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Ross Wilson: CTU Biennial Conference Opening

Ross Wilson, President, NZ Council of Trade Unions
Notes for CTU Biennial Conference Opening
10.30 am, Monday October 17 2005.

I have the pleasure and the honour of kicking the programme off with a few words. The Presidents traditional time slot has been brutally slashed so I have to be brief.

That has been done for three reasons:

Firstly, we wanted to be bit innovative with the programme and provide more time for your input and discussion and, hopefully, make it more enjoyable as well. So the next three days are going to be a little different from previous CTU and FOL conferences. A little less emphasis on speeches and a little more emphasis on informal discussion and debate. And a bit less of me chairing and plenty of the wonderful Michelle A’Court. That can’t be a bad thing.

Secondly, we want this conference to be a celebration:

- A celebration of what we have achieved in rebuilding the union movement over the past 6 years, including the 17% growth in union membership. We have all done a tremendous job, after the dark decade of the 1990s, and we should celebrate it. And can I take the opportunity to thank everyone, particularly our fantastic staff, for your hard work and commitment over the past two years, including the organization of this conference.

- A celebration of the success of our Election Campaign. The options were stark: between building on the gains of the last 6 years or going back to the 1990s with a Brash Government. We did the work, New Zealand voters decided not to go back, and there is no doubt that union activism made the difference. We certainly deserve a celebration for that!

We await the signal from the Beehive that a new Government is formed. That signal seems imminent and may well be made before the PM comes to conference tomorrow. It may not be our preferred model, but we appreciate the difficulties. As we have always said, we will work with nay party that supports our policies and works with us to make a better Aotearoa –New Zealand for working people. And we will challenge them too.

But the third reason I can be brief is that, at the 2003 Conference and subsequently, we have agreed on the essential elements of our strategy for the future. I said in opening the 2003 Conference that:
“We have to develop a shared vision of a modern progressive union movement ……………….. to meet the needs of workers in the 21st century and …… develop the strategic plan for achieving it.”

We have done that since then and we now have the most united trade union movement I can recall in the 30 years I have been a union official. So there isn’t a need for strategy papers. Strategy has already been agreed, is reflected in our Biennial Conference Report, and will be highlighted in Carol and my presentation later in the morning.
We have agreed that we are an organising, campaigning union movement;

- working co-operatively in industries and sectors

- empowering working people to realise their aspirations and potential,

- taking an active part in our political democracy

- and which engaging in social partnerships across a broad spectrum of economic and social initiatives in the State and private sectors.

So we can spend the next three days talking about the HOW: how we can make that strategy work better, and how we can continue to build the union movement as a vehicle for economic and social justice for our children and grandchildren.

There are just two areas of our work that I want to focus on for a few minutes.

The first is wages. We have a low wage crisis in New Zealand. There is a political consensus on that. All the political parties are agreed and said so during the Election Campaign.

Even Don Brash and John Key campaigned on the destructive effects of our low wage structure…….but came up with the wrong solution.

What our members, and all working people, want are fair wage increases. They deserve them and it is our job to make sure they get them.

We have seen strong public support for strike action when it occurs. The public understand that strike action is the only legal means we have of putting pressure on employers who resist fair pay claims, and that it is justified.

As you know it hasn’t been easy getting even a modest 5% minimum increase for many of the workers we represent. Many unions, but most visibly the EPMU which has done a great job leading this campaign, are having to take strike action because of an ideological resistance from many employers. They can afford to pay the 5% but they don’t want the success of collective bargaining to be demonstrated in action.

We saw what happened in the run up to the General Election. Did business say they would support the continuation of a fair employment law framework for collective bargaining? No way. National said it would return to an Employment Contracts Act and their IR spokesperson Wayne Mapp is on record as saying they would follow whatever Howard put in place in Australia.

ACTU & ICFTU President Sharan Burrow will be speaking to conference this afternoon and will outline the Howard legislation we have avoided.

Business NZ endorsed that National Party policy and not a single employer spoke out against it.

What does that mean for us, and for the 300,000 workers we represent? It means that we are going to have to renew our commitment at this conference to build and intensify the wages campaign we launched this year as the 5% campaign.

The economic evidence to support our campaign is overwhelming.

- According to the Reserve Bank corporate profits increased by 11% a year from 2000 to 2004.

