The Accord: Visionary Strategy or Political Gimmick?

Sunday 5 March 2023 marks the 40th anniversary of the election of the Hawke Labor Government. Without the Prices and Incomes Accord struck between the Labor Party and the trade union movement on the eve of the election there may have been no Hawke Government. And without the support of the militant unions and the Communist Left there would have been no Accord. The Accord years remain one of the most controversial and hotly debated periods in the history of the labour movement. Did it advance or retard the cause of working people? To mark the 40th anniversary of this most important chapter in our history, SEARCH is proud to publish this wide sweeping critique by Daren McDonald. An earlier form of this paper was originally presented to the South Australian Society of Labour History in 2021. Few moments in our labour history have galvanised such a dichotomy of opinion over whether the Accord was a visionary strategy or a political gimmick. There can be no denying that the Accord years were a period of far reaching change. They are years that are rich in learnings for the labour movement and the Left.

THE AUSTRALIAN LABOUR MOVEMENT has a long and proud history of achievement. One can’t appreciate the place of the ALP-ACTU Accords in that history without unpacking the philosophy and strategy of its architects, and the struggles and challenges faced in its implementation.

All too often critiques of the Accord are grounded in simplistic analysis. Arguments around wage outcomes and union density trends are constructed by critics devoid of context.  Some blame the Accord for the deregulation and privatisation initiatives of the Labor Government. Others go as far as to assert that the Accord was responsible for bringing neo-liberalism to Australia.

Too much written history of the Accord is tarnished with ideology rather than dispassionate and informed scholarship that comprehends the complexities of the economic and political challenges of the day and the dynamics and nuances of the Accord’s processes and relationships. This does a disservice to our labour history and a disservice to the labour movement.

The Accord years were marked by truly historic achievements as well as disappointments. Yet critics gloss over and undervalue the former whilst usually offering an incomplete analysis of the latter.  This has contributed to an unbalanced historical record that has confused and misled many activists of the current generation and inclined them to dismiss that historical period rather than to embrace those elements that are rich in lessons about how to design and effect transformational change.

What, then, were the achievements and failures of the Accord? What are the lessons?

What was the Accord?

It was in Adelaide at the Labor Economists Conference in 1979 that the Labor Party first publicly announced the basis for an Accord. Four years later, on the eve of the 1983 election, the Accord offered the Australian people a bold and compelling alternative to the Fraser Government’s restrictive monetary policy and wages freeze. For the unions and the Left it also offered an unprecedented opportunity to put the voice of working people at the heart of national economic decision-making and the promise of transformational social reform.

The original Statement of Accord

The parties to the Accords (1983-1996) were the Australian Labor Party (ALP) and Australian Council of Trade Unions (ACTU). The philosophy of the Accord was a repudiation of reliance on restrictive fiscal and monetary policy; in its place was an embrace of government intervention, planning, and partnership. The Accord’s stated objectives were to create jobs, protect living standards, improve income equity, reduce poverty, and expand the social wage. Its policy scope addressed employment, wages, prices, taxation, the social wage, industrial law reform, industry policy, technological change, education, health, workplace health and safety, and immigration.

Union support for the Accord was overwhelming. At the special federal unions conference held on the eve of the 1983 elections, delegates from 150 unions backed it with a sole individual in opposition[1]. Employers were never party to the Accord and had no input in shaping its objectives or program.

Ralph Willis, Labor’s first minister for industrial relations and a member of the ALP’s team that negotiated the Accord, described it “as probably the most detailed agreement ever reached in any country between trade unions and government.”[2]

Laurie Carmichael, a prominent communist and leading official of the Amalgamated Metal Workers Union (AMWU) who had a significant influence in shaping the final agreement, heralded it as “the first ever attempt for a strategic agreement between Labor in Government and Labour in industry.”[3]

The context

The starting place is to grasp the reality of Labor’s decades in the political wilderness. Bar the short-lived Whitlam government, by 1983 the Liberals had been in power federally for 35 years. And Labor had not just been routed in 1975; its economic credentials had been left in tatters.

