Unions In New Zealand

Monday 20 Oct 2003 Deborah Coddington Speeches -- Economy

Speech to HRH Princess Anne, Commonwealth Study Group Tour

Let me make it clear from the start - I am not ideologically opposed to trade unions. However, as a Member of Parliament for a Classical Liberal political party, and as an individual who promotes freedom, choice and personal responsibility, I am strongly opposed to the collectivist nature, and the desire for compulsory membership, which trade unions have come to represent.

I often make the point that if trade unions are such a great idea, why do they need to force people to join, or enlist the government's statutory powers to grow membership? We still have compulsory student unions in New Zealand, compulsory lawyers' unions, and there are strong indications that the Labour Government, at the urging of the CTU, is to reintroduce a form of compulsory unionism later this year or early next year.

Labour unions have moved far from their original goals to today's situation whereby employers and employees are treated like children, not as adults capable of making their own choices. There is a patronising attitude, which limits free contracting to the extent that we are right now progressing draconian holidays legislation through Parliament, which bans workers from negotiating their own holidays!

It's not only the private sector, which will be harmed by this new Holidays Bill but the public sector too. For instance, the Auckland District Health Board has estimated this could add another $1.25 million to its budget. Where's that going to come from? Increased taxes or reduced services?

The position of labour unions has changed drastically in New Zealand since the beginning of the 1990s - as it has around the world. The key trend we are seeing is the decline of trade union representation as a share of the total labour force.

Between 1985 and 2002, the percentage of wage and salary workers belonging to a union in New Zealand fell from 53.1 percent to 21.7 percent.

There has been some increase in the number of union members in recent years, no doubt due to the Employment Relations Act (ERA) and wider factors such as strong job growth following on from the successful market reforms of the 1990s.

But all of this growth in union membership comes from the public sector. That statistic alone gives you some clue as to why this government favours an expansion of the state. Unfortunately, the national interest comes a distant second when the government's union friends call. The Minister of Labour, Margaret Wilson, has a stated aim of getting union membership up to 30 percent.

The Employment Relations Act, let's be frank, was nothing more than a way for the Labour Party to say thank you to union leaders for their support during the party's days in the political wilderness. Flowers would have been cheaper - and more tasteful.

However, it is clear that the ERA has not had the impact that unions wanted and, predictably, they are back for a second bite with the review of the ERA that is currently underway. Council of Trade Unions secretary Carol Beaumont was recently quoted as saying "[membership] is not growing as fast as we would like".

We got a taste of what is to come out of the ERA review when, almost two months ago, I was able to reveal that Cabinet had signed off on a number of amendments to the ERA that will take New Zealand back to the dark old days of national awards, compulsory unionism (by stealth), multi-employer contracts and the Margaret Wilson slavery clause, which will require employers to maintain pay and conditions or pay redundancy when a business is sold.

On the one hand, this may herald the onset of another employment relations Ice Age. On the other hand, it may simply represent a last - futile but desperate - attempt by unions and their puppet government to stave off the inevitable. Wilson's Last Stand, you might say.

It won't work. The long decline of unions is here to stay. As a recent Victoria University report said: "the legacy of the Employment Contracts Act is proving to be a powerful one such that for unions any significant renewal in the current environment will be extremely difficult". And that's just what their friends say!

We have to ask ourselves why this is happening. The reality is that unions have not kept pace with the changes to the economy or to society, nor have they responded to the fact that workers - like consumers - value choice and freedom. Ultimately, that will be the unions' undoing.

Nowhere is this more clear than in the education sector, where the Bolshevik union leaders in the New Zealand Educational Institute (primary teachers) and the Post Primary Teachers Association (secondary sector) have steadfastly stood against sensible and pragmatic reforms such as school choice, increased self-management for schools, performance pay for teachers and increased accountability. Indeed, they have fought tooth and nail to wind back even the modest school reforms introduced during the 1990s such as bulk funding.

Not content with that, they are now working to saddle the early childhood sector with the same centralised, one size fits all system that has failed school children.

It does not need to be this way. Recent market-based reforms are simply a pragmatic response to the changing times in which we live. This is not the New Zealand of 50 years ago. Yet, the school sector continues to be regulated as though it is. In particular, teacher pay arrangements are a relic of the past and are out of step with the needs of a modern labour market. And unionisation has done nothing for teachers - the very people unions claim they represent.

In fact, I would go further and say that unionisation has lowered the status of teachers in the eyes of the public. Yes, they are still held in high regard, in general, but parents - the real reason why we have schools - are fed up with teacher union bosses who on the one hand claim teachers work all through the school holidays, are stressed out and need fewer contact hours, then won't agree to having teachers go on strike in the holidays.

Yet, in New Zealand, we see little recognition from the government or unions that they need to change. And so they fall further behind and further out of step with world best practice in education policy. Out of step with the Labour government under Tony Blair, out of step with the Clinton Democrats, out of step with teacher unions in the Netherlands, all of whom, favour choice. On Friday, the `Melbourne Age' reported that the Bracks government in Victoria was supporting performance pay for teachers.

I look forward to the day we see such progressive views from this government and from union leaders here, but I won't hold my breath. We need regime change if we want to move ahead.

New Zealand is a nation of small to medium-size business - around 80 percent of firms employ five staff or fewer. We also have natural disadvantages - the distance from our world markets is just one. Therefore we have to stand out and be different - in a positive and progressive way - if we are to be relevant in the world economy and attract investment.

It comes down to a simple question of what unions want - a better New Zealand for its entire people with increased productivity, higher wages and a growing economy? Or a bigger proportion of workers forced to conform to the collective mentality, have union dues deducted from their fortnightly payrolls, and employers refusing to take on more staff? You can't have both.

ENDS

For more information visit ACT online at http://www.act.org.nz or contact the ACT Parliamentary Office at act@parliament.govt.nz.

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