Shorten Problems Worsens

Reports and comments in yesterday’s and today’s media (including the Fairfax Press) about questionable deals with businesses concluded by Shorten when at the AWU have confirmed the serious problem he faces as Opposition Leader, even to the point where there is talk of Abbott having an election in November (on the problem posed for Labor by Shorten, see article by Dennis Shanahan in attached –Poor Judgement carries a cost but Shorten avoids paying full price). An early election however  would require a substantive change in Newspoll.

Shorten’s appearance on today’s ABC’s “Insider” TV program has not helped him. In typical ABC fashion Cassidy tried to help by first asking a dorothy dixer (“did you, as alleged, rip off workers”!). Shorten’s basic line was that his focus at the AWU had been on working between employers and workers to the benefit of both, and he gave examples which, he claimed, showed that. When asked about why employers are said to have paid union dues, Shorten said he did not now have details of past arrangements the AWU made with employers and the Royal Commission would have to be asked to produce relevant documents on those! Asked about the attitudes being taken by the Fairfax Press, Shorten “explained” that employers had done well.

Note, however, that yesterday’s Age had (for it ) an extraordinarily strong editorial calling on Shorten to explain himself (see Age editorial below “Shorten needs to come clean – right now”).

As to legitimacy, it should first be noted that an expert in workplace relations has said “if it could be proved payments were made by employers to unions in order to secure favourable enterprise bargaining provisions, and union members were not told of the payments, ­‘secret commissions’ may be found to have been made, which could then constituted a criminal offence” (see article below from The Australian on  “Construction cash paid to union”). However, the central issue is not about the legitimacy of the deals made when, as head of the AWU, Shorten was acting on behalf of that union: arguably those deals were legitimate under then prevailing regulatory arrangements administered by the Industrial Relations Commission (now the Fair Work Commission).

The key issue is whether, under Shorten’s leadership, Labor supports regulatory arrangements under which unions are able to conclude deals with businesses which involve unions agreeing to lower wages for employees than would otherwise be the case and/or to not  disrupting business activities in return for various favours to unions by businesses, such as agreeing to payment of union dues, payment of “training” of unionists, more RDOs and so on.

Deals involving the AWU and other unions, as revealed recently at the Royal Commission on Trade Unions and in the media, indicate that such arrangements are rife and not all employees and members of unions have been treated fairly.

As the regulatory body appears unable to prevent such deals, the resultant wages and conditions negotiated between businesses and relevant unions are simply accepted. With a sympathetic regulatory authority, this gives unions the power to threaten costly disruptions to businesses’ activities unless claims are concluded to their satisfaction (see attached excellent article by Sloan on Legislation allows cosy work deals to flourish). That such arrangements are built into the “system” has been illustrated by the former head of the Business Council, Tony Shepherd, proclaimed that his firm concluded a good deal with the AWU on wage costs on the East Link Rd construction. The BCA clearly needs some new blood.

Some, such a Shepherd, argue that deals concluded in such cases are acceptable because both parties agree. But  businesses not involved may be unable to compete and the wider community will experience higher costs than should be the case. The deals so far revealed certainly suggest considerable amounts are paid by businesses to unions that should instead be reflected in lower costs to consumers and exporters in particular. The government should surely take early action to prevent this situation continuing.

Below and attached are several reports of such deals as well as an analysis by a clearly well-briefed Sheridan which indicates that Labor has been completely wrong in accusing the government of making payments to people smugglers. It turns out that payments have been made by government intelligence agents but to obtain information that would help stop smugglers. It also seems that such payments were made by Labor when Rudd was PM. When asked about this Shorten made a complete fool of himself by saying he could not comment on national security issues

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