13 Years of Hard Labor: Lessons from the Accord experience

By Pat Brewer and Peter Boyle


Before the Australian Labor Party (ALP) became the federal government in 1983 it developed a "Prices and Incomes Accord", a social contract with the Australian Council of Trade Unions (ACTU). Today it is clear that the Accord was a disaster for the working class and prepared the way for the reactionary Liberal-National government which replaced Labor in March 1996. 

Many of the serious attacks on the working class now being made by the Howard Liberal-National government were prefigured by Labor. The Labor government deregulated and privatised the economy at a rate that won the praise of the OECD. While wages were restrained under the Accord, there never was any serious attempt to restrain prices. Unemployment at the end of the 1990- 92 recession was higher than it was at the end of the previous (1982-83) recession. Access to social welfare was restricted, the right to free tertiary education (won in the 1970s) was removed and public health was pushed towards the "user-pays" system. 

But most importantly, the major role that the union movement played in policing industrial peace and wage restraint under the Accord eroded traditions of militant and independent unionism, leaving the union movement widely discredited in the eyes of workers and in a poorer position to resist the capitalists' reactionary offensive. As Roy Green, a Labor left academic, points out in a 1996 analysis of Labor's defeat: 

Labor's traditional supporters suffered the effects of real wage restraint in the 1980s, only to see their efforts dissipated in a speculative binge, and massive downsizing and work intensification in the 1990s. The puzzle is not that they deserted Labor when they did but that, in the circumstances, they kept the faith for so long. They watched in dismay as their party sold off national assets to the private sector and restructured the tax and benefits system to advantage everyone, it seemed, but themselves... (Green 1996)

In April 1996 the National Executive of the Construction, Forestry, Mining and Energy Union (CFMEU) became the first national union leadership to publicly admit that the Accord was a "major reason for the decline of the rank and file base of the trade union movement" and had "turned many workers away from, and against, organised labour". 

But for 13 years, barely a word of criticism of the Accord was heard from the trade union leaders. Instead at one ACTU Congress after another there were standing ovations for Labor politicians who boasted of their successes with capitalist neo-liberal restructuring. 

While some of the Accord's erstwhile supporters in the trade union movement and academia have since turned critical (see Ewer, et. al., 1991), the union movement as a whole still remains tied to the conservative Labor Party. Furthermore, some who now disavow the Accord as it was implemented in Australia argue that they still support Swedish social democracy's version of the Accord (Higgins 1993) or the Accord in its original form (Stilwell 1986). They still insist that the "Accord framework" or a "new partnership between the unions and the ALP" (Green 1996) should still be a central part of a left agenda in the 1990s. 

This pamphlet evaluates the Accord experience, both in terms of the promises formally made and the high hopes held for it by some in the trade union movement. It will demonstrate its disastrous impact on the working class with a view to arming new generations of militants to combat future attempts by the Labor Party to foist a similar social contract on the union movement. 

Accord promises

The Accord was announced as a critical component of an alternative to the monetarist response to the stagflation (simultaneous high inflation and high unemployment) endemic to capitalist economies in the 1970s and early 1980s. The monetarist solution was to deflate the economy by raising interest rates and slashing government spending. As a consequence unemployment would rise. In a "free" labour market (that is, with union power restricted) high unemployment would then force wages (and other prices) down to a level at which businesses would eventually start rehiring. Under the Accord, Australian workers were promised a humane alternative to this brutal "fight inflation first" monetarist approach. Under the Accord, there would be a "suppression of sectional priorities and demands" of workers and capitalists to give priority to reducing unemployment and inflation. Accord policies were to have three essential characteristics: 

* They were to be agreed between the parties rather than imposed by the government. 

* They were to be comprehensive in that they would cover prices, wages, non-wage incomes, taxation and the "social wage" that is, expenditure by governments that affect the living standards of the people by direct income as well as basic transfers or provisions of services. 

* They were to be concerned with the equitable redistribution of income as well as basic economic objectives. (Prices and Incomes Accord, 1983.) 

