In Conversation with Sally McManus

Kerry O’Brien 

So, you’re referring, I mean when I say only to workers, that’s a very big part of the Australian workforce and vulnerable often. But is that, is that the extent of what you’re referring to as these fault lines? 

Sally McManus 

Well, there’s obviously all the other fault lines too this one, I think is the biggest one that’s been exposed the nature of this insecure workforce we’ve developed over a period of 20 years, and it has changed over that period of time, 25 years very significantly. And the consequences of that, there’s obviously a whole lot of other fault lines, and that those have been, you know, there for people to see too. And I know that I am focusing on the workforce, but you can’t blame me really, but people that are VISA workers, so a whole lot of them have been stuck in our country needed to stay in our country that didn’t get job seeker or job keeper, and so they’ve had nothing. And you know, you look outside now in Melbourne, and it’s basically the CBD of Melbourne is owned by delivery riders, like riders for Deliver Roo for Uber Eats or for other ones, and I can put a very safe bet that the vast vast majority of those are visa workers who have nothing, no other income. Same with labor hiring in a meat works. Why is it that people keep going to work? A whole lot of them are VISA workers too. So, prior to the pandemic, we had, well over a million workers on temporary work visas that were highly insecure. And now we’ve got this situation where we’ve, we’ve got them here. And it’s like, yes, we’ve got this group of workers who are second class citizens, casual workers who we want to talk about visa workers in a way, they’re third-class citizens. So, you know, those fault lines are there to see to. 

Kerry O’Brien  

Can you think of a bigger peacetime challenge that Australia has faced in terms of, in terms of the economy since the great depression? 

Sally McManus  

I think that there’s just no question whatsoever that this is, this is that it’s easily that, you know, we need to remember that we have lived through a pandemic before, you know, after World War One, but it’s almost not in collective memory. But we’re having a pandemic, which is a massive public health crisis, alongside what is a very, very serious global recession slash maybe depression. And, you know, there’s no, you know group of Australians who living memory who have been through that I think it’s going to be obviously, you know, was a totally different matter, but terms of the economic challenges and the pain that that we’re all going to face, it’s going to be an extremely tough time. 

Kerry O’Brien  

And yet, it’s a, it’s a kind of strange moment that we’re in in a sense, I mean, apart from those workers who have already caught up in the neck that you’ve just talked about, or just the fluidity and the instability of the situation and trying to estimate what is going to happen when we move beyond this period of huge government subsidy, propping the economy up propping people up. And we had another reminder of that today with, with Qantas announcing yet another set of redundancies. I assume I haven’t had time to catch up with it. But I assume because of the border closures and the latest pandemic, the latest virus wave and which, again, just underscores that I mean 6000 workers retrenched only weeks ago and now another 2000 plus, wouldn’t have been anticipated even a couple of weeks ago. And, and we are still being propped up. Do you have any sense? Is there any way to measure what is going to happen? When the, when the government support finally falls away? 

Sally McManus 

Well, in the Trade Union Movement, obviously, we see a whole lot of things that are behind the statistics. So, there’s a whole lot of companies at the moment that are just hanging on, and it’s because they’re tied to supply lines, like or tied to, for example, retail. So, you might have factories or small businesses that are supplying to retail like things like places that will make boxes for shoes, for example. So, you see the immediate effect in those frontline shops, but the knock-on effects over time, are quite huge. But I think the thing that makes this hard to quantify is the interplay between the outcome with a pandemic, like that public health parts of it, and the economic parts of it. So, it’s very hard, like even for the Treasury, and, you know, the smartest people that our country would have to be able to, you know, effectively and confidently model what may or may not happen. And people didn’t predict the extent of the outbreak in Melbourne, you look at, unfortunately, you know, the clusters in Brisbane at the moment, and it’s, it’s absolutely good that they’re right on top of that, and those numbers are small enough for people to stay on top of, but I just remember how quickly that got out of control in Melbourne, and all of a sudden, you know, where everyone was optimistic thinking things were gonna bounce back, and then they’re not. And there’s that intangible effect of this, and that’s certainty and confidence. Confidence for people like you and me, consumers to spend, confidence for businesses to open and to plan for the future, and that is taking a severe battering, because we can’t confidently say that there’ll be a vaccine soon either, so these are all just realities that we need to face. But, it’s actually hard to feel really optimistic in a, in a circumstance where there’s so many unknowns. 

Kerry O’Brien 

So, if there was one good thing that’s come out of it, you would say I imagined that it was the sense of Australians pulling together initially, that the establishment of the National Cabinet, the sense of unity of planning, the talk about unions and business and government, throwing the kind of ideological baggage over the shoulder and, and also pulling in concert for Australia, but the National Cabinet stuff is fraying around the edges over borders, and so on. And, and the Fairfax Papers reported this morning, that the weeks and weeks of talks that have been going on between business groups, and the unions are bogged down over the same old arguments, the same old sticking points, is that right? 

Sally McManus 

Well, you can’t really you can’t believe everything you read in the papers Kerry, you’d be surprised that that will be true. You know, at the moment, we gave a commitment to those people in the room that we wouldn’t have the negotiations outside the room, we trade it genuinely and in good faith and to have those discussions there. I’m a bit more optimistic than the papers have reported. But that’s all I really want to say about that. I think you do make a very important point about the ability of our country to pull together when we really needed to, and you just look at the absolute disaster that’s happening in the United States, and that’s on multiple levels. And I think that there’s, you know, there’s been a subconscious and conscious demand from the public to want their leaders to put aside partisan issues and to keep them safe and to protect their jobs as much as they can. And I think that by and large, most leaders have stepped up. I think the other thing is, is that, you know, in our country, you know, people might say, okay, there’s a trade union movement, like we’re an institution where we are, and we’re one that can be relied on when there’s a crisis to be there and to step up and to be part of part of our history is when we need to be a part of, you know, a national consensus for the greater good. 

