Australia’s weird new Federal Budget that advocates rapid wages growth: a quick critical note on the commentary

Here, Greg Jericho joins with other mainstream economists in agreeing with the lead analysis of Jim Stanford’s Centre for Future Work, that LNP government’s Budget expectation (requirement) for wages growth is not happening and shows no prospect of happening.

Again the usual high quality info from Greg. But this time, the analysis about why and what might be done is quite shallow, even absent.

Greg’s statistical causation focuses on underemployment. There are other deep factors at play than competing statistical tendencies.  But what establishes and further enables underemployment, and what is its connection to unemployment?

Another deep factor in keeping wages low is the Fair Work Act 2009 systemic, repressive scheme of penalties against workers who seek to exercise their SOLIDARITY power to improve their wages or to improve their job security. The Turnbull government’s only major change to Labor’s own version of this anti worker, anti solidarity wage and conditions fixing regime in the FWA is the harsher penalties against construction workers, including their extension to workers and their unions who do work in association with construction.

This is because Labor’s regime for bargaining and national wage fixing is working perfectly well for employers, not workers, as it was designed to do. This is one of the essential planks of neoliberalism, or Labor’s “neolaborism”, that is not going away … yet.

It beggars belief that this government, and arguably an alternative Labor government, will change the FWA so that workers can help solve their weird wages problem in the macro economy.

The other factor in keeping wages low is the union movement’s failure, so far, to develop a significant strategy that will genuinely restore worker’s right to strike and other forms of collective action, that will include rights to deal with international competition on wages etc., include climate change transition as a bargaining issue, and put worker solidarity back into both minimum legal rights and the development of society.

Mixed up in all of this is the “little matter” of profits. The discussion about profits, or its absence, in Australia is pathetic. Not just the volume of profit, but also what profit is, the exploitation of humans and nature upon which it depends, and profit in relation to total investment, that is the combination of investment in machines, hardware, software development, etc and the workers who bring all of that to life through their labour. We cannot understand the significance of the “wages problem” without grappling with profits and investment. Traditionally, Keynesians are not very good at that. So, we turn instead to our potential as union activists to do it properly?

Posted in Federal Budget, Neoliberal capitalism, Precarious Work, Wages

Why and how the Fair Work Commission’s cuts to Sunday penalty rates can be defeated.

by Don Sutherland, 25/2/17

Last week Australia’s industrial “umpire”, the Fair Work Commission, legalized a big cut to penalty rates for Sunday work for Australia’s lowest paid and most vulnerable workers in precarious work. (Click here and click here for the official summary of the decision.) Implementing the cuts is not compulsory. Anyone who thinks neoliberalism is dying needs to take a deep breath and step into the real world.

Like many others across the union movement and beyond I am very angry on several counts with this decision. Above all it does great harm to the lives of thousands of workers (click here for example), even though it will increase the take home profit of their employers.

There is a lot of material being posted in both mainstream media and in many sources across social media about why this decision is bad, some of it before the decision was handed down and of course a lot since. This article does not add to that.

Rather I focus on ideas about how the workers and union movement can respond.

How should the workers’ movement respond?

In my view not just with anger, but with a widely, deeply discussed and developed strategy to win the reversal of the decision or to prevent its actual implementation.

I am against a “strategy” based on immediate anger that sets our movement up for an urgent, satisfying day out and another “glorious defeat”. And I am also against a defeatist walk into the arms of the ALP as the heroic solution.

Rationale for a strategy

This Full Bench decision of the Fair Work Commission (FWC) comes out of an Award review that is required by the Fair Work Act (FWA). The Award review is very much an industrial relations club exercise. The FWA review involves either union peak bodies or employer peak bodies putting to the FWC ways in which Awards should be changed, with the capacity for others, especially governments and political parties, to join in. The parties present their claims and counter claims, then provide evidence in an increasingly judicial process that involves “expert” research and / or witnesses. There is not much industrial organising that goes on in support of union claims or counter claims these days.

In this current review all Awards are under the microscope. The focus in these particular Awards for workers in hospitality, pharmacy, fast foods has been on their penalty rates, especially the penalty rate paid for working on Sunday.

