What it means and how it affects the rights of people
I acknowledge that I speak tonight on Kaurna land. I thank the Dunstan Foundation for making this meeting possible and the law faculties for their aid. I pay respect to Don Dunstan whose leadership gave us the first ever democratically elected Parliament in South Australia, the first Sex Discrimination Act in our country and the first conveyance of land to Aboriginal people in our country.
The Rule of Law is a fundamental concept of our society and many others. In Australia we inherited our concepts of the rule from Britain from Magna Carta 1216 and from the Great Revolution of 1688 when the Crown acknowledged themselves bound by the Declaration of Right. By that Declaration the power of Parliament was secured against the power of the Crown. The Rule of Law was firmly established.
The meaning of the rule is very simple; every member of the society is bound by the law. It is the function of the Parliament to make the laws and of the courts to interpret the law and apply it to the facts; but if the Parliament disagrees with the interpretation it may by statute amend the law. The Rule of Law is fundamentally important. It binds us all.
In Australia the position is slightly different from the UK as we chose a Federal organisation, we have a What it means and how it affects the rights of people Elliott Johnston* The Rule of Law is a fundamental concept of our society and many others. In Australia we inherited our concepts of the rule from Britain from Magna Carta 1216 and from the Great Revolution of 1688 when the Crown acknowledged themselves bound by the Declaration of Right. By that Declaration the power of Parliament was secured against the power of the Crown. The Rule of Law was firmly established. Australian Options Summer 2004 3 Commonwealth and State Parliament with different powers to make laws and the High Court having power to rule on their validity.
I wish to make it absolutely clear that I support the Rule of Law.
But I make it equally clear, that it is absolutely wrong to think the Rule of Law is synonymous with the question of fairness or justice to all. That depends upon the law. After Magna Carta, Britain was ruled by the Barons and the King in their own interests; after the Great Revolution of 1688 by the Whigs the party of the developing trading and commercial class in the interests of their class.
The ruling class rules.
I refer to two great developments which have occurred since World War II—
1. After the war, following so soon after World War I, there was a profound wish for peace, for decency, for human rights. The United Nations organisation was established. On 10 December, 1948, the UN agreed, without dissent and with Australia’s support, and published to the world: The Universal Declaration of Human Rights.
2. On the other hand the economic system which is called capitalism has grown and changed vastly as a result of changes in technology, transport, communication, etc. It is now global capitalism, it wields extreme power. I remind you of what Don Dunstan said in his last speech at the Adelaide Entertainment Centre, 21 April, 1998, after referring to the domination of global capital:
"Their thesis is that, faced with a globalised economy we must reduce government provision of services to the barest minimum; ensure that services are operating in the interest of private profit; ensure that competition and an unregulated market govern production and development of our resources . . . and that we must totally deny ourselves of the fiscal flexibility to run a deficit budget."
I turn now to the question of the relationship of our rights and the law. This country was colonised by Great Britain and contrary to the facts of the matter the lands of the Aboriginal people were treated as terra nullius . The land was taken by the colonial power. Most of the people were driven into reserves and many had their children taken away; many were killed, either by arms or by introduced diseases; their culture was based on their land and overwhelmingly they lost their land. In the sixties there was the beginning of some change in attitude all over the country. The referendum to give Aboriginal people the right to vote in Federal elections was carried with huge majorities, it was followed by a growing awareness that Aboriginal people must be given some rights of self determination. The Aboriginal and Torres Strait Islanders Commission was set up. It was an effort at self determination in certain aspects of life very important to Aboriginal people. Reconciliation became a major issue.
Now the government introduces legislation to abolish ATSIC. It has passed the lower house, but it has not yet been considered by the Senate. The government proposes that ATSIC should be replaced by a group of Aboriginal people to be appointed by the government. I say this, self determination is a fundamental for the Aboriginal people; the concept of the government appointing a committee in the name of self determination is a farce.