Kerry O’Brien  

So, I look, I understand the constraints on you and the commitment not to talk outside the room for the moment at least, but I wonder if you can give us a sense in general terms of whether you’re optimistic, whether you feel there is actual progress that can be measured, and I’m not going to ask you what the measure is. Can you give us a sense of the sort of spirit in the room I mean, do you feel that there is a real different spirit in the room than you might normally have expected in talks about, about changes in the workplace? 

Sally McManus 

Well, employers aren’t a monolithic group, so there’s different employer lobby groups or employer representatives. And they do come with different perspectives, I would say that some of those groups absolutely do come to the table with more extreme views, but not views that are unknown, like this country’s has seen work choices, like we know what that agenda is, for some in business, I’ve just never really let go of it , you know, they’ve already dusted it off under the pillow they go to sleep with every night and that, you know, they’ve memorized every page. So, for sure, some people have approached it that way. But I wouldn’t say that that’s been a universal approach by business representatives, there’s been others who have been more constructive. The way we’ve tried to approach it is we’ve had our principles, which is that, you know, we can’t have workers and be worse off. Now within that, and within employer’s concerns that they raise that they believe that the system could be simpler and less complex, and other issues they raise around, for example, the issue of wage theft, you can see that there could be some common ground around, both making sure workers are protected, but seeing whether or not those concerns that employers are raising that would be that would be ones that are valid, could be met and dealt with without compromising the rights of workers. And so that’s what we’ve been concentrating on, it does involve needing to think differently and sure that some people are capable of that and other people, not so good at it. 

Kerry O’Brien 

And are you able to bring the united front from the union side? I mean, there’s a lot of different unions. And not everybody is on exactly the same page within the union movement, you wouldn’t expect that. But are you able, as a union movement, to bring a united front to the table? in those very, I think there’s five different groups of conversations going on? 

Sally McManus 

Yeah, there’s about 25 union leaders that are involved in this, maybe a few more actually. So, you’re right, that’s a very diverse group of people. So, you’ve got, you know, the leader of the Nurses Union, and you might have the, you know, the Metal Workers Union, or the AMWU so, you know, the Electrical Union, and you might have the Disability Workers Union7. So, they’re always going to come with particular perspectives. But actually, the Trade Union Movement in our country is really a united group of people who have common values. We’ve spent a lot of time thinking through what, where do we want to be in the future? Like what’s wrong with our current set of rights, we know we had so many problems before the pandemic with record low wage growth. The other issue we’ve already spoken about in terms of a level of job insecurity. So, we’ve actually as a group, thought deeply about these matters. And so, our side being united is sort of almost, I shouldn’t say it goes without saying because it doesn’t go without saying, but it just is where we are at this point in history. 

Kerry O’Brien 

I still remember some of those Labor conferences with a great deal of Union input that wasn’t always speaking with the one voice. So back in April, Scott Morrison said it was time for everyone to put their weapons down. And I think he included himself in that no more bosses, no more unions, we’re all just Australians now, he said, but you don’t seem to have put all your weapons down. Just this week, you’ve launched an ad campaign, which is being described as a shot across the government’s bows, just a reminder. How does that sit with no more bosses? No more unions? 

Sally McManus  

Look, there was like a nice line that I guess the Prime Minister came up with any sort of idea that, you know, there’s no workers and no bosses, obviously, I mean, he would say, anyone would say that’s not correct. No workers, no bosses, what I’m saying about that, I guess is that there’s always going to be a different perspective you’re going to come from if you’re a working person, as opposed to the employer. It’s not to say that you can’t put those aside when there’s a greater challenge, and in effect, that’s what we were doing. Employers, unions, workers, the government was saying that we’re going to put aside all other issues, and we’re going to work together to save lives and save jobs. And so by and large, we’ve continued to focus on that, having said that, there’s clear just differences, ideological differences between us and by and by with the government and also with some employers, but just because you’ve got ideological differences, doesn’t mean you can’t debate those and share those and that now, hopefully, the other side picks up a few things. And you know, it makes their decision making better. 

Kerry O’Brien 

But if when you’re in a recession, as we are, facing even possibly a depression, as we are, doesn’t the protection of jobs themselves overshadow the protection of all existing wages and conditions, does it not get to a point where there is a genuine argument for surrendering some conditions? Not all, obviously, some conditions that you might have previously considered sacrosanct in order to protect, to make some of those changes in order to protect and even create more jobs? 

