If it wasn't so cynical you'd admire him; casting himself as a friend of the trees, wining and dining the environmental lobby into thinking the PM was on their side, then dumping on them at the eleventh hour.
Heffernen is best remembered for the way he imploded after making false allegations against Justice Kirby; culminating in the notorious game of tip chasings through Parliament House once the case collapsed. He's also the mastermind behind the Turnbull for Wentworth debacle that risks seeing a blue riband Liberal seat slip off the Tory share register. And for fans of TV's Chaser, he is the thuggish killjoy who threatens to kick our heroes out of every Liberal function they attempt to infiltrate.
Not even his friends have ever accused Bill of subtlety, but he lured the environmental advocates into his web, hook, line and sinker. Was it that in the crazed glint in the eye, they thought they had found a soul mate? Or does he subscribe t o t he George Costanza edict - "If you believe it's true, it is not a lie"? Either way, as late as Monday, the friends of Tassie Wilderness were expecting something spectacular from the Prime Minister.
Spectacular was an understatement, the greatest sell-out of the environment in recent memory - wedging Labor between timber workers and the environmental lobby and orchestrating a Nuremberg style rally for his leader.
And his secret? A quick Google search will show it was bald-faced lying. How's this for a breach of trust - from an interview with ABC radio in early September:?
"We've got to do the right thing in Tasmania. Obviously it's up to the decision makers of the Government to define that, but I'm confident that the Government will do the right thing to protect the long term heritage values of Tasmania, so we can look back in fifty years and be proud, future generations can be proud, of what we've done - unlike mistakes we've made with water, where we've over allocated the rivers of the Murray Darling River Basin and looked back with horror and said how we could we have done that.
We've brought on Australia's greatest environmental problems in Australia, which is dry land salinity by over clearing a hundred years ago and we've all said how the hell did we do that. With the knowledge we've got now, it's just simply no more complicated than the right thing to do to end the over commitment of the land mass to Tasmania in the way it is and end old growth immediately.
Reporter: So that means you think the Government should cease old growth logging straight away?
": Well the scientists tell us that if we don't act now, we would have gone past the point of return to protect the long term heritage value of Tasmania's old growth forests.
Reporter: And do you think this is what the Prime Minister has in mind? That during the election campaign he will pledge to cease old growth logging?
I'm not about to predict what the Prime Minister or the decision makers of the Government might do, but I do know that those people are listening carefully to the issues and giving serious consideration to doing the right thing and we've got to look after the jobs, but we've also got to look after Mother Earth and the hundred year outlook for Tasmania's heritage values.
Reporter And do you think the Prime Minister has gone on this environmental journey with you?
Well, it's not a question of anyone going on a journey with me. It's just a question of people...
Reporter:: Or the same environmental journey?
...Getting the information and I'm sure that the Government is listening.
At the end of the day, the only journey Heffernen took was the merry one he led people of conviction, good intention whose only flaw was a lack of political cynicism. It should be the last time anyone ever trusts the Howard Government; hopefully it will be the last time anyone has to.
A Telstra representative told Jackie Skelton�s union, the CPSU, a compensation offer would be made in the first week of January but, instead, weekly payments were cut and she was forced to sell her Brisbane home.
"I haven't heard a thing," Skelton told Workers Online this week. "My payments were stopped by Telstra's insurer in February and I've been relying on Centrelink since because I can't go back to work."
Skelton has been diagnosed with "vestibula vertigo" since receiving the shock through a headset at the trouble Chermside call centre.
The middle ear condition sees her lose balance and she says she has hit her head and burned herself in subsequent tumbles, at home and in the street.
She is undergoing treatment from a doctor, physiotherapist and a psychologist.
"I maintain that I didn't just get an acoustic shock, I got an electrical shock as well," Skelton said. "I felt heat and pain before the explosion came through the headset."
Chermside has been wracked with OH&S difficulties, according to the CPSU.
Months after Skelton was blasted out of the workforce a mass acoustic shock incident saw at least five workers hospitalised and dozens of others treated in the carpark by doctors and paramedics.
