Liberty, Productivity and Jobs

THE TITLE for this assessment of the Howard government’s workplace relations record includes a point often neglected about these matters. Labour market regulation basically restricts personal freedom, and provides an institutional framework within which serious infringements of individual liberties—even crimes of violence—are perpetrated.

Discussion of the Howard government’s workplace relations record nowadays tends to centre on “WorkChoices”. The Workplace Relations Amendment (Work Choices) Act was enacted in late 2005, after the Senate’s composition changed on July 1, 2005, following the Coalition’s sweeping 2004 election victory. This Act, and its voluminous associated regulations, came into force in April 2006. A well-financed and well-organised Australian Council of Trade Unions (ACTU) campaign throughout 2007 focused on it to defeat the Howard government, and is claimed—rightly or wrongly—to have been important in doing so.

Two things however need saying. First, there is much more to the workplace relations debate than WorkChoices, important though that was. Second, it is impossible to debate the Howard government’s record without examining the history of industrial relations (as it used to be called) in Australia. That history is inextricably intertwined with our history as a whole. Over the past thirty years or so, what were seen as immutable verities in this area have gradually crumbled, on a two steps forward, one step back basis, as public opinion has increasingly questioned them, and the public status of trade unions has inexorably declined. WorkChoices was a culmination—although, in my opinion, an unnecessary and undesirable over-reach—of that thirty-year-long process. Neither the Howard government’s record, nor the likely future performance of its successor in the area, can be sensibly assessed unless that is understood.

THROUGHOUT MY LIFETIME, attitudes to trade unionism (which has been central to Australia’s industrial relations debate ever since the 1904 “Deakinite settlement”) have been a test of more general social and political allegiances. Those sympathising with “the workers”, or the downtrodden more generally, defended trade unions’ role in—so they argued—improving their conditions. A trade union-based Labor Party was portrayed as the political instrument to that end. The industrial relations institutional structure, and trade union privileges within it, were seen as the legal instruments.

Thus, when my mother (having been rendered a single parent) returned to teaching in 1942, she soon joined the Teachers’ Union. When I entered the Commonwealth Public Service as a base-grade clerk in 1954, I was immediately asked to join the Administrative and Clerical Officers’ Association, and readily did so. Later, dissatisfied with ACOA attitudes on issues unrelated to its members’ interests, I resigned and joined the Professional Officers’Association. By the late 1960s I had resigned from that also; nevertheless, for fifteen years I had implicitly accepted it as natural to belong to a union.

Until the late 1970s or early 1980s hardly anyone seriously considered abandoning the industrial relations structure built up over the previous seventy-five years. The one academic economist who had persistently questioned that structure during the 1920s and early 1930s, Edward Shann, had committed suicide in 1935. He had despaired at the social and economic destruction then being wrought by an award wage system that prevented employers from (legally) cutting wage rates in order to afford to offer jobs to the unemployed.

The first major postwar shock to the wide acceptance of these arrangements came in the form of (adapting Maynard Keynes) “the economic consequences of Mr Clyde Cameron”. As Minister for Labour (1973–75) in the Whitlam government, Cameron backed union claims before the Commonwealth Conciliation and Arbitration Commission (hereafter referred to, in that or subsequent guises, as “the Commission”). The result was a major economic “wage shock”. Minimum weekly award rates for adult males leapt by 18.2 per cent in 1973-74, by 30.5 per cent in 1974-75, and by a further 14.9 per cent in 1975-76. Female award rates rose even faster. Inflation soared; the Consumer Price Index (CPI) rose by 13.1 per cent in 1973-74, by 16.7 per cent in 1974-75 and by 12.8 per cent in 1975-76. Unemployment more than doubled.

After five years under Malcolm Fraser (1976–80), some ground had been painfully won back, in a process reminiscent of the to-and-fro surges of First World War trench warfare. By then, however, I had concluded that merely to go on arguing these matters before the Commission was useless, and that “root and branch” action was required. The Treasury then actually proposed such action, but for reasons that must still remain unrevealed, its proposals came to nothing.

In 1981-82 a second “wage shock” was imposed by the Amalgamated Metal Workers Union under the leadership of Laurie Carmichael, his fellow former communist comrade John Halfpenny, and George (now Senator George) Campbell. Average weekly earnings jumped by 13.5 per cent in 1981-82, and by 12.9 per cent in 1982- 83. With a reduction also in the award working week, this produced a leap in hourly wage costs of 23 per cent and—hard on its heels—a jump in unemployment from 5.6 per cent of the work force to 9.9 per cent two years later.