The nature of the economic crisis faced by the new Hawke Labor Government was not just unprecedented; it was hitherto unknown. Dubbed “stagflation” - double-digit unemployment and double-digit inflation and double-digit interest rates. In the 12 months to May 1983 employment in the metal industry fell by a staggering 17%![4]  

In its own words, the Accord offered a “radical new approach”, and its economic prescriptions were diametrically opposed to the prevailing neoliberal orthodoxy.

The Accord replaced Fraser’s wages freeze with a centralised wage fixing system. The Liberals cried “The Accord has given trade unions a [wages] system which no other country in the world would even contemplate.”[5] They were right. In December 1981 the Belgian government had abolished wage indexation. In June 1982, France, New Zealand, and Portugal imposed wage freezes. Denmark and Holland followed in October. Iceland and Luxembourg abolished wage indexation the following February and March. Italy followed in June. Canada announced a public sector wage norm 5 per cent below CPI while Britain announced a public sector wage norm half of CPI. In September Japan imposed a wage freeze[6].

In Nixon Apple’s words, 1982 was “an historic watershed in workers’ struggles”[7] globally.  It was a year that presaged the arrival of neoliberalism. Prominent communist Bernie Taft said in a prescient warning at the time that “Australia is entering a new historical period. Economic conditions will be very different to those which prevailed in the 37 post war years…. (and) It will be necessary for the trade union movement to operate in much more complex and less favourable circumstances.”[8]

Yet the “watershed moment” of 1982 was only the start of the neoliberal agenda that was coming to Australia. Two years into the young Labor Government, 1985 saw the emergence of a New Right with a fiercely ideologically driven strategy to turn Australia’s industrial relations system on its head.  The union movement became embroiled in huge disputes such as Dollar Sweets 1985, Mudginberri 1985, Robe River 1986, and Trouble-shooters 1988.  These disputes were fierce panzer tank-like attacks on workers’ rights by reactionary capital that struck at the heart of everything the Accord and the labour movement stood for.

The New Right’s strategy was not just to break centralised wage fixing but to break the award system, dismantle the arbitration system, and strike at any institution in our democracy including the unions that put community interest ahead of capital. Indeed, the strategic objective of the New Right went further than destroying institutions. Their goal was to destroy the culture of Australia’s industrial relations system and the values and principles that underpinned it. The long-accepted principles of Australia’s unique system - the “living wage”, “comparative wage justice” and “common rule” awards - were all underpinned by values of equality, fairness and social cohesion that can be traced to the 19th century and the scars of the great disputes of the 1890s, socialist ideals and the great social encyclical of the Catholic Church – Rerum Novarum[9] published in 1891.

These were the immense economic and political challenges that confronted the Accord parties. Yet so much of what has been written about the Accord glosses over or seems oblivious to this real-world politik.

Alignment of forces and their philosophies

The Accord was the most controversial moment in Australian labour history even before it was signed. In one corner there were the Labor Party, the trade union movement, and the mainstream Left (including the Communist Party).  In the anti-Accord corner was the Liberal Party, the employing class[10], and the ultra-left. For the ultra-left, the Accord was “class collaboration” and represented the “capture” of the union movement by the ALP.  For the employing class and Liberals, the Accord was unthinkable and the very opposite; nothing less than the capture of the state by the trade unions.  The Liberal’s Ian MacPhee declared “the Accord elevates the unions to a position of privilege and supremacy unseen in any other country of the world.”[11] John Leard of ANI and a delegate to Hawke’s National Economic Summit warned business: “The Accord has created a de facto coalition government (with) the ACTU….. we basically have government for the unions by the unions.”[12]

