Carol Beaumont speech to NZ Labour Party Annual Conference, 2006

Speech of CTU Secretary, Carol Beaumont to NZ Labour Party Annual Conference 2006

Kia ora tatou katoa               Welcome to us all

It is a great pleasure to convey very warm greetings from the New Zealand Council of Trade Unions – Te Kauae Kaimahi.  In particular let me convey greetings from our President Ross Wilson, our Vice President Maori Sharon Clair and our Vice President Helen Kelly.  The CTU is the central trade union body and our members are 37 unions that collectively represent over 350,000 workers in a wide range of sectors.  If there is such a thing as an average union member you might be surprised to know that she is a white collar worker. The CTU is part of a global union movement and we are an active affiliate of the International Confederation of Free Trade Unions which represents 155 million workers from 241 unions in 156 countries.

These annual opportunities to address key activists within the Labour Party are very welcome. Let me acknowledge that this is a special occasion as we are celebrating the 90^th Anniversary of New Zealand’s oldest political party.  As well as the chance to reflect on our common issues and shared values and the progress we are making I want to take this opportunity to consider the development of  the Labour Party relationship with the union movement and assess the challenges we both face. 

Lets start with our common values – our respective constitutions have different wording but there a common themes throughout.  They both stress:
- Democracy
- Human rights and Equal Opportunity for all in economic, social, political and legal spheres
- Peace and social justice throughout the world
- An equitable share of national income and production
- The right to useful employment
- The Treaty of Waitangi as the founding document of Aotearoa/New Zealand.

These values must underline everything we do and must be what we articulate passionately in a way that resonates for New Zealanders. The call for a strong Labour party or indeed a strong union movement in and of itself is not going to elicit the support of New Zealanders, - this comes when we build support around issues that affect working New Zealanders and convey our values in a way that is relevant to 2006 and that demonstrates how we work and what we have achieved.  

Given we are celebrating the 90^th Anniversary of the Labour party it would be remiss of me not to note that the birth of the party was as a direct result of union activity and the early leaders were all from the union movement.  Leaders like Peter Fraser, Bob Semple, Harry Holland and Michael Joseph Savage were active unionists but they recognised that the needs of working New Zealanders required a political as well as an industrial focus.  That remains as true today as it was in 1916 when the Labour Party was founded. 

The work of the CTU and our affiliates to improve wages of all workers is done both industrially and politically.  A high profile wage push in 2005 gained real traction, and we continue to pursue a fair share for workers through collective bargaining as well as putting wages on the agenda as a contribution to economic development, particularly in all of the industry development fora we are involved in.  The arguments for wage increases given a strong economy and major skills and labour shortages are compelling.  The paradox of modest wage growth in these circumstances is explained by low levels of collective bargaining. 

We have successfully put the issue of low wages into the public domain and gained support for increases in the minimum wage.  We are campaigning hard this year for further increases as well as the removal of age based discrimination against young workers through youth rates. Low wages proved to be an election issue and our wage campaign provided and continues to provide an alternative to the tax cuts proposed by the National party. 

Much that has benefited New Zealanders and indeed much that has defined us as a country has occurred under Labour Governments.  I think here of state housing, comprehensive social welfare, a strong and independent foreign policy, and our anti-nuclear stance, to name just a few.   

This Labour led Government has had to rebuild our economic and social infrastructure after the decimation of the late 1980s and the 1990s.  Labour has had to work hard to rebuild confidence in the party and what it stands for. Largely this has been achieved and much has been delivered for working people and their families.  By now it is an impressive list of achievements across health and safety, ACC, holidays, lifting the minimum wage by 46% since 1999, protection for vulnerable workers and so on, alongside historically low unemployment.  Recent achievements include the State Sector Retirement Savings Scheme, Kiwisaver, Working for Families, improvements in staffing levels in schools and in paid parental leave.  4 weeks annual leave for all workers becomes a reality from next April.

Despite these improvements, the position we find ourselves in the early years of the 21^st Century reflects the legacy of the late 1980s and the 1990s.  We have unacceptable levels of poverty, wide income disparity, long working hours and the loss of skilled people overseas – driven in no small part by our chronic low wages – over 30 % lower than in Australia.  Progress is hampered by a lack of investment in technology and infrastructure. The gap between rich and poor grew faster in New Zealand during the late 1980s and 1990s than anywhere else in the western world. Between 1984 and 1998 the income of the bottom 50% of income earners decreased by 14%, while the top 10% increased their income by 43%.

