Bob Gould, 2005

Stanley Bruce and John Howard compared
History repeats

Source: Paper for the Ninth Australian Labour History Conference, Sydney, June 30, 2005.
Proofreading, editing, mark-up: Steve Painter

“Ex-senator Arthur Rae bluntly expressed the more militant viewpoint: ‘why shouldn’t some unions run between two sets of courts trying to get the best deal? Doesn’t the capitalist try to get all he can? And when by an oversight or through their unscientific methods, or their own conflicting interests, they leave loopholes through which the workers can draw some few slender advantages, what arrant fools we would be to help them close the gaps and patch their rotten social structure’.” Labor Daily, June 16, 1926. (From Studies in Australian Politics: the 1926 Referendum, A.W. Wildafsky. The Fall of the Bruce-Page Government by D. Carboch.)

There are striking parallels between Prime Minister John Howard’s current attempt to transfer industrial relations powers from state to federal jurisdictions and to destroy the federal arbitration system, and the efforts of conservative Prime Minister Stanley Bruce to do the same thing in 1926-29.

To fully understand the 1926 developments and the current developments it’s necessary to go back to the beginnings of industrial arbitration in Australia, at the start of the 20th century.

Jack Hutson’s book, Penal Colony to Penal Power, describes the establishment and early evolution of the Australian industrial relations system, with the rapid emergence of state systems and the parallel emergence of a federal system.

William Holman, an early NSW Labor premier, describes in his memoir the successful initial resistance of the state Labor politicians in NSW and other states to transferring all industrial relations to the federal sphere.

Greg Patmore, in his informative, Foundations of Industrial Justice. The Presidents of the Industrial Relations Commission of NSW, 1902-1998, provides a very detailed description of the NSW industrial system, which emerged as a more favourable arena than the federal system for defending working class interests.

Socialists and syndicalists initially opposed the whole arbitration set-up in favour of collective bargaining, but the rapid establishment and institutionalisation of the system forced on socialists, syndicalists and other militant unionists the practical necessity of operating within the system, while not relying on it. Trade union activists developed the practice of relying on militant mass mobilisation of members to achieve industrial demands, which were then usually ratified, eventually, in the industrial commission.

The two important article by Peter Sheldon from Labour History, about the struggles of the rockchoppers and other labourers’ unions in NSW, are fascinating insights into the way militant union activists operated both within and outside the system, and also how Justice Heydon, a very reactionary early president the NSW Industrial Commission, tried to curb union militancy by widespread use of his legal powers.

One aspect of the institution of compulsory arbitration and awards, at both state and federal levels, which hadn’t been anticipated by socialists and syndicalists, was that the simple act of acquiring an award and union coverage rapidly led to the extension of trade unionism to very wide sections of industry, to women and the unskilled and the most oppressed, who were very hard to organise through normal trade union methods.

The rapid expansion of trade union membership and organisation from about 1903 to the early 1920s was spectacular.

In this situation, radicals who had initially opposed the system rapidly learned to operate a dual policy, both using militant organisation and mobilization, and also becoming fairly skilled in using the legal framework of the system to the best advantage for unions and their members.

Over time, extra-legal mobilisation and strikes tended to dominate in periods of militancy and industrial upsurge, and legal activity through the industrial courts predominated in periods of downturn.

In NSW, the degree to which unions could make gains in the Industrial Commission framework depended, to some extent, on the nature of the political and industrial standpoint of the commission president. People like Heydon and George Beeby tended to be pretty conscious reactionaries, while some Labor appointees were reasonably pro-union, and Premier Jack Lang’s appointee, AB Piddington, tended to be extremely progressive.

The trigger for the move by Tory Prime Minister Stanley Bruce to try to seize control of industrial powers from the states was Piddington’s decision in the NSW commission to introduce the 44-hour week, which enraged the bourgeoisie.

Bruce’s move

Bruce’s proposal in 1926 was surrounded by the same kind of rhetoric as Howard’s is today about getting rid of the anarchy of divided systems, and the virtues of freedom of contract.

Initially the federal opposition leader, Matt Charlton, supported the changes on vaguely Labor centralist grounds, as did a number of federal union officials who were located in Melbourne.

Immediately, however, militant figures such as Albert Willis in the Miners’ Federation, and Arthur Rae, a Labor senator who was one of the founders of the Australian Workers Union, started vigorous agitation against the transfer, which was rapidly backed up by the then emerging Lang machine in the NSW Labor Party.

The period around 1926 happened to be when the Lang machine was becoming a coherent force in the NSW Labor Party, and an important part of that machine was a group of union officials loosely described as the Trades Hall Reds, led by Jock Garden. These officials had a certain bureaucratic militancy in their industrial approach.

The NSW Labor Party prosecuted a potent mix of traditional states rights sentiment, expressed by Lang himself, and vigorous defence of the trade union advantages of preserving the state system, expressed by the Trades Hall Reds and Garden, and most articulately by Arthur Rae in the statement at the start of this paper.

