Under conditions of a rapidly developing global economic crisis, attacks on living standards and escalating class struggles, New Zealand’s Labour-led government has introduced new industrial legislation in parliament designed to bolster unions as policemen of the working class.
The so-called “Fair Pay Agreements” (FPA) framework formed the cornerstone of Labor industrial policy during the 2017 election, but it is only now being introduced. The Labor Party was hobbled in its first term due to opposition from its coalition partner, the right-wing populist NZ First. The bill finally passed its first reading on April 5 with Labour, Greens and the Maori Party in favour, and the opposition National and ACT parties against.
The legislation will establish a tripartite system in which unions, employers and the state will decide what are “fair” minimum wage rates and conditions for an entire profession or sector.
Labor says the FPA system will empower workers and improve wages and conditions by preventing employers from competing with each other by lowering wages. In effect, the legislation will establish a corporatist employer-union-government wage-setting framework while further restricting the right to strike.
The law will entrench low wages in entire industries, enforced by draconian legislation and unions. These pro-capitalist organizations, which have worked for decades with corporations and governments to impose below-inflation deals, are being further strengthened and integrated into state structures.
At present, unions can only negotiate collective agreements covering their members in individual companies and, in some cases, between several employers. Under the new law, if a union persuades 10% or 1,000 members of a particular workforce (e.g. cleaners or fast food workers) to sue a CCP, then the union can bargain a national CCP for the entire profession. The reach of unions will be extended to potentially tens of thousands of workers who are not unionized.
When workers are presented with an FPA proposal that removes their wages and conditions, they will be prohibited from striking against it: strikes will be illegal during FPA negotiations. This is in addition to the draconian provisions of the Labor Relations Act, passed by the Labor-Alliance government led by Helen Clark in 2000, which already makes strikes illegal, except when collective agreements are renegotiated or for reasons health and safety.
Presenting the Bill to Parliament, Labor Relations Minister Michael Wood said it would help ‘essential workers’ such as supermarket workers, ‘who have done so much to get our country through Covid but who have been left behind by a “race to the bottom of the labor market.
Wood, however, reassured the business elite by emphasizing that “no strikes are allowed” while the Fisheries Framework Agreements are being decided. He stressed that the measure would lead to improved productivity through “collaboration, innovation and investment”. Sectoral bargaining, he noted, is common in “many successful economies.” The central objective is to defend capitalism through mechanisms to lift the exploitation of workers and increase profits.
The FPAs were designed by a task force led by former National Party Premier Jim Bolger. As prime minister from 1990 to 1997, Bolger deepened a sweeping assault on the working class, begun by his Labor predecessors, that sharply increased poverty and inequality.
While opposition parties and organizations such as Business NZ view FPAs as wasteful and inflationary, Bolger, one of the most far-sighted representatives of the capitalist class, has expressed concern about the historic decline of trade unions, and thus the their diminished ability to control the working class.
Bolger told TVNZ Q+A last November that “obscene inequality” is pushing societies toward revolution. He said that while the National Employment Contracts Act 1991 (ECA) was key to ending industrial action “debilitating the country”, union density was now below what was “healthy”, unions ” probably too small now to have the influence they should have”. ”
The ECA reduced legislative support for unions and led to a dramatic drop in multi-employer collective agreements and union membership. “Flexible” work practices were introduced, along with individual agreements, contracts, performance pay and the complete elimination of overtime and penalties. The onslaught was encouraged by the union bureaucracy, then controlled by the Stalinist Socialist Unity Party, which suppressed widespread opposition and working class demands for a general strike.
The New Zealand Council of Trade Unions (CTU) actively promotes FPA legislation. CTU President Richard Wagstaff reiterated that the strikes, which are at an all-time low, will not be revived under the FPA. “There is no prospect, no prospect of industrial action from this,” he said. Employers, Wagstaff told the Dominion Post in 2018, “can plan to increase their productivity in the medium and long term”.
A key role is played by pseudo-left organizations. Union Unite, co-founded by former Socialist Action League leader Mike Treen and linked to socialist group Aotearoa, is promoting a CTU “Speak Up Sunday” event on May Day, to “make it clear how FPAs are important”. Unite encourages its members to submit proposals to the parliamentary select committee and distribute “a short video selfie to show your support”.
The unions, which are deeply discredited after decades of pro-corporate betrayal, are being pushed forward to impose the widespread assault on living standards. This month, the Reserve Bank (RBNZ) raised the policy rate by 50 basis points to 1.5%, the biggest hike since May 2000. The RBNZ warned that “inflation is higher than the target and employment is above its maximum sustainable level.
ANZ Bank economist Sharon Zollner described the “wall of inflation” as “completely inflexible” and said the RBNZ could not afford a “soft-soft approach”. Inflation is at its highest level in 30 years at 6.9% and is expected to reach 7.5% by the middle of the year. Fixed mortgage rates are expected to reach 6% in the coming months. the New Zealand Herald said the job market has gone “from sizzling to bright red,” indicating nervousness in ruling circles over an impending wage push by health care workers, teachers and others.
Policies pursued internationally by governments of all stripes, especially since the financial crash of 2008, have seen trillions of dollars printed to bail out the wealthy. These developments have been exacerbated by the COVID pandemic and the US-NATO proxy war against Russia. The ruling class is determined to make the working class pay for bailouts and the rising costs of war.
In response, an explosive growth of class struggle erupts internationally, involving direct confrontation between radicalized workers against the state and corporate unions. In New Zealand, 10,000 Allied New Zealand healthcare workers have voted to strike again after a previous strike was called off by the Civil Service Association when the Industrial Court ruled it illegal.
In Australia, tens of thousands of nurses across New South Wales walked off the job for the second time this month due to chronic understaffing and unsafe conditions, made worse by COVID. The striking nurses challenged the NSW Industrial Relations Commission which banned industrial action.
Workers who engage in anti-austerity struggles can only advance in a political struggle against the Labor government and the unions – organizations that represent the interests of a narrow, well-heeled bureaucracy that supports New Zealand capitalism. . Workers must form rank-and-file committees in every workplace as a means of breaking the shackles of the unions and advancing their own class demands. This is inseparable from the struggle for a workers’ government and the socialist reorganization of society.