It’s an ill wind that blows no good. The soaring level of unemployment, and the plunge into economic recession, resulting from these developments led senior Labor politicians to acknowledge—privately if not publicly— that something was amiss. Treasurer Paul Keating later put his finger on the point with his characteristically colourful condemnation of George Campbell as having “100,000 dead men around his neck”. These were those former members of Campbell’s union who, having lost their jobs because of the 1981- 82 wage shock, were still found, years later, driving taxis.

THE HAWKE–KEATING YEARS IN 1983

THEN, leading ministers in the Hawke government had gained some understanding of the problem. They recognised the destruction wrought by the Whitlam government. Although grateful for the 1981-82 wage shock’s contribution to their election victory (via the recession it created), they also recognised that another such episode would mean their own electoral demise. They therefore sought a modus operandi that, without detracting from the power of their trade union patrons, would protect themselves. Thus was born the “Accord”.

Brought into being at the April 1983 National Economic Summit, the Accord is widely seen as a great success. In truth, it was an exercise in Mussolini-style corporatism involving the government, the ACTU and major corporations such as BHP. The 1984 Shann Memorial Lecture, delivered after my intention of resigning from the Treasury had been announced, referred to this phenomenon:

Would not Shann have marvelled that the industrial
philosophies of Fascism which had begun taking hold
in the Europe—but never the Australia—of his day,
were now being activated in his own country … under
the patronage both of governments and of such notable
defenders of liberty as the Amalgamated Metals,
Foundry and Shipwrights Union?

Within the compass of this article, our industrial relations evolution cannot be traced in minute detail. Suffice to say that, under a prime minister who had previously been ACTU President for eleven years, no rootand- branch rethinking was ever likely. During the Hawke years the regulatory structure remained essentially unchanged. While the Accord circumscribed the Commission’s capacity to intervene on the macro level, it (and its state counterparts) continued their widespread micro level meddling.

Nevertheless, even during this period, and particularly after the Robe River dispute (see below), incremental advances towards “enterprise bargaining”, tiny at first but growing, began. In his compendious research paper for the Labour Ministers’ Council, The Case for Further Deregulation of the Labour Market (November 1998), my former Treasury colleague Des Moore pointed to such incremental developments. The Industrial Relations Act 1988, for example, provided for enterprise agreements even to depart from awards in certain (very limited) circumstances. The Business Council of Australia also plucked up enough courage to support, in 1987, a “new direction” for the industrial relations system focused around bargaining between employers and their employees at the enterprise level.

MEANWHILE THE ROBE RIVER dispute had seen a major set-to between management and trade unions. As a director then of Peko-Wallsend, operators of the Pilbara iron ore mining company Robe River, I happened to be peripherally involved in that dispute, the hero of which was Peko’s Chief Executive Officer, Charles Copeman. In a bitterly contested battle involving two serious strikes in August 1986 and January-February 1987, Copeman fought for the right to manage his company. He refused to accept the “rights” of union organisers to control work practices, or the legitimacy of the uniondominated West Australian Industrial Relations Commission to determine the issues. Rebuffing the enormous pressures placed on him by the governments of Western Australia and the Commonwealth, he took his case to three different forums. He appealed to the state Supreme Court; to his own employees; and to public opinion—and in the end, he won.

Copeman’s outstanding courage showed up the cowardice of fellow miners such as BHP and Hamersly (now Rio Tinto), who during the dispute had pointedly drawn their skirts aside from supporting him. Following his victory, Robe River’s productivity increased enormously. Ore produced per employee tripled between 1986-87 and 1990-91, while the frequency of injuries, real or claimed, plummeted by 80 per cent. The trade union emperors were publicly shown, for the first time on any major scale, to have no clothes.

When Paul Keating replaced Hawke in December 1991, Australia had experienced nine years under Labor. During those years the number unemployed actually rose, from 686,000 (9.9 per cent of the labour force) to 898,000 (10.5 per cent), although the number employed also rose by 1,377,000 (22.1 per cent). But with the CPI climbing by 76.2 per cent between 1982-83 and 1991-92, average weekly earnings for full-time adult employees barely changed in real (inflation-adjusted) terms, rising by only 1.1 per cent over the whole nine years.

