The Australian industrial superannuation system is one of the great models of industrial relations cooperation in the world. In 38 industry super funds, every day, union-nominated and employer-nominated directors put their day jobs aside and meet to oversee the business of making money for their members. In doing so, they’ve managed to significantly out-perform the market-based super fund model run by the big banks — while investing in asset classes like major infrastructure projects that politicians want supported but that the retail funds won’t touch.
As Crikey has detailed over and over and over, instead of being celebrated, this success has been pilloried as a colossal example of union corruption. As far as we can work out, Crikey is the only outlet other than industry fund-owned New Daily that even mentions industry super funds are actually jointly run by employers and unions. It’s as if the rest of the media have a weird filter that edits out employer groups from the story of industry super.
Funnily enough, however, from a historical perspective, industry super hasn’t been about some insidious victory for unions; instead, it represents a process by which trade unions have become fully fledged participants in the capitalist system that they’re intended to protect workers from. Unions now have every bit as much of an interest in the strong performance of the economy, of the major companies in which they’re invested and major asset classes as the rest of the shareholding class. Trade unions have been co-opted into the very heart of Australian capitalism. That incessant conservative demand of the 1980s, that trade unions abandon militancy and work with business for the good of the economy, has been achieved in a way that would have been unthinkable then.
But that hasn’t changed the business/Liberal/commentariat view that unions are implacably evil.
Now that the retail super funds that were championed by the Liberals, big business and the commentariat have been discredited, the latest hysteria about union funds is that they represent a sinister threat to business via their activism. There’s been a surge of coverage in the Fin and the Oz in recent days about the sinister threat of Greg Combet-led funds imposing their will on big companies.
Like the campaign run by Liberal Party loyalist Andrew Bragg designed to portray industry funds as a giant slush fund for unions, the fiction of rampant union activism barely manages straw man status. Article after article comes back to just one instance of union “activism”, BHP being pressured over the jobs of Australian seafarers. The AFR’s John Kehoe had to shoehorn in Glencore’s decision to cap coal production into his piece. It’s true that AustralianSuper is part of the Climate Action 100+ initiative that put pressure on Glencore — but so are such raving socialists as the Church of England, HSBC Global Asset Management and Canadian insurance giant Manulife. Terrifying.
But let’s consider an alternate reality in which unions really did pressure the boards of major corporations, via their industry fund shareholdings, to behave more ethically in recent years. What might have happened? What nightmare scenarios might have occurred? Perhaps the major banks would have been encouraged to proactively address their systemic and cultural flaws rather than wait for a royal commission, saving themselves hundreds of millions of dollars. Maybe major companies would have been more likely to negotiate higher wage rises, halting years of wage stagnation that have undermined economic growth. Maybe big mining companies might have proactively addressed the problem of tailings dams killing scores of people. Maybe energy companies might have been less likely to exploit their market power so aggressively that even the Liberal Party came after them with the big stick of forced divestment.
And, curiously, the AFR and The Australian have no issue with private investors throwing their weight around — even if it results in mammoth wealth destruction. Too bad if you were a small investor in Ten, for example, when Lachlan Murdoch, James Packer, Gina Rinehart and Bruce Gordon waded in and presided over the trashing of the network. And it took a royal commission into the banks before those newspapers wondered if retail super fund trustees were acting in the interests of members, when it was obvious for years that there were systemic problems in them. Apparently, industry super funds are to be held to a far higher standard than business.
The fantasy of union thugs lumbering into boardrooms and ordering businesses around via industry super funds itself relies on another fantasy — that Australia’s big business boards have been covering themselves in glory in recent years. That’s the lie at the heart of the latest attempt to demonise unions.