Address to The Sydney Institute - Fighting for the forgotten people: 75 Years On

I am delighted to be here as Minister for Employment at the Sydney Institute.

Gerard Henderson is of course, famous within this portfolio for first coining the phrase "The Industrial Relations Club" in 1983.

In the decades since, the phrase, and the concept, has been an integral component of any debates about industrial relations policy.

Gerard and Anne Henderson have also written extensively over many years about the history and philosophy of the conservative side of Australian politics.

Few individuals have a deeper understanding of the origins and history of the Liberal Party.

In 1994, Gerard published what was, at that stage, possibly the first ever attempt at a comprehensive history of the Liberal Party, entitled "Menzies’ Child".

This was a book marking the 50th anniversary of the founding of the Liberal Party by Sir Robert Menzies in 1944.

In 2017, we will mark a very important 75th anniversary.

On 22 May, it will be 75 years since the most famous of Menzies’ "Forgotten People" series of speeches.

In 1942, in the midst of a war, Robert Menzies articulated what it was that would keep Australia standing tall and who it was that gave Australia its backbone.

Amongst many memorable comments in this speech, he declared that in Australia "the class war, must always be a false war".

75 years on, it is instructive to reflect on what Menzies observed in relation to those who have power and influence, and those who don’t. 2

He observed that there were some people who "controlled great funds and enterprises".

They were those that we would now call the ‘business community’, which he described as "able to protect themselves – though it must be said that in a political sense they have shown as a rule neither comprehension nor competence".

Other people he said were politically well-organised.

Then, as now, the labour movement has always viewed disciplined organisation as the key to applying political pressure.

He identified a third group – "salary earners, shopkeepers, skilled artisans, professional men and women, farmers" among others, who he famously described as: "the forgotten people".

They were in Menzies words: "unorganised and unselfconscious, not rich enough to wield power in its own right and too individualistic for pressure politics".

And yet, they were "the backbone of the nation".

Menzies said the real life of this nation wasn’t found "in great luxury hotels and the petty gossip of fashionable suburbs or in the officialdom of organised masses".

These days he might observe that the real spirit of the Australian people is not manifested in corporate boardrooms, campaigns for fashionable causes, the corridors of Canberra, hashtag activists on Twitter, or posturers on Q&A.

The real life of Australia was then, and is now, to be found in the homes of those - who Menzies praised as "nameless and unadvertised Australians".

For the past 18 months I’ve had the privilege to serve as Minister for Employment.

In this portfolio, there are competing demands – and sometimes conflicts – between powerful sectional interests and those who do not have power and influence.

They were championed by Menzies as the Forgotten People.

Today, they are at risk of becoming the Expendable People.

Often, the Liberal Party is typecast by its critics to be the party of big business.

We are however, the Party of mainstream Australia.

Mainstream Australia values independence, self-reliance and aspiration. 3

Aspiration in this context means the belief that Australia is the kind of place in which anyone who works hard and plays by the rules can enjoy well-earned success and build a better future for their children.

This belief reflects the inherent confidence that Australia is the kind of place that will always reward those who Menzies described as "the strivers, the planners, the ambitious ones".

In this context, the Liberal Party took to the last election several policies in the Employment portfolio which starkly distinguished it from the Labor Opposition.

We promised to address the bullying and lawlessness in the building and construction industry.

We promised to make unions more transparent and accountable and stop union bosses exploiting union members.

We promised to protect the 60,000 volunteer members of the Victorian Country Fire Authority and the thousands of mum and dad owner-operator truck drivers.

Regrettably, in honouring each of these commitments, Labor not only refused to work with us, they fervently worked against us.

Perhaps the explanation can be found in the fact that last year, the unions donated $10 million to the ALP and spent a further $16 million on their own campaign to get Labor elected.

Menzies would certainly recognise today’s union movement as the same movement of organised "pressure politics" of 1942. But he would not recognise its modern day financial influence.

In 1942, when he spoke of those who "controlled great funds and enterprises," he was referring to "corporate Australia".

In 2017, the term is equally applicable to the union movement.

Allow me to provide a few contemporary examples of where the Turnbull Government has remembered and stood up for today’s Forgotten People.

Fighting for self-employed truck drivers

Early last year, my office and I received calls from distressed truck drivers, pleading for help.

Their livelihoods were being threatened and their lives turned upside down, because of a decision by a body called the Road Safety Remuneration Tribunal, established by Bill Shorten as Workplace Relations Minister in 2012. 4

Now a "Tribunal" to improve "road safety" sounds innocuous, indeed almost harmless.