Insiders say the incidents began after Telstra took call centre staff off battery-operated headsets and plugged them into the mains.
Recently, federal OH&S authority, Comcare, gave the facility four improvement notices. It told the company to carry out an acoustic shock risk assessment, minimise hazards, develop an action plan, and implement necessary controls.
But Telstra, which recorded a $4.1 billion profit last year, is baulking at being required to do anything about the Chermside situation.
It is challenging the Comcare notices in the Industrial Relations Commission, effectively putting back the possibility of remedial work by months.
Workers Online understands there have been at least two more acoustic shock cases since around 100 people were zapped in February.
The company has stone walled repeated requests from the CPSU and Skelton's lawyers to deliver on the compensation offer it made last year.
Piling Contractors Queensland moved its employees to new entity, Piling Contractors Australia, in a last ditch bid to defeat delegate protection clauses negotiated with construction unions.
The move was supported by the Master Builders Association but came unstuck after 10 site delegates fronted the Federal Industrial Relations Commission, last Wednesday.
The company backed off and the delegate returned to work on the motorway extension, pending a meeting of the Board of Reference, established to deal with issues of alleged discrimination against representatives.
The decision averted the possibility of further industrial disruption after workers struck for 24 hours, last week, in support of all three delegates and demands for better safety standards.
CFMEU delegates from subcontractors, Nace, Piling Contractors and McCourt Dando Trenches had been sacked in a 24-hour blitz against union organisation on the Abigroup-Leightons project. One worker was dismissed, by phone, in the middle of a mass meeting considering the sackings of his colleagues.
CFMEU organiser, Dave Kelly, said the trio had been active in defending workmates' rights, retrieving back pay and promoting safety.
He called their reinstatements "victories for justice and common sense".
"Up to 1000 workers from a number of unions supported these delegates, the jobs they were doing and delegates' rights," Kelly said. "They stood united behind their delegates and that's what got us home. Without that support all our fellows would have got the spear."
Members of the CFMEU, ETU, AWU, AMWU and TWU were involved in the campaign.
The reinstatements of the Nace and McCourt Dando representatives had been achieved at NSW IRC hearings before Commissioner McKenna.
Kelly said it was credit to Kavanagh and the NSW system that a "long, protracted industrial dispute had been nipped in the bud".
There have been tense times on the orbital project with unions fighting to establish organisation in the face of a concerted push to drive them out.
Kelly suggested the stand-off over delegates' rights could mark a watershed in how industrial relations would proceed on the project.
"The principal contractors have agreed to a proper procedure for the recognition of delegates and to work to have their subbies follow procedures that will protect their rights," he said.
In a shock midweek move, Boxall demanded by memo, that staff wanting to hand out how to vote cards for election candidates obtain written permission from their employer.
The CPSU was "flooded" by complaints from angry members and rushed the department before an urgent Industrial Relations Commission hearing where one of Boxall's underlings said the unambiguous written demand had, in fact, been a "misunderstanding".
The department agreed to email all staff saying, specifically, it had no interest in whether or not employees intended to engage in polling day activities.
"Our members were alarmed by a blatant attempt at political intimidation," the CPSU's Jenness Gardner said. "The department was forced to admit it had made a mistake but this was not an isolated incident.
"What people need to realise is that this sort of political interference is all too common. Today was a good opportunity to challenge this publicly, in front of an independent umpire."
Boxall is a key figure in the Howard Government's politicisation of the public service.
He has used his position to aggressively advocate some of the government's most contentious policies.
Boxall attracted criticism for the way he tried to prise departmental staffers away from union agreements and have them sign non-union AWAs. Then he attempted to thwart the CPSU by advocating a non-union collective agreement.
Staffers registered complaints with MPs and the Australian Electoral Commission about the way their boss ran the latter campaign.
He raised the LHMU's hackles as a board member of one of Canberra's most elite private schools, Church of England Grammar, where he advocated dumping long-serving domestic, catering and maintenance workers in favour of catering giant Spotless.
"Employees have private lives and employers, even Peter Boxall, do not have an unfettered right to judge their private activities," Gardner said.