Sally McManus 

Well, if you believed in trickle-down economics, you’d absolutely say that’s right. So, for example, employers argued several years ago that if we cut penalty rates, it would lead to jobs growth, and we’ve heard these arguments over and over again, and in fact, in a way, it’s been argued about superannuation now, and what happened with penalty rates, you know, was there big jobs growth, when those were cut? No, didn’t create one single job. And so, the idea that if you take something off working people that it’s going to automatically mean employers are going to employ more, we just don’t accept that full stop. But there’s another aspect to this, in the context of a serious economic downturn, which we’re seeing, there’s only certain you know, leavers that we’ve got. So, you know, there’s the issue of investment, private investment. Now, as we’re talking about before, there’s so much uncertainty about that there’s exports, we’re not going to see a massive change in that there’s not really a lever, there’s domestic spending, and that that is going to be so important with our borders closed. So, of course, that’s just you and me and everyone else spending in the economy, if you cut wages, and the take home pay of workers, effectively is shrinking domestic spending, because you know, that for those workers in particular, the ones that they would want to cut the wages for are low paid workers, and what do they do they spend all that money in their local community. And so, we would say it would be the bad thing, not just for those workers or for the next generation, like there’s no way we’re going to be passing on worse conditions to the next generation. But actually, it’s bad for the economy as well. It’s also why we say that the other leaver, the final leaver left is government spending, which is about 35% of GDP. And that that’s why there needs to be, that the way to create jobs isn’t about cutting working workers wages, it’s about having a job creation plan. And the only people who can do that are government, state and federal. And so, for a while, we’ve been saying, we need our governments to step up and be the job creators. And that means using that lever of government spending in order like we did after World War II, to get the economy going again. 

Kerry O’Brien  

But presumably you’re not saying, and we don’t know how long it’s going to last, to dig ourselves out of the hole once the pandemics gone, ad God knows when that is going to be. But you’re not saying, surely that is that the government, that it is government money, government, government programs that are going to dig us out of the trough, it’s got to be a combined effort, surely. And in that context, from your point of view, wages can’t be cut now, and job descriptions can’t become more flexible. And then where are the productivity gains going to come from that will be needed? Also, just to protect jobs, let alone create more? 

Sally McManus 

Well, a few things. Let’s start with the issue of government spending. So, we believe that they should spend money that is going to leave a legacy for the next generation and help in the long term in terms of economic growth. So, your question to do with productivity, for example, investment that could happen into our transport system that could happen in terms of supporting also, for example, the tourism industry that’s been smashed, in order to support the domestic tourism for people to spend their money here, free childcare, for example. We know and it’s been modeled that and where that happens, not only does that help, obviously, in terms of job creation in that area, but the productivity gains and the growth gains out of having women’s participation in higher in the workforce is not something that’s argued with economists. So, there’s all of those aspects to it. I was talking about the issue of workers’ rights because when you talk about wage cuts, like if they’re permanent wage cuts, like you’d say, okay, we’re gonna cut what the minimum wages or what wage rates are that it absolutely would be disastrous. But at the moment, this is happening like not, not that the actual hours that people are working is being cut everywhere, like the income that your average worker is now earning compared to before the pandemic is less because of stand downs, because of the loss of casual jobs, the loss of all these things. So quite often the employers argue about flexibility, and we need more flexibility, we’ve got so much flexibility in our labor market, really, it’s not funny, and we’re seeing this right now, you know, the amount of, you know, income that’s been lost at the moment, because of the pandemic is enormous. 

Kerry O’Brien  

But I think you’ve expressed concern, if not opposition to the idea of, of employers being able to, to change the job descriptions of workers, because of the situation we’re in. 

Sally McManus 

No, that was something that was supported in terms of the Job Keeper legislation, there’s limits around that. There’s reasonableness tests around that, and it’s, you know, obviously, you know, they now want to do something that’s within your skills. So that’s something that we’ve been flexible about, we’ve also been flexible about people working from home. I mean, it’s been a total necessity. But it’s meant that, you know, workers have had to make some pretty big changes in terms of how all of that works. So, I think that . Yes, some not so good, especially if you’ve got kids, it’s been really tough. But I think actually, the pandemic has shown that our IR system, despite what people say, is flexible, it’s fast, the ability for us to make changes quickly, and then for it to apply in a uniform, simple way across the economy, in an emergency, we did it, like we did it as a country, we did it because of the system we’ve got. Unlike the US where they don’t have any of those basic protect protections or the type of you know, system that we have got, it’s an absolute total mess, there’s no protections for workers. So, I’d say, you know, there’s a balance between ensuring that things can change when they, when they need to, and I think it’s already been demonstrated that certainly our system has, and it does so very efficiently and uniformly, and also protecting workers at the same time. There’s a balance to be struck there and I think actually it’s been struck fairly well. 

Kerry O’Brien  

So, there’s been a lot of talk about how things are going to change and will never be the same, after the pandemic has ended. What are the big permanent changes that you might identify now, that will be with us into the indefinite future as a result of this whole experience? 

Sally McManus 

Well, put aside the fact that I think people will have better hygiene around washing their hands forever. I think in the world, yeah well, actually, a nurses union talks about it, they obviously the rates of flu infections this year, right down, and you know, they’re very happy that that there might be a change in mindset with people. But anyway, I think some of the bigger changes in terms of the workforce, and more of a push by employers and probably also from employees to want more flexibilities about around working from home, as you said, some people have, have found that a struggle for a whole lot of reasons and other people have, have thought that it’s better in terms of being able to save, you know, time in travel and to be able to, you know, manage carrying responsibilities. That throws up a lot of big questions, a lot of questions in terms of who’s responsible for, you know, the costs of that? How do you ensure that there’s fair working hours, and there’s not this doesn’t lead to work intensification and unfair work intensification and effectively pay cuts by just telling people, expecting people to be able to work all hours in any hours? But then again, workers might want flexibility too. So, I think that there’s likely to be some big changes around that. I think that also in terms of technology, very rapidly, so many companies have had to change what they do and how they do it. I think that that’s likely to continue. And I think the way that a whole lot of businesses and workplaces will work or be more remote working in terms of even meetings like that. I don’t want to get back on the same amount of planes I’ve been on before, after all of this, I’m quiet, I’m usually on planes all the time. I know that many other people think well hang on a minute, is it’s more it’s more efficient to do it in a different way. You know, there’s some of, some of those types of changes, I think that it’s quite obvious, like I mentioned the issue of insecure work. I think that this has been brought to the fore. I think that that there needs to be changes there. I don’t think there’ll be the same acceptance of the levels that we’ve had and the unfairness of it. I think that the area of aged care is also in the spotlight in terms of you know, is this really what we want for our elders and what changes need to happen for a long time the Healthcare Unions have been talking about staff ratios, but now we just say horribly, you know, consequences of not having those safeguards. I think the issue of local manufacturing and the fact that we let our whole, not our whole, but a lot of our manufacturing industry go and go offshore think there is real questioning about that and about the need for us to be self-sufficient and the value in having those, those industries here in Australia. 