According to former ACTU Secretary and key architect of the Accord, Bill Kelty, there would have been no Accord without the trade union Left and the Communist Party of Australia (CPA)[13]. The CPA saw the Accord as a way to protect living standards and as a pathway for “workers intervention” in macro-economic decision making. According to Carmichael the labour movement needed to “pursue radical reforms…. which extend(ed) working class power in capitalist society by intervening in wider social and political processes.”  The 1982 CPA Congress said of the Accord “if full participation, democracy and mobilisation is developed, then a challenge to the ruling class in Australia can develop with a socialist direction.”[14]

The Communist Left believed that interpretation and implementation of the Accord would be an “arena of struggle”. Their view was multi-dimensional; they saw the Accord, in the words of Pat Clancy, federal secretary of the Building Workers Industrial Union (BWIU), tactically as a “weapon” to defeat Fraser and end monetarism and help protect the working class[15] from what Carmichael called “the howling gale of capitalist crisis” afflicting the world at the onset of the 1980s, and strategically by providing a pathway to secure transformational social change[16].

This mix of vision and pragmatism, of strategy and tactics, of co-operation and struggle is something that the Accord’s Leftist critics have never grasped. Episode 5 of the Master Class for Activists podcast provides a unique insight into why the Left - including communist leaders in the militant metal, building and maritime unions such as Laurie Carmichael, Pat Clancy, Tom McDonald and Pat Geraghty - backed the Accord.

The Accord’s achievements

The Accord realised many of the labour movement’s aspirations. It brought an end to the wage freeze. It broke the back of the economic crisis of stagflation and cushioned its impact on working families. To beat stagflation, the public policy of other countries was to impose pain on the working class by design via making them shoulder the main burden of the crisis. By contrast, Australia was the only country in the world that built the safety net during economic crisis. The Accord introduced an extraordinary raft of truly transformational social reforms.

The Accord also created over 2 million jobs.[17] It is worth noting that had job creation remained at the same level as it was under John Howard when he was Treasurer in the Fraser Government, unemployment in Australia by 1995 would have been 23 per cent.[18]

It was the Accord that reformed our minimum wage system and created the highest minimum wage in the world. The Accord spread better employment conditions across the country such as the extension of shorter hours for the 50 per cent of the workforce who didn’t have it and winning superannuation for the 70 per cent of the workforce that didn’t have it.

The Australian people elected and re-elected a Labor Government whose agenda was underpinned by the Accord for an unprecedented five terms. These 13 years were critical to delivering the Accord’s big agenda and gave the union movement the time it needed to restructure into more powerful industry-based unions and better prepare against the sinister strategy of the New Right.

Medicare, family allowances, more access to childcare, superannuation and regular wage rises; all these gains made a huge difference to workers’ lives especially low paid workers. Anna Booth, former federal secretary of the Clothing and Allied Trades Union, says “these were gains my members, many of whom were migrant women and often refugees, could never have imagined without the Accord”[19].  Let’s take a closer look at the three big safety net achievements of the Accord.

Australia’s minimum wage system

Today, Australia’s minimum wage sits at the top of the world league in key indices – in nominal terms as measured in US dollars, in terms of its purchasing power and in terms of keeping families out of poverty[20]. Figure 1 below[21] shows those countries with the highest minimum wage rates in the world[22].


Australia’s universal healthcare system

The establishment of universal healthcare is perhaps the greatest achievement of the Accord. “Without Medicare”, says Bill Kelty, “there would have been no Accord”[23]. Australia’s healthcare system is envied around the world. The Commonwealth Fund[24] in a 2017 report[25] rated Australia’s healthcare system as the most efficient in the world and delivering the best health outcomes in the world. This is shown in Figure 2 below.



Australia’s universal superannuation system

The Accord introduced the only compulsory universal superannuation system in the world. Today Australia’s system is consistently rated as amongst the best in the world[26]. Contrary to the view that the Accord put a stop on struggle, superannuation was in fact won through militant mass action on the ground backed by the ACTU and led by the building unions. Our industry superannuation funds have become the biggest and most powerful worker co-operatives in the world: workers’ capital that is materially changing the face of finance capitalism –leading the way on renewables; investing in infrastructure and creating jobs; challenging the environmental, social and governance practices of corporate Australia; and often returning to social ownership major assets, like ports, privatised by state governments.