However, even according to the text of the original Accord agreement, the mechanisms for the suppression of prices and incomes were very one-sided. There was to be no price regulation, only "surveillance" of prices set by large corporations and even this was to be done in a manner that would not cost the corporations or delay price movements. Wages, on the other hand, were to be regulated but, as a sweetener, the original Accord promised full wage indexation. Any union claims had to be formulated in consultation with the ALP government and with regard to its economic policy. Real wages, it was promised, would be maintained "over time". 

 There were promises to amend the taxation system to ease the tax burden on low and middle income earners, to end the tax avoidance industry (a longstanding privilege of the rich and corporations) and to reduce indirect taxation because of its regressive and inflationary nature. The Accord also promised to eliminate poverty by ensuring "wage justice" for low income earners, raising social security benefits and making other improvements to the "social wage" but all this would "depend considerably on the government's success in achieving a non-inflationary expansion of the economy". 

Left illusions in the Accord

In 1982 and 1983, the illusions held by some on the Australian left about the supposed progressive potential of the Accord were even greater than what was promised in even the original Accord document. Leaders of the now dissolved Communist Party of Australia argued that the Accord would not only protect real wages and deliver social wage gains but also provide an historic chance for the working class to intervene in the determination of national economic policy. 

No other party to the left of Labor supported the Accord but CPA leader Rob Durbridge hailed the Accord as a "welcome response to the need for planning and strategy". The Accord, he said, was a "radical new policy approach" to tackle unemployment and inflation, and to "achieve gradual, though real economic and social reform". Austrian and Swedish social democratic governments had proved that prices-incomes policies, like the Accord, would produce higher rates of sustained economic and employment growth as well as improved living standards (Tribune September 1, 1982). At its 1982 Congress, the CPA declared: 

... if the union movement takes a leading role in formulating policies to benefit the whole of the working class... and full participation, democracy and mobilisation is developed, then a challenge to the ruling class can develop in a socialist direction. (cited in Stilwell 1986, p. 27)

The CPA accused left critics of the Accord of "economism". To oppose the Accord was to abstain from a chance for the workers to intervene in broader economic and social policy, said the CPA. Accord opponents were charged with encouraging "individual groups of workers to follow a narrow policy of self-interest, and ignore the political and class dimensions of the struggle". (Tribune July 18, 1982) 

When critics of the Accord pointed to the example of British Labour's social contract of 1974-79, they were told to look to Sweden instead. It was conceded that there were "risks that the union leaders will be co-opted into marshalling support for an agreement which could end up being against their members interests". But these risks could be minimised by mobilising members around progressive elements of the Accord, such as the formation of a tripartite Economic Planning Advisory Council. If the Accord turned out to be against workers' interests the union movement would simply reject it. After all, it was only a voluntary agreement. 

At the time the Democratic Socialist Party (then called the Socialist Workers Party) and others on the left pointed to the naivete of the CPA's position. The whole problem, they argued, is that once a social contract is agreed to, it acquires a certain logic of its own. It has to be maintained for the Labor government to be kept in power. To preserve its support from employers the Labor government will cut wages and pressure union leaders to accept these cuts for the "good of the nation". If the union leaders praised the social contract as a great step forward and the only alternative to an Australian form of Thatcherism, and believed that it is the only way to keep Labor in office, sections of workers will, at least for a period, be forced to accept a falling living standard. That was precisely the problem in Britain in 1974-79 under the social contract of the Wilson and Callaghan Labour governments. Britain's workers did lose, they did see their living standards traded away by union and Labour Party leaders, and they were forced to put up with it for a time. The social contract did not encourage self- awareness of their power, but discouraged it and made it harder for workers to mobilise (Direct Action, September 8, 1982). 

Role of the metal unions

The CPA's position tailed that of a number of officials and research officers of the Amalgamated Metal Workers Union (AMWU). Laurie Carmichael — another CPA leader and then assistant national secretary of the metalworkers' union -- was one of the architects of the Accord. He stressed the pursuit of improvements in the "social wage" as an alternative to struggles for money wage increases. His union set an example by abandoning a full wage claim in favour of a campaign around the social wage. In a 1982 publication, Australia on the Rack, the AMWU tried to popularise the idea of a social contract based on defence of the social wage, industry policy (to reform and advance manufacturing industry in particular) and tripartite industry planning. 

