Europe and North America coming to Australia (see here and here, for example) were exaggerated, Barry O’Farrell has exceeded even our worst fears about the scale of attacks being planned in elite circles. What is being sold by the media as a case of reining in a spiralling public sector wages bill (and what right-thinking citizen could oppose that?) is actually the most significant attack on workers’ collective organisation in Australia in over a generation.

As liz_beths and I sat in (and periodically heckled from) the gallery of the Legislative Council yesterday, watching the non-debate around amendments to the new laws, it was noticeable that while Greens and Labor MLCs put cogent arguments, the government dealt with the laws as mere technical adjustments. Their message, in keeping with their pre-election “moderate” self-image, was at complete odds with the historic shift they were ramming through.

Imposing the new industrial order

While Left Flank has no desire to follow those calling the NSW Industrial Relations Commission an “independent umpire” — it being a state body that has always been used to limit workers’ claims for better pay, conditions and political rights under the guise of impartiality — the elimination of arbitration from industrial relations in this case is tied to unprecedented direct attacks on workers’ legal right to collectively bargain.  Arbitral mechanisms, while incorporating workers’ resistance into the Australian capitalism through state structures, also codified the recognition of the fundamental legal principle of collective organisation (and indeed the unions themselves).

The new legislation essentially puts all state public sector wage-setting in the hands of the government (with police exempted, apparently thanks to Fred Nile, but one wonders if O’Farrell was always looking for that escape clause), and the role of the IRC is to act solely within government policy. Furthermore, pay increases above the paltry 2.5 percent annual wage rises will need to be preceded by the delivery of savings. As FBEU state secretary Jim Casey has pointed out, the trade-offs are not the usual kind of “productivity” gains typical of wage deals, but must essentially come from direct cuts to conditions or jobs, or what are known as “employee related cost offsets”.

It is important to understand what this means: Because of the cap, the delay until trade-offs have been delivered, and the nature of the trade-offs themselves, this is more than a real wages freeze. It is outright wage- and job-cutting.

But the move of arbitral decision-making from the state-in-general to the direct control of the government includes something more: That governments will decide these settings, regardless of what bargaining there is over them. That could seem innocuous enough — maybe unions have to get used to bargaining directly with the public sector boss now, as they do in most other advanced capitalist countries that lack formal arbitration systems — but it is also tied to limitations on the right to bargain effectively. In particular, the use of “dispute orders” by the IRC — which effectively render industrial action illegal and bind the parties to a particular result — will now also be at the whim of government policy. In effect, if workers challenge a particular government-defined outcome the government can simply order the IRC to enshrine it and ban all collective action around the issue. That such threats can be justified around anti-strike clauses in essential services legislation only strengthens their hand.

The class warriors behind the O’Farrell façade

There is understandable shock that the election of an apparently “moderate” Liberal leader like Barry O’Farrell has so quickly turned into open class war, and on such a grand scale. That O’Farrell said nothing of substance about his industrial agenda before the election was because he intended to win by focusing on the ALP’s failures, not his own program. The ALP lost because it had exhausted its technocratic agenda of being “good state managers”, where social democratic vision had been replaced by business patronage, an endless game of making ratings agencies happy and an obsession with private sector involvement in public services. O’Farrell could hardly go to the polls promising to push that same agenda into overdrive, but he did play on its anti-political aspects, connecting with the idea that the ALP’s failures were moral ones (bolstered by an endless stream of scandals) rather than their basis in a particular brand of neoliberal managerialism.

The strategy was clearly being developed before the March election. O’Farrell wouldn’t confirm or deny reports that former Howard adviser Max “The Axe” Moore-Wilton and arch public service job cutter under Nick Greiner, Gary Sturgess, were advising him. But since the election Greiner has been appointed as Infrastructure Tsar and Moore-Wilton is on the board of his infrastructure body. These hardened class warriors, responsible for countless sackings and privatisations, likely form the strategic inner-circle along with neoliberal headkickers like Treasurer Mike Baird.

To put it in context, these people have been waiting 16 years for their chance to complete the Thatcherite agenda Greiner started, but which was humiliatingly rebuffed. Greiner may have been forced to resign as Premier because of corruption allegations, but the real problem the last Liberal state government faced was working class resistance in the public sector, led by schoolteachers but resulting in more widespread opposition and an unexpected hung parliament in May 1991. From then on the Liberals’ right-wing economic agenda was broken, opening the way for Bob Carr to beat John Fahey in 1995. The current government, having watched for all too long an ALP administration still dependent on its union base to deliver votes and stability, is desperate to settle scores once and for all.

The strategy they have chosen is clearly one of crash through or crash, but positioned to politically out-manoeuvre ALP and union opposition. In particular, the destruction of IRC “independence” and the increased legal restrictions on strike action are designed to apply a straitjacket on the union officials, who have become accustomed to playing within the rules set by the state in order to avoid exposing their organisations to court action and potentially devastating damages claims, even when it would serve their members better to fight.

Because union officials occupy a particular social function — of mediating between workers and bosses — they have a tendency to seek compromises more or less favourable to their members based on the existing balance of class forces. The Liberals would be wagering that the chronic decline in union power and rank-and-file confidence over the last 30 years would be enough to leave the officials feeling powerless.