The NSW opposition to the transfer rapidly won trade union support in other states, and this opposition meshed with traditional states’ rights sentiment in the smaller states..

In the event, the referendum was defeated, with narrow majorities in favour in NSW and Queensland and substantial majorities against in SA, WA, Tasmania and Victoria, to give an overall majority against.

In the run-up to the referendum, Matt Charlton and the Victorian federal officials were totally isolated and only got a few votes for the federal centralist position at a national unions conference (the form of national union collaboration before the formation of the ACTU) called to discuss the crisis.

The whole event is discussed in colourful, demotic way in a chapter from Jack Lang’s book, The Great Bust.

Two years later, in 1928-29, Bruce tried again, in a slightly different way. He issued a kind of ultimatum to the states that unless they transferred industrial powers to the federal government he would effectively abolish the federal arbitration commission by an act of the federal parliament.

When it came to discussion in the parliament, after the rejection of the transfer by the states, a political Pandora’s Box was opened.

Billy Hughes, who hated Bruce and was still smarting over his removal from the Tory leadership, had a certain nostalgic interest in preserving the arbitration system, which had been one of the achievements, from his point of view, of the period when he was a Labor leader before the conscription split of 1916.

Hughes’ revolt unleashed a series of unpredictable political cross-currents, including hostility to Bruce by the emerging film industry, which had axes of its own to grind with the federal Liberal government.

Bruce’s legislation was eventually defeated in the commonwealth parliament. He called an election, and the Tories were slaughtered. The Scullin Labor government was elected and Bruce lost his own seat to EJ Holloway of the Melbourne Trades Hall Council.

These events are discussed in Dagmar Carboch’s essay in the book mentioned above. It is also discussed in Lang’s The Great Bust.

In 1944 the Curtin Labor government went to the people with a powers referendum that would have transferred industrial relations to the federal sphere, and that referendum was also defeated.

After World War II, even up to the present, the division between the federal and state systems held certain advantages for most trade unions.

In NSW, the Industrial Commission has been the arena where a certain amount of industrial militancy, supplemented by energetic advocacy in the commission, has often led to wages and conditions outcomes for various groups of workers better than in most other states and the federal arena, and these breakthroughs have eventually flowed to other jurisdictions.

The experience of the NSW Nurses’ Association is a pretty good example of the utility of the NSW Industrial Commission as a venue.

In the nursing industry for the past 25 years, sporadic but consistent militancy at the base, recurrent and sometimes successful challenges to conservative union officials in ballots, and a fairly democratic union structure, have intertwined with reasonably effective advocacy in the commission to achieve substantial and continuing wages and conditions outcomes for nurses, which have flowed to other states.

It’s this constellation of factors, a bit like AB Piddington’s granting of the 44-hour week under Lang, that has driven Howard, like Stanley Bruce before him, to try to demolish arbitration at both and state and federal levels, and particularly at state level.

Howard’s proposals to weight the whole system as it is weighted in the US, against unions and workers, is the greatest crisis that the working class has faced in Australia for many years.

Lessons of the past for defeating Howard’s so-called reforms

Howard is moving ahead with his “reforms” in a period not unlike the late 1920s, when trade union organisation and density has receded somewhat, partly because of very mistaken policies by union leaders, such as the prices and incomes accord and bureaucratically imposed union amalgamations, frequently not on rational industrial lines.

The working class is entering this struggle, as it often does, rather defensively. It’s necessary in this situation for the labour movement and its assorted leaderships to do several things, informed by history and by examination of current circumstances.

Firstly, it is indispensable that the unions mobilise the maximum possible industrial militancy in this struggle.

Secondly, it important to conduct a serious public education campaign, because the working class, both organised and unorganised, initially understands only dimly what the issues are. From that point of view, the ACTU’s advertising campaign, which shouldn’t be a substitute for mobilising industrial militancy, is an excellent and effective beginning.

The third prong of the campaign is the maximum possible mobilisation of political pressure to defeat Howard’s proposals. This particular socialist and left-winger has become a ferocious states-righter for the time being. Like Arthur Rae, I think it’s entirely reasonable to mobilise the states rights sentiments that always exist in Australian politics to defeat the Tory onslaught.

There’s a substantial division in the ranks of the bourgeoisie on these questions, with states rights sentiment all over the country in National and Liberal ranks. A states rights rejection of the transfer of state powers to the federal government was even supported overwhelmingly at the recent national meeting of the Liberal Party, despite Prime Minister Howard’s strenuous opposition.

There’s an emerging possibility that states’ rights sentiment might lead to the defeat of the transfer of powers in the Senate.

The transfer of powers is the central aspect of Howard’s proposals, because the persistence of the state systems would make it very difficult for Howard to proceed at the federal level.