But before 1982, the union had a very different approach. Its response to the end of the long boom had been to "defend and extend working and living standards, workers' rights and quality of life". Unemployment was not the product of wage increases, as capitalist politicians and economists claimed, but was induced by the corporate power of the multinationals, the anti-social and anti-working class policies of the then Liberal government and by structural adjustment and technological change. In 1980, the union launched a campaign for a $57 wage increase and a 35-hour working week under the slogan "Let's Have Shorter Hours and More Jobs!" (AMSWU Monthly Journal, February 1980). 

The campaign was running very successfully but in December 1981 the union settled with employers for a $27 wage increase and a 38-hour week. Part of the deal was a 12-month no-strike agreement and this tied the union's hands as the 1982-83 recession struck and employers embarked on massive retrenchments. In order to conceal their unnecessary surrender, the union promised to get back the wage gains they had forgone through a campaign for an improved "social wage" under a future Labor government. 

The union's leaders argued that their new approach prioritised fighting for a "political alternative" rather than relying on industrial action on its own. 

Back in 1976 the union's journal had warned that workers' living standards could not be defended without broader political action: "With each passing day, we are being pushed closer to a political solution, Left or Right, of our economic problems" (AMWU Monthly Journal, March 1976). But by choosing the social contract strategy the AMWU leaders had opted for a right-wing political solution, albeit one presided over by a Labor government. 

The metal unions had been one of the most militant unions and had traditionally spearheaded wage campaigns. The industrial courts in Australia's centralised wage fixing system recognised the metal award (conditions and terms of employment enforced by the industrial courts) as the pace-setter. The idea was that any changes in the wage of a fitter was reflected in changes to other award wages under the concept of comparative wage justice. But now the metal union was "leading" in a campaign of wage restraint. 

Thus, through the Accord, one of the previously most militant sections of the trade union movement was co-opted into a dubious "consensus" politics. As the traditional right and left of the trade union movement were united around the Accord strategy, the handful of trade union leaders and activists who spoke up against the Accord in ACTU congresses were belittled and eventually intimidated into silence. Critics from the organised left were painted as "ultraleft", "old-fashioned" and even allies of the "New Right". 

Accord policy in practice

Since the first Accord was signed in 1983, there have been several new versions agreed between the ACTU and the Labor government. Each has exacted more sacrifices from workers. Several of these versions were negotiated just before elections and proved critical to winning significant employer support for Labor. 

Between 1983 and 1985 wages were adjusted quarterly according to movements in the Consumer Price Index except in 1984 when indexation was discounted to leave out the inflationary effect of the government's introduction of a levy on personal incomes to help pay for the national health insurance scheme, Medicare. Known as the "Medicare fiddle" this was the first real wage cut implemented under the Accord. But even if there had been full wage indexation, workers who had suffered real wage cuts under the previous Liberal government would not have been allowed to catch up. 

Under the second version of the Accord (1985-87), wage indexation was again "discounted" &151; this time in return for a promise to consider tax reform and improved superannuation rights for workers. The AMWU played a vital role in the negotiation of this Accord. 

Under Accord Mark II the Labor government began slashing spending on the social wage in order to pay for tax cuts which benefited high income earners the most. The biggest cuts in the "social wage" were delivered via reductions in the revenue allocated to state governments who, in turn, cut back on education, health, public transport and welfare (see Figure 1). This allowed the federal government to show a temporary surplus in its budgets for a few years while shifting the blame onto state governments for attacks on the social wage. 

There were also cuts in the "social wage" directly administered by the federal Labor government. Free tertiary education was ended and students had to repay the costs of their education in delayed tax levies. Pensions, unemployment benefits and other social security payments were made less accessible and new policing measures seriously violated privacy and civil rights of welfare recipients. 

After a few years, these cuts in the "social wage" were reflected in rising poverty levels, homelessness and overcrowded schools. Cutbacks in mental health spending has meant that many of the people forced to live in the streets are mental patients turned away from hospitals. 

