Workplace: Dirt Cheap
Industrial: Daddy Doesnít Live With Us Anymore
Economics: Who's Afraid of the BCA?
International: From the Wreckage
Politics: Infrastructure Blues
History: Meat and Three Veg
Savings: Super Seduction
Politics: Popping the 'E-Word'
Poetry: To Know Somebody
Review: Off the Rails
The Locker Room
Thatís Our Team
Janetís Job No Victory
Royal Finger Lickers
Will $20 Restore Carr?
Interview with Peter Lewis
You spent the best part of a decade running a business overseas, what's your perspective on the way the Howard Government has changed Australia?
It seems to have been an exercise in winding back the investments made by the previous Labor Government in infrastructure, in education, in a whole range of areas. So you run all those assets down and encourage people to go out and borrow more money to make themselves feel good - economically we've been holding the best party on the block because we borrowed more money to buy more beer, But sooner or later that's going to end - and the disappointing news is that the prosperity that was generated thanks to the reforms of the previous Labor Government have basically been pissed up against the wall. So I think that at an economic level they've really squandered the opportunity they had to invest more deeply in our people and our infrastructure.
Socially, coming back what I really did notice was a dramatic reduction in egalitarianism. I think you scratch the surface with most people and they've got that real Australian egalitarianism in their hearts - but you've got to look at it objectively. You look at the spread between rich and poor, you look at the home ownership levels and you look at a whole lot of things, and that image is slowly becoming more and more of a myth.
In terms of your personal story you were part of the tech boom and to a lesser extent the dot com crash. What did you learn about the way economy's operate through that experience?
LookSmart started in 1995 so we were around a long time and had a lot of hard times before the boom. Then this parallel universe comes along for a while and Silicon Valley became a wealthy insane asylum and then it all went away again. Through that process you learn a lot of things but the first is that markets left to their own devices always go through boom and bust cycles and it's really important to find ways to minimize the bust. Whenever you are in middle of the boom you get a whole lot of highly paid and highly articulate people explaining to you why the boom will continue and why the fundamentals have changed and all that sort of nonsense. Then surprise, surprise the fundamentals prove they are the same.
This doesn't mean you go around regulating everything but it does mean you have to do things to try and lessen the impact of both cycles. Currently the problem for Australia is that we've inflated the boom even further with levels of debt that are not sustainable, As a consequence I fear that we'll all have a correction that will be more severe than it needs to be. And whenever you have a recession it's the working people who get belted.
We've got a big business lobby at the moment who are basically trying to push the Howard Government to take radical labour market deregulation reform as the panacea to our economic ills. What's your view on the way BCA's entered this debate and is there another way that business should be promoting national interest?
Well, firstly let me say this: I've run a business in the People's Republic of California and it's a much more regulated labour market than we have here. But we constantly hear the argument that labour productivity is so much higher in the US than it is in Australia and that our real problem is somehow we need to deregulate our labour market. I'm not saying that there may not be a need for some reform, but the reason American's have greater productivity is because of their scale.
This is a hypothetical example, but if it takes 5,000 people to build 5,000 cars then it probably takes only 7 or 8,000 to build 10,000 cars and 20 or 30,000 people to build 50,000. Labour productivity is much higher in the States because they've got a market of 300 million people not because they've got some wonderful deregulated labour market, In fact, in California which is the engine of growth it's a highly regulated labour market. If we focused on driving exports and building up the scale of our businesses by attaching to global markets we would see much higher productivity than we're ever going to get out of additional deregulation of the labour market. I just think industrial relations is a tenth level economic issue compared to the real issues in the country which are that of total failure to grow our exports position - it is a political issue because there is political advantage to the Tories in attacking unions.
Also understand that the business voices arguing for the further deregulation in the labour market of lower wages come from a group of domestically focused services companies. They have a very friendly, not very competitive attitude to each other, and they basically want an easy life. They are not the companies who grow their profits by going offshore and creating exports and growing their customer base and becoming really competitive. They don't do that. They stay in their cosy little patch of the Australian business environment and grow their profits on the backs of their workers, their customers and their suppliers. And for those people ,who are now starting to face competition coming into this country, the only way they think they can compete is to squeeze all of those people further.
This is a complete furphy that it's the workers holding us back. Tim Harcourt from Austrade has research that shows that among manufacturers the export companies pay 40 per cent higher wages than companies in the same industry of the same scale in the domestic economy, they invest twice as much in training and they grow twice as fast . These guys are playing in the A grade and they're winning and their the heroes of Australian business - the exporters. It gives the lie to the idea that our workforce is what prevents global competitiveness
What's the role of Government in terms of running the national economy ?
I guess my philosophical position is pretty simple. I believe in small but powerful government. I'm not a big fan of big bureaucracies. I'm not a big fan of "programs". I'm a big fan of governments that really works hard and uses its powers in a way the public trusts; that creates the environment where good things can occur.
I also believe government has to have a strategy. I don't believe in saying simply that the market will look after everything. I think markets are useful tools but that does not in any way absolve government from providing leadership to the nation. I'm not aware of any truly outstanding successful economies throughout the world that don't have governments with very strong and proactive strategies. But we don't have one in this country.