Kerry O’Brien 

Well, let’s just for the sake of this exercise, assume that you’re right about the fault lines that you’ve identified and you would say that the casualisation, significant casualisation of the workforce that the practices of labor hire companies have been a significant contributing factor that just adds two significant elements in the modern Australian industrial relations system. Hasn’t the horse bolt, I mean are you saying that you would want to turn those things around you would want a considered drive to actually reduce casualisation, to somehow reduce the activities of the labour hire companies. 

Sally McManus  

It’s absolutely what I’m saying. Absolutely. I think that the problem we have is that some employers will not even admit that it’s an issue. And actually, some in the commentariat, and some politicians say the same thing to they just say it’s not an issue. And sometimes I think I’m living in another world to them. The fact that they don’t realize that this is a huge, you know, quality of life, quality of community issue for working people that was prior to the pandemic, now they can hopefully see that more up-close mean labour higher is, is like the worst form of insecure work, you don’t even have the same connection to the workplace that permanent, casual or direct casual workers have. And turning down a shift may mean that you just go down to the bottom of the list and you don’t come back for a long time. So, getting rid of the extent of that, I think needs to be a national ambition. We should have a conversation as a nation. Do we think it’s okay, that we’ve got to the point where we’ve got third highest level of insecure working OECD, third highest? Now there’s plenty of other very successful economies that have, let’s say ours is around 35% or say 33% that have around 25%? Well, is should that be our ambition? Should we be in the middle of the pack in terms of the OECD, I don’t think it’s got anything to do with the success of a country, the amount of the just taking rights off a whole lot of people which effectively we’ve been doing. And I think that having an ambition and one that’s shared nationally for us to say, it’s just gone too far. And there’s a place for casual work there. There’s a place for labour higher, but it is about short-term work, it is about when it’s in unpredictable, it’s not a permanent job, that it goes on and on and on for years and years and years. It’s just, I think, wrong, we’ve led ourselves into that situation. And we shouldn’t have two classes of workers with two sets of rights. 

Kerry O’Brien 

But you’d have to acknowledge that a significant number of those casual workers are by choice, that, that there are those who do want flexibility in their lives. And secondly, correct me if I’m wrong, but my read of the Bureau of stats figures on the casualized workforce is that it’s been relatively stable around 25%. over some years.  

Sally McManus 

Over about 24 years, it’s been relatively stable. This is casual work, which is one form of insecure work. And we did let that get, it shouldn’t be out of where it is, as far as we’re concerned. On top of that, what we’ve seen happen is the growth of the gig economy. So, this is another form of insecure work. And as sometimes I use the term casual because it’s hard to like list all the different forms. So, in that you’ve got all these gig economy workers, which we were talking about before, who aren’t even considered as employees, and so they don’t even get any of the basic rights. They’ve got less rights and workers did 100 years ago. And this is a something that’s been grappled with around the world. How do we do this? How do we regulate it? How do we make sure that those workers get rights? We’ve got to deal with that here to labour hires another form of insecure work I’ve talked about another form of insecure work is rolling, ongoing fixed term contracts. You see so much of this in the university sector, you see it in health, you see it elsewhere, where you never ever get permanency. Now, in the rest of the OECD, there’s limits on rolling fixed term contracts. So, whilst you say okay, some people want to be in casual workshop, they do. We’re not saying get rid of casual work. We’re just saying that it’s gone too far, and a whole lot of jobs that are actually permanent jobs have just been converted into so called casual jobs. 

Kerry O’Brien 

I don’t think it’s going far to say that you declared war on neoliberalism when you became the ACTU Secretary but the glory years Labor under Hawke and Keating in the 80s and 90s were built on a Labor version of the neoliberal model, were they not? Lower taxes, including company tax spending cuts, surpluses, privatisation, deregulation of financial markets, big tariff cuts, that saw a lot of factories and jobs disappear, less centralised, less regulated labour market, unions had a huge say in those decisions. They had never and have never since had the same influence over government policy as they did in those years. But looking back, weren’t unions shooting themselves in the foot? If not more seriously, than the foot that much more than a flesh word? I would have thought. 

Sally McManus 

Yeah, well, I suppose the statistics unfortunately speak for themselves at the time you’re talking about when these ideas first came about in terms of neoliberalism, our union density was higher than 50%, and now it’s around 15%. So, a lot of what was started by the Keating Government, not entirely led to it, it didn’t it was more John Howard, when he came in, who applied, you know, the ideas of neoliberalism, you know, much more rigorously. So, Labor on one hand, you know, back then did start some of those changes, but they also did things that are exactly the opposite, like built Medicare, built the universal superannuation system, those things as well. So, I think that we just have to deal with things as they are today. And I think that the extent of privatisation that we’ve seen in this country, and the fact that it’s still pursued by, you know, some governments is shown itself, I think, to have promised a lot. It’s promised that there’s going to be cheaper prices, better service and all of that. And I think after 20 years of experimenting with that, that, clearly, that’s not the case in all, if not, most of the circumstances, what companies do, like we see in private aged care, is you privatised, they’ve got to find ways to make money, and that’s their job. They’re a private company. And so, they cut corners, whether that be meals, or whether that be staffing and in order to, you know, for the profit tribe. And I just think that there’s a lot to learn about that. And I think that certainly in the areas of all essential services that, you know, including places like aged care that they shouldn’t be in private, hence. 