The end of wage indexation

In 1987, the ACTU and the Labor government agreed on Accord Mark III which ended wage indexation and introduced a two-tier wages system. The first tier was an across-the-board $10 a week pay rise and the second tier was for a 4% wage increase in return for lifting certain alleged "restrictive work practices". This did not make up for inflation and workers had to trade off conditions to gain the second tier increase. Yet some of the Accord's supporters in the left justified accepting the new system by arguing that it would reduce the gap between higher and lower paid workers. In particular, workers who demanded full indexation were condemned as "greedy male workers" who did not want the gap between female and male workers' wages to be narrowed! 

The next year, Accord Mark IV introduced a new two-tier system. The first tier was for a 3% wage rise but this would only be granted if unions agreed to review the awards under which their wages and conditions were determined. The second tier was a flat $10 a week increase but was only payable six months later. This introduced a real wage lag, another major means of implementing real wage cuts. 

Accord Mark IV was significant for generalising the idea that any future wage increases had to be justified on the basis on improvements to the "structural efficiency" of particular industries. This fragmented union wage campaigning further as different industries had very different capacities for proving gains in structural efficiency. It also alienated the rank and file from union officials who were involved in protracted discussions "at the top" to negotiate improving employers' profitability. When the shopfloor was consulted, more often than not, it was to identify more workers' conditions that could be traded off. 

Ideological campaign

The ideological preparation for this took place through the ACTU's 1987 adoption of Australia Reconstructed, a report by a joint mission to Western Europe by the ACTU and the Trade Development Commission. This report lauded the "consensual processes" in industrial relations in Austria, Sweden and Norway. The ACTU declared that it shared with employers the goal of making Australian capitalism more internationally competitive and that this would dictate new relationships in the workplace. The architects of the Accord already had this goal but Australia Reconstructed heralded a systematic campaign to unite the trade union movement around this economic nationalist project. When the two-tier wages system was introduced, the CPA began to tentatively criticise the Accord as it was being implemented, but Australia Reconstructed's fine words about the Swedish model once again raised the desperate hopes of these "interventionists". The CPA's newspaper, Tribune, hailed Australia Reconstructed as a "victory for the left who have argued for an alternative to the capitulation to market forces". 

AMWU officials celebrated having convinced the government to set up a tripartite Heavy Engineering Advisory Group to distribute loans at subsidised interest rates to engineering firms prepared to make new investments and help "improve work practices". The metal unions published Australia on the Brink.to try and popularise its industry policy with its own rank and file. 

In Unions and the Future of Manufacturing, Peter Ewer, Winton Higgins and Annette Stevens (academics and former metal union research officers) boasted: 

For unionists a generation ago and their academic observers, fixation on wages and conditions and refusal of a wider involvement in managing economy and enterprise defined the essence of unionism. But in its involvement in the Accord and the politics of industrial regeneration unionism has broken decisively with the older, narrower definition of its competence, to claim a qualitatively wider, initiating role in policy making and industry.

The ACTU was lauded for transforming itself from an "old fashioned" trade-unionist institution into an "incomparably more effective peak organisation" which had "distinguished itself for the breadth of interests it articulates -- including the unemployed and the poor — and the forcefulness of its representation". Their one complaint about the ACTU was that it did not employ enough research and policy staff! 

But while the AMWU research assistants and officials congratulated themselves on their latest intervention into economic policy formation, wage cutting continued under the Accord. Under the fifth version of the Accord, two wage increases were allowed but only for workers whose unions could satisfy the Industrial Relations Commission that award restructuring was in progress. Employers argued that the complex codification of wages and conditions for various occupations, which had built up over years of centralised wage fixation, introduced inefficiencies into the workplace. They demanded that awards be restructured to help improve productivity. In practice this meant a greater exploitation of labour through more trade offs and real wage cuts for most workers. 