This is not about picking winners - as some have said. The winners pick themselves by growing global market share. Look at export education, look at the wine industry, look at surf wear, look at some of the biomedical guys and these are true Australian success stories. My question is: is there anything we can do in the way we structure the economic environment to make them even greater successes. How do we make our $20 million exporters become $200 million become $2 billion exporters? The answer lies in the way we structure competition policy and the way we structure our tax system and the way we do our labour market development and our education and our immigration policies.
You seem to be raising these ideas into a debate that is still polarized between pro-bsuiness and anti-business
It's like we've been fighting the same old wars for 50 years. You know I don't think the fight between Labor and Capitalism are nearly as important as the fight between Capital and Management. What we've seen in the last 50 years is the rise and rise of the managerial class at the expense of capital - that is shareholders, particularly the people whose superannuation savings underwrite the system. This is a new debate, and it's one that we should take sides in - on the side of shareholders and business owners.
The old debate about free trade versus protectionism has been over for 20 years. How can you talk about whether we should let the international competition in, its already in! What we've got to do is figure out how we're going to get our products into the rest of the world. We go into battle over imports but we have no debate over exports.
And this means our debates end up pitting workers against workers. Workers as consumers versus workers as employees and saying well, Labor has to choose between one or the other because that's the battle over imports. If we drive exports harder then we'll create jobs so workers as employees will win; and if we had a fast growing economy driving a trade surplus over time the exchange rate would increase and therefore the price of imports would be cheaper for workers as consumers.
So you know it's the high growth export economy that's going to deliver win-win for workers both as employees and consumers. I think we need to re-set the debate - politics is about setting the agenda. Labor's should be setting new debates in motion while the other mob are stuck in some reactive knee jerk position in the "last wars".
The debate between Capital and Managements is really important and the Tories will always side with Management. At the end of the day they'll fall down on the side of management because that's who their mates are. We represent workers who are the owners of the superannuation funds. But we should also be representing small businesses. So I think we need to change the terms of the debate. That's not a trivial political challenge but that's what a progressive party should be.
Where do you see the role of a union movement?
Well I don't think that the role of unions necessarily has to change dramatically. There's fundamental reasons that unions exist that are important. There are the core activities on behalf of working people; and then there is the important position that unions play in terms of superannuation and the divide between management and capital I was talking about before. It was unions, for instance, that actually increased the savings of the nation and made a positive impact on the economy.
There are challenges obviously, I don't claim to be an expert on the specific challenges of the union movement is facing; you've got guys like Greg Combet who, I think is just an outstanding Australian, who lives with those issues day to day, so I don't put myself out as the one who speaks out on those topics. I've spent some time with the guys at APESMA and they're starting to get much more organised amongst IT workers - and goodness knows some of those workers have real issues that they deserve to be properly represented on. Funnily enough they're starting to realise that they need a union. The unions do face long term structural challenges and they're trying to address those and I hope they do thatwell but its mindless propaganda that suggests that they're something irrelevant - its clearly not the truth.
Just to finish off with your ideas to reform the ALP. You want to shake things up. Tell me about your ideas
Now, I don't think that my ideas are worth anything more than anyone else's ideas. The real point is that there is a huge number of people out there, a huge number that want to see the party change and I just run into people all around the place, at branch meetings, in business, in the Federal Parliament, anywhere, where people identify the same sets of issues.
I don't think that I've got any particularly unique perspective on what the challenges are for the party. We've got a very talented caucus but most of them share common backgrounds and we just need more diversity. I've not met anyone that doesn't believe that's true although sometimes I think those in Canberra get a bit caught up with the leadership and everything else will flow on from there. I don't' think that's actually the only issue. I think we need to address the gene pool and accept that diversity is fundamentally valuable in any organization.
I think the second challenge is that we have such a much more passionate and capable supporter based than many running the Party realise. There are thousands and thousands and thousands of true believers out there who love the Party and who vote for us all the time and are willing to help in any range of ways. And they are locked out and that's a tragedy.
You always hear in business that "our people are our greatest asset" and it becomes a clichť. But apart from Centenary House its hard to think the Labor Party has any assets except its people, That's all we trade with, so you'd think that we would be focused on getting the biggest possible number of people actively involved, finding the many talents out there and leveraging them. I'm talking about investing in those people, mentoring young people instead of sticking them in Ministers offices and telling to stack branches. Instead we could be giving them five years experience in the private sector and give them some deep research and policy development experience as well and help them learn how to do all the other skills that are also important.
We're not acting like a high performance organisation. Our only stock in trade is the calibre of the people and how they work collectively as a team and the problem with the team right now is not that they're bad players its just that they all come from the same background. The downside of all of that is the problems with branch stacking and problems of unions being taken over by factional operators rather than focusing on their members and those are serious issues.
That said, I'm really optimistic about the future of the party in the medium term because I think there's such a ground swell of passion around all the issues I've outlined that it is going to happen. I think that the vast majority of people within the system actually want to see that happen even if they're not completely clear about how to go about it because they've been stuck in the system for a while. That's what's happened before, the party renews itself every 20-30 years. I just wish we started a bit more in 1996 and we might have been there by now.
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