UNIONS ASK FOR THE SPOILS OF VICTORY

UNCLAS SECTION 01 OF 02 CANBERRA 000246 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: PGOV ELAB AS SUBJECT: UNIONS ASK FOR THE SPOILS OF VICTORY REF: CANBERRA 182 ¶1. (SBU) SUMMARY: Jeff Lawrence, the new Secretary of the Australian Council of Trade Union (ACTU),the unions' national umbrella organization, said in a speech March 12 that organized labor would lobby for real wage increases for low-paid workers, higher retirement contributions from employers, more collective bargaining rights, and job security. Lawrence also announced that the ACTU would push for an AUD $26 per week increase in the minimum wage. While the Rudd Government has already satisfied a key union demand by quickly introducing a bill to abolish the Howard Government's Australian Workplace Agreements (reftel),the government has called for wage restraint to curb inflation and it has promised to keep some of the former government's restrictions on unions' rights of entry. Managing organized labor's expectations will be a key issue for Prime Minister Kevin Rudd as he seeks to balance its demands with the realities of governing. END SUMMARY. THE UNION AGENDA ¶2. (U) In a nationally-televised speech to the National Press Club in Canberra on March 12, Lawrence said the unions would retain their campaign against the Howard Government's "WorkChoices" labor market reforms until WorkChoices is abolished. He said the ACTU would oppose new Australian Workplace Agreements, push for greater collective bargaining rights (Lawrence claimed Australia was the only country in the developed world where employers could ignore the wishes of employees to collectively bargain),protect workers from unfair dismissal, argue for the return of an "independent umpire that has the power to resolve disputes", and fight for a strong safety net of minimum standards and awards. ¶3. (U) Lawrence said the unions would "stand up for real wage rises," seek improved training for workers, promote a better work/family balance, and campaign to raise employer retirement contributions from nine percent to 12 percent in 2012 and 15 percent by 2015. "This may seem an ambitious agenda," he noted, adding that "despite seventeen consecutive years of economic growth and profits at record highs, the rights and living standards of many Australians have gone backwards under the Howard years." Lawrence ruled out a wage agreement between the ACTU and the ALP Government, acknowledging that only one in five workers are dependent on minimum wages and awards, and that for most workers, wages are a matter between employers, employees and their unions at the enterprise level. "The relationship we want with the Rudd Government," Lawrence declared, "will be founded on constructive communication." "SHOW ME THE MONEY" ¶4. (U) Lawrence also announced that the ACTU will seek a AUD $26 per week increase for Australia's lowest paid workers in its submission to the 2008 Minimum Wage Review by the Australian Fair Pay Commission, which by law determines the minimum wage each July. Lawrence said this would have a negligible impact on inflation and would barely meet the rise in the cost of living over the next year. He said that the ACTU had calculated that almost one million minimum-wage workers had suffered a decline in their real yearly incomes of up to $2,200. The Australian Chamber of Commerce and Industry has called for a $10-11 per week increase and the Australian Industry Group a $13 increase. The Treasury is alleged by the Opposition to have recommended an $18 increase to the Fair Pay Commission, something the Treasury Secretary Qto the Fair Pay Commission, something the Treasury Secretary denies. The Rudd Government did not recommend a specific increase in its submission to the Fair Pay Commission. Shadow Treasurer Malcolm Turnbull attacked the Government for failing to back its ACTU allies and not putting Treasury's advice "front and center" as Rudd had promised. The ALP pointed out that the former Howard Government had also made no specific recommendations in its two minimum-wage submissions to the Fair Pay Commission. UNIONS WANT PAYBACK ¶5. (SBU) COMMENT: By not backing the ACTU's wage claim, nor even specifying an amount, Rudd has almost certainly disappointed some unionists, although Lawrence said publicly that he was not concerned. With a booming economy and low unemployment putting upward pressure on wages, the reality is that a large proportion of workers' incomes will continue to grow regardless of what the Fair Pay Commission does. However, one fifth of Australian workers (1.6 million) still work for minimum wages and standard conditions, so the Fair Pay Commission's decision has more than symbolic importance. CANBERRA 00000246 002 OF 002 Ironically, with the minimum wage currently AUD $522.12 a week, the increase sought by the unions is only 4.9 percent. However, with underlying inflation currently estimated to be running at an annualized rate of 4.2 percent -- above the Reserve Bank's target limit of two to three percent -- this increase may be too rich for the Government's blood. ¶6. (SBU) COMMENT CONTINUED: In his address, Lawrence said: "The Government does not owe us anything and we are not seeking any payoffs." The reality is, however, that the ACTU and individual unions spent an estimated AUD $30 million on their anti-WorkChoices campaigns, much of it subsidized by additional levies on union members, and their efforts were a major factor in Rudd's election victory. Many union members believe that Rudd, who raised their expectations before the election, owes them. Given their close relationship, the ALP and the unions should be able to work out their differences behind closed doors, but the unions will not be pleased if the Fair Pay Commission's minimum wage increase, due in July, is significantly below the ACTU's figure. The Parliament will likely pass the bill phasing out AWAs by 2010 this week and it will introduce more union-friendly workplace reforms later in the year, so Rudd should be able to mollify the unions for now. They also know that his personal popularity was a significant factor in the ALP's victory last November. On the other hand, unlike most of his ALP colleagues, Rudd does not have a union background and the time may come when his differences with organized labor become more pronounced and more vocal. MCCALLUM