"The Commission made it very clear that staff had every right to be upset about this issue."
Councillors are expected to overwhelmingly endorse the measure next Tuesday as western Sydney municipalities move the asbestos debate from compensation to prevention.
The certificate, which will be required for development applications, is the headline grabber in a three-pronged approach that will see Ashfield establish an asbestos register and lobby state government for greater powers to access and remove the deadly fibre from private properties.
"We are trying to build a property profile so we know where asbestos is and its condition," motion sponsor Mark Bonanno said. "Obviously, if it's dangerous, it will have to go but if it is intact it will be added to the register which potential buyers or renovators will be able to access.
"The recent debate has all been about compensation and that was good but it is time to turn our attention to prevention."
The resolution comes as the CFMEU warns that up to 90 maintenance workers at RPA Hospital may have been exposed to white asbestos.
Independent testing of air samples from the hospital's boiler room and main tool store have returned positive results. Workers Online understands that eight out of 20 samples recorded the presence of white asbestos dust.
Central Sydney Area Health Service has isolated the problem areas and agreed to put maintenance workers through full health check-ups.
CFMEU secretary, Andrew Ferguson, welcomed the Ashfield initiative as a "positive and practical step towards a safer community".
"What Ashfield is doing is an important step in our campaign to protect residents and renovators from horrible deaths," Ferguson said.
Bonanno said he had spoken to councillors from a number of inner west municipalities and most had expressed "strong interest" in following Ashfield's lead.
He suggested inner-west councils were likely to put asbestos certification and asbestos registers on the agenda of the Local Government Association of NSW.
Meanwhile, Korean workers are challenging other communities to help them reinvigorate labour day.
More than 300 Korean members of the CFMEU, along with partners and kids, partied and played soccer last Monday to celebrate union successes and reaffirm their allegiances.
"It's an important day and workers should celebrate their successes," Ferguson said. "The Koreans have laid down a challenge to other communities and unions to help them make the day bigger, better and more important."
Pratt is trying to undermine packaging industry wages and conditions by forcing through 14 separate, non-union, site agreements that would shatter workers� bargaining power, according to the AMWU.
Visy Corrugated Packaging is offering lures of up to $1000 a head if employees turn their backs on a demand for a single national agreement, voted up at every site around Australia. But the size of its dividend depends where individuals are employed.
The $1000 bounty appears to be a Warwick Farm special. If falls to $500 for Dandenong employees and disappears, altogether, if Visy Recycling employees at provincial Laverton bet on the non-union option.
It's the sort of divide and rule strategy that AMWU industrial officer, Juliana Dickinson, says would be knocked on the head by a national agreement.
The company offer undercuts wage movements already made by Visy's principal competitors, Amcor and Carter Holt Harvey. Between them, the big three, control 95 percent of the country's corrugated packaging market.
Amcor has just signed off on a three-year agreement with the AMWU that delivers workers annual increases of 4.75 percent. Carter Holt Harvey has offered 4.5 percent but Visy won't go beyond four.
The Visy proposal would also see income protection rates reduced.
Dickinson pointed to the Amcor settlement as evidence of the value of a national agreement.
"It was signed off before the old agreement had even expired," she said. "It delivered agreed wage rises to everyone, introduced paid maternity leave and other improvements, including increased redundancy.
"We want uniform improvements for people doing the same work whether they're at a small site in Queensland or a big one in Perth.
"If we stick together we can win. Amcor has shown us that."
Visy Corrugated Packing currently operates under two enterprise agreements - one covering eight NSW workplaces and the other applying to workers in Queensland, Victoria and WA.
The company starts its campaign for stand alone, non-union agreements with a ballot at Warwick Farm today. It has scheduled votes for Dandenong and The Packaging Company, at Smithfield, next week.
The AMWU says Visy has refused to meet and negotiate over a log of claims developed and endorsed by meetings on all its 14 sites.
Robert Reich, academic and US Labor Secretary in Clinton�s first term, will be the guest of the NSW Labor Council to lead discussion its Working NSW project to deveelop a vision for the workplace in 2020,
Reich is the internationally acclaimed author of "The Work of Nations' regarded as a blueprint for work in the global economy as well as the hilarious "locked in the Cabinet' covering his time as Labor Secretary.