O’Farrell and co. would also be betting that the sheer demoralisation caused by the March landslide would be playing on not just the parliamentary and organisational wings of the ALP, but that unions would read it as a sign of their own irrelevance, thus leaving them feeling even more powerless. By unleashing the dogs of war so early in their term they are hoping that whatever short-term electoral pain they may suffer, their massive margin and the long gap before the next election will allow them to win again by having engineered a miraculous resurgence of the NSW economy.

Turning the tables on the neoliberals

But such a strategy is also laced with potential pitfalls, and therefore potential opportunities for resistance:

1)   Despite the exaggerated claims made for the mining boom, Australian capitalism is not in the great shape its boosters want us to believe. Avoiding the worst of the GFC depended not only on China but a massive stimulus package that, as it peters out, has revealed a “two-speed” economy. Business and Treasury opinion is focused on intensifying neoliberal attacks on public spending (except that which goes directly to business, of course) in order to — so the theory goes — provide enhanced conditions for private capital accumulation. These are not attacks that start from a position of economic fragility, and this is even truer of the not-so-Premier State.

2)   The sudden and dishonest nature of the attacks means the Liberals have not laid ideological groundwork. This underlies the technical nature of O’Farrell’s line, but it is a weakness the Greens in particular have exploited by going on the ideological front foot (somewhat outgunning Unions NSW and an unconfident ALP cadre). Already a case against the attacks is cohering, much in the way that Howard’s WorkChoices line was overwhelmed by clear ideas from within the unions. As John Kaye pointed out in Friday’s marathon speech, neoliberal policies are widely reviled in the electorate. Barry O’Farrell is not Margaret Thatcher, and this is not 1979.

3)   The Greens have been a wildcard that neither the Liberals nor the ALP seem to have predicted. Left Flank has argued that the NSW Greens stood at a crossroads on class questions, but the performances of David Shoebridge and John Kaye (rightly labelled “heroic” by Unions NSW chief Mark Lennon) suggest that they have seized a vital opening while the ALP and union leadership have hesitated. The party has mobilised supporters to the rallies outside Parliament House and been able to work strategically with ALP MPs despite the hostility between the two parties before and after the election. Importantly, the Greens have argued that the passage of the laws is only the start of the campaign, clearly locating the necessary resistance outside the parliamentary sphere.

4)   Such a wide-ranging attack risks spilling out of the confines of a sectional dispute over wage setting. These are not just huge numbers of workers under attack, but the immediate effect of “employee related cost offsets” will be further decline in frontline services, the very thing the ALP was despised for. If private sector workers and local communities are to be galvanised over this issue it will take more than the injustice being heaped on government workers. But if the argument is put that the services they depend on are at risk, the campaign can have a more universal anti-neoliberal appeal: It becomes “save our community services” — an immediate politicisation of the core issues.

5)   The relatively passive state of the unions is not fixed, either. The main public transport union and the Public Sector Association are already talking industrial action. The effective removal of bargaining poses a bigger existential threat for the union bureaucracy than the fears of legal sanctions created by dispute orders. Unions will have lost their raison d’etre if these laws succeed in eliminating the usual processes of negotiation. Of course some union leaders will hope in vain that they can talk the government around to softening its attacks or exempting more workers, but the Liberals’ strategy means that any backdown will be seen as a sign of weakness. The attacks are already radicalising many workers, with talk of serious industrial action coming from sections of the rank-and-file.  The real weakness is that unions are not used to conducting such battles, and the need to build organisation in workplaces and communities is an essential precondition of delivering mass action more centrally across the state. At the very least Unions NSW — hopefully in collaboration with the Greens and the ALP — should be setting a date for a mass statewide protest in Sydney, as a springboard to bigger and better things.

6)   Finally, there is the issue of the government’s apparent electoral impregnability. David Cameron in the UK has been able to use the vicissitudes of FPTP voting and Nick Clegg’s willingness to be an electoral human shield to so far ride a deeply unpopular cuts agenda. But O’Farrell has two buffers that can be potentially destroyed by a serious campaign from below as well. The first is the large chunk of long-term working-class ALP voters who bought the depoliticised line that surely he couldn’t be worse than Labor. The second is the National Party base, much more working class than the Liberals’ and heavily reliant on rural and regional public services. To woo either group requires not the imagined shift towards social conservatism that has so beguiled ALP hardheads, but economic class arguments laced with basic notions of social solidarity. But in the end for this to be about an electoral outcome in 2015 is a distraction from the fight at hand; the experience of Your Rights At Work being channelled solely into a vote for Rudd should serve as clear warning in that regard.

It is hard to imagine a higher-stakes game being played in Australian politics today. It certainly leaves the smoke and mirrors debate over a carbon tax in the dust. The contradictions of the Liberal strategy mean that the balance of forces can be turned very quickly. Indeed, the events in Wisconsin show how lacking in authority even the most hubristic conservative governments can be. It is to these possibilities the Left needs to look, because to allow ourselves to be paralysed by weaknesses on our side — no matter how real — is what O’Farrell hopes we’ll do.