HERE I SHOULD INTERPOLATE a personal reference. In 1986 Ray Evans, Barry Purvis, Peter Costello and I founded the H.R. Nicholls Society and I became its first President. Founded “to promote discussion about the operation of industrial relations in Australia, including the system of determining wages and other conditions of employment”, it flew in the face of the “industrial relations club”.

Journalists such as Pamela Williams wrote articles about “union busters”. Trade union leaders such as John Halfpenny combined in unity tickets with business organisation leaders such as Brian Powell (then chief executive of the Victorian Chamber of Manufactures) to describe us personally as “Fascists”. Halfpenny also described the Society as “the Ku Klux Klan of industrial relations”, a description for which he subsequently paid dearly in the courts. Government ministers, from the Prime Minister down, condemned us as “economic troglodytes and political illiterates”. But within three years, two bright young men from the New South Wales Labour Council wrote in their subsequently published book Labor, Prosperity and the Nineties: Beyond the Bonsai Economy, that the H.R. Nicholls Society had “won the intellectual and the political debate”. (One of them, Paul Duffy, was immediately sacked for his pains; the other, Michael Costa, is today the New South Wales Treasurer.)

I mention those facts by way of full disclosure, but also for two other reasons. First, because they bear out my strongly-held view that in a free, democratic society, ideas do matter—a view underlying the establishment of Quadrant itself. Second, while the H.R. Nicholls Society sought to place the whole industrial relations structure under the microscope of public opinion, it particularly focused on the outrageous deprivations of freedom, and outright crimes of violence, committed by trade union bosses under cover of that structure. The Society’s website (www.hrnicholls. com.au) is replete with such episodes as that of “the Mount Thorley 25”—the blatant victimisation of the twenty-five workers recruited to the Mount Thorley coal mine after some workers there were dismissed for persistently demanding that two men must work a one-man mechanical shovel.

BY THE TIME, therefore, that Paul Keating became prime minister, faster change seemed not only economically essential, but also politically possible given the shift in public opinion. Soon after Dr John Hewson had lost the “unlosable election” in March 1993, Keating delivered a remarkable address, on April 21, to the Victorian branch of the Australian Institute of Company Directors. I have described that speech elsewhere as being among the most forward-looking utterances in this policy area by any politician from either side of politics. John Edwards, then one of Keating’s private office advisers, has written about this episode in Keating: The Inside Story:

The industrial relations system clearly needed to be reformed,
principally because wage agreements were not made at an
enterprise level between employers and employees. He [Keating]
was now proceeding to alter the framework of industrial relations
to allow non-union enterprise agreements. But as long as Australia
was to have a system of collective bargaining underpinned by
minimum awards, rather than the alternative of individual contracts,
the reform Keating proposed was as far as he wished to go, needed
to go, or would be allowed by his colleagues to go. He was removing
the major obstacle to the proliferation of enterprise bargaining.
[italics added]

Keating’s speech was savagely criticised by the ACTU, and when his Minister for Industrial Relations, Laurie Brereton, later addressed the ACTU Congress, “Danger Man” was received in stony silence. His subsequent Industrial Relations Reform Act 1993, while incorporating much of what Keating had laid out, also came at the heavy cost of new and particularly irksome provisions (s. 170CE of the Act) relating to “unfair dismissals”. These imposed onerous new obligations on employers wishing to dismiss an employee, and provided the framework for the system of industrial blackmail later known as “Go Away Money”.

The unfair-dismissal provisions were the pay-off to the trade union movement for its acceptance of the moves towards greater enterprise bargaining flexibility. Essentially, they gave union organisers a new sandpit in which to disport themselves as “friends of the workers”. Apart from the vexatious litigation processes involved, and the costs to employers whether or not they contested the claims, they made employers much less willing to offer jobs. Since you could no longer readily sack people who were found wanting, you were more wary about engaging them. Because, also, the provisions applying to casual and part-time employees were less onerous, they reinforced the drift away from full-time employment to part-time and casual jobs. The Keating period was thus one of both pluses and minuses for labour market flexibility.

