RUBY:

From Schwartz Media, I’m Ruby Jones, this is 7am.

Scott Morrison’s appeals for a new compact between workers and business has reminded some of the 1980s Accord - brought in by the Hawke government.

But there are big differences between the two - especially over what can be bargained for.

Today - Mike Seccombe on the negotiations Scott Morrison hopes will restart the economy.

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RUBY:

Mike, let's start with the interview that Scott Morrison gave to The Australian last week. Can you tell me about it?

MIKE:

Yes, I can. It was on Monday last week and it was a very friendly interview as Scott Morrison interviews with the Murdoch media tend to be. And I think it may have been his only media appearance for the week, actually. But anyway, the story said that Morrison had urged a, quote, new industrial compact between workers, employers, unions and government.

RUBY:

Mike Seccombe is The Saturday Paper’s national correspondent.

MIKE:

What he said seemed to suggest that he was hoping that these various parties would come together in some kind of forum to come up with a plan themselves. He seemed to think that it would happen of its own volition. And anyway, what he said sounded to me a bit like a plan for an accord, you know, getting all the parties together and talking about it.

RUBY:

And Scott Morrison elaborated on some of these ideas at the National Press Club on Tuesday… what did he say?

MIKE:

That’s right. He did. Morrison gave a headland speech saying he wanted to get everyone back into the room and talking about the reform.

Specifically, he said the industrial relations system we have is no longer up to scratch and needed to be reformed.

Archival tape -- Scott Morrison:

Our current system is not fit for purpose, especially given the scale of the challenge of the job that we now face as a nation.

MIKE:

According to Morrison, no one side had all the answers, which I guess is some kind of admission, but that the whole thing had become mired in difficulty and confrontation.

Archival tape -- Scott Morrison:

It is a system that has, to date, retreated to tribalism, conflict, and ideological posturing. This will need to change, or more Australians will unnecessarily lose their jobs, and more Australians will be kept out of jobs.

MIKE:

He announced that he would drop some of the government's proposed anti-union legislation as a show of good faith. He called it good faith. And the legislation I was referring to is the so-called Ensuring Integrity Bill, which was designed to make it easier to deregister unions and to remove union leaders. I don't mean to be narky about his gesture, but the fact is this legislation had already been rejected once by the Senate at the end of last year. So the likelihood is they wouldn't have got it through anyway so...

Anyway, Morrison said that his industrial relations minister, Christian Porter, would convene a series of five working groups involving both bosses and workers to look at EI reform and that he hoped to have the reforms done and dusted by September, which is pretty soon. The onus in all this, though, seems to be very much on the unions and the businesses to get together and work out some kind of reforms themselves to get the economy moving.

Archival tape -- Scott Morrison:

At some point, you've got to get your economy out of ICU. You've got to get it off the medication before it becomes too accustomed to it. We must enable our businesses to earn Australia's way out of this crisis.

RUBY:

Mike - can you take me back - and explain this idea that you’ve raised, of an Accord?

MIKE:

Well, back in the early 80s, Australia, as now, was in a state of economic crisis. The circumstances were kind of different - inflation then was running at eleven point four per cent. Well, you know, that's not a problem now. Now, the greater problem is deflation. Then, wages were growing like topsy. And of course, now they've been stagnant for years. But there are some parallels.

First and foremost, Australia is deep in recession and unemployment was running at around 10 per cent. And the government of the day, led by Malcolm Fraser and his treasurer, John Howard, had no idea what to do.

Really. In fairness, you know, you weren't the only ones. This problem, which was called stagflation, which is simultaneous high inflation and low economic growth and high unemployment, it was a major problem across many developed economies. But anyway, they didn't know what to do. So, duly, they got turfed out at the 1983 election and in came the Hawke government with a promise to get all sides together to find some kind of a solution to the problem.

Archival tape -- workers movement:

Now is the time if ever there was a time for the people of Aus to rise in anger and start to intervene in the affairs of governing this country.

MIKE:

And so was born the prices and incomes accord, which is why I used the word accord.

RUBY:

Okay. And so how is the prices and incomes accord going to work?

MIKE:

The deal was that in return for moderating their wage demands, like I said, wages were growing unsustainably fast. The union movement agreed to seek less in the way of wage rises in return for certain social benefits.