But by the time Accord Mark V had run its course, a few of its erstwhile supporters in the trade union movement were getting nervous about its effect. One of these was Chris Lloyd, then national research officer for the AMWU. Many metalworkers were demoralised because through award restructuring they were losing hard-won conditions. The union had boasted that it would restructure the award to give workers more interesting work, "career prospects" and the chance to upgrade their skills and qualifications but the problem, Lloyd admitted, was that employers had a different agenda: 

The dangers of award restructuring in all industries is that flexibility will become the main agenda. And the employers will duck the training skills argument because it costs and they're not ideologically up to understanding its purpose... (Australian Left Review, July 1990, p. 12-13)

For metalworkers, explained Lloyd, "flexibility" meant working 12-hour shifts, no penalty rates, and flexibility in annual leave (that is, you took your annual leave in a form and time of the year that suited the employer). Most workers did not understand what the Accord process was but knew it was bad, Lloyd admitted, and there was a real danger of the unions destroying what was left of their credibility with their members. 

Lloyd complained that it was hard to get union members excited about training prospects under award restructuring: 

For nearly eight years of the Accord a whole generation of workers has achieved [nominal] wage increases from a highly centralised process that doesn't really involve them. Most new workers aren't aware of the history of wage fixing, the Fraser years, the industrial campaigns of the sixties and seventies. Workers who do remember these things are struggling to understand why, in a period of the eighties when there was substantial productivity and profit improvements in Australian manufacturing, they got such dismal results out of it. It's not surprising that so many workers are cynical about individual unions, about the ACTU... What is definitely missing among workers is the belief that they actually have some power in the wage fixing process. Removing that power has led a lot of them to become somewhat uninterested and cynical about the way industrial relations operates...

Enterprise bargaining

Accord Mark VI was negotiated in 1990, on the eve of the recession which was brought on early by the Labor government through sharp rises in interest rates following a blow-out in the balance of payments and a dramatic rise in foreign debt. Much of this debt was built up by high-flying "entrepreneurs" who made millions on unproductive, speculative investment in company takeovers and real estate. 

The new Accord imposed a 14-month freeze on general wage increases in return for promises of tax cuts and improved superannuation. It also announced the shift away from centralised wage fixing to "enterprise bargaining". Enterprise bargaining — which was previously painted by unions as one of the "nasty" policies of the New Right when the Accord was first introduced -- means the negotiation of wages and conditions on an enterprise-by-enterprise basis. 

Since 1990 the ACTU has been willing to accept enterprise bargaining as long as it or one of its affiliates is guaranteed a role in its negotiation. However, the dynamic of enterprise bargaining is to dissolve union solidarity and, ultimately, to render unions increasingly superfluous. 

The Industrial Relations Commission initially refused to recognise this Accord (fearing an end to its own role) but eventually relented. 

After Accord Mark VI, enterprise bargaining replaced central wage fixing and the Accord came to represent little more than the ACTU's support of the Labor government's by then avowedly free-market policies. However only a minority of workers were able to strike enterprise bargains and by March 1996 most workers had not had even a nominal wage rise since the beginning of the last recession. Further, a new round of inter-union rivalry was sparked off as unions fought to attain sole coverage of workers under enterprise deals for new projects. 

Friendly obituary

In 1991 the Australian Financial Review published a fond "obituary" to the Accord process: 

The prices and incomes Accord has enjoyed surprising longevity. Labor politicians boast of its unique place in the history of such world phenomena, a once-off hybrid like so much in Australian industrial relations, a sort of social contract platypus which has, miraculously, survived. 

 The fact is the "state of mind" among the small coterie who formulated the original idea has spread, evolved and matured. Acceptance of the need for continuous change in working habits and relationships has penetrated into the consciousness of the union movement... 

 Strata upon strata of union officialdom now are faced daily with the disciplines exerted by the market and the implications of their own decision making on a wide range of macro-economic outcomes in a way unheard of just a decade ago. 

 If its benefits seem so tangible, why should the Accord now be buried? The short answer is that it has delivered its two major achievements &151; an attitudinal shift among union officialdom and a moderation in aggregate wage outcomes through the 1980s... (Australian Financial Review, August 15, 1991)

With the onset of recession in 1990 employers were also becoming confident that rising unemployment and the Accord-tamed and fragmented union movement meant that real wage cuts could be implemented without centralised wage fixing, particularly with the introduction of enterprise bargaining. Meanwhile the ACTU supported enterprise bargaining as long the union officialdom was included in the process. 