But behind the Orwellian name lay a Machiavellian motive.

In truth, the establishment of this Tribunal had nothing to do with safety.

Rather, it was a brutal power grab on behalf of the Transport Workers Union at the expense of Australia’s 35,000 self-employed truck drivers.

The Tribunal had issued a Payments Order, dictating so called "safe rates" of pay that applied only to owner drivers.

This clearly discriminated against small family businesses, often based in regional Australia. In fact, it made them unviable.

The Tribunal’s decision would have imposed a radically new pay structure on the owner drivers.

It would have meant, for example, if a livestock carrier picked up a partial load from multiple farmers, they would have to charge each farmer the prescribed full rates as if for a full load.

This prescriptive approach clearly wouldn’t work for a diverse industry. It wasn’t supposed to.

It was intended to force owner drivers to join a big union and drive for a big company, or, not drive at all.

As the effects of the Tribunal’s decision kicked in, some family businesses laid-off staff, or sold equipment.

Some left the industry, while others wanted to leave but couldn’t get a fair price for their trucks in a flooded market.

Within the space of a few weeks, I met hundreds of owner-drivers and their families.

They were the most upright, salt-of-the-earth Australians you could ever meet.

To the Government, they were Menzies’ quintessential "Forgotten People", doing their best to go about their business, provide for their family and pay their bills.

But they were suddenly in need of defending from those Menzies would have described as the "politically well-organised". 5

For those who had devised this Tribunal, they were the Expendable People, who simply did not fit into their view of the world and, had no political significance – except to potentially become "another member" of the TWU.

Two weeks after the Order took effect, to the relief of these owner-drivers, we secured the Senate numbers to abolish Bill Shorten’s Tribunal.

This was no thanks to Labor and the Greens, who fought the owner drivers all the way.

It was to my great relief, that in the following days my office again received calls from truckies, this time, saying they were back on the road.

Fighting for volunteer firefighters

Shortly after this sorry episode, we saw a similar political grab for power threatening volunteer firefighters in Victoria’s Country Fire Authority.

The CFA is one of the largest and most effective emergency services volunteer organisations in the world.

Anyone who has lived in Victoria has either been touched by bushfires or knows someone who has. They appreciate that the role of the CFA is intrinsic to Victorian life.

Its 60,000 volunteers personify our Australian national character and represent the best of our values.

Last year, a dark political cloud was cast over the future of this quintessentially Australian organisation.

The Victorian Labor Government tried to ram through an enterprise agreement containing clauses described by a former Labor Emergency Services Minister as "Trojan horses" to "side-line CFA volunteers" by handing over its management to the United Firefighters Union.

This plan included interfering with the CFA’s chain of command, requiring union agreement before the CFA could change its internal policies and, even requiring volunteers and paid firefighters to wear different uniforms.

Even community engagement and education, which for 70 years has been conducted by volunteers known and trusted in their communities, was to be union controlled.

The CFA’s former chief executive said she "could not stay and oversee the destruction of the CFA," and resigned.

Even Labor’s Emergency Services Minister, Jane Garrett, felt compelled to resign. 6

The CFA board refused to accept the agreement, so they were sacked by the Andrews government.

Despite this agreement having huge implications for volunteers, they had no say in it.

For the sake of a deal, they were cast aside, a further example of Labor’s Expendable People. Forgotten, in favour of a union deal.

When the Prime Minister and I met numerous volunteers of all ages at Coldstream, northeast of Melbourne, we were greeted by a 71-year-old CFA veteran, Don Bigham.

Following in his parents’ footsteps, Don joined the CFA as a teenager.

After 55 years of service, including 18 years as a Brigade captain, he was still active in the CFA, along with his wife and daughter.

Don, like thousands of other CFA volunteers, dedicated their lives to the service of their community.

Why? Because as Don said: "that’s just what we do".

In August last year, the Turnbull Government successfully amended the Fair Work Act, to protect the operations of emergency services volunteer bodies.

We stood up for those who would otherwise have truly been Forgotten People.

Fighting for self-employed tradies

One of the two double dissolution trigger bills of 2016, was the bill to reinstate the Australian Building and Construction Commission, to properly enforce workplace laws on building sites.

The debate on the ABCC is often conducted in abstract terms of statistics dealing with industrial dispute levels or productivity.

However, in reality, it is a story all about people. Hard-working, law-abiding people who have been scandalously forgotten and overlooked.

Since being Employment Minister, I have met and received representations from many self-employed tradies and medium sized builders.