Archival tape -- Bob Hawke:

The Australian economy when we came in was in an absolute bloody mess. You know, we were gonna finish up the poor white trash of Asia if we didn't do some tough things.

MIKE:

So things like greater family payments, greater access to childcare and most important of all, Medicare. Medicare came out of that accord.

Archival tape -- Bob Hawke:

The Labor government will return to the basic principle of the right of all Australians to health services according to their medical needs.

MIKE:

And, anyway, it was so successful. They were ultimately seven iterations of these accords in all, and they did much to make Australia what it is today.

Archival tape -- Bob Hawke:

The benefit for Australian people has been absolutely immense. It is a key reason that we've had 26 years of uninterrupted growth since the early 1990s.

MIKE:

They encompass tax reform. Industrial relations reform. Industry policy reforms. And a whole lot more. And of course, one of the big ones was the universal superannuation system that we have now. And that now holds assets of pretty close to twice Australia's annual GDP. It's enormous. And a key player in that was Bill Kelty, who was the ACTU secretary at the time. And so he got it past the union's side.

Archival tape -- Bob Hawke:

Y’know Bill Kelty was often accused in the media of being… the 20th cabinet minister or something.

Archival tape -- Bob Hawke:

The challenges are there to be met and working together and with you. We will achieve those challenges in a way that no community, no society would ever have expected us to.

MIKE:

And then Kelty subsequently went on to become a member of the board of the Reserve Bank. So he was one of the people I went to and I spoke to him last week…

He was absolutely vital to this process. I mean, Kelty was interesting because he didn't have a sort of...manning the barricades attitude to employers. You know, he was...he believed that people could be negotiated with. And and, in fact, that was what he said to me. He said that the reason they were able to pull off this accord back in the 80s was by ignoring what he called, the crazy right and the crazy left.

Archival tape -- Bill Kelty:

The left and the right are the two, they’re the two opponents of our system. so you gotta protect yourself from yourself from the crazy right and the crazy left.

MIKE:

And he said the crazy right in the employers, you know, always attacked the big safety net. They attacked superannuation. They attacked the wages system,

Archival tape -- Bill Kelty:

So what do they do so predictable. It's just the code of the crazy right.

MIKE:

The crazy left, on the other hand, always attacked capital and didn't want to talk to employers because they were, quote, the enemy.

Archival tape -- Bill Kelty:

And then you gotta protect yourself from the crazy left, who says. run around attacking capital for capital. Think employers are the enemy.

MIKE:

And Kelty's line was that the reason they succeeded was they went straight through the middle and they spoke to everyone.

Archival tape -- Bill Kelty:

We were moderate. Talk to unions and talk to employers.

MIKE:

So I guess that was the secret to his success, was his preparedness to actually talk to the other side.

RUBY:

How similar is Scott Morrison’s new IR plan to the 1983 Accord?

MIKE:

Well the first thing you’d have to say there isn’t a lot of detail at this stage…and there’s certainly no big bargaining chip that might attract the workers to the table... like medicare, for example

RUBY:

We'll be back in a moment.

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RUBY:

Mike, we're talking about the Accord that helped Australia through the economic crisis of the 1980s. One of the original architects of that system, Bill Kelty, has proposed some ideas for what could happen now. Tell me about those.

MIKE:

Well, a big one was to use the superannuation system, which, as I've already mentioned, he helped start and which is now a huge pot of money. Super funds now hold close to three trillion dollars in assets. And Kelty says that they could be used to ameliorate the coming economic crisis.

And what he would do was see the government issue, what he called national recovery bonds, which would be bought by the Reserve Bank, which would then sell them into the market, primarily to the superannuation funds.

And he said in that way, our $260 billion extra deficit would be fundable relatively easily, he put it.

Archival tape -- Bill Kelty:

If you have to invent something for coming out of it, you’d invent this.

MIKE:

The super funds are keen to get themselves more involved in a lot of infrastructure development in Australia and have in general suggested they're happy to be helpful during the recovery phase.

RUBY:

Right. And what else is Kelty advocating for? What are the other planks of his plan?

MIKE:

He also advocated a modest increase in the minimum wage, maybe two or three per cent. But instead of it all being given at once, it would be phased in over the next year, such that as you know, things like JobKeeper tailed off as the economy hopefully picks up a bit of steam. They would become more affordable and they could be brought in in a staggered form over the year. So that was another part of it. He would also continue the JobKeeper scheme beyond it's currently scheduled cutoff, which is September 27, when the government plans to pull a pin on it, at the moment.