At that time he was credited with initiating several grounds-breaking measures including:
- anti sweatshop legislation
- increasing the minium wage
- and attempts to curb excessive executive pay.
The centrepiece of Reich's visit will be a public lecture at Sydney's Seymour Centre on December 6 and a scheduled address to the National Press Club in Canberra on December 8.
Labor Council secretary John Robertson says the visit is designed to spark a wide-ranging debate amongst Australian union on their place in the future.
"The challenge for unions is to develop a long-term game plan for the future of work - in the same way that t he HR Nichols Society did for the Right in the 1980s," Robertson says.
"We don't expect Robert Reich to have all the solutions, but we wan t to work with the best thinkers from progressive politics to map out a long term plan that gives working people a stake in the global economy.
"You only had to witness the way the Howard Government distorted the industrial relations debate in the election campaign to understand why we need to create a counter-story of our own."
To book tickets for Robert Reich's Seymour Centre lecture call 02 9351 7940. tickets $15 for current union members, $20 for non-members
Henry Walker Eltin, which extracts Pilbara iron ore for BHP Billiton, is spruiking the fact that AWA numbers have jumped from 40 to 80 since it locked out mineworkers.
But Tracey says those numbers flow from the contractor forcing new starters onto non-union individual contracts rather than any breakthrough in the battle for hearts and minds.
"They would be the only employers in Australia celebrating a 30 percent take-up rate," Tracey said. "They couldn't get their own workforce across because those people had the right to make up their own minds so, what they have done, is conscript people who needed jobs to keep their families going and claimed it as a victory.
"They had 15 percent of the original workforce and they have still got 15 percent of the people who were able to choose. Henry Walker Eltin's crowing is a celebration of mediocrity."
Yandi, hours from Newman in the remote Pilbara, is home to a showdown over the future of federal government AWAs in the booming minerals industry.
Companies, including BHP and Rio Tinto, have swung workforces away from union-negotiated agreements by putting massive bounties on individual agreements.
Yandi is the first mine site to overwhelmingly reject AWAs and Henry Walker Eltin has reacted with a brand of hardball that blows arguments about "freedom of choice" out the window.
The concept is undermined by inducements, worth about 25 percent of earnings, to walk away from collective contracts. When workers rejected those lures, Henry Walker Eltin decided that signing an AWA would be a prerequisite for new starters.
That insistence is at the heart of the stand-off between Yandi workers and the company. Unionised employees are demanding that new colleagues be given the freedom to choose between individual and collective contracts.
Tracey says that "fundamental democratic right" will be on the table when parties resume discussions after a softening up period of rolling stoppages, lockouts and, in one case, a lock-down in which workers were locked into their remote desert camp.
Meanwhile, Federal Court judge, Justice French, has ruled that, for the purposes of the Workplace Relations Act, lockout notices don't actually have to inform anyone of the employer's intention.
Justice French rejected an AMWU claim that Henry Walker Eltin lockout notices were deficient because unions couldn't have been aware of the action before it took place.
The company had pinned a lockout notice to the door of the union's Perth office at 5.30am on a Sunday, and locked its members out of Yandi, hundreds of kilometres to the north east, half an hour later.
Justice French accepted the company's view that for lockouts in response to industrial action, the Act did not require actual notification, only that the notice be written.
Justice French also found the company had given individual workers sufficient notice of the lockout, even when notices had been received after the lockout had started.
The workers, members of the Australian Workers Union, have been seeking proxies to support their bid to prevent executives earning more than 20 times what they pay their employees.
The AWU has proposed five changes to the BlueScope constitution to be voted on at the company's Annual General Meeting in Sydney on October 19.
AWU National Secretary Bill Shorten said BlueScope workers were falling behind the rest of the industry and their pay rises are not keeping up with the cost of living.
"In the last three years since September 2001, BlueScope workers average pay rise has been 8% compared to 17% for workers at OneSteel and Smorgons," Shorten said.
