Dr Michael Bassett

Dr Michael Bassett

Newspaper Columns


24/12/02 Local Government
10/12/02 Reflections on the US
26/11/02 Election aftermath
12/11/02 US mid-term elections
29/10/02 The Washington Sniper
15/10/02 The Democrats
01/10/02 American Elections
17/09/02 The American mood
03/09/02 Unions
20/08/02 The media
06/08/02 Immigration
29/07/02 Whatever Happened To National?
09/07/02 Inflation
26/06/02 MMP
12/06/02 Apologies
29/05/02 Dirty tricks?
15/05/02 Health
04/05/02 Don Brash
01/05/02 Welfare
17/04/02 National's Predicament
03/04/02 Self Help
20/03/02 John Banks
06/03/02 Health is a Killer
23/02/02 Jim Anderton
20/02/02 Luck
06/02/02 Treaty of Waitangi
23/01/02 GE
09/01/02 Floating dollar
26/12/01 Health Care
12/12/01 Margaret Wilson


Reading Ross Wilson's CTU wish list for the next three years issued during the coalition negotiations worried me. The union movement, he said, was "moderate and progressive and also wanted economic growth". His desiderata, however, suggest that growth is a low priority; nice if it happens, but less important than his list of social engineering projects. I couldn't help reflecting on how times had changed since the formation of the earlier Federation of Labour (FOL) in 1937. In those days it all seemed so simple. Keynesian economics was in vogue; more state spending would in turn produce more employment, increased spending, higher tax revenue and more for governments to redistribute to the "deserving" - mostly unionists. Labour leader, Peter Fraser, warned that unions must understand that the government through legislation and regulation, not union muscle, would produce nirvana. The FOL was the voice of organised labour, the Labour government its political expression.

During World War Two an elaborate stabilisation mechanism evolved. Its high priest became Fintan Patrick Walsh, confidant of Prime Minister Fraser, and the FOL's leading light for a quarter century till his death in 1963. Better than anyone, Walsh understood the intricate balance of interests underpinning stabilisation. That's why he opposed the watersiders when they over-stepped the mark in 1951, and why he lectured Sidney Holland and Keith Holyoake when they bestowed special privileges on farmers. Transcripts of his deputations to Holland and Holyoake show him running rings around them. Walsh argued it was in no one's long term interests for any special interest group to plunder the State or stabilisation's harmony of interests would collapse.

But even before Walsh's death, governments were breaking out of what many saw as stabilisation's straitjacket of controls and regulations. While there was a close relationship between Robert Muldoon and Walsh's successor, Tom Skinner, it was not a partnership of similar political outlooks, nor equal intellects, as had existed between Fraser and Walsh. Baffled and dispirited by their declining influence, the union movement sought to use brawn rather than brain. The Wellington BNZ construction fiasco, Mangere Bridge and Marsden Point in the late 1970s and early eighties resulted. What had been a partnership between government, employers and unions had escalated into confrontation. Worse followed. Under Jim Knox's leadership in the 1980s, ministers hearing his version of meetings they had all attended, concluded Knox had been absent. Inadequate leadership and low level advice at Trades Hall meant that the reforms of the 1980s bewildered most union leaders. Only Ken Douglas who picked up the pieces following Knox's retirement understood the need for fundamental changes to union thinking, and began a process of re-engaging with governments.

Economic knowledge has developed since Keynes's time, and unions are still catching up. Workers need from government a willingness to set parameters for the operations of the market place. But we now know that big spending governments, higher taxes, and redistribution are more likely to produce what in the 1970s we called "stagflation" - low or no growth plus high inflation. They always impact most heavily on low income people. More than anything else, workers need economic growth, the jobs it creates, and the promotional opportunities. The lesson from the 1970s is that busy, over-active governments, hurt workers more than they help. That was the decade when workers' share of national income declined.

Reading Ross Wilson's wish list made me doubt he understands his world as well as Walsh did his. When Wilson talks of the need to "fine-tune" the Employment Relations Act, it sounds like greater union empowerment. This alarms those who remember the last days of Muldoon. Talk of collective bargaining neglects the complex geographical and ethnic dynamics of New Zealand's new work-place. Wilson sensibly talks about skill development and the role it can play in lifting economic performance. But does he really think that we will lift ourselves back to the top half of the OECD's growth ratings - something that would do a huge amount for workers' living standards were it achieved - by introducing more holidays, further work-place regulations, higher minimum wages, and pay equity? Years ago it became clear that such things cost jobs and retarded growth. Investors simply put their cheque books away.

One wonders from whence the CTU gets its advice. Despite Walsh's crude tactics and his frightening manner - one wag said his bushy eyebrows looked like a badly clipped privet hedge - he had ready access to many of the finest minds in the country. They respected his intellect. At Trades Hall they don't seem to produce big minds any more. I guess it's more comfortable dealing with Wilson's affable, reasonable leadership. But it's hard to resist the feeling that the CTU needs a lot more grunt if it's to get beyond sectional slogans, and instead guide governments into policies that really will improve workers' lives. Certainly the current agenda won't do it.

Michael Bassett has belonged to trade and professional unions all his life, and was a Labour MP for fifteen years.