'Lucky' Australia's boom undercut by labor problems

Poor labor relations continue to bedevil Australia as the country stands at the brink of a massive resources development boom. Australians call their well-endowed nation the "lucky country," but government leaders and economists warn that the absence of industrial peace is endangering their economic success story.

The situation became so stormy politically that Industrial Relations Minister Andrew Peacock resigned April 15. Mr. Peacock and Prime Minister Malcolm Fraser have had a series of rows over government policy on the labor problem, and in his resignation statement, Peacock said his ministerial authority had been undermined by the prime minister, whom he accused of acts of "gross disloyalty."

The militant mood of organized labor, according to government officials, could lose Australia foreign -- mostly Asian -- markets and spur inflation inside the country. Recent strikes over pay and a drive for a 35-hour work week have practically crippled the wool, coal, and travel industries.

In response, tens of thousands of Australians marched through the streets of their main cities last month, demanding less disruption from union strikes. Labor leaders said the protests were "union bashing."

When national airline workers went on strike recently, the Royal Australian Air Force ferried home Australian travelers stranded in New Zealand -- a sign of a thoughening government attitude toward the unions.

With inflation held to 9 percent and unemployment at around 6 percent, Australia has not faced the economic problems affecting other developed nations. It remains attractive to foreign investors. Bankers and brokers speak optimistically about the future.

Giant resources projects linked to export contracts are scheduled to become productive during this decade. Uranium, liquefied natural gas, coal, oil produced from coal, and oil from shale are among them.

The real estate market is thriving in major Australian cities.

In the farming sector, producers are calling for increased production to keep pace with foreign demand. Wheat board chairman Sir Leslie Price says that if output by Australia and other exporting nations is not stepped up, "The world will run out of grain" in the 1990s.

It is a rosy picture for Australia's economy, but clouded by a labor situation that is increasingly turbulent:

Strikes in the past 12 months have crippled the wool industry, halted coal exports, prevented air travel at various times, and severely curtailed gasoline supplies.

Beer has not been brewed nor bread baked during strikes that hit those industries.

Graves were not dug for the duration of one Sydney dispute, and prisoners have been locked in each time their guards have walked out.

Many strikes have inconvenienced Australians, but the Fraser government is most concerned about stoppages in export industries.

Japanese businessmen have referred to Australia's labor situation as "the English disease," a reference to Britain's strike-prone industries.

Deputy Prime Minister Douglas Anthony and other politicians have warned that unless the industrial relations climate changes, Japan -- Australia's biggest export market -- will cease to regard Australia as a reliable source of raw materials. Japanese buyers have indicated they may have to diversify their supply sources.

Some left-wing unionists do not find the prospect of fewer exports to Japan unattractive, even if it would delay development of resources industries. They say Japan uses Australia as a giant quarry, which will be a detriment, over the long term, to Australia.

A more widely held view is that Australia should develop its raw-materials export potential as soon as possible to improve economic prospects for Australians.

However, there are no indications that strikes will diminish.

Of particular concern to the government is disruption on building sites caused by sudden strikes by order of the Australian Builders' Laborers' Federation, led by pro-Peking communist Norman Gallagher.

The federation's disruptions at crucial stages of construction are popular with union members because companies feel obliged to make generous settlements to keep to their deadlines. The union has a reputation for using "muscle" on picket lines.

Unions range from those led by communists to strongly anticommunist groups that support the right wing of the opposition Labor Party.

Aside from pay-related disputes, disruptions this year are chiefly over union demands for a 35-hour week and union opposition to uranium exports. Unions want the working week cut, with heavy overtime penalty rates to apply for additional work. Unions say they will step up their efforts to ban uranium exports, asserting that adequate nuclear safeguards do not exist in foreign countries.

The government, however, is strongly in favor of exporting uranium. Union attempts to ban exports are unlikely to succeed, mining industry observers believe. Nevertheless, severe industrial disruption quite probably will result from the campaign.

As resources development projects planned for the mid-1980s get under way, employers are expected to call for greater immigration of skilled workers. Unions are expected to oppose this, arguing that unemployed Australians should instead be trained in new skills, even if training produces delays.

Overall, Australia's promising economic outlook has only one negative aspect: extremely poor labor relations. Experts are not forecasting any improvement.