"At a time when the company is making record profits and senior executives are rewarding themselves with multi-million dollar salary packages, BlueScope workers wages have not kept up with inflation."
The AWU proposals (Resolutions 4 to 8 on the AGM notice papers) are as follows:
"Limiting directors' duties to four public company directorships or two chairmanships is needed to make sure they have the time and energy to properly protect the companies' and shareholders' interests. Capping directors' terms at 10 years is a modest requirement for encouraging real independence among non-executive directors," Shorten said.
A study commissioned by the Lab or Council of NSW , The Buck Stops Here (by academics John Shields and John O'Brien) last year found that higher salaries for Chief Executive Officers actually coincided with lower company performance. The study identified a performance-optimal range for CEO pay of between 17 and 24 times average wages - exactly encompassing the level proposed in the AWU resolution
The report also confirmed that Australian CEO remuneration jumped from 22 times average weekly earnings in 1992 to 74 times average weekly earnings in 2002.
Just weeks after leaving Treasurer Michael Egan's office to head the Department of Commerce, director-general Michael Coutts-Trotter has sparked industrial action by refusing to meet over plans to privatise SM Solutions and Q stores.
Members of the Public Service Association implemented bans on delivery of mail to, and printing services for Ministerial Offices, the Department of Commerce Head Office and Labor Members of Parliament.
John Cahill, General Secretary says the bans are due to the NSW Government "pursuing in times of budget deficit crazy fire sales of profitable, yet cheap and efficient government businesses."
"Adding insult to injury the Government is pursuing the privatisation of government businesses at the expense of employees job security and employment conditions," Cahill says
Employees in the government businesses of CM Solutions and Q Stores are responsible for the efficient and cheap storage, supply, printing and mail delivery to government departments.
The privatisation plans follow a report by management company Deloitees - which the PSA says ignored the benefits the agencies provide to the whole of government.
The memorial, to be built next year on the shores of Canberra's Lake Burley Griffin, will commemorate the 353 asylum seekers who drowned when their overcrowded vessel sank off the Australian coast in October, 2001.
Of those who perished 150 were children.
Controversy still surrounds the sinking of the "Siev X", after a Senate inquiry in 2002 was told the Australian Government knew of the whereabouts of the vessel and its unseaworthy condition - yet did nothing.
The Senate has twice called on the Government to establish a judicial inquiry into the sinking.
The tragedy came just before the 2001 federal election when the Howard Government was running strongly on the issue of "boarder protection".
Project officer of the exhibition, Beth Gibbings, believes the drowning of the 353 passengers on the "Siev X" is an incredibly important part of Australia's history.
"These people from Iraq and Afghanistan were fleeing persecution," says Gibbons.
"We are responsible, not least because we had their husbands and fathers imprisoned in detention"
"If it was an airline full of white people, would the public and media reaction have been different?"
The exhibition will be opened by popular former Governor General and High Court Justice Sir William Deane.
The national exhibition of the schoolchildren's artworks will be on display at the Pitt St Uniting Church located at 264 Pitt St, Sydney, between Park and Bathurst Streeets between the 26th and 30th of October.
For more information on the project visit www.sievxmemorial.com or email [email protected]
Kids Overboard: The Play
If you missed the short-lived return of the "Children Overboard" Senate Inquiry, at least you can catch the smash hit stage version.
CMI (A Certain Maritime Incident) is based on the transcript of the Inquiry into an explosive episode in recent political history, and it's back for a Sydney return and inaugural Canberra sitting.
The Bulletin described the work as "a startling, highly kinetic, blackly comic and deeply provocative work of theatre".
The play will be performed at the Sydney Performance Space, between the 13th and 17th of October, (02 9698 7235) and in Canberra at The Street Theatre, between the 19th and 23rd of October (02 6247 1223).
THE LHMU has blown the whistle on the practise, which can cost low-paid workers up to $30, saying that employers should foot the bill.
"The employers are legally responsible to ensure these police checks are made, but too often they are shifting this cost onto their low-waged employees," LHMU Child Care Union Assistant National Secretary, Jo-anne Schofield said.
