
Issue No 41		26 November 1999

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Interview

A Bob Each Way

Interview with Peter Lewis

ALP tactician Bob McMullan is responsible for charting Labor industry policy into the next millennium. He tells us where he's heading.


	Bob McMullan

The first question is: can you have a master plan for industry in a global economy?

I don't think you can have one master plan for every industry, but you can have a commitment to being active about helping the industries that are doing well to succeed, and supporting the ones that are struggling. You can have a framework of policies that's committed to saying: I think there's a role for manufacturing industry in Australia in the 21st Century, and we want to get the policies in place to make it work.

What criteria do you use for deciding which industries are going to be the ones that you put your effort into?

Well, it's not really for government to choose. I mean, there are some where the mood is that this is opportune for great success and everyone uses information technology and bio-tech as the examples. And for ordinary Australian workers they sound a bit obscure, but there are factories producing - up in Penrith there's a Utilux factory producing really high quality IT products for the whole world. In Ryde there's a company producing medical equipment and exporting it to the world. There are manufacturing jobs and service jobs and quality high wage jobs flowing from those sectors, but we can't take our eye off the ball in areas like cars and TCF. They are where a lot of Australians get their jobs and in 10 years time there'll still be a lot of Australians getting their jobs there, so you need to look at a framework that helps those sectors survive and where they are strong, to thrive.

That seems to be a bit of a departure from the early 90s policy, which seemed to be that the market should be the decider of industry policy. You get rid of tariffs and you see where the market goes. You are saying that that is not the solution in itself?

I don't believe that just allowing the market to determine is sufficient. You can't pretend, if it was ever possible, it's no longer possible to pretend that you can make - can fly in the face of global pressures. What you need to do is help people succeed globally. It creates more opportunities than it creates threats, so you have got to help people take advantage of the opportunities and assist people to meet the threats. You can't build barriers to keep the rest of the world out. They won't work, and they'll be counter productive. But you've got to acknowledge that when you open up to the world - which I support - some people are not in as strong a position as others to compete and they need assistance.

Is there a sense in which there has to be a balance between featherbedding some industries and putting money into growing other ones?

Well the government can't make any industry succeed. There's no policy where a government can make an industry succeed. It's got to be the companies and the workers in the industry make it succeed. All we can do is make it possible.

If you look at the two most controversial areas - the automobile sector and textile, clothing and footwear, there is essentially a bipartisan policy in place until the year 2005 to give them strong support. We think the government is a bit silly in not proposing to have a review of those programmes before they finish in 2005, and if we are elected we will have that review.

But we've got a chance now, because that key tariff argument is essentially settled for five years, to move on to look at some new ways of helping manufacturing to succeed and they are not really big expenditure items. The money isn't there and money won't make it work. It's about helping the development of new products and new companies through venture capital assistance for small businesses. Through research and development to develop new products. Through helping people build better businesses through advisory services. Export assistance. Lifting the quality of design so Australian products are at the cutting edge. Those are the sort of things.

If you pretend that somehow or other - if you rip a billion dollars out of the taxpayers pockets and disburse it to a lot of industries you are going to make failures succeed - you can't. Government can't make a silk purse out of a sow's ear. Success will be driven by workers and companies together, committed to success and being flexible, modern, competitive. But if the government doesn't provide a supportive framework - it doesn't help out in times of crisis - then it's denying it's responsibility.

Let me just give you one example. You've got a crisis in the automobile sector at the moment because of the transition arrangements for the GST. It's leading to a buyers strike. Workers in Victoria are being stood down for up to 12 days in the next three months, costing them hundreds of dollars, and less obviously, workers in smaller factories are also suffering. You know - all the automobile parts and retailing and car detailing and all those areas, and the government's response is to do nothing - and it's just not good enough.

So, where do the fault lines exist between Labor and the Coalition on industry policy?

Well, the principal area in the next few years is going to be about those modern elements of a new policy to make sure we have a manufacturing sector. They are the things I mentioned before about research and development; about research about new products; about better products; better businesses and assisting people to export more effectively to be part of the world market.

It's those sorts of things where the government has cut back and where the future holds the prospect of more jobs for Australian workers in businesses that are growing. A senior union official said to me the other day: You can't have good jobs for your members if they are not working for companies that aren't succeeding. And that's right and there is a growing recognition that those two things have to go together. And you can't have companies succeed without decent jobs for the workers in them . And you can't have decent jobs for the workers without the company succeeding.