We are in the unenviable position of competing with low wages in China and high technology in most developed economies. We are a small country, reliant on trading, with a very open economy. A significant proportion of the businesses operating in New Zealand are foreign owned and in many cases profit created here is sent offshore which is part of the reason for our high current account deficit.   

These are all critical structural issues and create significant challenges for the delivery of social justice and the opportunity for all New Zealanders to participate fully in our society.  We cannot be a successful country on the back of such structural inequality. 

The CTU believes not only that Government has a responsibility to work to address these challenges but so too have unions and business.  I will discuss this work later. 

The relationship between Labour and the union movement has evolved over time.  Clearly we are independent but our shared history and values creates a close relationship, one that manifests itself in a number of ways, including through the CTU to government, individual unions to government  and through unions affiliated to the party who participate in the democratic process and seek to influence policy and the selection of candidates committed to workers rights.   

With a Labour Government as legislator unions campaign to build support for changes we want and often push the Government to go further.  With a Labour Government as policy maker we are social partners seeking to work with Government and business in developing and implementing policy.  With a Labour Government as employer unions expect the Government to be a good employer and provide a leading role. And finally unions are political allies seeking to engage people in political processes and campaigning to win elections of worker friendly governments. 

Maintaining integrity in those relationships – good faith if you like, while recognising our independence and differences, is an important part of a maturing and equal relationship.  The CTU recognises the commitment of time by both the union movement and the Government to regular communication. Regular communication needs to happen at all of the levels I mentioned and there are improvements to be made.  We do not and must not take the relationship between us for granted. Of course the relationship can become more difficult when Labour is in Government, particularly over time, if desired changes are not made and as the experience of previous Governments fades from memory. Changes that have been made can be forgotten or seen as the norm and not sufficiently valued. Only strong relationships and communication and a willingness to deal with concerns can counter these risks.

The CTU – Government Forums which have seen hundreds of union delegates engage with the Prime Minister and her colleagues throughout NZ over the last 3 years are highly valued by both parties and will continue to be built upon. We have now completed 13 forums and both parties have a commitment to seeing them continue. 

I want to acknowledge here the leadership of Helen Clark.  Helen your commitment to processes like the Forums and your willingness generally to engage with unions and their members is valued and respected by the union movement.  Thank you also for your accessibility and willingness to intervene when required.

The political system we operate in means,  for both of us, that our relationship is not an exclusive one and we have been working to build respectful and independent relationships with a number of parties – Greens, Progressives, Maori, and NZ First. 

The union movement and Labour party have a vital interest in each others success but there is a need to better acknowledge this.  There are Labour party members who are not union members or who don’t promote workers rights and support union campaigns.  I do challenge you all here – individually but also in your roles within the Labour party to promote workers rights and unionism.  I sometimes detect a cringe element in some about promoting workers rights or union agendas.  This must be challenged and part of the CTU’s role is to ensure that the vital role of unions in a modern democracy is widely understood and valued. 

The union movement has a broad agenda encompassing economic and social development, the provision of quality public services, a well functioning and stable democracy, our relationship with the world and much more. The Governments 3 key themes – economic transformation, families young and old, New Zealand identity are of course very relevant to the work of the union movement.  

Economic transformation which creates a strong economy that is based on high wage, high skill, and highly productive work is clearly vitally important to workers. One of the key questions for the CTU is how do we transform workplaces to be the modern, dynamic, participative workplaces that effectively combine the knowledge and skills of workers with technology, marketing and all the other factors that are part of a value-added economy? We know that the innovation framework needs as much if not more focus on the workplace as it does for instance on research and development.  One way we do this is through our agenda of worker participation – getting workers involved in the decisions around their workplaces, be it through health and safety reps, learning reps or other mechanisms. 

Families young and old includes key issues like increasing  workforce participation, lifelong learning, quality flexible work, work life balance, quality  public health and education, all areas which are on the work agenda of unions. New Zealand identity must include core values like fairness, economic and social security for all and recognition of, respect for and celebration of our diversity.  

The world of paid work is a primary, although not sole, focus of the CTU.  I want to consider how the CTU and the Labour Party need to provide Decent Work consistent with our common values. The challenge to us all is – how to ensure that we are delivering Decent Work for all not Decent Work for some.  This means contemplating how we ensure employment for Maori who have unemployment rates of 8.2% compared to population overall who have unemployment rates of 3.6%.  Or employment for young people – Maori youth unemployment sits at 20%.  Or women remaining concentrated in a narrow range of jobs and earning hourly wages that are still 13 per cent less overall than men, an improvement on last year, but clearly still not true pay and employment equity for women.  It also means recognising that while productivity increased significantly between 1998 and 2005 real wages barely rose.   

