Prime Minister Julia Gillard knew just who she was talking to when she gave her address to the Australian Industry Group’s annual dinner on October 25.
The AIG and its affiliates represent more than 60,000 bosses, according to its website. This includes Veolia, the privatisation juggernaut.
But just so she didn’t rustle too many feathers, Gillard spoke to them in the kind of arcane riddles she hoped only they could understand.
Building on the promises she made to the biggest bosses in her address to the National Press Club on July 15, Gillard promised the manufacturing barons of the AIG that Labor had “a reform agenda to deliver” — one that no hung parliament, recalcitrant premier or populist opposition was going to stop it from making good.
Gillard painted a picture of the “hard work” that had made the Australian economy strong, but said she understood how tough some manufacturing bosses were doing it. “I know that the upward pressure on our currency makes life harder for manufacturing exporters as well as exporters of services like tourism and education and agriculture exporters too”, she said.
It was when Gillard got to the solutions to the problems of manufacturing capital — squeezed between the mining giants on the one hand, and what have been called “restrictive work practices” (i.e. workers’ wages and conditions) on the other — that she became rather less forthcoming.
“At the same time as the dollar is so strong, I'm also conscious that electricity prices are rising and that this is also hard for Australian industry”, Gillard said. The problem, she argued, was “caused by a sustained period of under-investment”.
State governments, it seems, have been using their ownership of electricity utilities as a cash cow, and not investing enough in the industry. So what was Gillard’s solution?
“There is another way to manage these issues”, Gillard said ominously.
She meant privatisation. Not that she mentioned that unpopular word directly. But she left her audience in no doubt of what she meant.
“Living in Victoria at the time, I saw the reforms of the energy sector undertaken by the Kennett government and continued by the Bracks and Brumby governments”, she said. “This provides an example that other states could learn from.”
Liberal Victorian premier Jeff Kennett privatised the state’s electricity in 1992, soon after his election, along with many other public assets, including “public” transport. This is the model Gillard wants all other states to take up as a key part of Labor’s “reform” agenda: it’s just that some of them (particularly NSW) are a little tardy.
Privatisation of electricity would also make it easier to deliver a carbon price, Gillard suggested. This “will also help us compete in a carbon-constrained global economy”.
But electricity privatisation was not the only promise that Gillard wanted to make to the assembled manufacturing moguls. She also wanted to assure them that Labor was committed to “reform”.
Citing the example of former Labor prime ministers Bob Hawke and Paul Keating, who began the deregulation of the Australian economy, privatised Qantas, the Commonwealth Bank and the Commonwealth Serum Laboratories, and smashed the Builders Labourers Federation and the Pilots Association, she said: “Reform is not easy — but it works.”
“Reform” — i.e. the smashing of workers’ resistance to longer hours, more work, and poorer conditions — “also lifts productivity, and this is the heart of the matter”, Gillard said.
She denounced the anti-bank posturing of Liberal/National shadow treasurer Joe Hockey and shadow finance spokesperson Andrew Robb. But in the same breath, she also took a bite out of NSW Labor Premier Kristina Keneally for her refusal to submit to watered-down national occupational health and safety laws.
“I never thought I would hear a NSW premier deny that a deal is a deal and a signature means you agree”, Gillard wailed.
Gillard even had a shot at NSW premier-in-waiting Barry O’Farrell over his threat to stand in the way of the “reform” of water entitlements in the Murray Darling Basin.
“Everyone who is committed to economic reform now has a job to do”, Gillard demanded.
“Simplistic solutions abound. The risk of a return to economic populism is real. The reform conversation needs many voices.
“Leaders must lead, and my voice will be loudly heard.”
Gillard finished with a flourish, daring anyone — federal opposition, state governments, unions or popular movements — to speak against the new god, “reform”.
“My government has an ambitious reform agenda: financial consolidation; building capacity on the supply side with tax, superannuation, infrastructure and skills; extending market-based reforms to health and education, carbon and water”, Gillard said. “We will pursue it with discipline and rigour” — so don’t stand in our way!
No doubt Gillard’s speech impressed the manufacturing bosses present. They must have smiled as they swigged another glass of French champagne. For the rest of us, the challenge is evident. If we don’t resist the Gillard government’s “reform” agenda, our services, wages and conditions go down the toilet.
The Gillard government’s agenda is there to be fought, and if we don’t fight, we lose.