We've got to get that message out. We want a more cooperative approach to the future of industry, where workers get a chance to have a say and unions as well as employers and government in where things might go in the future and at the moment I think too many workers feel too locked out of what the future holds for them.

I interviewed Peter Reith a couple of weeks ago where he made the claim that there was no longer any other side between capital and anyone - there's no side between capital and labour any more. It seems like you are almost subscribing to that view as well.

Well, Peter knows there's a side because he's on one side and he is not called "Partisan Pete" for nothing. There are people who try to run their businesses by the old method of just driving down costs and that means cutting back on benefits for the people who work for them. Making their lives worse and their conditions either reduced or less secure.

Now that's not the way of the future. There'll always be conflict because sometimes the interests of employees and employers come into conflict and there needs to be a process - both an organisational process through unions and a structured process through government legislation -- to resolve those conflicts but the industries that succeed will succeed when each recognises that neither one can succeed without the other.

To that extent, there is common interest of course. How can you have a good job in a company that's going broke? I mean, if the company is going to go out the door next week, things can't be too terrific for you. But how can you have a long term successful business if everybody who works in it is angry, frustrated, struggling in the rest of their life because the way that they go about doing their job and what they get paid for it is so bad that they can't enjoy the rest of their life?

So, where that mutual recognition exists and where people look cooperatively in a tripartite way about planning the future for the industry, then there are big prospects for cooperative development of Australian industry - and John Button showed the way for that a bit. I mean it wasn't easy. It wasn't as if when he restructured and saved the steel industry in the 80s there was no arguments, but there was an active role for the government in resolving those arguments and setting some common guidelines and directions. A modern version of that is what is required. You can't go back to the 80s. What you need is lots of 21st Century versions.

How does a 21st Century vision differ from the 80s?

Well in the 80s I think you could do things more within national boundaries - and not have to take so much recognition of the international pressures. Those days are gone. I mean money moves in nanoseconds. Goods, services, products, people move around the world much more quickly, and of course people trade on the internet now. You can buy all sorts of products all around the world, so you can't have the same old mechanisms, but you can have the same framework and the same aspirations and just have modern mechanisms for achieving it.

Of course a lot of Button's work was to ensure that BHP continued to operate in Australia. I guess part of that was to protect a large Australian company. How important in the future will be the nationality of the investment?

I don't think it is so important. Steel is a very good example at the moment. And I think the unions in the centre are approaching it quite intelligently. It's not a question of whether BHP owns those plants. It's a question of whether they are owned and operated in Australia by people who are committed to them. So that they invest in them and create jobs and exports and will create a viable steel industry out of the bits BHP wants to shed. That can be a very exciting and positive element, and if we get too hung up about saying oh well, we'd rather it was owned by what used to be the Big Australian , well we're focussing on the hole and not the doughnut. I mean the substance is we want a steel industry employing Australians, producing products for the rest of Australian industry that are good quality products that are produced by Australians with decent jobs who can succeed in Australia and internationally.

We can do that but you have got to work out what your goal is. At the end of the day in industry policy the goal is to make it a centrepiece of a high wage, high skill strategy for the future of Australia. When you look around the world there are essentially two strategies for increasing employment. There's a high skill high wage strategy and a low skill low wage strategy. the government is essentially pursuing a low skill low wage strategy. All their proposals about jobs are about changing what happens for the way people are employed. Whether they have got a job - the nature of the job - the conditions of the job. Now, you can't ignore that but the country where the government has got a bit of a human face is looking at how you can use education and training and skills and research and design to create high skill high wage niches for Australian companies and Australian products around the world. And that's what we want to do. We don't want to go down that low skill low wage route.

Have you learned any lessons from BHP?

It's been very interesting. The reaction of the workers has been very interesting. I think the impression I have had is that people are more committed to creating a successful industry that they can have a good job in than they are to one particular employer any more. And I think that's wise. I think they are being smart and people see if they can make what used to be this section of BHP into a section of a viable new business that somebody buys or invests in, then they have got prospects for the future. And that's terrific. I mean, whether it's in Whyalla or Newcastle or the existing operation at Port Kembla or out at Rooty Hill, those things are important for the future of those workers. And when you go to other manufacturing plants, their success depends upon getting good products from BHP.

What role do you see industry super funds having as a source of local investment?

They are very important. I've been in a lot of discussions with super funds in general and industry super funds in particular. Now, they have always got to serve their primary purpose, which is to provide retirement income for workers. They can't just spray the money around in good causes. They have got to invest it in a way that creates enough income to pay decent superannuation benefits to workers when they retire. But all the signs are that you can do that in the way that helps new businesses develop, new jobs be created - whether it's the new high tech companies that are employing Australians or whether it's investment in new roads and railways and other sorts of infrastructure. That is the way you can both get a decent return on your investment and create jobs for workers and for their kids. And that's what people want their money to do, so they are very important.

