(1990) Economic Directions in the 1990s: Japanese-Australian Dialogue

Speech given at a conference of the Australia-Japan Economic Institute (AJEI) in August 1990, edited from the transcript published in AJEI Conference Proceedings, AJEI, Canberra, 1990, pp. 67–73.

Thank you for this in­vitation to talk about a few ideas. In looking at Japan, in looking at the experience of the Japanese economy and the industrial relations system of Japan, it is interesting for an Australian trade union official to think about ‘how did Japan achieve the economic successes that it has over the last three decades?’ and ‘what lessons there might be there that are applicable to Australia?’

In thinking about the various interpretations that are offered about the nature and resilience of the Japanese economy, it is a bit like seeing Kurosawa’s Rashomon movie. For those who have not seen that film, it is about an event in a forest where there are various interpretations of the single event and each of them are consistent internally and each of them describe what might have occurred: whether the woman actually escaped into the forest, whether she went there to find her lover, whether she was killed, whether she was raped. Each of the in­terpretations seem logically consistent. Per­haps, to some degree, that is one of the impressions that I take away for my understanding of how Japan has been able to achieve its economic success. There is no one interpretation.

One definite thing that one can say about the Japanese experience is that it has been learnt. I think there is a view amongst most people in Australia that Japan has achieved a wonderful economic miracle and that this somehow became a product of Japanese culture that emerged from the mist of this inscrutable Japanese society. This is a viewpoint laden with a definite perspective on how this came about, and an implicit assumption that it is not possible to replicate in another country.

I am sceptical of that interpretation, however, partly because of my understanding of Japanese history after World War II, plus my un­derstanding of industrial relations in Japan in the 1950s and for much of the early period of the 1960s. This period was very much conflict ridden, with an industrial relations system that was not spoken as if it were some sort of model for the rest of the world. What occurred in Japan is that the Japanese invented their own system of handling disputes, which is partly relevant to Japanese culture, but is also an answer to the sorts of problems that Anglo-Saxon societies face – including Australia, Britain and New Zealand.

There are some lessons to be understood and those lessons relate to the Japanese attainment arising from the poor industrial relations practices of the fifties and sixties and the over­coming many of those experiences. I think that is something relevant to the reform of the Australian industrial relations culture.

A second observation concerning Japanese industrial relations experience is that in Great Britain features of Japanese management now is significantly, though largely indirectly, impacting on the British industrial relations culture. This is very largely due to the Electri­cal, Electronic, Telecommunications and Plumbing Union (EETPU) deciding to lead the way in Great Britain in the late 1970s with a single union agreement and with ‘no strike’ clauses in the agreement.

That largely arose as a result of Toshiba having a plant in Great Britain – which was to be closed down. The electricians’ union gambled on a single union agreement, no strikes, and a minor revolution oc­curred in British industrial rela­tions springing from that event in 1976-77.

In Australia too I believe there are many valuable lessons to be appreciated from some of the joint ventures that have occurred. Industrial relations in the automobile industry is a case to be looked at. The Chrysler/Mitsubishi operation in Adelaide is an example of relatively good industrial relations compared to the rest of the industry.

It is interesting to note that in Great Britain the EETPU had one of its national organisers, Roy Saunderson, spend a considerable amount of time in Japan. He drummed up business with the Japanese industrial conglomerates, saying ‘if you wish to invest in Britain’ – this was prior to 1992 – ‘we are the union to deal with’. Saunderson is vitally involved in the process of understanding the Japanese and pitching for investment in the UK – with a receptive, friendly union at the other end.