Unfortunately due to the bullying, thuggery and intimidation they are subjected to in their industry by big building unions, they must remain anonymous. 7

Let me however, quote from a typical letter I received. Certain details have been excluded to protect the writer:

"I was previously the owner of a building contracting Company employing approximately 30-40 workers and apprentices.

I was approached by the Union and asked to sign a union based Enterprise Agreement.

I spoke to all of our employees who supported me in standing up against this union as they were more than happy with the Company’s agreement.

I relayed this information to the Union official who then stated that unless I signed he would make sure that we would never be awarded another contract…

I still refused to be bullied so the union set up picket lines at projects we were involved in and stopped my employees from entering the sites.

…Eventually, to enable us to complete the projects I reluctantly agreed to the Union demands and signed their agreement.

Unfortunately the financial damage was done…I myself lost all of my assets, and was subsequently forced into bankruptcy by the ATO…

No one ever really recovers from these types of actions from union stand-over men."

This letter speaks for countless other small operators in the industry who have been threatened with, or suffered, a similar fate.

Given these types of actions, it is probably just the tip of the iceberg that the CFMEU currently has 110 representatives before the courts which, in recent years, have imposed over $8 million in fines on the union and its officials for breaches of the law.

However, this clearly hasn’t been enough of a deterrence.

For both the CFMEU – and the new ACTU Secretary, Sally MacManus – breaking the law is perfectly acceptable if you don’t like the particular law!

Their attitude ignores the fact that laws are not abstractions. They are there to protect actual people.

When building unions break the law, these are not victimless crimes.

The people who suffer from union lawlessness are the individual workers and small subcontractors, who in any other line of work would reasonably expect the power of the Australian state to protect them from law breakers. 8

Many of these people affected are not so much Forgotten People, as Invisible People. Because they are too frightened of recriminations from the thuggish unions to speak up and expose how things really are in this industry.

They needed a strong voice from Government.

Cleaning up the building and construction industry, is critical for its 1.1 million workers and 300,000 small businesses, which rely on a fair system where rules actually mean something.

It’s also critical for taxpayers, because the high level of industrial disputes in construction – currently six times the average – adds around 30 per cent to the cost of schools, hospitals, roads and other vital infrastructure.

These extra costs are not just due to union misconduct, but also the large head contractors that engage in cartel-like conduct with big unions that inflate their costs and impose those costs on smaller subcontractors and taxpayers.

After the ABCC was abolished by Bill Shorten in 2012, the rate of industrial disputes in the construction industry increased by 47 per cent, while disputes declined by 31 per cent in the rest of the economy.

Unfortunately, no one keeps statistics on the number of subcontractors bullied, intimidated, denied work or forced out of business by building union tactics.

The Turnbull Government had a responsibility to act and we did. The ABCC has been restored.

But I am sorry to say that it has not yet fully changed the prevailing culture.

Further reform is desperately needed to better protect the Invisible People, and to deal with those who think breaking laws is simply a game in which no one gets hurt.

Fighting for small shops, pharmacies, takeaways and hotels

Further evidence of Labor’s contempt for small business can be found in their hypocritical reaction to the independent Fair Work Commission’s recent decision to modify Sunday penalty rates.

An inconvenient fact Labor never mentions is that many big businesses already pay lower Sunday rates, through enterprise agreements negotiated with unions.

Small businesses however, don’t have this option.

This means for example, to hire permanent staff on Sundays:

• 　 a suburban greengrocer must pay $5 an hour more than Woolworths;
•  a family-owned takeaway must pay $8 an hour more than McDonald’s;
•  a bed and breakfast must pay $10 an hour more than a five-star hotel.

Let’s be frank about Mr Shorten’s hypocrisy…

As a union boss, he personally made an art form out of doing deals which cut or abolished penalty rates.

He is happy for big businesses and big unions to cut deals that cut penalty rates.

He’s only opposed to lower penalty rates when an independent umpire modifies them for small businesses, which then evens up the playing field.

Those opposed to this decision would do well to actually listen to what various small businesses told the Commission during its review, because they are typical of thousands of workplaces across the country.

Mr Gough for example, is the owner of a specialty deli in Ballina. He employs 20 people, but due to high Sunday penalty rates, works on Sundays for free.

He told the Commission with moderate changes, he could open the store’s bakery on Sunday, work fewer unpaid hours and pay for more staff.

David owns a pharmacy in Culburra Beach, which he knows provides an invaluable service to the community, including the local retirement village.

With moderate changes to penalty rates, he could open and employ staff every day except Christmas.

Hotel owners from Fitzroy, to Broken Hill, to Rockhampton said they have been reducing trading hours, cutting shifts or working on Sundays unpaid.