Unions support a transformation agenda based on high skill, high technology and high wages – and we are determined to work with Government and others to put in place the platforms for this transformation.  We recognise that productivity improvements are essential for NZ to compete globally, to provide decent work and to provide quality social services.  Productivity must be lifted through an investment approach – including investing in people - not an approach of reducing wages or conditions or making workers work harder for less.  For many NZ workers productivity is a dirty word.  We are promoting an approach that includes investing in skills development, lifting participation in work design and decision making as well as lifting wages.  A vital prerequisite for the union movement is the development of active labour market and change security provisions that give workers employment security if not job security and provides adequate social protections.  I want to stress that this work would not have been possible a decade ago when worker and union rights, including the fundamental right to freedom of association and collective bargaining, were under attack as they currently are for so many in the region including our close neighbours in Australia. 

This change in labour market governance in NZ since 2000 recognises unions and promotes the development of productive workplace relations.  I believe these go hand in hand.  This has been strengthened by an increase in tripartite dialogue.  Underpinning this are improvements in the legislative minimum code.  

This leads me to my next challenge – the need to genuinely recognize unions as the voice of workers. Decent Work for all is not possible without unions. Genuine change cannot occur without involving workers in developing the solutions. 

Genuine sustainable change cannot be built on the back of inequality. Unions have a fundamental role in fighting for those who are disadvantaged or excluded.   

Achieving Decent Work for all makes good economic and social sense.  Despite this there is still a strong resistance to accepting worker rights including the right to organise in unions and collective bargaining, and there are some recent examples of this that we don’t want in this country.  We do not want the approach taken by Australian owned Progressive Enterprises in locking out nearly 600 workers for over three weeks; we do not want the anti-worker and anti-union Work Choices legislation enacted by the Howard Government in Australia in March of this year and we don’t want legislation removing the rights of workers, like National MP Wayne Mapp’s so called ‘Probationary Employment’ Bill.  All of these actions or provisions seek to give more power to employers and diminish the rights of workers.  In all of these situations public opinion is against blatant abuse of power. The recent Progressive dispute has not only been a positive example of union solidarity but also showed the public of NZ expressing their opposition to bullying behaviour, including through the $400,000 plus donations that were received for the workers.  Perhaps this bodes well in ensuring that we won’t go back to an Employment Contracts style of employment relations, although the stark choices in employment relations policy in last years election campaign shows the intentions of backward looking National Party.     

Building a sustainable employment relations system will require a recognition that modern workplaces and industries need to have higher levels of trust, participation and democracy and to provide quality well rewarded work.  The features of such a system include:

• A rights based and comprehensive framework legislation, policies and institutions that provide the processes for determining how people are treated in paid work. 
• Strong minimum code provisions
• Workers organized in strong and well resourced unions able to engage at the industry/sector level as well as the enterprise
• Employers organized nationally and at the industry/sector level and willing to engage at that level
• A commitment to partnership processes at the workplace, industry and national levels
• Good faith behaviour and workplace culture
• Sufficient, well resourced and recognized worker representatives able to engage with employers and government representatives
• Strong rights on information and consultation
• Recognition of the needs of an increasingly diverse workforce including the needs of those in relationships that are not the traditional employee relationship, and
• The ability to be both flexible and respond to change while providing security of employment

Despite our differences, we have been building our relationship with Business NZ.  Of course we have separate constituencies, a tradition of opposing each other, and we continue to disagree on plenty of issues. But there is a willingness to work together in the national interest.  This includes a stated commitment to building a high wage, high skill, and high trust economy underpinned by a modern physical and intellectual infrastructure and meeting social and environmental needs.  And I think the Government can take considerable credit for exhibiting a commitment to take tripartism seriously in their willingness to consult regularly with both unions and business interests and increasingly to facilitate joint discussions. 

To be sustainable, any organisation or movement needs to reinvest, look for partners and broad social acceptance, have a secure economic base, be critically aware of trends and be flexible enough to respond.  Just as our economy needs to modernise, so does the union movement.  I am well aware that in advocating high performance workplaces and industries, we will need high performance unions. We need to be open to new ideas and relevant to an increasingly diverse workforce many of whom have had no experience of unions. Unions are no longer the complacent organisations reliant on legislative props we often were prior to the Employment Contracts Act and we are moving back to a broader agenda and approach than the bargaining agents we were forced to become in the 1990s.  We are a positive, united and growing union movement committed to fighting for a fairer New Zealand.