HOWARD: THE FIRST PHASE

THE FIRST PHASE (1996–2005) of the Howard government’s workplace relations record was marked by three positive developments and one persistently negative one. First among the former was the passage of the Workplace Relations Act 1996—the so-called Reith–Kernot Act, negotiated between the then Minister for Employment, Workplace Relations and Small Business, Peter Reith, and the then leader of the Australian Democrats, Senator Cheryl Kernot. Second was the 1998 waterfront dispute, which effectively broke the stranglehold over the Australian waterfront by the Maritime Union of Australia. Third was the Cole Royal Commission of Inquiry into the building and construction industry, resulting (later) in the establishment of the Australian Building and Construction Commission, with real powers to deal with the criminal violence and economic mayhem imposed on that industry by the Construction, Forestry, Mining and Energy Union (CFMEU) in particular. Meanwhile, however, there remained the persistently negative influence of the Senate in severely eroding, or blocking outright, the government’s labour market reform measures.

Despite the criticisms of it by market flexibility advocates, the Reith–Kernot Act marked a decided advance.

For example:

• It introduced Australian Workplace Agreements (AWAs) between employers and their employees, negotiated with or without a “bargaining agent” (which also might or might not be a trade union). Entirely outside the award system, and hence of the Commission’s powers to interfere, AWAs were nevertheless subject to the so-called “no disadvantage test”. This required a new authority (the Employment Advocate) to certify that employees entering into AWAs would suffer no disadvantage overall compared with the relevant award conditions.

• It required the Commission to simplify all awards by limiting employment conditions in them to a minimum “safety net” of not more than twenty “allowable matters”.

• It restored the secondary boycott provisions of the Trade Practices Act, whereby remedies may be sought in the real courts against the institution of boycotts (such as picketing) by unions attempting to maintain restrictive practices.

• It watered down the 1993 unfair dismissal provisions, allowing legal costs to be awarded where the court judges a claim vexatious, and somewhat reducing the excessive burden imposed on employers by “procedural fairness” requirements.

• It made it harder for existing unions to oppose registration of a new union because the workers involved could “conveniently belong” to the former instead.

• In these and other ways it outlawed the concept of compulsory unionism.

All these advances had to be negotiated with the Australian Democrats.While it is easy to criticise the limited progress achieved, the Democrats were responsible for that. The party formed, in Don Chipp’s phrase, “to keep the bastards honest”, chiefly ensured continuing bastardry by those running the employment protection rackets of the “No ticket, no start” variety.

In 1998 came the waterfront dispute, the second defining moment (after Robe River) in the long struggle for industrial relations reform. Here too a courageous individual, Chris Corrigan, led the fight. It was, however, Reith—backed strongly throughout by Howard himself—who gave Corrigan the government’s backing.

They faced a trade union movement that rightly saw the waterfront dispute as a potential turning point in its national power and influence. It was supported by a Federal Court whose judges persistently sought to ignore the clear import of the law, a Victorian police force which largely failed to maintain law and order at several critical moments, and a bitterly hostile media. Despite all this, the Maritime Union of Australia was ultimately forced to sue for peace.

In the aftermath, container lifting rates previously declared unattainable were quickly achieved. Throughput on the docks improved as dramatically as the fall in the number of workers needed. No longer was the Australian waterfront seen around the world as a thieves’ kitchen of industrial relations extortionists. Above all, as with Robe River, the violent and corrupt face of trade unionism was exposed for all Australians to see and judge for themselves. The nakedness of these emperors was again revealed.

IN AUGUST 2001 the then Minister for Employment and Workplace Relations, Tony Abbott, established a Royal Commission of Inquiry into the building and construction industry, headed by Mr Terence Cole, QC. Its report in February 2003 found that “a culture of intimidation, coercion and industrial lawlessness is rife” in the industry, which was singular in the degree of its disregard for the law. One part of the report, classified secret because of its legal implications, detailed recent criminal and other unlawful offences in the industry. It recommended prosecution of the twenty-three trade unionists and eight employers responsible, and also named sixty-six other unionists and employers who had committed unlawful, though not criminal, offences.

The government’s chief response was the Building and Construction Industry Improvement Bill 2003, introduced by Abbott’s successor as Minister for Employment and Workplace Relations, Kevin Andrews. It met the same Australian Democrat-condoned Senate obstructionism as other workplace relations legislation had encountered since the Reith–Kernot Act. Not until the Senate’s composition changed after the 2004 election was this legislation finally enacted. Meanwhile commercial building costs in Victoria, where (along with Western Australia) the CFMEU’s writ ran particularly strongly, continued to be 15 to 25 per cent greater than in New South Wales (to take but one example).