And he would restructure it, of course, to make it fairer, you know. And he would also phased in, better pay for certain jobs such as teaching and nursing. You know, those not terribly well remunerated jobs that we've relied on so heavily through the crisis. And he would also make some changes. The industrial relations regime to further encourage enterprise bargaining.

Archival tape -- Bill Kelty:

And let’s just increase the grey maturity of bargaining and look after low paid workers and invest a bit more in good occupations. Now that is where most of Australia sits.

RUBY:

So Scott Morrison has reopened the conversation on IR reform, but without much detail at this point. Does the union movement have proposals out on this?

MIKE:

Well, the ACTU has put up an eight point recovery plan and it also advocates more infrastructure spending. It also advocates more resources for education, training and community support and further government payments to low income households and an expanded safety net.

The ACTU has also called for a $30 a week increase to the minimum wage, which is just a little more than Kelty was suggesting. But a great deal more than employers were suggesting who argue that it can't be afforded at all at this stage and that there should be no such increase. So there's that.

The other big thing is that the unions want something done about what they called insecure work. They want to see greater job security provided by ending what they call forced casualisation, by outsourcing, offshoring, rolling labor contracts and the overuse of labor hire companies.

And there is something to this. I mean, at the moment, 30 percent, I think, of the workforce is casual, which is one of the highest rates in the developed world. So, you know, what the unions want is to see the casual workforce effectively halved and a lot of those casual jobs replaced with two million new permanent jobs.

RUBY:

And what about proposals from business?

MIKE:

Well, the opposite, essentially, employers want to further entrench casualisation and then want further, in inverted commas, flexibility in the labor market. And they also have put out a pretty detailed wishlist of reforms.

The Australian Industry Group, which is one of the big employer organisations, put out a long list last week and began with a quote from its chief executive, Innes Willox, calling for, quote, fresh thinking and a new approach. But, you know, when you look at what they're asking for, the new approach looked remarkably like the old approach.

RUBY:

Mike, what’s likely to happen with Morrison’s new plan?

MIKE:

Well, I think you'd have to say it's going to be difficult. I spoke to Sally McManus, who's the secretary of the ACTU. A few weeks ago before all this started going down. And she said at that stage that she thought that a 1980s-style accord agreement was no longer possible in Australia because attitudes had hardened on both sides.

Archival tape -- Sally McManus:

It’ll be working people that will be saving lives in the hospitals. It’s working people who will be keeping our whole society running. We will view very dimly any employer who tries to opportunistically take away workers rights.

MIKE:

Kelty was much more blunt. He said that, you know, the consistent attacks on the union movement by the Howard government, by the Abbott government, Turnbull and Morrison have made unions actually, you know, rather more reluctant to cooperate.

Archival tape -- Bill Kelty:

But if I punch you in the nose every fucking day then I don’t think I’ll come around to your house knocking on your door. Well, fuck it.

MIKE:

So people have got pretty excited about Morrison's announcement. But, you know, it's a bit hard to see how something significant is going to come through the middle of all of this. You know, Morrison is still, in his framing, very much talking the employer's agenda. It's not clear what the workers are getting out of it.

Archival tape -- Scott Morrison:

It may succeed. It may fail. But I can assure you, we're going to give it everything we can. It's been in good faith and it's been honest, and it requires everybody to leave a bit aside.

RUBY:

Mike, thanks so much for your time today.

MIKE:

Thank you. Bye bye.

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RUBY:

Also in the news

A 30-year-old man from Blackwater in central Queensland has become Australia’s youngest Covid-19 death, bringing the national toll to 103.

The man tested positive after he died, and an investigation has now been launched into possible hidden cases in the area.

A nurse who had contracted COVID-19, but travelled to Blackwater before she was diagnosed is the suspected source of the infection.

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And in NSW, the government has announced a plan to freeze public sector pay for 12 months, saying it’s part of a scheme to save 3 billion dollars for “health and jobs”.

However, Labor and crossbench MPs have already announced they intend to block the change in parliament.

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I’m Ruby Jones, this is 7am, see you tomorrow.