There was a necessary but not sufficient precondition to the rebuilding of the NZ union movement and that was the need to repeal the Employment Contracts Act and replace it with a legislative base that recognised the right of workers to organise in unions and promoted collective bargaining as a means of addressing the fundamental inequalities of power in the employment relationship.

The Employment Relations Act facilitates rather than prescribes and in many ways is closer to the ECA than the legislative environment that went before.  Not that this was apparent in the hysterical response of many employers to moderate legislative change.  The ERA has already been reviewed and strengthened but we still have some fundamental concerns.

We recently held an employment law conference which considered whether the current framework provided the basis for the type of employment relations we seek.   In particular we considered the central place of collective bargaining as well as developing social partnerships and the interrelationship of these two important tools for promoting the interests of workers.  It is clear that further reviewing of the ERA will be required to ensure its sound objects are met. Particularly that collective bargaining can be achieved for those who are more vulnerable in the workforce, that multi employer bargaining and the development of industry standards becomes a reality and that the Act is relevant to a wider group of workers.

So there is more to do.  We know how important our role has been over the past seven years in building our influence in Government and the legislative and policy gains which have resulted.  And we know from the experience of the previous decade how quickly those gains can be destroyed.  So it is important that we do our very best to articulate and promote the role that we see for unions in modern society.

One way of putting our case is to present as evidence the successful small country models where unions have played a crucial role in economic and social development.  Countries like Ireland, Austria, Norway, Denmark, Finland and to some extent Singapore where a “social partnership” approach has been identified as a key component of transformational economic and social change.

And that is why the Minister and Secretary of Labour, the CEO of Business NZ and CTU President Ross Wilson made a brief visit to Helsinki and Dublin in June.

Key learnings from the visit included recognition that in a globalised world of minimal protection, small countries have to develop a national strategy.
In small countries the task of building consensus around shared problem definition and solutions is comparatively easy.

In Finland and Ireland there is a strong level of alignment between elected politicians, senior government officials, and business and union leaders in their understanding of national economic priorities and strategy, and a social partnership approach, with its problem solving culture, is acknowledged as a key contributor to the economic success of those countries.
Both those countries see industrial relations, labour market policies and in particular workforce development, as key contributors to the next phase of economic development. There is a strong emphasis on an investment approach and integration of economic and social policies as part of the overall strategy. More participative and democratic workplaces, and the learning networks which develop, are seen as a vital contributor at workplace level.

So we have some excellent models to support our advocacy of a high road approach. There are of course key differences that mean we cannot just import a foreign model and hope that it will be accepted, let alone work, in our particular context.

In New Zealand during the past seven years the CTU has pursued a staged approach:
• we advocate recognition that unions are an essential part of civil society
• we argue for more specific forms of social partnership
• we argue that unions are part of any industry  - industry does not just comprise employers)
• we engage based on recognition that although we have a distinct perspective, there are overlapping interests with employers and government
• forms of social partnership have initially tended to be built on particular issues like skills and  productivity
• once engaged we seek to move to sustainable projects that include a vital component of worker education that can underpin genuine worker participation
• we look for opportunities to link across issues such as productivity, working smarter and work-life balance.
We are clear that our approach to social partnership must not undermine or replace our independence and core organising capacity and must provide organising opportunities including opportunities for membership and delegate involvement.

We are now looking at options on how we further progress our social partnership work.  This work is reliant on strong representative unions and a collective bargaining base particularly at the industry level.  We need to see our objective of industry bargaining of standards as evolving out of and being an integral part of, our social partnership work.  Most importantly we have to continue to point to the simple logic that wages and salaries are part of any industry or sector development strategy, in the public and the private sector.

The extent of our engagement is a reflection of the reality that we have won the right to be involved as social partners in the whole economic, industry and workforce development agenda. We have a long way to go in operationalising this agenda into our work as unions, and we have established industry and sector groups to help us achieve this.  We face the challenge of getting buy-in to this approach from your average employer

We know that now is the time, when we have seen good economic growth and relatively full employment, to make greater investment in education and skill development, to work on improving workplace performance and organisation, to improve workforce participation, and to create decent jobs.

And we have to do that as a nation with a sense of urgency. We are leading that public debate because while businesses can, and are in increasing numbers, shifting their production to China, workers can’t.  They don’t want to live in China, but more to the point: We want to build our future in Aotearoa New Zealand.