Throughout almost the whole period until July 2005, the Howard government’s attempts to enhance labour market flexibility were persistently thwarted in the Senate. Over this nine-year period the Labor Party (and the Greens) merely opposed. The real culprits were the Australian Democrats. During passage of the Reith–Kernot Act their actions at least bore some resemblance to that constructive review process which they had always claimed as their justification for existence. After that they lapsed into a settled pattern of delay, obstruction and general negativity.

In researching this article, I have lost count of the number of occasions on which, for example, the government’s attempts to reform the unfair-dismissal provisions of the law were frustrated. The Workplace Amendment (Unfair Dismissals) Bill 1998, having failed to pass, was reintroduced in 2000 only to fail again. The Workplace Relations Amendment (Termination of Employment) Bill 2002 was again blocked in the Senate, as was the Workplace Relations Amendment (Unfair Dismissals—Lower Costs, Simpler Procedures) Bill 2002, and its 2003 successor of the same (increasingly inventive) title. The Workplace Relations Amendment (Fair Dismissal) Bill 2002, despite again ringing the nomenclatural changes, was unacceptably amended in the Senate and, having been laid aside, was replaced later in the year by the identical, and identically named, 2002 (No. 2) bill, which also duly failed. Two years later, the Workplace Relations Amendment (Fair Dismissal) Bill 2004 having failed to be enacted, it was succeeded by the Workplace Relations Amendment (Fair Dismissal Reform) Bill 2004, with the same result.

Such frustrations notwithstanding, during these years much changed. Just as the Keating years had seen a gearshift in the pace of workplace relations reform by comparison with the Hawke years, so even this “first phase” of the Howard years saw a further such gearshift. March 2006 not only marked the tenth anniversary of Howard’s election, but also the threshold of WorkChoices’ entry into force in April. By then, a growing number of workers was employed either outside the award framework entirely (as in AWAs) or in various forms of enterprise bargaining agreements. The Commission’s role, although still considerable, had declined, as had the role (and even more dramatically the membership) of trade unions.

Economically, also, the evidence was mounting. In the Autumn 2006 issue of National Observer I sought to assess the overall record of “The Howard/Costello Decade”, from which the following key points are drawn:

• Over the ten-year period (end-1995 to end-2005), total employment grew by 1,691,000 (20.3 per cent). Full-time employment grew by 865,000 (13.8 per cent), while part-time employment grew by 826,000 (40.0 per cent). That much faster rise in part-time employment no doubt owed something, in a positive sense, to the greater flexibility of labour markets. But it was undoubtedly also due to employers choosing to offer part-time rather than full-time jobs because of the unfair-dismissals regime.

• The unemployment ratio fell, over the same period, from 8.1 per cent of the labour force to 5.1 per cent.

• Moreover, the proportion of the working age population (fifteen to sixty-four) employed rose remarkably, by approximately five full percentage points. Since this proportion had barely changed over the preceding thirty years, clearly something had happened.

• Full-time adult male ordinary time average weekly earnings, deflated by the CPI increase over the period (27.1 per cent), rose by 21.2 per cent in real terms. Over the preceding Hawke–Keating decade, they had risen hardly at all (2.8 per cent).

• Real average total weekly earnings (including overtime and penalty rates) for all employed persons (male and female, full-time and part-time) grew more slowly, by 14.5 per cent, reflecting the shift towards a growing proportion of part-time workers. Again, however, the comparable figure for the preceding decade had been a fall of 4.4 per cent.

HOWARD: THE SECOND PHASE

JOHN HOWARD’S 2004 election victory saw gains of seats not only in the House of Representatives but also, vitally, in the Senate. It was immediately apparent that the government now had an opportunity to advance labour market reform significantly. In November 2004, for the one and only time in my life, I added my signature to nineteen others in a letter to the Prime Minister devised by the H.R. Nicholls Society, advocating establishment of a Commission of Inquiry to “hear submissions … and produce a Green Paper to assist the Government and the Parliament”. This suggestion was politely rebuffed, effectively on the grounds that the government already knew what was required, and needed no further public input. While the first part of this claim was arguable, it under-rated the importance of carrying public opinion with it, and of the contribution that a widely-ranging inquiry could have made to that process.

Although most discussion of the resulting Howard legislation focuses on WorkChoices, it actually comprised three separate measures, namely:

• The Workplace Relations Amendment (Work Choices) Act 2005 itself, including amendment of the previous unfair-dismissal provisions, thereby finally overcoming the Senate’s nine-year obstruction.