"When you earn between $13 and $15 an hour the nearly $30 cost for these checks are a significant whack out of your pay.
Schofield has called on the Federal Government should back up the Federal Police crackdown on child porn by insisting that employers pay for these checks; or that a compulsory allowance be paid to all childcare workers to cover the costs of these checks.
"Unfortunately this government has ignored the plight of childcare workers - having fought any claim for wage and allowance improvements that childcare workers have put forward in the Australian Industrial Relations Commission.
"Victorian and ACT childcare workers have been waiting nearly two years for a work value case decision by the AIRC.
The Federal Government joined with employers to argue against any improvements for nearly 25,000 childcare workers in this case."
The CFMEU's John Sutton is still waiting for a formal response from Canada after his members registered their concern at a peaceful protest in Canberra.
"Canada is one of the few countries that still mines asbestos and is one of the world's largest exporters of white asbestos," says Sutton.
"With 100,000 people dying every year worldwide from asbestos-related diseases, the Canadian Government needs to seriously consider its policies on asbestos production and export."
Canada exports the deadly fibres to countries like India and Thailand where the material is used for brake pads in cars and in cement.
The CFMEU has evidence workers in these countries use little or no protective equipment when in contact with asbestos.
"The Canadian Government has actively blocked the listing of white asbestos in the major international toxic substances convention, the Rotterdam Convention," says Sutton.
"The convention assists developing countries to prevent shipments to toxic material from first world countries being dumped on their markets."
The Australian Government banned all use of asbestos last year.
National secretary, Peter Tighe, fears young Australian's are missing out on training opportunities and has called for a Senate Inquiry into the skills crisis - regardless of the federal election outcome.
Tighe points to figures showing that between 1992 and 2001 the number of electrical apprentices in training plummeted almost a quarter, from 21,473 to 16,540.
At the same time the number of foreign workers granted permission to work in Australia has increased by over a third from 26,000 in 1996 to nearly 38,000 in 2002. Over the three years to 2002 the component of skilled trades people in that group doubled to eight percent.
Recent ACTU research has shown in the next decade there will be a national shortage of 250,000 traditional trades apprentices which will cost the economy $9 billion in lost opportunities.
Though 170,000 trades people will leave work in the next five years only 40,000 will enter.
But Tighe claims the Howard Government has failed to ensure enough educational opportunities for young Australians to cover the shortfall - instead the importation of thousands of foreign workers as a short term measure has been fast-tracked.
"The Howard Government has stood by and watched while apprenticeship levels in key areas such as the electrical trades have plummeted," says Tighe.
"It is again trying to create the impression it is doing something about it. The truth is, unlike the falsely accused refugees during the 2001 election, it really is throwing kids - the aspirations and careers of Australian kids - over board, while it secretly loosens or simply ignores many of its own requirements for the entry of foreign workers into Australia."
"Theoretically, before (businesses) can import foreign workers to address a skills need, these companies must provide a training plan to the Immigration Department and commit to a local training strategy."
"However, under the Howard Government this is not being policed in a meaningful way."
University research by Dr Phillip Toner shows the skills crisis has its genesis in privatisation of public utilities in the 1980's.
In the 1970's thousands of electrical tradesmen came out of local and state government workshops every year. State Rail and Sydney City Council would each offer opportunities to 400 youngsters annually.
The private sector keenly snapped up the finished product.
But with the rush to privatise government enterprises in the 1980's came accountants who transformed apprentices from investments into costs.
Many comentators believe the failure of private enterprise to invest in expensive training for younger staff is driving the skills crisis.
Dear Editor
In my previous letter I outlined my concerns about the impact 'bullying cultures' have on the economic performance of companies - 'over time', well I am pleased to share with you once again further investment insights - and research that validate what we have both commented on in previous issues. Investing in people and their dignity makes very real economic sense.
Warren Buffett ( also known as the Oracle from Omaha, as well as being the second richest person in the world, only slightly behind Bill Gates) is regarded by many people in the financial world as a freak of nature when it comes to investing, yet, as they learn more about his thinking, they start to understand that he is both very practical and disciplined.
