A star is born at the 1983 economic summit
As business and union leaders prepare for next month’s economic summit in Canberra, revisit the historic 1983 summit through an extract from an unpublished biography of former ACTU Secretary Bill Kelty.*
DURING the [1983 election] campaign, [Labor leader Bob] Hawke had promised to hold a national economic summit within weeks of being elected where he would bring together traditional foes to thrash out a consensus behind the government’s economic plan. Critical to the success of the summit would be to secure a binding public commitment from the ACTU to the principles of the Accord, especially wage restraint. The Accord had been devised by the ALP and unions with no input from the business community, and the task was now to bring business on board as well.
The opening day of the summit was set for 11 April, five weeks after the election, in the House of Representatives chamber, 10 days before the new government was due to take its seats on the Treasury benches for the first time. Before the event, cynics dismissed it as nothing more than a talkfest — and it was. It was also brilliantly effective political theatre.
Writing in The Age on the morning the summit opened, [Bill] Kelty said the ACTU hoped it would result in an open government approach to economic management and develop “the maximum degree of consensus” about the nation’s economic direction. The words might as well have been written by Hawke’s staff. “The linchpin of the ACTU approach to the summit will be the Accord between the government and the ACTU,” Kelty wrote. “The trade union movement is committed to ensure that the prices and incomes policy is implemented in the most constructive manner.”¹ The message Kelty wanted to convey to the nation, through the stagemanaged forum of the summit, was that the unions could be “an agent for moderation and not extremity”, but that business also had to be part of the solution by not pushing up prices.
Ninety-eight delegates and 19 observers — plus an army of bureaucrats, advisers, and media — descended on Parliament House for the week-long summit, including the state premiers and the cream of Australian business, like Sir Peter Abeles (TNT), Brian Loton (BHP), Sir Arvi Parbo (WMC), and Sir Roderick Carnegie (CRA). Seemingly the only person not invited was the new Leader of the Opposition, Andrew Peacock, who was on the other side of the country in Perth. Maverick Western Australian Liberal MP Wilson Tuckey, on the other hand, gatecrashed the opening by using his parliamentary pass to get onto the floor of the chamber.
The ACTU delegation of 31 had been assigned a block of seats where normally government backbenchers would be placed. All of the Executive were present — even Norm Gallagher from the BLF, fresh from a short stint in prison for contempt of court. As the delegates took their seats in the green leather and oak chamber on the first day, there was barely a woman among them. Jan Marsh, the ACTU researcher who had done so much work writing the Accord, stood out in a pale blue dress among the sea of grey hair and grey suits. In the row in front of her, flanked by Cliff Dolan and Charlie Fitzgibbon, sat Bill Kelty, head down and seemingly pre-occupied by the notes in front of him, oblivious to the nervous bonhomie all around him. In fact, Kelty was still putting the final touches to the speech he would deliver that afternoon.
Bob Hawke opened proceedings at 9.45am, with his now familiar refrain that Australia was facing a crisis like none since John Curtin had confronted the Japanese would-be invaders in 1942, and the political class had to show leadership and pull together to guide the economy to safety. But beyond the rhetoric, he indicated that the outcome he desired was a broad commitment to a wages and prices policy to promote employment and economic recovery. After Hawke came speeches from NSW Premier Neville Wran, business representatives and Cliff Dolan from the ACTU, who, with a generally pessimistic overview, gave a quiet, unruffled commitment to restraint and responsibility.
Straight after lunch, Paul Keating took the podium with a sombre analysis of the economy and the budget which still committed the government to its election promise of creating 500,000 new jobs within three years. But to get there would require almost unprecedented restraint to cap wages growth at three per cent or less, Keating said.
Now, all eyes turned to the speaker after Keating, Bill Kelty. If Kelty was still a relative unknown before the summit, that afternoon he announced his arrival as a significant new figure on the national stage.
Kelty had still been writing his speech as the summit opened and completed it just an hour before he presented it. It was plain-speaking but it made his audience sit up and take notice, because they had never before heard a union leader speak so directly about the economic challenges faced by the nation.
In his flat monotone, Kelty left the other delegates in no doubt about the ACTU’s commitment to the wage restraint promised in the Accord, which could start immediately if the government commenced implementing the social wage parts of the package. His was a message of conciliation and reasonableness.
Unions were not “ideological lemmings” and accepted that companies had to make higher profits to employ more people, Kelty told the summit.
“We accept that seeking the achievement of lower rates of inflation and higher levels of employment will involve moderation of wage demands,” he said. “However, the moderation in wage demands will in turn substantially depend upon reduction in cost pressures that are faced by employees.” An inflation first policy that increased unemployment would be “a policy of despair and defeat”.
The bottom line, Kelty said, was a return to a centralised wage-fixing system with cost of living adjustments in the context of the Accord. “Frankly, without a commitment to such a centralised-wage fixing system, there can be no agreement,” he told the hushed audience. “It is the only system which provides the basis for equity in wage fixing.” He said if centralised wage fixing was restored, sectional interests would need to be suppressed, and unions were prepared to further discount their wage claims to pay for the introduction of Medicare.