Employers in the industry and beyond have over several years invested big money and resources to convince the FWC to agree to cut penalty rates for Sunday work. They have been supported by the Murdoch press, a big posse of commentators from right wing think tanks, and all major employer organisations. The union movement has been the major source of opposition. Originally, employers wanted cuts to all penalty rates but decided for a strategic reason to focus on Sundays. Do not doubt that their “victory” last week to get Sunday rates cut is a foundation for a renewed assault at some time in the future for further cuts into both Sunday and Saturday rates and public holiday rates.

While the employers were investing big in their own way to achieve their victory, the workers’ effort – mainly through their unions – was valiant and well-intentioned but puny in comparison. It was entirely defensive, and accepted the rules of the Commission and the Fair Work Act.

The employer strategy successfully used prominent Labor politicians, some of them willingly, and ex politicians (most notably perhaps Martin Ferguson, formerly a President of the Australian Council of Trade Unions).

The employer strategy relied very much on today’s working class  historic memory loss  about what an Award actually is. Nothing significant has been done by unions to counter this with worker education. Australian unions, generally, have opted to devote most resources to enterprise agreements as the vehicle to protect and improve wages and conditions.

Remember, the employers originated and escalated this war on living standards, not the Fair Work Commission.

This very bad outcome is a reflection of the current balance of power between Australia’s 21st century capitalist class relative to that of the working class.

That is the situation that our strategy must change.

A working class based approach to our strategy

Can we build a strategy, loaded with mindful militancy, that can reverse this decision and also the whole current momentum against working people? (Facilitated in the bosses’ favour by the Fair Work Act, e.g. lockouts, agreement cancellations, and the new Building Industry Code to be enforced by the construction industry’s own industrial police force against construction workers and their unions.)

Of course we can. Here are some ideas.

The first big strategic decision for all union leaders no matter what level of the union movement we are active in: should we leave the reversing or whatever of the decision to heroic leaders, those at the “top” of the union movement and especially those in the ALP and the Greens in the parliament? Will calls to the government for the government to change the statute re-build our numbers and our power?

Or, should we return en masse to a conviction that the workers in these industries, and their brothers and sisters in others, can grow together as a socio-political force to reverse the decision themselves through their own industrial and political action?

The union movement at all levels must, absolutely MUST, embrace this second approach. Why? Because we must see workers of the twenty first century as capable of learning to struggle for their objectives not as objects whose conditions of existence are decided for them by elites, well-meaning or otherwise?)

That still means lots of education work and lots of communication that is educational (not cheap slogans or cute and clever memes,) leading to days of action on carefully selected dates. Days of action can be seen as the building blocks to more serious forms of action, including a national strike that can decide the struggle in favour of the workers.

Industrial strategy leading the way

The Commission is now waiting for submissions from the parties about the timing and process for phasing in the new reduced rates. Depending on each award, the critical dates seem to be in late March and early May.

After that the Commission will set dates for the start of the new reduced rates, probably later this year.

So, for example, this year these union / workers days of action might be 2-3 days before or on the day of the “submissions” hearing and then again 3 days before the start date.

Remember, employers can chose not to reduce rates. Embedded in these days of action there must be a workplace, public, social and political demand that each individual employer NOT implement the decision, but infused also with basic education and learning about “what is an Award”, “who are the employers”, “what is their strategy”, and “what is the Commission”. (Of course, many employers will try to “stay sweet” with their workers by telling them that it’s not their fault and they have no choice but to implement it.)

To the extent that it is necessary, a secondary level of campaigning in these 2 periods might help reinforce worker pressure on MP’s to come out at a local level to urge local employers not to implement the decision.

How long will it take to win – the trajectory for winning?

The second big strategic decision is a notional time frame that this campaign will take 2 to 5 years to win. It would be nice to win sooner but expectation that we can – in my view – misjudges the power of those who want this decision against the current power of those of us who oppose it.

We need time for education work and union growth organising to build the power to win. We do not have it right now, just the same as the employers did not have enough power to win their objective in 2007. The employers have understood strategy much better than us and have been ruthless enough against working people and their unions to stick to their strategy and be flexible in applying it.

We have to be every bit as cold and calculating as they have been and more.

Therefore, these days of action MUST be educational and  must be seen as building blocks to very big and powerful actions in the future that will be more decisive.

Our strategy will have to escalate over that 2-5 year period in the spread and depth of awareness among the workers immediately affected and those who will experience the flow on effects of it.