A third observation is it seems that in this country most people in leading positions in industry, government and trade unions preachily comment about the need for investment in Australian industry. I heard overnight an observation that when Japanese investors are asked to invest in Australia that is all very well. Perhaps one response from the Japanese side might be, ‘well, we will invest in Australian manufacturing industry when Australia decides to invest in its industry’. That is relevant to the points made in previous contributions today concerning the task of making sure that macro-economic policy is right and that bringing the Australian inflation rate down is a major contribution to improving the basic parameters for investment in in­dustry – together with the micro-economic reform issues that Tony Berg [of Macquarie Bank] spoke about. Nonetheless, I think that looking at investment, there is very much a feeling in the trade union movement of support for more invest­ment in Australian industry such that if offshore investors decided to locate new plants or develop existing plants there is more of a view on the part of the union movement to work out the single union agreement and work out a fairly fresh approach on greenfield sites. That is an important area of the Australia-Japan economic relationship that should develop in the rest of the 1990s.

The fourth point is the issue of im­migration. I know that immigration has become a very touchy issue in Australia, partly to do with the Multi-function Polis. It seems to me to be an incredible irony that whenever Australian delega­tions and ministers, whether it be from New South Wales, Victoria or the Commonwealth, visited Japan throughout most of the 1970s and 80s, the argument has been put forward that we need more investment in productive enterprises in Australia, that investment largely limited to the real estate market is a problem for Australia, in that we want investment along a much broader base. Yet when the idea of the Multi-function Polis is put forward there is an immediate reaction of suspicion about ‘what they are up to’ on the part of many ill-in­formed people in Australia.

But that is not the point to make about im­migration. I actually suspect that there are many younger people in Japan who might favour the op­portunity of spending some time in Australia. Despite some arguments that have been put forward in the past that Japanese do not migrate, it is probable that some younger Japanese would be prepared to migrate to Australia. In doing so, they would provide some sort of base to encourage further in­vestment in this country from Japan in manufac­turing and many other industries. Therefore, it ought to be a policy of government, in terms of handling our im­migration programme, not simply to regard the task of immigration policy as the design a rule book with immigration clerks sitting behind desks waiting for people to make applications. There might be some role in encouraging immigration from some key parts of the world, this being one example.

So the point is that the union movement in Australia is increasingly reflecting on the Japanese ex­perience, thinking about what are the lessons to be applied from the industrial and economic miracle that has occurred over the last 30 years. That consideration is very much enhanced by the range of regular contact now between the Australian trade union movement and the unions in Japan. In the past it used to be the case that the Miners’ Federation and few other unions would tend to take an interest in Japan. That interest is now broader. The ACTU now co-ordinates two or three major visits by senior union leaders to Japan each year and the Japanese are very much in­volved in our immediate region of the South Pacific in encouraging much more regular contact between the union movement of the various Pacific countries and Japan. When I was in Fiji a month ago, I met up with some people from the Japanese Institute of Labor (JIL) who men­tioned that over the last two years there have been 112 unionists from the Pacific Islands who have gone over to Japan – which struck me as both extensive and quite surprising because the union movement barely exists in many of those Pacific countries.

One thing that that is interesting at the moment is how the Australian labor move­ment might learn more from the Japanese in­dustrial relations climate and, on our part, encourage more of an understanding of how Japan operates and, on the Japanese side, a deeper understanding of how Australian industry operates, in order to facilitate greater in­vestment. I know that the Federated Iron Workers’ Association (FIA) is currently contemplating employing someone from Japan, on an initial 3-6 months basis, in order for that person to develop a familiarity with the Australian industrial relations scene, so that that person might go back to Japan and promote Australian industry, demonstrating that the FIA is an organisation with whom you can do business. In other words learning from some of that experience men­tioned earlier concerning the EETPU in Great Britain.

With respect to reforms within the Australian union movement it is noteworthy, first of all, that the union movement now is very much determined to quicken the pace and change in terms of union rationalisation. That is certainly the view at the top, especially the perspective of Bill Kelty. There will be a special ACTU executive meeting in October on the 15^th and 16^th to finalise the process of rationalisation and Kelty and the ACTU leadership are now putting forward the idea that in every industry there ought to be determined the principal union and other unions. In other words, in future a bargaining unit at the industry level and the enterprise level will be very much determined by the principal union. The pur­pose of the rationalisation proposal, currently up for debate, is to minimise the problems we have with the multiplicity of unions. Even if all the amalgamations were to succeed we would still have 4, 5, 6 unions at most enterprises in manufacturing industry. To answer that problem the ACTU is now proposing that there be a single bargaining unit for the purpose of negotiation. This is currently the direction in which the ACTU is moving – setting up a brand new system with a single bargaining unit at the industry and the enterprise level. That is a revolution in industrial relations reform that the ACTU is advancing.