In addition to the commitment to wage restraint, Kelty also opened the door to unions accepting an increase in income tax to help tackle the Budget deficit.
“We accept that tax indexation may not be able to be implemented. We have indicated our preparedness to accept that reality if there is a concerted attack on employment . . . The employed are likely to be required to pay increased real taxation so as to increase employment and to satisfy the commitments of the employed, to the poor, the disadvantaged, the aged and the unemployed.”
But, lest he be seen as an apologist to the business community, Kelty also reiterated the central premise of unionism: “An acceptance by the trade union movement in this country of the belief in the market, left unfettered, should determine wage rates would represent an abandonment of our fundamental beliefs and an acceptance that the value of trade unionism, as we know it, will be destroyed.”²
The next speaker after Kelty, businessman Sir Roderick Carnegie, could hardly restrain himself in his praise for the young union leader, but then delivered a brickbat by opposing not only the Accord and centralised wage fixing but also the arbitration system itself. However, when the first day of the summit finished at 4.45pm, it was to Kelty that journalists flocked. He quietly demurred any interviews, while Hawke light-heartedly told journalists: “the sorcerer is very proud of his apprentice”.³
The next morning’s newspaper headlines were dominated by the ACTU’s “olive branch”. ‘Apprentice delivers for the sorcerer’, ran one headline in The Age. ‘Kelty takes the honours’, said Melbourne’s Sun News-Pictorial.
“It was the speech of a new leader,” the political historian Paul Kelly, who was covering the summit for The Sydney Morning Herald, would write. “A baby-faced, prematurely grey-haired midget who riveted his audience, offering economic analysis in a whining nasal tone, supremely confident of his authority within unions and aware of his intellectual dominance of employers.”⁴
After four days of debate and discussion in the stuffy House of Representatives chamber, the 200 delegates to the summit agreed to a final communiqué. The communiqué almost entirely fitted with Hawke and the ACTU’s desired agenda.
After Kelty’s olive branch on the first day, the young federal secretary of the Storemen and Packers and ACTU vice-president, Simon Crean, had delivered a veiled threat the following day that if centralised wage indexation was not guaranteed, there would be a return to the anarchic industrial relations environment of 1981 and 1982. The good cop/bad cop approach worked.
The final communiqué was endorsed by every delegate bar one — Queensland Premier Joh Bjelke-Petersen. Effectively a mandate for the new government, it was a blueprint which endorsed an economic recovery program consisting of an economic stimulus, wage restraint and higher taxes if necessary. The stamp of the Kelty-led ACTU was all over it. Such was the irresistible force of the union movement’s united face, that at the last minute, in a speech to close summit, the chairman of TNT, Sir Peter Abeles, virtually begged for the Accord to be widened to be a tripartite package including employers. With the official business over, the summiteers posed for a photograph on the steps of Parliament and then headed back home.
In contrast to the unity and resolve from the union movement, the business and employer side of the chamber had been a rabble, with no central purpose and discordant views being expressed by different people. Business had been outsmarted and the firm partnership between Labor and the ACTU had been cemented. The fall-out for the business community would be the establishment of a new peak employer organisation, the Business Council of Australia.
The summit was a triumph for Hawke, proof that his consensus approach worked, and seemed to confirm him as a modern day Messiah. But the other great winner was Bill Kelty, who had towered over ACTU president Cliff Dolan and other union leaders all week. Kelty left the summit with a new-found reputation as a powerbroker.
Hawke was eternally grateful for the role Kelty played during the sensitive early days of the Accord, not only in managing the union movement, but in managing employers.
“Bill was knocking back employers in particular industries who were offering him higher wages,” said Bob Hawke. “He said no, it is not the way to go, we have got to adhere to the Accord, and that was a pretty dangerous route for him to follow and dangerous for those he was persuading to go along with him . . . Bill was crucial in keeping the integrity of the argument before people. He did an enormous job; the Accord couldn’t have worked without him.”⁵
The theatrics over, the hard work began to implement the government’s agenda and to deliver on the commitment to tackle unemployment and inflation simultaneously. The newly-formed Economic Planning Advisory Council would play a key role by providing input from unions and business into the prices and incomes policy.
But even before the ink was dry, ominous signs emerged that for the ACTU at least, the path forward would not always be easy as building unions ramped up a campaign for higher wages and shorter hours, seemingly in defiance of the Accord. “Hawke is no longer ACTU president and shouldn’t dictate to us,” said the Western Australian secretary of the Builders Labourers Federation, Kevin Reynolds.⁶ This was to be a test of the authority of the ACTU that would come to a head in the following years.
¹ ‘ACTU: positive attitude at talks’, The Age, 11 April 1983
² Kelly, The End of Certainty, loc. cit., pp. 66–7
³ ‘Unions’ olive branch’, The Australian Financial Review, 12 April 1983
⁴ Kelly, op. cit., p. 66
⁵ Bob Hawke interview with Iola Matthews, 1999
⁶ ‘Hawke hits BLF to save new accord’, The Weekend Australian, 16–17 April 1983
From Union Man, an unpublished biography of Bill Kelty written and researched by Mark Phillips.