Other major achievements

The Accord was responsible for so many advances in building a modern welfare state that many major achievements pass into history almost unnoticed - like the introduction of needs-based funding to childcare and the introduction of the world’s first national childcare quality assurance system. Under the Accord the number of childcare places in Australia increased by over 500 per cent[27]. In education, the number of children completing secondary school increased from 30 per cent to over 70 per cent[28].

Reforms like universal health care and superannuation were truly “revolutionary reforms” that fundamentally changed Australia forever. They were achievements not gifted by parliament or by capital but won through a unique blend of vision, strategy, leadership, partnership, hard-bargaining and struggle that was the Accord.

Further achievements included the increased rights won by workers and unions to information and consultation over matters such as workplace technological and organisational change and health and safety.

The criticisms of the Accord

The Accord’s Left critics say it is responsible for:

  • the introduction of neoliberalism to Australia
  • a decline in union density
  • not delivering wage justice
  • a redistribution of wealth from labour to capital, and
  • corralled militant action.

About Neoliberalism

In the words of French scholars Duménil and Lévy “it is probably difficult to find a data series that informs more about the roots of neoliberalism” than the change in wealth held by America’s top 1 percent[29]. In 1930 they held 45 per cent of total wealth, by 1965 this was down to 35% and by 1975 it was down to slightly more than 20 per cent[30].

Neoliberalism thus emerged globally on the eve of the 1980s in the words of British political economists Saad-Filho and Johnston to “impose discipline upon a restless working class”[31], curtail their social rights, and regain what the bourgeoise saw as their rightful share.  

The Accord was not a vehicle of neoliberalism in Australia but its principal target. The Accord’s repudiation of monetarism, the ending of the wages freeze, the expansion of the safety net, the creation of more powerful industry-based union; all these things were the very antithesis of neoliberalism. That is why the Australian New Right under the leadership of John Howard, declared war on the Accord and why as Prime Minister he set out to gut our safety net institutions[32].

Moreover, as Anna Booth argues, the Accord gave working people through their unions an unprecedented voice at the heart of national decision making on a myriad of issues through a truly amazing set of bipartite and tripartite institutional arrangements. This stands in stark contrast to the pre and post Accord periods in which unions have generally been portrayed by neoliberals, in the words of Left cultural warrior Ian Milliss, as “agents of legalised extortion”[33].

Of course, it is true that the Labor Government - under pressure from the contending classes - gravitated back and forth between the competing philosophies of the Accord and neoliberalism. At times this created sharp differences between the Accord parties. On some issues the union movement prevailed such as when the government withdrew its proposal for a GST at the Tax Summit. On other issues the Left was less successful. For Carmichael, the greatest disappointment was that the Labor Government did not meet expectations on industry policy. The privatization of public assets, such as Qantas and Telstra, and other deregulation, were strongly opposed by the Left unions. They were not policies of the Accord or policies that unions had agreed to.

By the same token, the Left should be wary of suggestions that market drivers and economic liberalisation, by definition, is necessarily always something to be opposed. By the 1980s some sectors of Australian industry had become internationally uncompetitive, in part because some had been badly managed and hidden behind protectionism. The Labor government used market mechanisms to drive industry modernization and efficiency, with the goal of protecting and creating jobs and stimulating national income. The challenge for the left and the trade union movement was to ensure that workers were best looked after during this necessary transition. 

About union density

Union membership rose in Australia during the Accord period up until the early 1990s. Membership in the building unions reached record highs. Nevertheless, it is legitimate to speculate that the Accord had some negative impact on union density. Workers in some strongly unionised shops did feel – especially in the more centralised wage fixing period of the Accord – a degree of alienation from the union movement because of the unions’ commitment to negotiate wages claims at a national level on behalf of the whole working class.