They are not milking cows. We can't just direct them - why don't you go and invest over there. That would be socially a nice thing to do. If it's not going to deliver decent incomes for - retirement incomes for workers.

Isn't there a difficulty when the biggest returns on any analysis come from putting your money into markets and just letting the international global trade of money generate your profits?

The successful funds will always have some percentage of their money in new high tech businesses. They will have some of their money in infrastructure and building new infrastructure from which they can make a dollar as well as help other businesses to succeed. Some in the share market. Some in property. Some invested just in cash management or whatever. There will always be a spread but what we want is to make sure that some of that money is going into decent programmes to create new businesses and new jobs for Australians. You see, Australians have always been good at generating new ideas. What we have to get better at is turning those new ideas into jobs.

Just on the States. It seems that every State Premier these days is running a bid against the other States to attract business into their jurisdiction. Does that cut across the objectives of a national industry policy?

Well, you would always wish that there wasn't money wasted bidding one State against another and I think we would want to have a dialogue with the States about how we could minimise that, but Premiers are ambitious for their States and they are elected to do things for the people in those States and you can never stop them trying to do better for their State. That's why they get elected.

I don't just mean that cynically. I mean, that is - in a Democracy - that's what people want you to do. They elect you and that's your job. They say, we want you to get some jobs here. And if you say, oh I'm sorry, I won't try, people feel you are neglecting your duty. So it is a difficult balance to strike, but we would want, through the Premier's Conference or the Council of Australian Government, to get the States together and see if we could get agreement to limit the amount of money that sometimes just gets wasted, where there's no new jobs created, they are just transferred from one part of Australia to another.

Finally, where do you see the growth areas being over the next 10 to 20 years? Where are the jobs for young Australians going to be down the track?

Well, we'll be actually putting out some documents about where we think the jobs of the future are going to be early in the new year. But the key thing is the jobs are going to be... What you are going to have to do to get those jobs is to be well trained. That doesn't mean you have got to have PhD. It might mean you have a diploma from the TAFE or an apprenticeship, but you have got to have training, skill and accept that probably the future isn't in lifelong commitment to one particular firm. It is clear that there is a lot of growth opportunities in some of the new industries, but the new technologies are creating new opportunities in traditional industries. You see, you look at what's happening in the car industry with Australia's capacity with new metals and new technologies to be part of the global car market.

I think there are a lot of jobs. I think when you look at what we call "industries of the future" which is what industries are going to be creating new jobs and new investment in 10 years time, in 2010, you can see that of course IT and biotech and those things will be creating a lot of jobs. There will be a lot of jobs in the services sector, but there will still be more than a million Australians working in manufacturing and it's their future that a government can perhaps do most to help.

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Issue 41 contents

Interview: A Bob Each Way
ALP tactician Bob McMullan is responsible for charting Labor industry policy into the next millennium. He tells us where heï¿½s heading.

Unions: Organiser of the Year
Just ten days to go before entries close for our $2000 air ticket. Hereï¿½s another nomination.

History: Labour Daze
A report from the 6th National Biennial Conference of the Australian Society For The Study Of Labour and Community.

Politics: Tomorrowï¿½s Questions
While the turn of the century sees Sydney play host to the Olympic games, the International Youth Parliament 2000 will bring world focus to contemporary issues facing young people.

Health: Red Ribbons
December 1, World AIDS Day has a special place in the history of the AIDS pandemic.

International: Organised Chaos
Persistent rumours are floating around Jakarta that the former boss of the official pro-Soeharto Indonesian trade union movement is about to be charged with corruption.

Economics: Seattle Numbers Grow for WTO Protest
News of the agreement to smooth Chinaï¿½s entry to the World Trade Organisation has created its own "China Syndrome" for organisers of the Seattle WTO event.

Satire: Too Many Media Players!
The Productivity Commission has issued a report calling for the abolition of existing cross-media ownership laws.

Review: Leviathan
John Birmingham has lifted the lid on Sydneyï¿½s shady past - and found trade unions to be at the centre of the sordid tales.

Deface a Face: Reith Loses His Shine
With his Second Wave looking more like a splash in the bath-tub, Workplace Relations Minister Peter Reith still reigns as the union movementï¿½s favourite bogeyman.

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