Kerry O’Brien 

Well in national terms. It was Labor again, it was Hawke and Keating, particularly Paul Keating, who started that big privatization drive. Are you really saying that you can actually, you could pull off, we collectively as a nation could pull off a U turn on that we could, we could actually reverse the privatization process? 

Sally McManus 

Maybe again, it should be a goal, it should be something that we consider in terms of where do we want to be as a country? A lot of that privatizations happen at a state level, obviously, state governments are the ones that have, you know, utilities, water and electricity that at various times have been privatized. And I don’t think that the experiment, especially in terms of things like, you know, natural monopolies has led to this, this, you know, great future that was promised at the time it hasn’t. It’s money that’s also been lost to the taxpayer, and really, that’s you or me paying for schools and hospitals. So, I do think that as a country, we went too far in terms of, you know, down the road of neoliberalism. I did have a chat to Paul Keating, after I was elected, because, you know, there was a lot of discussion around this particular issue, and he said to me that, you know, the decisions he made was based on the Australia as it was then and the economic times that it was then and that if he were the Treasurer today, he’d be making different decisions. So, you know. He said, I don’t know if he were even saying he nationalized, Qantas, but, you know, the importance of the public sector, more so in terms of, you know, what was important with the changing demographics in particular, was something that he mentioned. 

Kerry O’Brien 

So, so you’ve acknowledged that, that the Keating agenda of beginning the process of deregulation, of the labour markets, was in a way the start of the slippery slope for the Union Movement in terms of the decline in its membership, the really dramatic decline in his membership but and pre virus, Australia was already starting to see stagnating wages as you identified earlier across Australia for several years, at least to the point where the Reserve Bank Governor was, was urging employers to end essentially urging unions to go harder on wage rises, he was saying we needed a boost in incomes, as a reserve bank is hardly a radical institution. But how does that reflect on the strength and capacity of the Trade Union Movement that you basically need the Reserve Bank Governor giving you a push to try and get better outcomes on wages? 

Sally McManus 

I just go back a little bit in terms of the reasons for union growth, the issues of major structural change, changes in the economy, us moving more to a service-based economy, you know, as much bigger factor also, John Howard was another big factor, too. He changed workplace laws were removed the ability for the encouragement of union membership. So, so that’s a big thing. Getting back to what you’re saying about the Reserve Bank Governor, well, this is an issue of bargaining power. The reason why we have record low wage growth is connected to the levels of unionization it is, because how do wages go up? You know, unions make wages go up. Either that or it’s an issue of supply and demand for those workers who are in a particular position where they’ve got skills that are that are really sought after. It’s not that employers are just turning around and saying, here, here’s a pay rise. Like if that were the answer, we’d be seeing, you know, wage growth all the time. But the connection between harsh workplace laws, which is basically constrained unions over a period of time, and we’ve got extremely harsh labour laws in our country, in terms of constraining the rights of workers to exercise bargaining power, is, I think, the main reason why we’ve got record low wage growth. Well, we did have and still do. 

Kerry O’Brien 

What do you identify from the union side? And you have to be honest with yourselves on this, if you’re going to kind of improve the situation from your side, I would imagine, and you strike me as a fairly straight shooter. So, what do you identify from the union side as the failures to see what was coming and adapt and somehow work out ways to stay relevant and attractive for Trade Union membership, particularly with younger generations coming on? 

Sally McManus  

Yeah, firstly, I’d say this is that every other developed country recognizes that unions are a public good. So, they have policies, they differ a bit, depending on the part of the world, you’re in that support union membership, because I know that if you don’t support unions in what they do, and give them ways of making sure that, that there’s support for union membership, that essentially will have what you’ve got in Australia, we’ve got, we’ve got just as bad as in the south of the US. Other than that, is you struggle very hard to find an equivalent country that’s anywhere near what we are. So first of all, I would say that you need governments that are actually going to support union membership. The other thing I’d say is that sometimes we didn’t take opportunities when they were there. And so, if you go to the issue of insecure work, I think we could have foreseen more that this is where it was going to go. And various times, we might have had opportunities to push this harder, we didn’t take them when they were there. So that’s a, I think, a fair reflection on that, especially when you look at where we are now. The other thing is, is that there’s also been very significant technological change. So, people these days in order to sometimes find out, you know, what they’re meant to be paid, it’s Google that they’ll go to, to work that out. So, unions ourselves haven’t changed enough in terms of how accessible we are to people. And by accessible, I mean, you’ve got a whole generation of people who expect to be able to interact and to be able to participate in their things that they’re a member of, or part of online quickly and easily. You can’t do that with most unions, it’s too hard to find out sometimes what union to even join now. Those are things that are all within our control. And so, I think that basically that technological disruption has happened around us, and we haven’t been quick enough to respond, mind you, we’ve prioritizing this as a as a major thing that we do need to do, because we recognize that, that if we don’t, we’re going to be completely left behind. 