I refer very briefly to refugees since in this hall last year we were addressed by the eminent human rights advocate Julian Burnside QC. But just let me say this—
On 14 December, 1967 the UN General Assembly voted unanimously (including Australia) for a resolution which repeated Article 14 of the Universal Declaration of Human Rights which reads:
"everyone has the right to seek and enjoy in other countries asylum from persecution".
A Labor government voted for the Declaration in 1948; a Liberal government voted for its re-assertion in 1967. Thirty years on we are locking up those who seek asylum in our country from persecution. We are doing that pursuant to our law. The High Court has recently held that it is our Law, the Law made by this government, which says that a person seeking asylum, who has been Rule of Law: What it means and how it affects the rights of people ...it is absolutely wrong to think the Rule of Law is synonymous with the question of fairness or justice to all. That depends upon the law... 4 Australian Options Summer 2004 locked up, whose application for a visa has been denied, who in strict accordance with the Act has written to the Minister and asked to be deported but who cannot be deported, because he is stateless and being so no other country will accept him, is to be locked up and this may be for life.
The Declaration of Human Rights declares that all have a right to employment and to an adequate standard of living. What is our situation?
There is a view widely held that our economy is doing very well, some say better than any other. But certainly well.
The Australian Council of Social Services, and other groups, say that our situation is that our rich are getting richer and our poor are getting poorer. Pretty obviously the rich are getting richer; few admit the poor are getting poorer, but I don't hear many denials. Given the state of our economy how is it that this can happen?
The Australian Bureau of Statistics (August 2004 ) says that we have a labour force of 9.7 million people of which 6.9 million are employed full time, 576,000 are unemployed and 2,271,000 are employed part time. Of course I do not suggest that all those 2,271,000 wanted full time jobs. But I suggest at least 500,000 did. Many say more than that. But what it means is that more than ten percent of our labour force are unemployed or underemployed. How is this in such a successful economy? There are a number of explanations—
1. We all know that the banks have reduced jobs by
closing branches and that some companies
particularly in the clothing industry have moved a
good deal of manufacturing overseas to countries
where labour is very cheap.
2. But I suggest that the main reason lies in the efforts
particularly of big corporations to reduce both the
number of workers and the number of permanent
workers.
It is worth looking at a bit of history. With Federation we got an Industrial Tribunal, and employers and employees were encouraged to join organisations and in the latter case trade unions. Justice Higgins declared the first basic wage in the Harvester case and for nearly 90 years we had a Conciliation and Arbitration system which by legislation has ceased to exist, except in a very reduced form, since the early nineties. The consequence of our system was that the person who was in ordinary employment became entitled to a salary, to annual leave, long service leave, public holiday pay, sick leave, protection against unfair dismissal, workers’ compensation and in some cases maternity leave.
Global capital has set out to change the situation by abolishing conciliation and arbitration, by reducing the number of people employed and the number of people in that full employment which carries these various benefits. It seeks to do this in two ways in particular—
1. Reducing the number of employees by the working of overtime. Over recent years there has been a big rise in overtime and now 28.8% (with particular groups ranging from 15.8% to 52.3%) of all full-time workers "work 50 hours per week or more".
I acknowledge that there are perfectly legitimate reasons for some overtime: for example, breaking down of equipment, but this extent is quite extraordinary. The overtime workers get higher overtime pay of course, at least where covered by awards, but it has many savings. Not only less workers with all the entitlements, but space, equipment, plant, tools, administration.
Faced with a considerable unemployment problem, France has recently legislated for a 35 hour week and an abolition of overtime except in special circumstances. Should we consider such legislation? Not necessarily exactly the same, but certainly some limitation of overtime.
2. Perhaps even more important is the effort of the employers to engage what are sometimes called casuals or part-timers or non-permanents or another group namely those provided by labour hire firms. As Rule of Law: What it means and how it affects the rights of people ...Global capital has set out to change the situation by abolishing conciliation and arbitration, by reducing the number of people employed and the number of people in that full employment ... Australian Options Summer 2004 5 I earlier said there are 2,271,000 of these or actually 23.4% of the total of the employed work force. There are a lot of disputes over the questions of what entitlement casuals have to other benefits such as annual leave, sick leave, public holiday pay, long service. Particularly intriguing are the labour hire workers. There is great argument as to whether these people are even entitled to workers compensation if they are injured at work.