We have to continue to put the challenge to business. We have had economic growth of nearly 20% in five years, and business has been booming.  Yet as soon as there was a whiff of tax cuts, Rogernomics and labour market deregulation, business interests simply abandoned all their professed intentions to work with government and other stakeholders on economic development and an investment path to build a high wage, high skill economy. 

Some might argue that that is a reason for the CTU to keep business, and Business New Zealand at arms-length. We don’t agree. Our role should be to challenge those failed policies and to continue to build the social democratic agenda. Employers argue against industry bargaining yet they lament the fact that workers are not attracted to their sector. Low pay cannot be addressed on an individual firm basis, and our role includes challenging them to discuss industrial relations and wages as part of industry and skill development strategies.

If we are going to commit to the changes we need to make as a country to build our skills and knowledge, to transform our industry sectors so they can compete against the world, then we are entitled to know that workers will get their fair share. And Government has a responsibility to make sure they do.

The precise institutional forms and resources used to support such a framework can be debated. But we need recognition by employers that the low wage issue is a structural issue and it is an overall industry issue rather than a matter of some enterprises.  An economic transformation model should use a social partnership framework to promote industry mechanisms to address this structural problem with as much vigour as we see applied to market development, productivity and other economic development initiatives.

The challenge for us is to get that established in the public debate and recognized in our national policies and legal frameworks, including the Employment Relations Act.   We also need to be vigilant in promoting and ensuring that improvements are delivered for all New Zealanders not just some. 

Our right to organise industrially and politically is a human right guaranteed by international law. It is not just a workplace right. It is also important at a political level as a countervailing force to corporate power.

It was a relatively weak civil society that tried to oppose that neo-liberal agenda in the late 1980s and 1990s. I don’t think most New Zealanders saw the Employment Contracts Act as the attack on “civil society” and democracy that it most certainly was. But its main architect did.  The National Government Minister of Labour Bill Birch is reported to have told a meeting of the right wing “think tank” the HR Nicholls Society in Australia that the ECA was not only a means to reduce New Zealand wage costs for employers, but also to destroy unions “and the Labour Party they supported”.

One of the important lessons we learned from the 1990s is that we as unions have to fight for our role as institutions of democratic society, and increase the public awareness that a political attack on unions is an attack on democratic society. And that is why the CTU Officers frequently make the statement that the CTU, with more than 350,000 affiliated union members, is the largest democratic organization in New Zealand.  It helps to define that important civil society role.

Democracy is of fundamental importance to the CTU and the Labour Party as we are both formed to represent the interests of the many not the few.  We are working hard to improve our political work and it is critical we do so as democracy in NZ is being undermined.  Ordinary New Zealanders are often cynical, disinterested or even hostile to politics or politicians.  This creates an environment where people don’t bother engaging in political processes including the elections.  The CTU and Labour both need to work hard in changing this situation of disinterest.

For our part the CTU and our affiliates are committed to doing our politics differently. We need to both broaden and deepen political interest and activity by workers and their families.  Union members are members of communities and we will be encouraging greater linkages of union and community campaigns.  We can also provide explicit political roles for our delegates, for example ensuring all workers are on the electoral roll and facilitating discussions (and actions) around issues.  We need to lift participation in community activity including voting in local government elections. We will strengthen our processes of identifying the issues that matter to workers and articulating them strongly and passionately.  We must continue to convey our messages in a way that really matters to people – workers rights and creating a sense of the sort of workplace or country we want for our children and grandchildren are more likely to have impact than union rights or being seen as only interested in our current membership.  We want to create stronger links to worker friendly politicians at all levels – confidence and trust needs to be developed.  Unions will be ensuring this political work is a regular and ongoing aspect of our work – not just something that happens in election years.  We are clear that the next General Election will be won by increasing turnout.

To summarise – we have a vital interest in each others success. Improvements for working people and their families cannot occur without a legislative environment that recognises workers rights and without a Government that is willing as this one is to be an active participant in economic and social development.  Improvements for working people cannot occur without the collective and representative voice that unions provide both industrially and politically. The role of unions in mobilising workers to vote in the interests of themselves and their families is vital for Labour.

A fundamental measure of success must be progress in delivering on our common values to build a just New Zealand where no-one is left behind.  Labour led governments have delivered many gains for working New Zealanders over the last seven years, and this momentum on our common agenda must continue. 

Let me finish with a quote from Sonja Davies, Labour party and union stalwart who died last year “Nothing is ever too difficult to achieve. Only inertia can defeat us”.
Thank you