For example, he believes that when you look at any potential investment you should look at it as if your were an owner of that business. This makes sense.
He also believes that the relationship between market value and business value strengthen with time (for better or for worse), and many of his investments were purchased at times when the market undervalued excellent businesses which he knew 'over time' would reflect the true underlying value and growth. This also makes perfect sense.
He also regards short-term trading or going with the latest 'hot stock' as speculative, and very dangerous, because the way he sees it - how can you put your money into something you don't understand. This is what most punters have a hard time understanding.
His approach to investing is simple yet uncommon, however, in my experience what he practices and preaches makes good sense. Here are a few of his rules:
1. Concentrate your investments in outstanding companies run by strong management.
2. Limit yourself to the number of companies you can truely understand.
3. Ten is a good number, more than 20 is asking for trouble.
4. Pick the best of your best companies, and put the bulk of your investment there.
5. Think long-term - 5-10 years, minimum.
6. Stock market volatility happens, Carry on.
This also brings me to my most important point, we now have some very strong evidence that 'investing in people and their dignity' is a very worthwhile investment, producing excellent returns over the long term. I will let the following article speak for itself:
People: cost or value?
Wednesday, 06 October, 2004
By Glenn Martin
Organisations continue to see their people as a cost to business rather than the basis of business success, because of the focus of traditional accounting methods. Until organisations learn to measure the contribution of people to their capability, they will continue to under-invest in initiatives that would enhance that capability.
Dr Lauri Bassi recently visited Sydney from the USA to present workshops for the Australian Human Resources Institute. She put the case for a new measurement system that complements the financial data provided by profit-and-loss statements and balance sheets. Her argument was that being competitive in a knowledge-based economy depends on the contributions made by people, not so much their physical resources or technology.
Bassi asserted that traditional accounting methods track historical data about investments in physical resources and technology. However, they do not provide any measures that inform organisations about the potential of their people to generate future success. In a knowledge economy, organisations need to know what factors lead to future income-earning capacity - they need good lead indicators, because investments in people take time to bear fruit.
Measuring investments in human capital
The question for organisations is, what are the factors that can predict future success? Bassi has carried out research into the connections between organisations' financial performance and their prior investments in human capital. Her work has spanned the last seven years and involved partnerships with the American Society for Training & Development and articles published in the Harvard Business Review.
The framework that Bassi and her colleagues have developed has produced a set of tools, the Human Capital Capability Scorecard. It draws on research from a number of researchers during the 1990s. This research examined the links between the management and development of people's potential on the one hand, and subsequent financial success on the other. Various researchers found that particular developmental initiatives were associated with above-average organisational performance.
But Bassi also wanted to establish that above-average investments in human capital (without distinguishing particular types of initiatives) results, in general, in superior organisational performance. She selected a group of publicly traded companies that invested at roughly twice the industry norm in employee development and then followed their performance on the stock market.
The results were clear, over a period of four years. The selected companies significantly outperformed the market. The Standard & Poor 500 annualised return for the period was 10.7%, while the selected portfolio delivered an annualised return of 16.3%. This exercise was followed up with a live portfolio of companies in conjunction with a money management firm, and the results between 2001 and 2003 were similarly impressive. The portfolio again outperformed the Standard & Poor 500 market index.
The conclusion Bassi reached was that a company's future financial performance is predictable based on its prior investment in human capital. Questioned as to whether it matters what particular initiatives and programs organisations invest in, she responded that it makes sense to assume that organisations themselves know best what is most needed. We can generally assume that they will spend their employee development funds wisely and look for a return on them.
Bassi observes that a policy of investing in human capital runs counter to the common management mindset of cost-cutting and looking at the short-term gains. She says her results show that there is a link forwards from human capital investments - those companies that made such investments were rewarded subsequently by the market. On the other hand, companies that cut back on such spending "because times are tough" did not show future gains in the market from this cost-cutting.
Developing a scorecard
The Human Capital Capability Scorecard developed out of a closer examination of the different aspects of human capital. The Scorecard consists of two major areas: human capital foundations and human capital outcomes. Each of these contains a number of measures, about which organisations can obtain data from across the organisation. Information and perceptions are obtained from workers and managers, and from different departments of the organisation. These measures are then correlated with measures of financial and business performance.