Related to this is that enterprise negotiations are increasingly a way of life in Australia. There are 15,000 individual awards or agreements registered by the various industrial tribunals that specifically relate to a single company or enterprise. So, increasingly, enterprise negotia­tions are a fact of life in Australian industry. The debate is very often what should be the rules of the game in determining such agreements and whether the particular agreement itself is appropriate and, generally, what they might contain. There is nothing inconsistent in the approach cur­rently being adopted by the ACTU concerning the rationalising the union movement and, as well, encouraging more of an enterprise focus.

I would also say, however, that I have my own views about the pace of change necessary and some of the details of the ACTU proposal. I will be developing those in the lead up to that special executive meeting in October.

If one looks at Japan, one of the largest unions there is the union that covers the tobacco, clothing, textile and some retail workers. It is a single union and it actually is a union that provides a service to enterprise-based organisations that are in effect part of a federa­tion which is the union. So the union actually provides a service at the enterprise level to assist the employees at that level to negotiate enterprise agreements. In Japan there are unions that straddle a wide range of areas, not quite an industry union. The union in question is the largest union in certain industries and significant in retail.  That model is worth contemplating.

Where there are some differences and arguments to be resolved in the ACTU relate to what is important in the emphasis in the enterprise as against the industry and how do they inter-relate. This is what is being debated. My personal view is to favour a single enterprise bargaining unit and for that unit to be serviced by the principal union in that bargaining unit. It does not matter so much that there are a number of unions at the enterprise, so long as the single bargaining unit operates and an employer is only dealing with one organisation rather than 7, 8, 10, or 20. Therefore developing an enterprise bargaining unit is the key to the union restructuring.

In summary, Mr Chairman, there are many things to be said about the Australian trade union movement and our understanding and interpretation of a relationship with Japan. 

Japan is in many respects seen as a role model and example of a successful economy. An economy that has seemed to have contained industrial disputation, promoted productivity, reduced inflation – particularly if one compares our experience with the oil crisis of 1973-74 and that of Japan’s. In the fifteen years since then, our level of inflation has been considerably higher, an average of about 9.5 percent. There are many things that the Australian union movement can learn from the Japanese.

As I mentioned earlier there are various interpretations, hence the Rashomon movie analogy, but there are some things that we might be able to do in the trade union movement. Particularly, this includes learning that the Japanese experience is not something that strangely emer­ged from the mist of Japanese culture. It is some­thing that has been developed out of the industrial and economic experiences of the ’50s and ’60s, and therefore it is worth pondering the transferability, and differences, associated with the fact that you can over­come adversity, you can learn to improve. This is very much the major lesson that Australia can take from Japan.

Postscript (2015)

I grew interested in Japan, especially after travelling there for the first time in 1988 and joining the board of the Australia Japan Foundation (AJF).

It appealed to think about the societal (including union) differences between both countries and what, if anything, we could learn from each other. As some of what I wrote subsequently indicates, I admired the adjustments made in Japan as a result of the oil and associated economic shocks in 1973/74.

Perhaps Australia’s comparable moment, in reflecting on and making choices for how we operate as a nation, was what we were in the middle of in 1990.

Professor Peter Drysdale (1938- ) was always respectful of my role and activities as a member of the board of the AJF (which ended in mid-1994, after I left the Labor Council of NSW.)

Years later, when Professor Ross Garnaut resigned as a Professor at the Australian National University (to take up a new role at Melbourne University), Peter publicly welcomed me at a farewell function, saying I was a former Secretary of the Labor Council and past Treasurer of NSW. Ahuh. Sometimes I got confused with Mike Egan (the former Treasurer of NSW). We both wore glasses and had wavy hair.