These small businesses believe moderate changes will improve customer service and create jobs.

It’s very rare that their voices are heard in national debates. Yet they represent the vast majority of employers in this country.

It is vital that their voices are not now drowned out and, that they do not also become, Expendable People. 10

Fighting for honest union members

Despite the decline in union membership - trade unions continue to have a legitimate role.

However, they must be transparent and accountable.

And contrary to the view of new ACTU Secretary, the Greens, and a number of other union leaders, they must abide by the law.

The systematic pillaging of the Health Services Union by various senior officials – who were also ALP luminaries – reflected an attitude that the rules just don’t apply to union bosses.

Similar incidents at the NUW and AWU show that the HSU was not an isolated example.

Together, these union leaders fleeced millions from some of our lowest-paid workers.

For these union bosses, their own members really were the Expendable People.

Across Australia, there are 47 unions and 63 employer groups that receive annual revenue of $1.3 billion and own or control $2.2 billion in assets. They also pay zero dollars in tax.

These are indeed, in Menzies words, "great funds and enterprises".

In many cases, certain unions are bigger and more powerful than the employers they negotiate with.

They represent more than 2 million members, who deserve to know their organisations are acting in their best interests.

Last year, as part of our stand against lawlessness in the workplace, the Turnbull Government passed legislation to make unions and employer organisations subject to similar governance standards as companies.

One might be forgiven for thinking that the party of the unions and purported party of the workers might have supported reforms to achieve honest unions for honest workers.

Astonishingly, it didn’t.

Last month we introduced new legislation to stop secret payments between unions and employers.

Whether such payments are for personal gain, to boost union coffers, boost union membership, boost union influence within the ALP, or, buy industrial peace - they are a blight on our economy and impact negatively on the rights of law abiding Australians. 11

If our legislation is passed, only specified legitimate payments will be allowed and, if you are negotiating an enterprise agreement, these will need to be disclosed.

These reforms will finally clean up the culture of opaque dealings that have often seen unions and employers both contrive to sell out the interests of their employees and members through secret deals.

In this respect I can say, that the Turnbull Government is the best friend that honest union members have ever had.

The Government is not standing still.

We will soon move to introduce additional bills to enhance integrity and fair dealings in our workplaces. These will include:

• New measures to prevent unions from deliberately falsifying membership records.
• Ensuring union elections are conduced openly and fairly.
• Giving the courts the power to disqualify officials who repeatedly break the law; and
• Giving the courts the power to deregister or place into administration, unions whose leadership has ripped off its members or who have repeatedly broken the law.

Fighting for vulnerable workers

A strong employment system requires all parties to abide by fair rules.

That’s why we’ve introduced legislation to equally deal with unscrupulous bosses. This includes:

• Outlawing the appalling ‘cashbacks’ practice, exposed at 7-Eleven, where employees were forced by their employer to repay part of their wages. 
•  Increasing penalties ten-fold for serious contraventions involving deliberate and systematic underpayment of workers; and
• Holding head offices responsible, so they can no longer turn a blind eye to dodgy franchisees.

Australians have an acute sense of fairness. We believe in playing by the rules.

In 1983, Gerard Henderson wrote in "The Industrial Relations Club" that the various members of The Club accepted as pragmatic "industrial realism" that no-one would be prosecuted for breaching industrial awards. 12

These old attitudes are still yet to be fully eliminated.

The Government is determined to ensure that there are strong laws that are an effective deterrent to those who think nothing of breaking them.

Maybe then, we will have finally achieved a "new province for law and order" when everyone who is subject to Australia’s IR system, accepts that obeying its laws is not an optional extra.

Conclusion

I began this evening by revisiting the words of Robert Menzies 75 years ago, and considering what relevance they still have for his successors in the modern Liberal Party.

75 years on, Menzies’ wisdom still rings true.

The various examples I have cited, demonstrate the callous indifference shown by the forces of "great funds and pressure politics" - to those who stand in their way and who do not have their own organised voices.

The ‘Forgotten People’ – the great hard working, optimistic majority of Australians, are often at risk of being over looked in so many of our political contests – but they are still, as Menzies said, "the backbone of the nation".

Our future lies in the hands of honest, law abiding, hardworking men and women.

It lies in the can-do attitude of small business people.

It lies in the love of families and the community spirit of volunteers.

It lies in the resilience of those who take on individual responsibility, who refuse to let setbacks deter them from having a go.

Australia’s future still lies in the instincts and efforts of "the Forgotten People."

Today, we have a duty to ensure they do not become the Expendable People.

ENDS