Kerry O’Brien 

So, isn’t it true that one significant factor has been that where you once had a plethora of big, big companies, big enterprise, big workforces, you’ve now got a lot smaller workforces, much smaller businesses, that are virtually unionized? Is hat not something that you should have seen coming? 

Sally McManus 

Yes, we probably should have. I mean, we could beat ourselves up all day thinking about, you know, what we should have seen in our crystal ball and how we could have prepared for it. But that is absolutely part of the story of union membership decline, absolutely. And it’s part of moving to more of a service-based economy, and the consequences of that, and the system of bargaining that, that we that we had back when enterprise bargaining first came in, we had a different economy was, as you were talking about big factories, we had a manufacturing industry ,and so you could pursue enterprise bargaining with the type of bargaining power that you would need in those large workplaces to get fair outcomes. Now, of course, what happens when you dilute that down to much smaller organizations, that’s much, much harder. And it’s also not efficient, it’s not, you know, it doesn’t make sense if you’re in a small workplace to be, you know, negotiating spending, you know, months negotiating with your employer over an enterprise agreement, it just makes sense that if you’re in a childcare center, for example, and not for profit childcare center, that you should be able to bargain across your whole sector, rather than each childcare center after each childcare center. And that’s why we’ve been arguing that our bargaining rules need to change so that every worker has access to collective bargaining at the moment, effectively, they don’t because of those issues you raise. 

Kerry O’Brien 

So, when we saw those figures from the Productivity Commission, just in the last few weeks, showing a quite significant decline in wage growth of young Australian workers, and I think in the under 25, since it’s been a, it’s been a consistent cut, series of cuts, as I understand it, going all the way back to about 2001, and for over 35, under 35’s, it was back to for at least the last 10 years. Now, what do you what do you finger right? What is at the heart of that long term decline in young people’s wages? 

Sally McManus 

Union membership, like the fact that the whole bigger macro picture of workers not having this, enough bargaining power to be able to balance things out is part of what’s happening. And when you look at the rates of insecure work, casualization amongst that same cohort of people is extremely high, you have now a whole generation that doesn’t know what a sick day is, a paid sick day is, paid annual leave. And so, when you’re in that situation, inevitably, you have less bargaining power, because if the employer the next day can just say goodbye, you know, it makes it much harder to be, you know, saying please give me a pay rise. So those issues interact, absolutely they do. And both of them need to be addressed. If we’re going to deal with this intergenerational problem we’ve got. 

Kerry O’Brien  

 I don’t want to spend too much time offering, you know, inviting you to lash yourself. But it does strike me significantly that when you’re talking about the casualized, low paid workforce, particularly young people in the service sector, and particularly women, young and older. I mean, it just seems that the unions have to take a significant part of the responsibility for that, there is a clear union failure there somewhere.  

Sally McManus  

Why? Why do we have to? 

Kerry O’Brien  

Because otherwise, your relevance presumably just keeps shrinking. I mean, if you take Amazon, Amazon workers employees or say JB Hi-Fi or Domino’s Pizza, as against the kinds of union protection and the strength of unions, like the metal workers in the past, I mean, there is a, there is a serious disconnect between those two isn’t there. 

Sally McManus 

But you can’t compare apples with apples, like you’re talking about, it’s almost like saying to be this generation of union nurse or the one just before me that, that, you know, you should be doing the same thing as the generation did like Bill Kelty, you can see over this side, it was a different world. It was a different world that they were operating with where in terms of what their rights were to take even basic things like industrial action, there wasn’t massive fines for individuals, and for unions. It wasn’t, you know, at the moment, it’s almost criminalized in some parts of our country or the government’s keep trying to do so. It didn’t have that situation. You had a centralized wage fixing system where the institutions and in law encouraged union membership now, all of that’s been stripped away, and you’ve got, you know, this generation of workers are dealing with that. So, yes, you’re right in saying that, you know, identifying what the problems are, and what we’re going to do about it. But those problems aren’t small problems. And they aren’t problems that, that we’ve necessarily bought on ourselves, they’ve been a deliberate strategy over a period now of many decades, starting with John Howard, starting with Margaret Thatcher, starting with Ronald Reagan, to try and reduce the influence of workers power, which is unions, and they’ve done that explicitly over that period of time. That’s what we’re up against. And so, I find it like hard to accept that working people should be blamed for entirely, for their situation. 

Kerry O’Brien  

No, I am not saying working people, we are talking about the Union Movement. As in those who are driving the unions.  

Sally McManus 

Yeah, but it’s almost like we’ve got all these levers that we can just pull to fix things. And we, we don’t like this now needs serious surgery if you’re going to fix some of these big problems. And really, what I’m saying is that it’s got to start with as a country saying, well, is this what we want? And the consequence of not supporting the union movement means that we now have record low wage growth, it means that we have so much insecure work, it means that, you know, we’ve got the gig economy, which is unregulated entirely. Is this the type of country we want? Is this what we want? Or do we think it was actually probably better when workers had a bit more bargaining power and a bit more safe? 

Kerry O’Brien 

So, and I’m thinking, as you’re saying this, that if it is all but impossible to stage a strike today, isn’t the battle already lost? And I’m saying this in the context of, I read the story of your first march in support of a strike was when you were still a school student. What was that about? And, what is the likelihood of an equivalent person to you, student today to you, and the others involved in that strike being able to have that strike? 