The philosophy behind the ACTU strategy during the early Accord period was to effectively “borrow” the power of the industrially strong to win wage rises for the industrially weak. In practice, this meant that the industrially powerful received less than they might have otherwise got (in a free market) in return for the industrially weak getting more than they would have otherwise got (in the free market). The need to balance the best interests of the whole class and the best interests of the most well organised was one of the militant Left’s most difficult challenges during the Accord period.

Whatever impact the Accord had on union density, however, it was marginal compared to the impact of changes in global capitalism. Research by the Australian Institute of Employment Rights (AIER) in Figure 3 shows that union density in Australia has been falling since the beginning of the 1950s[34].



The AIER analysis further shows in Figure 4 that in global terms the rate of decline of union density in Australia between 1980-2005 was not exceptional. Thus, declining union density was neither confined to the period of the Accord, nor directly and principally attributable to it.


Further, Figure 5 below[35] shows that the Australian experience accords with international experience over the long historical period. With few exceptions, there is a common global pattern. Union density across the industrialised world over the past century reveals inverted “U shapes” in virtually every OECD country, with union density most commonly peaking between the 1950s and 1970s.


Figure 5

As a trade union official who organised throughout the Accord years, I know that there was a level of frustration in my most militant shops amongst workers who sometimes felt constrained from fighting for a better deal by the centralised decision processes of the Accord. I saw little evidence that this translated into unions losing members other than possibly at the margins. I also know many workers could not have got a better outcome than delivered under the Accord – including many low paid NESB workers in metal industry shops – because they lacked the industrial muscle. Moreover, my members in these workshops well knew it.

The other thing that must be said about the fall in trade union from the early 1990s onwards was that part of it was real and part of it was illusion. It was a real consequence of changes in global capitalism as they played out in Australia including leading to the collapse in our manufacturing industry – up until then the traditional heart of trade unionism. It was a real consequence of fiercely anti-union government policies in several major states and their privatisation of public assets. Governments in Queensland, NSW and later Victoria did great damage to the union movement. It was the real consequence of the New Right’s (new) industrial relations strategy and tactics that were unleashed during the Accord years as a counter revolution to the labour movement’s agenda. And it was also a real consequence of the union movement through the late 1980s and early 1990s correcting the illusion that it had more members than what it ever really did. For example, there were numerous different ways that unions counted members. One union still counted a temporary worker as a member up to three years after they became unfinancial. The replacement of manual records systems by more-accurate computerisation was just emerging in the pre-Accord years. Further, the union amalgamation processes of the late 1980s flushed out the true membership position of some affiliates when they had to demonstrate/prove they had the members they claimed.  Prior to then the stated membership of some unions was commonly, occasionally grossly, inflated – sometimes unconsciously (as a consequence of poor systems and manual processes) and sometimes quite consciously (for political rather than industrial reasons).

In summary, while the Accord may have had some impact on union density in Australia[36], the primary causes are to be found in the global factors of the changing face of capitalism and the world of work, globalisation, and the emergence of New Right strategies to destroy unions or render them impotent.

On wage justice

The Accord has been criticised for not delivering “wage justice.” To this charge, we must ask “Is there any system under capitalism that can deliver wage justice?” I suspect Marx would have said that the mere suggestion is a contradiction in terms. The key issue to be considered is not just the wage outcomes achieved but whether it was possible to materially better the wage outcomes achieved, given the power of the contending classes and the context.

With the objective of trying to protect the living standards of the whole class – especially the industrially weak and those yet-to-be organised – in 1983 the Accord parties were successful in having the Australian Arbitration and Conciliation Commission end the wage freeze, introduce the most highly centralised wage fixing system in the world, and grant periodic national wage case increases.[37]  

Militant Left Leaders who saw in the Accord a chance to effect major social transformation (L to R: Peter Robson, Nat. Sec. CPSU; Tom McDonald, Nat. Sec. Building Workers Industrial Union of Australia; Dick Scott, Nat. Pres. AMWU; Laurie Carmichael, Ass. Sec ACTU; and Jack Cambourn, National Secretary of the Federated Engine Drivers' & Firemens' Association of Australasia.

