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How Labour will gut the economy --- Prebble

How Labour will gut the economy --- Richard Prebble

Thursday 26th Aug 1999
Richard Prebble
Speech -- Economy

Extract from speech to Kapiti Rotary
Senior Citizens Hall, Ocean Road Paraparaumu
7.30 pm Thursday 26 August 1999

How Labour will gut the economy

Hon Richard Prebble CBE, Leader ACT New Zealand

The Labour party is running a campaign on industrial relations that can only be described as misleading advertising. To the media and to the Employers Federation leaders' forum yesterday, the Labour party attempted to distance itself from the CTU draft bill.

This is dishonest. In fact the Labour party's proposals are based on the CTU bill and in effect are virtually identical.

The trade union movement, I have it on very good sources, have received categorical assurances from the Parliamentary Labour party that Labour's industrial policy will be the CTU's. Commentators such as the left wing critic Chris Trotter have pointed out how enthusiastic the trade union movement is for the election of a Labour government because the trade unions have no doubt what Labour's industrial policy is.

It has the potential to destroy business in New Zealand.

Labour's industrial relations policy will destroy the Employment Contracts Act. That Act has been a great success. In 1990 New Zealand, proportionally, had the highest strike record in the OECD; last year we had one of the lowest.

Labour has proposed three subtle changes to the Employment Contracts Act.

First, only trade unions will be able to negotiate a collective contract. This gives the trade union movement by law a monopoly.

Second, only union members will be covered by the collective contract - and you will have to join the union to join the contract.

And third, it will be legal to strike to get a multi-employer agreement.

These three changes will bring back national agreements and will bring back compulsory unionism by the back door.

Let's look at the first two changes - only trade unions being able to negotiate a collective contract, and only union members being covered by the collective contract.

Among other things, this means the contract is no longer between the worker and the employer - it's between the union and the employer. The union owns the contract and owns the jobs. It's the fast track to a closed shop.

Those first two changes taken together will mean that people not in unions will lose the right to strike.

It's a sad day when the political party that's meant to represent the worker actually denies individual workers the right to strike.

Yesterday was also a sad day for the truth. Facing questions at yesterday's Employers Federation conference, Helen Clark did not give a truthful answer.

When asked how her policy would change things for non-union workers on a collective contract, Miss Clark said "nothing would change" for those employees.

The Employers' Federation, who have read Labour's policy thought that perhaps Labour had made a change and so checked with a Labour MP also at the conference who assured them that Labour's published written policy on industrial relations had not changed.

So Miss Clark's answer either means she doesn't understand her own industrial policy - highly unlikely - or she set out to deceive.

Incidentally, I have been informed by some of the country's largest employers that Helen Clark has in private also given these assurances. They are not true.

Under Labour's policy, it's completely untrue to say "nothing will change" for non union workers ion a collective contract.

Everything is about to dramatically change for them. They will no longer have a collective contract. They will be just be a collection of people all on identical individual contracts. They will lose their rights under the collective contract, including the right to strike. It's a classic example of Labour's disregard for the rights of the individual.

At the Employers' Federation's conference yesterday Michael Cullen said Labour's framework was "designed to be used primarily at the enterprise level".

He said workers could only strike in favour of multi-enterprise contracts in very few special circumstances - the implication was that it would be where there were "bad" employers which offered so-called "McJobs".

Well, I think that you might find a big variance in people's views on what a "bad" employer is. There would also be a big variance in people's views on whether a so-called "McJob" is a good job or not.

For the record, I say that almost any job which helps to get an unemployed person into the workforce and teaches that person work skills and good work attitudes, is a good job. An unemployed person lacking job skills has to start somewhere. If it were not for so-called "McJobs", many unemployed people would not be able get onto the first rung of the ladder of employment.

Michael Cullen's speech to the employers yesterday was a disgrace. To paraphrase his remarks, he basically said 'we're going to be the government and anyone who disputes our Walt Disney descriptions of our industrial relations changes, we will remember'. When a potential deputy prime minister and treasurer says he is going to remember you, presumably it's not for the good of your health. Some employers are already feeling intimidated by the threat.

We have not had a senior politician in New Zealand threaten members of the public since the days of Sir Robert Muldoon.

If Labour's policy really is Walt Disney, they should be able to explain it. In fact it is a cleverly put together policy that requires a sophisticated knowledge of industrial relations to understand that what is being proposed is a move to monopoly trade union power of a sort never seen in New Zealand before.

It is a threat to every small business in this country. It is a real threat to 300,000 New Zealanders who voluntarily left a trade union and now face a prospect of being blacklisted.

Militant unions will want multi-enterprise awards and they will have the power, under Labour's proposed legislation, to get national coverage. The playing field will be tipped in favour of the unions and against the employers and non-union workers.

Here's an example. Let's say the Dominion has 20 printers, of whom 8 are union members. And let's say the Evening Post has 40 printers, of whom 15 are union members.

Let's say there's a proposal for the printers at both papers to strike in support of a multi-enterprise contract. Who could vote on it? Not all of the 60 employees (the 20 at the Dominion and the 40 at the Evening Post), but only the 23 union members. Once they are on strike, the employer, under Labour's policy, can't employ anyone else to do this work. The 37 non-union workers will be extremely adversely affected, whether they like it or not.

A small number of employees who belong to the union will have a disproportionate amount of power. And the strikes that eventuate will be across enterprises and country-wide.

Here's another example. Let's say Ansett pilots are striking over a new roster - the country won't be totally grounded because Air New Zealand is still flying.

However under Labour's proposals, the country's pilots will have one multi-employer agreement. Air New Zealand pilots will be going out on strike over an Ansett roster, and the country will be totally grounded.

Moreover small business will be forced to use the national agreement or be boycotted. That means the little regional airlines could be forced to the wall.

Labour will remove the requirement for strike notice to be given in a number of what are currently classified as essential services. And Labour will also take away some services from that list. Transport, for example, will no longer be deemed an essential service. You can see what sort of transport problems we will have under a Labour government.

The footnote to Labour's policy says dependent contractors will be deemed to be employees. No more owner drivers. No more independent contractors. It's a massive change.

Some union activists are already flexing their industrial muscle believing, like state television, that the election's already over. Just last week in Auckland a group of balaclava-wearing thugs attacked employees who didn't want to join the union. Indeed, in Auckland in the last month there has been an escalation in industrial thuggery of the sort that the boilermakers' union used to specialise in.

Perhaps the most important change that Labour's industrial relations policy will bring is that we will see unelected trade union bosses once more wielding more political power than the country's democratic representatives.

If you go back and read the speeches of MPs like Pete Hodgson, you can see that Labour's industrial policy is as I describe it. Labour is relying on the fact that their changes are subtle - and if they just categorically deny what is in their policy in black and white, employers and employees will believe that Labour plans no change.

It's important to look carefully at Labour's choice of words. Helen Clark's right when she says Labour is not proposing to go back to the pre-1991 collective agreements. What Labour is proposing is much worse.

Many militant trade unions hated compulsory unionism because they could not reject from the union moderates who disagreed with them. Under Labour's 1999 proposals, unions will be able to strike for multi-workplace agreements, trade unions will have a monopoly in negotiating such collective agreements, and they will be able to demand a closed shop and refuse to allow workers to join the union.

I've had it reported to me that trade union officials are already telling workers that when the Labour government's elected and the legislation is passed, they will be blacklisted and they might as well go to Australia now. This is industrial policy that no previous Labour government has ever agreed to. It will deliver more power to the trade union movement than they've ever had before.

It is the issue of the 1999 election.


For more information visit ACT online at or contact the ACT Parliamentary Office at

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