Losses under the Accord process

While the Accord delivered the positive outcomes to the ruling class, what it did for workers can be demonstrated statistically. 

Wages: In 1990 Labor Prime Minister Paul Keating boasted that the Accord had reduced real unit labour costs by 14%. (Keating 1990) 

Since 1982 award rates of pay have fallen between 17% and 28% in real terms. 

To some degree working class household incomes have been maintained through an increase in the average hours worked by full-time workers and increased numbers of older women entering the workforce as second breadwinners. Some 70% of new part time jobs created in the last two decades have been filled by women. However real median disposable household incomes after housing costs (excluding farm families) actually fell during the 1980s (Bradbury, Doyle and Whiteford 1990). 

All average measures of income hide significant changes in income distribution, both within the working class and in broader society. Until 1986, the Accord froze wage relativities but since the introduction of the two-tier systems and then enterprise bargaining, weaker unions and non-unionised workers have fallen further behind. Women's wages are on the average 65% that of men and are expected to fall further behind under enterprise bargaining. (Stilwell 1993, p.80) 

According to Phil Raskall of the Social Policy Research Institute at the University of New South Wales, a dramatic expansion of inequality started in Australia around the mid-1970s and between 1980 and 1990 all the gains in reducing inequality made in the post-World War II period were wiped out. (Raskall and Saunders 1991) 

Profits: This dramatic change in income distribution reflects the shift of national income to profits under Labor. The share of wages and salaries in national income fell from 74% to 63.3% in the first seven years of the Accord. Meanwhile profit's share rose from 26% to 36.7%. (Treasury Budget Papers 1989-90). This shift from wages to profits represents $400 billion in current dollar terms. 

"Social wage": Labor politicians claim that any increase in income inequality between 1983 and 1994 was offset by increases in the "social wage" (e.g., health, education, housing, childcare) and social security payments. Indeed a 1995 microsimulation income study (Johnson, Manning and Hellwig 1995) commissioned by the then Labor prime minister's department concluded that after taxes, social security payments and the "social wage" were taken into consideration, inequality between households in Australia decreased between 1983 and 1994. However this conclusion is questionable because it apportions all government social spending to individual households, thus defining health, housing, child care and education as individual non-cash benefits rather than benefits to society as a whole. 

Labor politicians claim that their changes to the welfare system were only to better target those in real need. And in their last years in office they introduced new social security payments to some low-income families. But by introducing user-pays and eroding universal health, education and welfare rights Labor paved the way for even more draconian attacks on the "social wage" by the Liberal-National government that replaced in it in March 1996. 

Unemployment: Five years after the 1990-91 recession technically ended, the unemployment rate remained at about 8.5% and was not expected to fall very much before it rises again in the next recession. Even at the height of the 1980s boom, unemployment only dropped to 6%. 

The 1.5 million jobs Labor politicians boast were "created" by the Accord did not keep up with the increase in the size of the workforce. Furthermore, half of these new jobs were only part-time, as are 25% of all jobs in Australia today. 

Taxation: Wage-tax trade offs were central to the Accord process yet it was not wage earners who gained the most from tax cuts under Labor, the most spectacular of which were reductions in the top marginal tax rate from 60% to 47% and the corporate rate from 49% to 33% (raised to 36% in 1995). The real after tax income of the rich, those on 260% average weekly earnings (AWE) and above, rose an average of 29% between 1983 and 1991. However, people on 96% to 260% AWE had a 4% fall in income while those with below 96% AWE suffered an average 8% fall in real after tax income. (Aarons, 1993) 

Union rights: The Labor government did not keep its promises to repeal anti-union laws enacted by the previous Liberal government and passed new laws to force unions to amalgamate, even against the wishes of the rank and file. In a couple of landmark cases in the 1980s, the courts established a precedent for employers to claim huge compensation for industrial action. After a decade of ALP rule, the International Labour Organisation considers Australian law restrictive of the right to strike and in contravention of labour conventions to which Australia is signatory. 