A strategy of this type must culminate with the consequence of economic pain for the employers who wanted this decision and who decide to implement it.

The next award review will be in 4 years or so, possibly less. That is the moment for the first “really big culmination” of our strategy in which employers can face the prospect of real economic consequences for their actions.

Within it there is the opportunity for the union movement to actively regrow from within the 21 st century working class, basing that on education-driven organising of both union members and potential members.

This decision to cut penalty rates is one element of ruling class momentum against all workers … the whole of the working class.

We can add to that the employers threat to re-locate operations to off shore low wage havens, use of lock outs during bargaining, demand for major concessions in enterprise agreements, and refusing to bargain for any improvements about job security or wages or safety, employer applications to cancel agreements and drive their workers back to the minimum wages and conditions in Awards, penal powers against any workers who take industrial action that is not approved by the FWC, and the government’s new Building Industry Code policed by the building industry commission. This is a considerable array of power for employers that is facilitated by the Fair Work Act.

Penalty Rates Plus

Genuine working class power can be built to demand at the next Award review and even before not just the restoration of current penalty rates but also a significant increase in the minimum Award rate, and automatic casual conversion after 3 months for those who want it.

These issues are relevant to all other Awards as well. We are talking about common, multi industry actions to take on common big employment problems.

This will be a campaign for all workers because the huge gap between award rates and union negotiated agreement rates is contrary to the fundamental rationale for unionism, and should not be acceptable to any unionist.

The focus of the whole movement must turn steadily (although not absolutely) to AWARDS and away from enterprise agreements.

Finally, this “ordinarily people” rooted strategy will require that the Fair Work Act (including its penal powers against workers) be defied, and probably broken, and ultimately genuinely re-written for workers’ benefit.

That’s not a reason not to do it but it is a reason for a lot of educational work in preparation.


Posted in Uncategorized

Why Trump Won–And What’s Next (print)

Jack Rasmus

The following is my follow up article, soon published, analyzing the Trump election win and its consequences. Dr. Jack Rasmus

Why Trump Won—And What’s Next
Copyright 2016

“US real estate billionaire, Donald Trump, is president-elect. In an age when 97% of all GDP-national income gains since 2010 have accrued to the wealthiest 1%–of which Trump is one—how could American voters come to elect Trump? How could they vote for a candidate that they simultaneously were giving a ‘negative rating’ of 60% to 80%? That fundamental question will ever haunt this election.

What the election shows is that American voters in electing Trump wanted ‘anything but the above’ Obama policies of the previous eight years, policies which were just extensions of the neoliberal regime established in the 1980s in the US since Reagan. And voters didn’t care about the political warts, past or present, of Trump. They just wanted something different…

View original post 2,455 more words

Posted in Uncategorized

Australia’s Penal Powers for the 21st Century

White Australia was born as a penal colony. And throughout its history since there have been plenty of laws that fine, impose financial damages and lock up both the original inhabitants of the land and the working people of all nations who came here to make a living. Those laws swing into play whenever landowners and employers needed a government instrument to protect their profit making and wealth accumulation from the collective action of aboriginal communities and their supporters, and also combinations of workers whether members of unions or not.  (For more on this read Jack Hutson’s From Penal Colony to Penal Powers.)

This story (click here) describes how Labor’s Fair Work Act of 2009 replicates that history so that it systematically prevents workers from exercising their collective power in the twenty first century.

Some of us who have been around for a long time know very well that there is NO END to the hypocrisy of employers when it comes to the exercise of their power. Employers like Bluescope Steel, in their own right and through their associations like the AIGroup, AMMA, and the Business Council of Australia, constantly whinge about the role of outside third parties in industrial relations.For them, “outside third party interference”means unions, especially those that coordinate effective worker action across industries, and a Fair Work Commission with genuine democratic powers to ensure that workers human rights to organize and take collective action are protected.

But, they made sure, when they negotiated the Fair Work Act to replace Howard’s Workchoices in 2008-9, they kept and re-energized that extra third party power that would punish workers for exercising the only power they have – collective industrial action. And, what is more, new ALP negotiators and certain (not all) union leaders let them have it.

What we see here, as we have seen in other disputes, is the PENAL PROVISIONS OF THE TWENTY FIRST CENTURY.