In the meantime I think there is no doubt that the business world is saving itself plenty of dollars by way of working overtime and employing casuals. It is the trade unions, including in SA, that are trying to do something about these questions—applying for award variations, seeking agreements, etc.
The Australian Manufacturing Workers’ Union has recently done an in-depth analysis of the position. Since 1990, permanent manufacturing industry jobs have fallen by 159,900; the casual jobs have risen by 71,000. In the manufacturing industries there are a lot of labour hire firm workers. There is some other data in Research Note 53 issued 16 September 2004 by the parliamentary library of the Federal Parliament. It reports that since 1988 54% of all new jobs created have gone to casual workers.
The position of the Federal government is that it gives no attention whatever to the question of overtime or the casual groups. It is intent on doing away with what remains of arbitration; it supports the Australian Workplace Agreement system that it has legalised by legislation.
On the 28 September, 2004, the Adelaide Advertiser reported:
‘The Federal government will inject millions of dollars into luring workers away from unions and on to contracts under a workplace policy. Workplace Relations Minister Kevin Andrews will announce today a $12 million package to increase the number of workers on Australian Workplace Agreements. The government will also unveil plans to protect small businesses from unfair dismissal and redundancy laws."
This is simply our government acting on behalf of global capital. It is fundamentally opposed to the Declaration of Human Rights, declarations that have, in the past, been supported both by Labor and Liberal governments.
The other aspect associated with the poor getting poorer is the treatment of those who are unemployed or those unable to seek employment because of ill health or disability. It is not an area which I have greatly studied.
I will say just this: The payments are low; the conditions are extremely strict; the penalties for breach are draconian and the efforts to find work for the unemployed are nil. There is another matter which I think is universally admitted and that is that the number of homeless people is increasing alarmingly. That surely indicates that the poor are getting poorer.
The evidence is overwhelming that the rich are getting richer. I was quite astounded recently looking at The Weekend Australian of 18–19 September 2004, page 38. The chief executives of the four main banks were said to have annual salaries of $7.4-, $7-, $4.426-, and $2.482- million and the chief executive of Macquarie Bank $9.089-million. In quite different and unconnected articles it was said that the managing director of Origin Energy received $2.44-million for his year’s work; the chief executive of Bluescope Steel $4.4-million; the chief executive of Billabong $1.4-million; and it was said that Mr Ahmed Fahour was paid $13.3-million in a "golden hello" just to sign on with the National Australia Bank. Recent reporting from the four main banks has some interesting information: Together their after tax profit is more than $11-thousand million; the percentage of shares held by their top five shareholders range between 30% and 51 %, and each of their top shareholders is a USA banking group.
Why is it that our laws relate to the question of wages of ordinary workers and are silent on the question of returns for senior executives, company directors and such like?
In 1998 our Federal government appointed a committee to report on business taxation. Its report was published in July 1999 entitled: A Tax System Redesigned, More Certain, Equitable and Durable. The three members were all major company directors. None of them was representative of other than corporate interests. I should be very surprised if any government appointing a Committee to report on the tax on wages appointed three workers without other interests having a say.
The Committee, which incidentally placed great emphasis on the globalisation of the economy, recommended a reduction in company tax to 30% (which in fairness I should add the government had told them it desired), it went along with the dividend imputations credit which Keating had introduced (but I should add also, in fairness, that at the time he said that the company tax rate should be raised to the highest individual tax rate which at the time I think was 48%). The 30% tax rate is the lowest company tax rate which has existed since at least World War II. When the Government actually introduced it they were able to say (and said) that it was recommended by this highly expert committee. The Report is too long to discuss.