Unions which sought to break the Accord's wage straitjacket were attacked. The militant Builders Labourers Federation was deregistered in 1986. Police were used in numerous attacks on the BLF while other supposedly left unions blatantly poached their membership. 

In 1989, at the height of the business cycle and when company profits were at record levels, the Australian Federation of Air Pilots tried to break the Accord with a 30% wage claim. The Labor government supported the cancellation of the pilots award, the issuing of common law writs by the airlines and the use of scab labour and the air force to break the strike. 

Union membership: The proportion of the workforce that is unionised fell from 51% in 1981 to 39.6% in 1992 (ACTU figures supplied in 1991, 1993 congresses). By 1992 the number of work days lost in strikes had dropped to its lowest level in 30 years (see Figure 5). Employers benefited from this while workers suffered an associated loss of militant traditions, experience and confidence. 

The ACTU's main solution to declining union numbers was to promote what it called "strategic unionism". This plan to restructure the union movement into some 20 large unions was outlined in Future Strategies for the Trade Union Movement, a document adopted by the 1987 ACTU congress along with Australia Reconstructed. Rather than a strategy to turn around the decline in unionisation, this was a bureaucratic plan to live with this decline, as was made clearer in Can the Unions Survive?, a 1989 update of the strategy which predicted a decline in unionisation to 25% by the year 2000. 

What went wrong?

A number of former supporters of the Accord have tried to explain what went wrong with the Accord. 

In 1986, political economist Frank Stilwell warned of its "degeneration into a policy little more than wage restraint". In his book, The Accord...and Beyond. Stilwell examined the exuberant hopes of the CPA that the Accord would somehow provide an alternative road to socialism in the context of "widespread disillusionment about more traditional insurrectionary strategies for socialist transition and the disillusionment about the character of existing societies which have followed that route to socialism". He pointed to the influence of the notions of "political unionism" and the "Swedish road to socialism" which were being promoted in Australia by the academic Winton Higgins. The hope that the Accord might provide a road to socialism was totally unfounded as neither the ALP nor the leaders of the trade union movement in Australia were the least bit interested in a transition to socialism. (Stilwell 1986) 

In The Accord...and Beyond, Stilwell preferred to see the Accord as an "arena of class struggle", albeit one in which the working class had lost the struggle in the case of the Australian Accord. The Accord failed to live up to expectations, he argued, because of the dominance of the right in the ALP, the pressure from the "New Right", and pressure from financial markets and international capital. 

Stilwell did not call for the abandonment of the Accord strategy. The solution, he said, was for the ALP left to be strengthened. Advocacy of "progressive" aspects of the original Accord — such as industry planning and rises in the "social wage" — could give the ALP left a tactical advantage. 

Stilwell admitted that this strategy hinged on a "liberal-pluralist" view of the capitalist state. He conceded that there was a "mountain of theoretical analysis and argument developed by Marxists demonstrating the inherent class nature of the capitalist state" but said little in response except to declare his view that the state was an arena for class struggle, as was the ALP and the Accord process. 

By 1993, when it was no longer possible to claim that the Accord was anything but a disaster for the working class, Stilwell was still advocating an "alternate economic strategy which presumes the possibility of the [capitalist] state serving the interests of the labour movement". However, he was forced to admit with disappointment: 

The original Accord envisaged wages policy as a component in a broader program of progressive economic and social reform. In practice, wages policy has been integrated into a quite different program of austerity and regressive distribution. (Stilwell 1993, p. 84)

In 1991, a group of academics, former and current union research officers published Politics and the Accord, which they called a "dissident, heretical critique of current ACTU and labour movement policies". (Ewer et. al. 1991) They admitted that the Accord delivered wage restraint, a shift in income share to profits in the context of unprecedented industrial peace. They also conceded that Labor government policy had been one of austerity, privatisation and deregulation and it had abandoned commitment to maintaining full employment. But the main reason for the Accord's failure was the lack of working- class mobilisation around "progressive" elements of the Accord such as industry policy and award restructuring. Tactical mistakes on the part of left union leaders and the "political immaturity" of workers were to blame. The alternative, they argued, was for workers to concentrate on "issues at the point of production", specifically training and skills development. 