The penal provisions of the 20th century were neutralized in big disputes through the 1960’s that culminated with the national strike when Tramway Union official Clarrie O’Shea was jailed for refusing to pay fines imposed by the courts because union members were taking industrial action in defiance of the so-called “bans clauses” of the day.

The industrial strategy that led to that great union and democratic victory was ten years in the making.

The Australian workers of the twenty first century need a strategy that defeats the penal powers of the twenty first century. It is all about a deeper meaning of democracy than the very limited form that too many of us are sort of comfortable with these days.

Electing a genuine reforming Labor government backed up by the Greens and genuine pro worker and democratic independents to get rid of these undemocratic industrial laws will make a difference.But this was never on the radar in recent Federal elections.

So, that will not happen unless it is part of a conscious strategy that creates a massive and independent movement of workers that makes it impossible for Labor and Green politicians to dodge their responsibilities.

Posted in Australian union movement, Common Action, Corporate behaviour, Engineering Services: metal workers- fitters, mechanics, boilermakers, electricians, techicians, TA's, labourers, Labour and union history, Solidarity

Four theses on ‘green bans’ and the contemporary right to the city


The ‘right to the city’ is back on the agenda. In Brisbane, hundreds rallied this past Saturday against rapacious development in the city’s migrant and student heavy West End. In Melbourne, houses …

Source: Four theses on ‘green bans’ and the contemporary right to the city

Posted in Uncategorized


By Warwick Neilly and Don Sutherland


If anyone wondered about the actual abilities  and vision of highly paid private sector executives in Australia one need look no further than the grand scale debacle that Arrium steel has become. Arrium’s operations are essential  to Australia’s manufacturing, jobs in regional Australia, and national security, but you wouldn’t know that from the performance of its owners and managers.

If Arrium’s Australian operations were to be completely shut down, it would mean 3000 direct jobs lost at Whyalla, devastating for the company dependent town, plus over 2000 more redundancies principally in NSW and Queensland company operations. It is not hard to see who finally pays when the global enterprise fantasies of highly paid executives come undone by the real owners of the 21c global economy.

And it would also mean increased dependency on imported steel, sometimes of doubtful quality.

Future development plans for the steel industry must include specific and effective arrangements for workers and their local communtities to help guide the implementation of the plans, including but not just inside the workplaces.

The corporate culture of selfishness and incomeptence

Arrium still describes itself on its website “proudly” as having a “global mining and materials operations spanning Australia, Asia and the Americas” (

That pride, if one could ever describe a dysfunctional corporate as having such an attribute, was destroyed on the Australian stock market on 7 April when Arrium went into a trading halt and then forced administration to block USA based vulture private equity investor Blackstone taking control of Arrium.  Blackstone were offering to pay 55 cents for each $1 debt held by Australia’s big four banks.

To stop the prospect of Blackstone taking control, the banks forced the move into administration to protect their investments, effectively executing  the existing Arrium board, threatening the livelihoods of a committed workforce and, may have permanently trashed many small and even big shareholders’ wealth.

Blackstone’s attempt to take control of Arrium followed attempts by two other vulture capital funds – Argand Partners or Cerberus Capital Management- to bid for Arrium’s USA based Moly-Cop mining consumable businesses.  These two vulture investors had offered around $1.0 Billion compared to Arrium board’s price estimate of $1.5 Billion which would have gone towards reducing debt held by the four Australian banks.

The Administrator is now expressing confidence that Arrium can survive following talks between the banks and the Australian Workers Union, the union covering workers at Arrium. The same banks funded Arrium’s ill-fated expansion in iron mining and export in the past which has created the current crisis.

The workers’ response

The AWU, along with the AMWU and CEPU-ETU, is doing its utmost to retain steel manufacturing in Australia and its crucial they be extended community and progressive activists support. Workers employed with Arrium- also known as One Steel across the nation- accepted a reduction in wages in March.  Similarly, BlueScope workers accepted a freeze on wages and job losses last year.

The wage cuts followed 900 Arrium job losses in the past 12 months.

There is high risk in thinking that accepting wage cuts and freezes to can save enterprises like Arrium and BlueScope. Clearly, the crisis in the industry has not been driven by what workers are paid. Neverthless, when workers make  such decisions they have to be respected. The campaign is not over and full success will be measured with a return to previous wage levels and a lifting of a freeze at BlueScope.

