REBELLION AT ROBE RIVER
Peter Paterson on the
corporate origins of the Australian economic crisis
Melbourne A MAN named Copeman suddenly emerged last week as the saviour of Aus- tralia. By this week, however, Mr Cope- man had disappeared again, overlaid by the insufferable eiderdown of Australian corporatism. In his place stood the uncon- vincing figures of the Prime Minister, Bob Hawke, and the Federal Treasurer, Paul Keating, uneasy partners in the production of a national budget intended to effect an adjustment to the arrangement whereby Australians run a Third World primary producers' economy while insisting on maintaining a Swedish-style Welfare State. Or, at any rate, to convince the interna- tional financial markets that the adjust- ment will be made.
Mr Copeman arose like a mystical Nolan knight from the chocolate-brown earth of the Pilbara, the remote Western Austra- lian region from which are torn the miner- als which have fuelled Australia's artificially-high living standards. Well, actually, Mr Copeman himself was no- where near the place, and in his three- piece business suit and with his background as Oxford Rhodes Scholar and business- man he is as far removed from Ned Kelly as it is possible to be.
But Mr Copeman is the boss of a mining company called Peko-Wallsend which runs the Robe River iron ore mine. And he did deliver a breathtaking challenge to one of the central pillars of Australia's corporate state. What he did was to defy a ruling of the Western Australian Arbitration Com- mission when it ordered him to reinstate a group of workers the company had re- assigned to various menial jobs — canteen and cleaning duties, mostly— and who had been dismissed for refusing to be so re- assigned.
Mr Copeman went further. When the remaining workers at the mine threatened to strike in support of their colleagues, he sacked the lot of them and closed it down. Nor would he reopen it, he said, until management's right to manage was res- tored, and the exercise of that right, as a first priority, would be the elimination of 284 restrictive practices which were making the whole operation uneconomic. In a country where big business, big unions and big government arrange these things between them, Mr Copeman had stepped right out of line. Word was brought to the Prime Minister who, true to form, groped for the consensus. Unions had to recognise, said Mr Hawke, that the restrictive practices of the past (e.g. when he was head of the trade union movement) were not necessarily appropriate now. In `reasonable circumstances' they would get rid of these practices, but not 'if you have these double standards about saying the unions must obey the law, but we will abandon it and cock a snook at the law'.
The point about double standards is an interesting one. Certainly Charles Cope- man was defying an order of the court — or a pseudo-court concerned solely with in- dustrial relations — and Australian em- ployers scarcely ever do that. But the unions do, all the time. And instances where they are penalised for doing so are extremely rare.
By this time, Mr Copeman was looking extremely isolated. Other employers, even the other mining companies in the Pilbara, failed to come to his support. Apart from anything else, a trade delegation was in Japan when all this happened — the ore from Robe River is shipped straight to Nippon Steel — so this hapless manage- ment Hampden could be represented as unpatriotic as well. Nevertheless, he had pointed the way to the one major item of deregulation that the Australian economy desperately needs, and without which no amount of budget tinkering on the lines of Paul Keating's exercise on Tuesday will have any long-term effect. The centralised and bureaucratic industrial relations sys- tem sits like a dead weight on the eco- nomy, fuelling inflation, eroding personal liberty, and undermining responsibility.
It is, if you can imagine it, like living permanently under the Wilson and Cal- laghan administrations' social contract, but with even more interference in the business of wage-fixing and the settlement of dis- putes. It is about as appropriate to a modern economy as a straitjacket in the wardrobe of a sane man.
This, however, is the Australian way, based on a commandment handed down in 1907 by Justice Higgins defining a fair and reasonable wage as one 'based on the normal needs of an average employee regarded as a human being living in a civilised community'. Social justice, ever since, has dominated incomes policy in Australia, and has been given a higher priority than economic considerations or the ability to pay. This objective has been brought about by a system of state-run arbitration panels, courts and commissions which, like all such bodies, tend to split the difference. In its latest, precarious, mani- festation, the national 'accord' between Mr Hawke's Labor government and the un- ions, wages are linked to the consumer price index, CPI, but inevitably, as the economy has run into trouble, Mr Hawke is demanding from his social partners an element of 'discounting': in other words, he does not wish to compensate the unions for the full CPI increase.
So, Mr Hawke has ransomed the future of his government to the trade unions. The basic question is not whether they will co-operate in a process which will reduce the living standards of their members they might, or they might not. It is whether it is democratically responsible for an elected government to put itself in hock to a vested interest in the first place.
Perhaps that is what Mr Copeman was trying to say. We shall never know: last weekend the guardians of the regulated wages system, in the person of David Parker, West Australian minister for minerals and energy, discussed the situa- tion at Robe River with the Peko-Wallsend company's Japanese partners. Mr Cope- man was then interviewed. The upshot? Mr Copeman agreed to restore all matters in dispute to the arbitration commission and to reinstate the dismissed workers. The brave rebellion was over.
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