- Wages rose just under 2.1% a year in the same period.

- Unit labour costs fell by nearly 1% a year for each of the last 5 years.

- Director’s fees have gone up 20.5% in the last year.

- And Executive pay rates have regularly gone up by twice as much as workers’ pay.

- Our average wage is 30% lower than in Australia.

- Our minimum wage is 46% lower than that for Australian workers.

The challenge for us is to close that gap, and even the evidence from six months of the campaign shows that this will only be achieved by collective bargaining.

It is also important that we continue to support public sector wage campaigns as we have done over the past six years. Pay and Employment Equity is an important part of that, as is publicly funded (or should I say under-funded) areas like aged and disability care.

And we will be giving no credibility at all to the sudden post-election scaremongering by some bank economists about a wage-price spiral. These are the economists who change their opinion according to the politics of the day.

The same economists who now warn about the labour market putting pressure on inflation were happy to ignore any inflationary impact of the massive tax cuts promised by the National Party. All of a sudden, post-election, they are now calling for interest rates to rise again.

But more importantly, wage rises are not inflationary if part of the wage increase is out of profits, and if productivity is improving. The main pressure on inflation at the present time comes from oil prices and housing – not from wages.

Workers deserve a fair share right now.

And that brings me to the other area of our work I want to focus on. We have accepted that unions need to be involved in a broad agenda including skill and economic development strategies.

In fact we have also asserted the right to be involved, with Government and business, in the development and delivery of economic and social development strategies.

Our future lies in building a high skill, high performance, high wage economy which recognises the value of skills and knowledge and treats labour as a valuable asset.

It is now acknowledged that the Employment Contract Act era of the 1990s encouraged employers to focus on reducing labour costs rather than investing in skill development and technology to improve productivity.

The result is that our wages here are low enough to drive skilled workers offshore, particularly to Australia, but not low enough to ever compete with China.

The impact of China on all countries, including ours, is going to be immense over the coming years.

It is estimated that even developing countries like Bangladesh and Indonesia will each lose up to a million manufacturing jobs to cheaper labour options in China.

Now is the time, when we have seen good economic growth and relatively full employment, to make the investment in education and skill development, to work on improving workplace performance and organization, 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.

So the CTU has developed, and is involved with, a broad range of initiatives which are aimed at ensuring that unions and workers participate in the major changes that we have to make as a country to move up the economic value chain to survive in a global economy.

And Carol will report on progress with those initiatives in our session later in the morning.

I want to conclude with a challenge to business. The World Bank has said for the second year in a row that New Zealand is the best place in the world to do business in, 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.

Business exposed itself as ideologically opposed to any form of centre-left government and demonstrated that appeasing business has no political dividend.

However, we have a national interest to consider; the national interest of developing economic and social development strategies which are going to provide decent work and incomes for working New Zealanders, and for our children and grandchildren. Helen Clark knows that and that is an important reason why we are supporting her Governments.

And an essential part of those industry development and productivity strategies is an incomes strategy to ensure that workers get their fair dividend.

We are not going to be taken for a ride. We should not continue to sit down and work with employers on skill development, productivity and industry development issues if they are not prepared to commit to strategies to ensure a fair wages return for workers.

Why would workers engage on this work if it is the same old story of working harder for less?

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.

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 share. And Government has a responsibility to make sure it does.

And National also showed they would attack the state sector. The CTU has worked closely with state sector unions over the past few years to support strong well-funded quality public services with decent rates of pay. We have also supported a partnership approach wherever possible so that unions work with state sector employers and the Government in general on key issues

By supporting the extreme industrial relations policies of the National Party business has raised serious issues of good faith.

So this conference needs to challenge the business community to think again, and to sit down and work through wages strategies on an industry by industry basis, as part of the productivity and industry development work.

We want to see collective bargaining extended, another increase in the minimum wage, and industry engagement where wages are put on the agenda alongside skill development and productivity. And we will be reflecting that in the conference resolution you will be asked to vote on.

So while I hope you will enjoy this conference, and celebrate achievements, we also know that we have huge challenges ahead of us.

As I said earlier the conference has been deliberately organised to give you the maximum opportunity to participate. I ask you to take those opportunities seriously and provide your input into our “Unions 2010” strategy.

Kia kaha.


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