The AWU and associated unions have put pressure on both LNP and Labor Party governments and oppositions to be proactive in the current crisis which was precipitated by BlueScope last year with its threat to close steel production in Port Kembla.

Alternatives and trade policy

South Australia’s Labor Treasurer Tom Koutsantonis has appealed to the banks to remember what federal Labor did for them with account guarantees during the GFC.  This followed what was a mild market regulation intervention of imposing a new quality assurance regime on steel used in SA to prevent the importation of low quality steel.  The new regulatory regime has been backed with SA government funding for fabricators and manufacturers to establish quality control systems and they have established an Advocate for the sector.

When PM Turnbull was in SA weeks before Arrium was forced in to administration he promised to buy $80 million of rail line steel from Arrium to replace up to 600 kilometres of ageing railway lines in South Australia under a no-bid contract that would be awarded by at the federal rail agency- Australian Rail Track Corporation.

Bill Shorten then called for a national procurement program for all three tiers of government to save Arrium, after the company went into administration. Minister Pyne came close to this on Q&A on 4 April but then dodged mandated procurement because of competitive pricing issues and his government’s obsession with a free trade stance. Pyne and Trade Minister Ciobo have since become more strident in their defence of free trade and have rejected a national procurement plan. Ciobo’s elevation to Trade Minister followed the resignation of Andrew Robb the most pro-active free trade politician in Australia’s history.

The LNP have bad form when it comes to steel and untrammelled free trade.

AFTINET (the Australian progressive fair trade and investment advocacy organisation) has pointed out (11 April 2016) that when the USA Australia agreement was negotiated under Howard’s rule in 2004, the USA excluded steel after Australia sought to include it. The more recent China Australia agreement saw China do the same to protect national procurement rights.

Our major trading partners can have national procurement in free trade but Australia can’t according to Minister Ciobo!

Even BlueScope’s submission to the senate Inquiry called for “fair trade” measures within free trade agreements.

The LNP are bending over backwards to set up the destruction of steel manufacturing in Australia. Just as they did with the auto industry.

In the Arrium crisis, the Baird NSW government announced imported rail line steel from Spain would be used for Sydney’s North West Metro project being built by an overseas private consortium.

In effect, they told the Whyalla community they could close down.

Baird’s announcement followed the NSW Greens tabling a very reasonable state projects procurement bill in the Legislative Council in March this year that had strong Illawarra unions’ and community support.

The Illawarra Greens made a comprehensive submission to the current Senate Inquiry prior to the committee’s public hearing in the Illawarra on 1 April this year.

Their proposal called for: a mandated 100% structural steel procurement for all projects across all three tiers of government; more effective anti-dumping measures; a stringent quality assurance regime for steel used in all building and construction works-public and private- in Australia  outlined in the Australian Steel Institute’s submission to the Inquiry; and investment, including public sector co-investment, for a transition to technologies in manufacturing; and the use of renewable power supplies to reduce greenhouse gas emissions.

The South Coast Labor Council’s Secretary Arthur Rorris believes that BlueScope hasn’t committed to the latter as they have a board running a global manufacturing enterprise which does not want to commit to maintaining production in Australia.

The Clean Energy Finance Corporation (CEFC) has put in place models of public co-investment that work and can guarantee greenhouse gas reduction and long-term enterprise sustainability and regional community jobs.

The same can be done with steel production by both BlueScope and Arrium. This approach to public sector investment in Australia’s sustainable economic future is what has driven the Abbott and Turnbull government’s ideological drive to shut down the CEFC.

Making the future of steel more democratic

The next phase of determining the future of steel making in Australia is, in the very short term, focussed on Arrium.

The Illawarra Greens have submitted a very reasonable, achievable plan.

There are, though, some additional things that could happen now.

They are:

-An immediate federal government decision, or commitment from Labor if they win government at the coming federal elections, to block any overseas takeover of either company as part of their input to the current Senate Inquiry.

-Insist that the three tiers of government procurement plan include a return to pre-existing wages and conditions at Arrium, an end to the BlueScope wage freeze and re-employment of workers by both companies.

-The unions and workers pursuing the right to establish councils in all Arrium and BlueScope workplaces across Australia to assess all plans that may come forward in consultation with their local communities, express views that are listened and positively responded to by all parties, and to monitor all future co-investments.