If Howard does manage to get his proposals through the Senate, the next phase has to be the united Labor state government and trade union challenge to the law in the High Court. It’s not clear that even this conservative High Court would endorse the transfer of powers, because many of the conservative judges are Tory traditionalists and states’ righters.

Time is not working in Howard’s favour, as it didn’t work in Bruce’s favour from 1926-29. If a High Court challenge is eventually necessary, it probably won’t start until early next year, and will probably proceed through most of next year.

If Howard were to face that situation, he’d be in much the same position as Bruce was, drifting into a federal election with the albatross of turmoil surrounding what will be by that time very unpopular industrial legislation around his neck.

To summarise, my view is that the labour movement should conduct a campaign with three essential components: the maximum possible industrial mobilisation, the best possible educational campaign and the maximum exploitation of political and legal mechanisms to exploit Howard’s weaknesses, which in this context is particularly the deep-rooted traditional states rights sentiment.

Vignette 1. Senator Arthur Rae is one of my great Australian socialist political heroes. As a very young man he was a founder of the AWU. There’s a picture of him, along with the other founders of the AWU, dressed up to the nines, in the first modern history of the AWU, by John Meritt.

Arthur Rae was elected as a Labor senator in the early years of the 20th century. He lost his seat in 1914, but was re-elected to the Senate in the Lang years. He was an autodidact and a knowledgeable socialist theorist. He was first, foremost and last, a proletarian agitator and he used his position as a Labor politician in bourgeois parliaments to continue his socialist agitation.

He was expelled from the AWU in the early 1920s because of his support for the Bush Workers’ Propaganda Group and his opposition to the bureacratisation of the AWU. He later supported the breakaway Pastoral Workers Industrial Union from his position in the Senate.

Rae lived long enough to support the agitation in support of the admission to Australia of Egon Irwin Kisch, the Czech socialist and opponent of fascism, and in his old age this grey-haired Labor Senator climbed on to the Strathaird, where the immigration authorities were holding Kisch by refusing him permission to land.

The successful struggle against the Bruce government was one of Arthur Rae’s finest hours.

Vignette 2. In the late 1950s and the early 1960s I was a member of a small revolutionary socialist group led by Nick Origlass. We were active in the Labor Party and part of our activity was to send standard socialist resolutions, often written by Nick in slightly strange language, to the state conference every year.

These resolutions would come from the Balmain branch and state electoral council, the Dulwich Hill branch, the Vaucluse SEC and the North Bondi branch (where I was), the Unanderra branch and the South Coast SEC, and the Boilermakers Union and the Ship Painters and Dockers Union.

One year, in a fit of youthful enthusiasm, I suggested a resolution calling for the abolition of the arbitration system and its replacement by collective bargaining. Nick, quite properly, pulled me up. He said: “Are you crazy, do you seriously want to abolish awards, legal recognition of unions and the legal enforcement of industrial health and safety.”

He said: “It was valid for socialists to oppose arbitration when it was initially imposed, but now it is part of the industrial and political landscape and it has certain benefits for the working class, which the overwhelming majority of workers accept. What matters to socialists is the constraints the system places on working class mobilization and organisation. The correct proposition now is that we should demand the elimination from the arbitration act and the industrial system of all restraints on union activity, such as the penal clauses.”

Like Arthur Rae before him, he said: “Socialists aren’t obliged to play by the bosses’ rules. We should accept the things that are useful for the working class and reject the bad things.”

We sent a resolution in that spirit to the state Labor conference. Nick Origlass had a particular and entirely valid preoccupation with the penal clauses and his position was that union officials and unions should defy the penal clauses and in due course one union official, Clarrie O’Shea, did, during a rising a rising arc of industrial mobilisation.

The ruling class faltered and for the next generation the penal clauses were a dead letter. Leftist Labor activists played their part too, rejecting proposals for a wage and price freeze at the 1971 Labor Party federal conference. A whole period of working class mobilisation and improvements proceeded from those events, and that period only ended with the second set of accord measures carried out by the new Labor government in 1983, after they were supported by the ACTU federal unions conference in 1982, all except for one courageous elected official who was a delegate from NSW, and who was persecuted by the bureaucracy for quite a while afterwards for her defiance.

Vignette 3. The Maritime Union dispute of 1998 took place after a long period of working class demobilisation and trade union decline. It was a defensive kind of dispute, marked by a massive community mobilisation, pickets, etc, judicious industrial confrontation and vigorous court activity in defence of the union.

It was an important partial victory achieved in very adverse objective circumstances. In my view, the generally defensive features of the trade union mobilisation were valid in the difficult circumstances and led to the preservation of unionism on the Australian waterfront, which is a very big achievement when compared, for instance, with the deunionisation of the British waterfront.

The partial success of the MUA struggle is very important in the current defensive circumstances confronting the trade union and labour movement in the light of Howard’s assault on the rights of the working class.