The outcome of the exercise is that the organisation can identify which human capital areas are likely to yield the greatest return on investment. For example, data might reveal that the area where the organisation performs most poorly is in leadership and managerial practices, or in knowledge accessibility.
Bassi has carried out the Human Capital Capability Scorecard exercise in organisations that differ markedly in size and type, ranging from a school to a consortium of 17 large US banks. She says that the exercise can be very confronting, as it can give a very unflattering account of the organisation's treatment of its human capital and systems. However, her experience is that because the exercise bases its scoring on a wealth of data from multiple sources, managers generally accept the need for change, and the scoring provides clear indicators of where the most profitable changes can occur.
Kind regards
John McPhilbin
I am stunned that no one is talking about the $A 35 million in Carbon Credits that the Tasmanian forests could attract annually. In the international market a hectare of forest is worth $A 200 annually.
Australia and New Zealand are currently selling Carbon Credits to overseas companies who are signatories to the Kyoto Protocol. Attached are come internet articles on Carbon Credit sales, but check yourself.
http://www.mitsui.com.au/MCA_media_release_Feb_04.pdf
http://www.meridianenergy.co.nz/aboutus/newsevents/news/wind+farm+wins+carbon+trading+agreement.htm
Graham Farrell
While at the time of writing this editorial the result of the poll is unknown, what is clear is that yet again unions have somehow been positioned as a negative for the ALP.
Despite the widespread public support for unions, reflected in poll after poll, the Conservatives manage to portray unions as the enemy of the Australian people.
The Prime Minister has pegged his entire interest rate scare campaign on the fact that Labor's industrial relations policy would create economic ruin by - shock, horror! - restoring some powers to the industrial umpire and forcing employers to bargain in good faith rather than beat their workers into submission via the number one industrial tactic of the 21st century - the lock-out.
Howard's kept a straight face accusing Labor of rediscovering socialism, while ignoring the reality that the nation's largest economy, NSW, chugs along swimmingly on the very same model of industrial relations - cooperation, flexibility and mutual respect.
Bereft of a fourth term agenda, he rabbits on about further 'freeing up' of the labour market - code for attacking workers rights - and is never asked to exactly explain what he means.
Meanwhile, his workplace relations minister Kevin Andrews dishes out bald-faced lies about how great AWAs are, comparing the salaries awarded to public sector managers to part-time child care workers and claiming it's the form of employment, not the job, that makes all the difference.
In the normal course of events, one would expect this sort of rubbish to be exposed by the media - whose job it used to be to analyse policy and scrutinise the public debate. But in this election senior journalists, who should know better, have swallowed the porkies hook, line and sinker, playing into the PM's hands an doing the public a grave disservice in the process.
Even the complexity of the Tasmania timber workers could not cut through the stereotype. Rather than seeing this as a legitimate case of a union doing what its members pay it to do - that is, protect their interests - the media simply characterised it as the PM triumphantly taming the beast.
That's the risk you take when you position yourself too closely with one political party.
The lesson for the union movement is that it needs to be more than a cheerleader come election time - and there were some nauseating and downright degrading examples of that this time around.
When it comes to election campaigns, our challenge must be to pick the issues where we have credibility, build our case and campaign on the ground, not for a political party but a policy outcome. Only then will our message have credibility and our motives not be questioned.
A number of unions have done just that this campaign: the HSU on health, AEU on school funding, the NTEU on tertiary education, the AMWU on trade, the police unions around retirement. The challenge is to convince all political parties that their positions are broadly held and the changes need to be made.
Until the union movement can establish itself as advocates of its members - rather than a political player - the cartoon will continue to be perpetuated and politicians will get away with the sort of nonsense Howard cooked up this time around.
The sad irony of this election is that given a choice between the interests of big business and working people, the party operating for the powerful managed to portray itself as the champion of the little guy.
We need to break this circuit or election nights will continue to be as painful as I suspect this one will be.
Peter Lewis
Editor
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