However, the matter that I want to draw attention to is the enormous effect of dividend imputation credits (which they endorsed). When the company system was being developed the biggest concern was that if people were involved in what today we would call a partnership, they would not only share the profit but they would be responsible for the losses and so the limited liability company was formed and has of course become the dominant form of company. A shareholder must pay 100% of the price of the share, but he or she is a totally different person than the company. If the company goes bankrupt the shareholder is not liable at all. They are two entirely different persons. So for years the company paid tax on its profits and the shareholder paid tax on the dividend. Dividend imputation credits means something entirely different. The company declares a dividend and providing that dividend is paid out of that current years profit, it can fully frank the dividend with a credit which (when the tax rate is 30%) is 3/7ths of the amount of the dividend. Not all dividends are fully franked but 90% is a very reasonable percentage. In preparing the tax return the franking credits are added to the income; the tax is calculated on the resulting total and the total of the credits is then deducted from the total of the tax.
So A and B each have a yearly taxable income of say $50,000. A's is wages, B's is dividends, 90% fully franked. At the current tax rate A's tax is just over $11,000, B's tax is nil.
The rich are getting richer for all sorts of reasons and some of those reasons are associated with changes to the law and some are associated with failure to make changes. The poor are getting poorer for similar reasons.
In 1945 our Federal Parliament passed an Act "To Approve the Charter of the United Nations". It was an exceedingly simple act. Four sections only. The approved Charter was then set out in full in the schedule.
The Charter has been amended on a few occasions since and each time the Australian Parliament has passed an Act that records and approves the alteration. Article 39 of the Charter provides that the Security Council: "shall determine existence of any threat to the peace, breach of peace, or act of aggression" and shall decide the measures to be taken to maintain or restore peace and security. Article 25 of the Charter reads: "the members of the United Nations agree to accept and carry out the decisions of the Security Council in accordance with the present Charter."
Koffi Anan has said what is obviously true, that the invasion of Iraq was illegal. It was obviously so. Iraq, had not made an attack on the United States, on Great Britain or Australia nor threatened to do so. It is acknowledged that Iraq played no part in the attack on 11 September in the United States.
The right to live in peace is a very fundamental right. A right of all people. Our right and the right of the Iraqi people is being trampled on by the aggressors.
It is somewhat unclear to me why it is that our government can act in direct opposition to the terms of a Charter which has been approved by our Parliament on several occasions but apparently it is so.
That means that our law is fundamentally at odds with the Charter of the United Nations developed and adopted by people the world over who were determined to seek peace after two world wars.
[Elliott Johnston then discussed the implications of Australia’s failure to ratify the Kyoto Protocol on greenhouse gases. There have been some important developments since he spoke. This is dealt with in this issue of the journal on page 36.]
I repeat what I said earlier, I believe in the Rule of Law. I also believe in justice and the rights of people. I realise that not everybody agrees on exactly what those rights ought to be or on exactly how they should be enforced. I think we agree that we do not want our environment greatly harmed by climatic change (or indeed other changes). I think we believe that it is unfair for the rich to get richer and the poor to get poorer at the same time. I think we have an interest in peace. I believe that we do not want to see people locked up, deprived of all liberty because they are attempting to avoid persecution. I think it is crucial in all of our interests that the Aboriginal people and non-Aboriginal people become totally reconciled and that the Aboriginal people attain justice and fairness.
We have many problems. We have to find the way forward. I think that we have to end the rule of global capital, its domination of our society. I think we have to talk with others about how this can be achieved . May I respectfully remind you of the last words that Mr Dunstan used in his great speech to which I have referred. After speaking about the power, the operation, the ideology of global capital he concluded with the words:
"We intervene—or we sink." . . . I respectfully agree.
*An edited version of a speech by Elliott Johnston on 5 October, 2004, at the Elder Hall ,University of Adelaide. Organised by Australian Options with the support of The Dunstan Foundation , the Schools of Law at the University of Adelaide and Flinders University. The complete speech is available on Australian Options web site at australian-options.org.au