• The Building and Construction Industry Improvement Act 2005, finally enacted.

• The Independent Contractors Act 2006.

The Work Choices Act came into force in April 2006. It was immediately challenged in the High Court over its reliance on the corporations power of the Constitution (s.51(xx)), but in November 2006 the Court held (five to two) that it was valid. How serious the Labor states really were in challenging legislation that would, if upheld, give Labor and the union movement the labour market centralising powers that they had long dreamed of, is open to question. Julian Leeser has argued the contrary in his Samuel Griffith Society paper “Work Choices: Did the States Run Dead?” (Upholding the Australian Constitution, Volume 19).

Be that as it may, among many other detailed provisions, the Act:

• Brought within the Commonwealth’s jurisdiction all matters governing relations between employers and employees of “constitutional corporations”—around 85 per cent of total persons employed.

• Provided for a new quango, the Australian Fair Pay Commission, to replace the Commission in setting minimum wages, thereby maintaining the system that has long locked the most disadvantaged out of jobs.

• Confined the Commission to a disputes resolution role, and only when requested by the parties.

• Significantly amended the unfair-dismissal provisions of the 1996 legislation, most importantly by exempting firms with under 100 employees.

• Widened the capacity for employers and employees to agree between themselves in one way or another (including via AWAs) without union intervention.

Between April 2006 and the November 2007 election, Labor and the ACTU waged a war of attrition against the new regime, which forced the government into a number of retreats. Joe Hockey replaced Kevin Andrews as the minister and hence chief government spokesman. Very late in the day the “no disadvantage” test, effectively removed by the Act, was largely reinstated (with all its inherent bureaucracy and delays) in the so-called “fairness test”. Government spokesmen were consistently on the back foot. Instead of aggressively pointing to the Act’s benefits for jobs, they invariably allowed themselves to be pushed into defensive responses to claims of loss of some benefit or other. The frequent absences overseas of the government’s most articulate spokesman—the Prime Minister himself—did not help matters.

The victors in this electoral battle are obvious. Yet before we too readily dismiss this “second phase” of the Howard government’s workplace relations record, consider the following facts relating to the eighteen-month period March 2006 to September 2007, during which the new legislation was operative:

• The period saw 499,000 jobs created, 92 per cent of them full-time. Over the previous decade only 51 per cent of the jobs created were full-time. The major rollback of the unfair-dismissal provisions clearly had a large hand in this remarkable change.

• The unemployment ratio, 5.0 per cent (seasonally adjusted) of the labour force in March 2006, fell to 4.2 per cent.

• The ABCC’s establishment had created a “cultural revolution” in the building and construction industry. Time lost on building sites in this formerly disputesridden industry shrank to virtually zero. Productivity improvements were huge, and commercial building costs fell commensurately.

• By August 2007 trade union membership, with all its associated bullying and other unsavoury behaviour, had fallen by 5 per cent from a year earlier. Only 14 per cent of private sector employees now belonged to trade unions (compared with 41 per cent in the largely state Labor government-controlled public sector).

In my opinion, the structure (including the constitutional structure) of the Work Choices Act was misplaced, and inherently regrettable. In that sense, therefore, I do not mourn its passing. It would however be churlish to deny its remarkable success, during its brief life, in boosting Australia’s labour market performance.

The ball is now at the feet of the Rudd government, and particularly of the Deputy Prime Minister and Minister for Almost Everything, Julia Gillard. Already the Work Choices Act itself has been repealed, and replaced by legislation laying out a framework for change over the years ahead. The trade union movement is in “payback” mode, and is calling in the electoral debts contracted by the parliamentary party. For those supportive of the labour market reform cause, the outlook is ominous.

There may nevertheless be some grounds for hope. Key ministers must surely know that the government’s future, and their own, will largely stand or fall on its economic performance. The continuing financial market turmoil (for which the government cannot be blamed, but whose consequences it will still have to live with) is handicap enough. The last thing it should be seeking is a lapse back into union-dominated labour market restrictions, with their associated adverse effects upon personal liberty, productivity, and jobs growth. It remains to be seen, therefore, whether in these circumstances it will continue to rush upon its own destruction, or whether it will, like the Keating government, turn aside.

This is the sixth in a series assessing the Howard government. John Stone also contributed the first, “Our Greatest Prime Minister”, in the March issue.