Ewer et. al. were at pains to prove that the Accord strategy marked a progressive break from traditional Laborism, a point that Higgins also underscored in a speech on the "Swedish road" to South African unions (see Higgins 1993). But in Labor, Prosperity and the Nineties: Beyond the Bonsai Economy, trade union officials from the Labor right Costa and Duffy argued that the pro-Accord left were well within the "Laborist" tradition, defined for much of this century by support for a "White Australia", protectionism and arbitration. 

But, as political economist Michael Rafferty has pointed out, both sides agree that the priority for the trade union movement today is to work to help Australian capitalism become more competitive. Ewer et.al. think this will be done through training in the workplace while Costa and Duffy argue that the answer lies in enterprise bargaining and smaller, more "flexible" unions (see Rafferty 1992). 

An even more blatant demonstration of the coming together of these two "Laborist" streams can be seen in Towards Best Practice Unionism: The Future of Unions in Australia. (Ogden 1993). Under the slogan "Management is too important to be left to managers" unions and workers are urged to join in the struggle for "enterprise efficiency". 

There is a clear pattern in the development of the thinking of the pro-Accord left. They began with the premise that the revolutionary road to socialism is not viable &151; at least in countries like Australia &151; because workers will always reject this path. Furthermore, they believed that revolutions cannot create democratic and dynamic regimes. 

Therefore, they argued, a "realistic" road to socialism requires some scheme of economic and social reconstruction, to be carried out by the capitalist state, which is somehow in the interest of all classes. Inevitably this was an economic nationalist scheme to "increase the size of the cake" (Stilwell 1986) or to "join the ranks of high skill, high wage economies" (Ewer et. al., 1991). 

When the Accord was exposed as yet another ruling class program of austerity and deregulation, the pro-Accord left blamed the working class for not struggling for the "good aspects" of their schema. Finally, these "interventionists" were left rationalising Labor's introduction of the free marketeers' industrial relations regime, enterprise bargaining, in the 1990s. 

A radical alternative to the Accord

A starting point has to be recognition of reality. When Labor came to government in 1983 this was not some big opening for the left to intervene through a social contract with that government. Capitalism in Australia, as elsewhere in the world, was in economic crisis. The end of the "long boom" in the mid-1970s sent the capitalists on a drive to boost their profits through taking back wages and conditions won in the previous two decades. Under these conditions there could be no "win-win" solution for both capitalists and the whole of the working class. Austerity, privatisation and deregulation was the order of the day for all capitalist governments as they sought to make the working class shoulder the burden of their economic crisis. 

In this situation it is easy to see why a social contract with a Labor government committed to capitalism is suicidal for the union movement and the working class. It means going with tied hands into a situation where capitalism is trying to take back the concessions won by workers during the post-World War II long capitalist economic boom. 

A radical strategy, or for that matter even an honest reform strategy, would begin with preserving union independence from the Labor government and building the broadest and most militant struggle possible against the capitalist austerity campaign. Trade union democracy would be vital to such a strategy as it is an antidote to the powerful tendencies of bureaucratism and class collaboration especially in wealthy advanced capitalist countries. Such a strategy would involve more than "free for all" campaigns for wage rises. It would have to include united union campaigns for wage rises, spearheaded by the strongest unions and followed up with united pressure to have any gains shared by the rest of the workforce. The campaign should call for automatic and full indexation of wages, in addition to compensation for wages lost under Labor and the previous Fraser Liberal government. 

A radical strategy would also include union and community campaigns, based on broad mass action, to defend and extend the social and democratic rights currently being wrested back by federal and state governments. Campaigns of this nature play an important role in broadening the consciousness of the working class and in building alliances with other groups oppressed under capitalism. 

The issue of unemployment should be met with a campaign for a shorter working week (with no reduction in pay) to share the work around, and for increased spending on socially and environmentally needed public programs (funded by taxes on the rich). 

Obviously the success of such campaigns is inconsistent with improving the profitability and international competitiveness of Australian capitalism. However, independent mass struggles around these campaigns not only directly address the immediate needs of the working class but also point to the necessity of replacing capitalism with a new and truly democratic social system. 


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