-A discussion of full public ownership if co-investment, including on greenhouse gas reduction, is not accepted and either of the companies threaten closure of production in Australia.

These are all reasonable proposals but no be doubt will be met with strident opposition from the anti-worker, anti-union, climate change denying, free trade, pro-private sector LNP.


Warwick Neilley

Don Sutherland

13 April 2016









Posted in Uncategorized


This thought looms because of the lead letter in today’s Sydney Morning Herald. The letter, that I cut and paste below, laments the steady destruction of Sydney’s parks and green spaces and associated amenities. As we all should. The writer wonders who should control decisions about these in the face of the profit hungry developers.
In Sydney’s own history we find the perfect answer: the builders labourers’ greens bans that saved so much of Sydney against the ancestors of these profit hungry developers in the 60 s and 70s and occasionally since.
In brief, a green ban is workers taking industrial action that puts a ban on a project that might or actually is destroying the environment and the human enjoyment of that environment, either as residents in it or as passers-by or visitors to it. The workers combine through their union to say, “We will not supply labour to the site and we will act with the community to prevent rich property developers and / or their governments from trying to do so.”
For more on these and the democratic processes that the New South Wales builders labourers, through their union, insisted on, read Green Bans, Red Union by Meredith and Verity Burgmann and Jack Mundey’s autobiography. Or click here. Or here.
Green bans required 2 things: a democratic decision of the community that wants them that is then presented to the union, and a democratic decision of the construction workers to agree to carry out the ban.
The capacity to organize can deliver the first.
But, IN THESE TIMES, the second, requires, as well as the capacity to organize, a determination to disobey repressive anti strike laws in Labor’s Fair Work Act, and to stand with construction workers against the Turnbull- Abbott government’s laws to set up a special Commission (the Australian Building and Construction Commission – ABCC) to repress and police construction workers and their friends and associates.
The ABCC laws are now before the Australian parliament and, because they are strongly opposed, they are potentially the trigger for the right-wing government to dissolve the parliament and run a new election.
These laws intend to, among other things, stop, detain, interrogate and imprison construction workers and their friends in the community for doing things like standing up against profit hungry developers. (For a plain language summary of the laws and links to more information: click here.)
Yet, many in eastern Sydney, the scene of civil protests against the destruction of Anzac Parade, and the northern suburbs (not all I stress, but I mention these because that is where the author of the SMH letter comes from) who lament the loss of green spaces and want more democratic control over the decision-making, either like or couldn’t care less about Turnbull’s lies about construction workers and their unions.
Such irony. These lies and the associated media propaganda are the means to persuade a majority of Australians and parliamentarians that special repressive powers against construction are necessary.
The powerful property developer 1%érs are the direct beneficiaries of these proposed laws. Metaphorically, who knows maybe “for real”, the government is in their pocket.
To all lovers of Australia’s natural habitat and historical buildings: if you don’t want the property developers to have the power to do what they are doing then you must stand up with construction workers – today’s builders labourers – to stop Turnbull’s ABCC laws and ABCC election. Green bans are socially useful democratic actions.
Here is today’s Sydney Morning Herald letter:
“Who is really looking after our urban public space?
“Elizabeth Farrelly’s article (“Parks and Trees make way for profit”, April 14), in highlighting the loss, degradation to Sydney’s public space amenity poses the obvious question: who is really looking after our urban public space?
“Growing cities like Sydney are under constant pressure from the demands of development.
“Loss of public amenity adjacent to redeveloped harbour front land (for example, Barangaroo), adjoining parks such as the Botanic Gardens or along historic majestic major boulevards like Anzac Parade form the unfortunate casualties of an absence of both custodianship and advocacy by an appropriate public body.
“Since the early 1990s, this publicly staffed office working within the-then Department of Planning has been outsourced largely to private consultants.
Hence developers and their consultants, “push the envelope”, including incursions into the public space.
It doesn’t take that much imagination to conceive of the potential conflict of interest that design consultants risk in having both public and private clients.
Possibly it’s high time to reconsider resurrecting in a contemporary guise, the role of civic authority of “city designers” to ensure both the quantity and quality of open public space commensurate to a dynamic, sustainable “global city” like Sydney.
Cleveland Rose Dee Why
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Posted in Australian union movement, Environment and labour
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