Sally McManus  

Well, it was about neoliberalism, was about the Greiner Government. It was a new Liberal government got elected in New South Wales, they went about attacking the public sector. And part of that was obviously schools and teachers. And I was at a public school, and they started sacking our teachers, and I was in year 11, and all of a sudden history teacher was gone. And, you know, we felt this directly.  The teachers organised and they had strike action. Now, the consequences for that Union, the Teachers Federation back then, of taking that strike action, like, no one was going to, they weren’t fined. The 50,000 people that were there, that didn’t happen to them, either. The laws now in New South Wales by the government, because it’s the state law, but it’s not really that much different, have changed. So that’s exactly what would happen now, individuals would be fined and so would the union. And so, I guess what your point about this needing to change I agree with. How to get there is another matter. I guess the first thing is I’ve been trying to say is we’ve got to talk about it, we’ve got to say, well, you know, is this the type of country we want? Is it important that workers can band together in their unions? And is this an important part of a healthy democracy, to balance out the power of those that have power? And of course, the other thing we’ve seen, and around the world, too, with the decline in union membership is a growth in inequality, and we’re now in a situation where, you know, we’ve got, you know, record inequality in Australia. And that’s also part of that. So, I don’t think that this case is a simple problem. I think it’s one that we have to talk about directly. And, you know, in terms of what the union movement does about it, there’s many options open to us, but at the moment what we’re saying is that we’ve got to put on the table what the problems are. 

Kerry O’Brien  

So, when you say as you did, that, that that some unlawful action is justified if you’re, if you’re striking against unjust laws, what you’re also saying is that if you did try to break the law in that way that you would be fined out of existence? 

Sally McManus 

Yeah, what I was saying is that industrial action in our country is, is effectively you know, criminalised. You get fined for it, you have all of this happened to you, there’s only a certain like, tiny window where you’re allowed to take so called legal industrial action. And, you know, it’s an ILO convention and international legal convention that people around the world workers should have the right to take industrial action. So, I was defending the right of people to do that, the right of workers to withdraw their labour if they feel as though they have to. And I believe that like it’s right, it’s if workers have no other option, and the only option you’ve got is to withdraw your labour, that’s something that we should be supporting as a democracy. 

Kerry O’Brien  

It’s a big, it’s a big debate to have, a big discussion to have, and I know it would become very heated very quickly given all the sides that would be involved in it. But we’re getting close to time, and I want to spend the rest of the time talking about the future workforce, the changing nature of work, and the kind of workforce requirements that we should be fashioning, should be thinking about now. I mean, when you when you look at, at the impact of the digital age already, and we know that the change that we’ve experienced so far as fast as it has been, is not likely to be anywhere near as fast as the changes we might be copying in the next 5 years, 10 years 15 or 20, which makes it very difficult to plan. So how are the unions planning under your leadership to meet the challenges of a digital workforce, say 10 years from now, 20 years from now? Should we be thinking of how we as a society are going to maintain some kind of equity or fairness in the sharing of available jobs? We know a lot of traditional jobs, white as well as blue collar have already disappeared, and more are going to. We don’t know how many jobs are going to replace them whether it will be the same number or more or less. There are many people with whose views are different right across the landscape. So, how do you plan for that? 

Sally McManus 

Well, first of all, we look at the evidence, and we listen to the experts. So, it’s a very contested area, this area about are the robots taking all the jobs? And does that mean that jobs or work is going to disappear? And there’s plenty of people out that spruiking that idea. And that if that were the facts and true, well, then there’s a whole lot of consequences that flow from it, but actually workforce participation, so the amount of people actually working prior to the pandemic was at record highs. And what we’ve seen happen as it’s more about some jobs changing and new jobs being created, that’s more of the challenge rather than sometimes I feel as though it’s a bit of scare mongering about saying that jobs are going to disappear, because they’re not. If they were to be a different matter. So, I think that this does mean that in terms of the skills of the future, they will be different ones, I think in terms of how people relate to each other and organize from the perspective of workers will be different. I’ve seen a massive experience of this during the Coronavirus where, all of a sudden, that sort of sense of being together in a workplace disappeared for so many workers, and it was replicated by technology. And so, on one hand, lots of people find that alienating and, you know, absolutely after holiday full of Zoom, you know, you really don’t want to ever look at a screen again, however, on the other hand, I’ve seen, you know, meetings or workers all around the world, and many unions have seen this all around the world that have been larger and bigger, more inclusive, more participatory than ever. And I think that the more you isolate people in their personal lives and you mix that with work, there’s going to be a need, a human need for collective connection, to be able to interact with your workmates and with other like-minded people is going to be more of a need than less of a need because if there’s less of that at work, there’ll be a need for that elsewhere. So, I think that the changes at work will have a huge, more likely to have a quite a large psychological impact that is often not talked about. I don’t mean in terms of mental health issues, I mean in terms of the way we see being at work, and what that means to work with colleagues, how we work in teams, how we how we interact, given that I think that technology is more likely to change that there’s a lot of talk about the need for different skills, soft skills, you know, people skills, empathy skills, problem solving skills, critical thinking skills, which is also pretty ironic, given the government’s wanting to cut back on our money to support people doing arts degrees. And I think that that’s true, we know that, you know, with the type of technological changes we’re seeing in workplaces, you’re not going to be doing the job in the same way. When you start your work. If you stay there for any longer than five years, that’s going to change. 

Kerry O’Brien  

Yeah, but, I mean, you are looking at a situation now where we’ve got significant skill shortages in this country and a very significant part of the reason we’ve got those skill shortages is because we are bad, we are just not very good at anticipating the skills that are that say three, four or five years ago identifying the skills we were going to need now. There’s this process in the pipeline, where, that’s taking up to five years in the TAFE, in the in the tertiary trade sector, where education sector, where it can take five years for the various state bodies to agree on the training required for a particular skill. And by the time that training has been determined to reshape a course, it’s already become obsolete. So how on earth are we going to be–? As this process gets quicker and quicker? How on earth are we going to keep up with it? 

Sally McManus 

I think it’s a slightly different issue. It’s not that we’ve chosen not to decide that we want to have a plan for where we want our skills, we’ve actually, governments have actually consciously decided, no, we’re just going to leave that to the free market, we’re not going to have a forward planning way of doing things, we are not going to as a country say, okay, we think we are going to be good at x, like let’s just say it’s, I don’t know, medical technologies, we’ve got a competitive advantage here, we are going to make sure we build the skills around, that we’ve decided part partly because of neoliberal thinking not to do that. Alongside that, we’ve guarded the TAFE system like, that’s what we’ve done. And you can’t say on one hand, or it takes a long time to do things and on the other hand, you you’ve pulled out so much funding and support for that particular area. So, I agree with you in that this is a big problem. And a lot of it’s been filled in so many ways, by different type of immigration, by temporary skilled labor as opposed to permanent migration, and that’s changed the makeup of the workforce, also the type of migration program that we’ve got in our country, too. And that’s all been because in the end, we’ve decided, let’s just leave it to the free market, in the end, it’ll all work itself out. Well, it hasn’t worked itself out. It’s much better if we do forward plan, like you say, and that we work out what we need to do as a country, and then we build the skills and the opportunities for young people around that. 

Kerry O’Brien  

So, when you talked about, about, about building for the future, the Business Council of Australia has challenged the Prime Minister to as they’ve put it, get off the fence and pick some winners in industry to actually identify up to 10 industries that, at which Australia could do extremely well, that would end could underpin our economy going into the future and our safeguard our prosperity. Do you support that? And do you actually believe? And do you actually believe that that we can ever rebuild our manufacturing base the word once was?  

Sally MacManus  

I do support what you have just described that the Business Council has put forward. The deliberate policy of governments not to pick winners clearly has not served our country well. We should be having industry plans, like we used to have, in order to plan for the future and put ourselves in the in the best position that we can. I forgot the second part of your question. 

Kerry O’Brien  

Well, that basically it was, it was really one question which is, which is whether you support the identification of those, those industries with the with the potential, but also can we, can we rebuild a healthy,  productive and bigger manufacturing base than we have actually surrendered? 

Sally McManus 

Well, seeing all of this up close and during the Coronavirus period that’s still continuing, but especially 4 months ago, was an eye opener for me essentially what happened is that, you know, is in the middle of seeing from the workers perspective in the healthcare area, as well as you know, being involved in discussions with the government, the fact that we had a serious shortage of PPE in our country, and we couldn’t, we didn’t have the facilities to be able to produce it. And a whole lot of other medical supplies, we couldn’t either. And what happened is that basically a whole lot of companies stepped up with often supportive of the unions in those areas to refashion what they were doing to be able to basically create a local manufacturing industry for those, what we needed, really quickly. So, the idea of can we do it? Of course we can do it, of course we can do it. It’s a matter of us saying that we want to do it and also saying that we’re going to back in those industries as well. Doesn’t always mean just because it’s cheaper is better. And we’ve seen what happened in the Coronavirus, you can’t always rely on international supply chain either. 

Kerry O’Brien 

Last question, Sally, you were it’s an obvious question in a way: your average CEO these days doesn’t seem to last in any job for more than 4 or 5 years. It used to be a lot longer. Your job carries lot of pressure with it, none more so than right now and into the certainly the next 12 months at least and for however long it takes us collectively to find our way out of this. I wonder, how long you give yourself as a as a kind of broad-brush thing, before you feel it’s time for somebody fresh to step in and you have any pretension to follow in the footsteps of a Bob Hawke or Simon Crane or Jenny George, Greg Combet, a Ged Kearney into parliament? 

Sally MacManus 

Yeah, it’s funny I’ve got behind me, there’s the pitches of all the previous leaders of the ACTA going right back 95 years and one guy was there for 20 years. I just think, well, how did you do that? I don’t think that you can last in that type of type of role on doing for that long. So just says that things changed a lot. Certainly, obviously didn’t have email or mobile phones and people thinking they can get 24/7. I always, for me, sort of said set myself at the beginning of this, I want to go really hard and put everything I’ve got into it for a period of time, in that period of time is probably not longer than 8 years. Now we’ve had the pandemic, I don’t know if that sort of compresses things, because you’re right in saying that is a big experience. But you know, like, like anyone, you know, you build in all the things you’ve got to build in to make sure that you’re there for the long term because you know, workers need you on your second part of the question, do I have aspirations to go into parliament? The answer is no. 

Kerry O’Brien 

As simple as that? 

Sally McManus  

As simple as that. I think, my talents, if I’ve got any, are suited to movement building, and if people can find a role for me after, after I do this, beyond birdwatching, I’d like to play a role in, you know, movement building. 

Kerry O’Brien 

Well, there are some who would say that Parliament House needs a bit of movement building in itself. What practical legacy do you want to be remembered for? 

Sally McManus 

I would like to turn around union density.  

Kerry O’Brien  

Good luck with that.  

Sally McManus  

It’s a bit hard to say, because the figures come out. You can’t sort of you know, you can’t, you know inflate things. 

Kerry O’Brien  

Sally McManus, thank you very much. Thank you for being part of this conversation. 

Sally McManus  

Thank you.