Over time, however, the Commission started to award less than the ACTU sought and/or delay the increases it did grant. As the Accord years rolled on the Commission indicated decreasing commitment to the concept of centralised wage fixing. By the late 1980s the dialectical contradictions of a highly centralised system had become a major challenge for the unions themselves in trying to find a wages policy that met the aspirations and circumstances of workers in all the different sectors of the economy.[38] A more decentralised wages system started to become inevitable under the weight of the centralised system’s own contradictions, fierce opposition to a centralised system by the employing class, and the need for greater micro economic efficiency. This was the impetus for the move to enterprise bargaining.

No government lasts forever. Knowing this, the Accord parties sought to put in place a labour movement model for enterprise bargaining before Howard/Costello/Reith came to power. The strategy made sense but there was anxiety around the union movement about how then Treasurer Paul Keating understood, framed and talked up enterprise bargaining and a concern that this created legitimacy for Howard’s deregulation rhetoric. Whereas the unions’ model of enterprise bargaining was to be underpinned by a robust safety net of the award system and arbitration, Howard’s model envisaged no such institutional underpinnings.

The move to enterprise bargaining was not without its successes. Kelty argues that after the ACTU had established a new system of higher minimum wage rates during the first highly centralised period of the Accord, it was possible and necessary to free up the system and enable the industrially powerful sections of the union movement (who had abided by no extra claims commitments during that first period) to advance sectional claims. When enterprise bargaining was endorsed by the Commission large sections of the workforce won significant real wage improvements[39]. However, enterprise bargaining proved tough for those unions who had never been able to rely on bargaining – either during the era of centralised wage fixing or the decades that preceded it[40]. It revealed the historic dependency of much of the union movement on the traditional institutions of comparative wage justice, the award system and arbitration. The neoliberal New Right well understood this which is why the New Right’s principal goal from the mid-1980s onwards was to destroy these very institutions. The New Right understood – in a way the Ultra Left didn’t - that the unions have always relied on several forms of power and that it’s very hard to win wage increases for large numbers of workers through militancy alone.

Evaluating the wage outcomes of this period, Tom McDonald, the former BWIU national secretary, reminds us that for much of the period, jobs not wages were the big issue for most workers, and the economic conditions meant that the bargaining position of the class was not strong. He writes that “the reality on the ground was that the powerful unions could have done better for their members on their strongest jobs outside of the Accord. But most of their members probably would not have done better, and certainly the class (as a whole) would have been worse off without the Accord”[41].

On labour’s share of national income

The Accord is accused of transferring income from labour to capital.

The threshold consideration is whether the lives of working people and their families improved during the years of the Accord? In the 12 years between June 1983 and June 1995:

  • Full-time adult average weekly total earnings increased in real terms by 7.2 per cent[42], notwithstanding all the challenges to wages policy discussed above;
  • the value per person of the social wage components of housing, health, education and childcare increased 75 per cent[43];
  • Household disposable income per person rose in real terms by 20.9 per cent[44]; and
  • Among the OECD countries, only Belgium and Sweden had a more equal distribution of earnings than Australia[45].

Pause too to think about what the winning of superannuation has meant for working people. Today, industry superannuation funds (alone) hold assets valued at $849,400,000,000.00[46] In other words, the wealth held by working people today is (through super alone) $850b more than it would have been without the Accord. [Editor’s Note: By 2023, this has grown to $1.3T]

Now, let us look deeper at the argument about labour’s share of national income. Across most of the developed capitalist world, the first three decades after the Second World War witnessed the dominance of Keynesian economics, the long boom, the building of the welfare state, and an international bourgeoisie wary of the socialist world’s alternative. This all contributed to more favourable bargaining conditions for organised labour. By the mid-1970s labour’s share of national income had reached historic highs. In Australia during the 1970s, says Jim Stanford, labour’s share of national income “peaked comparatively highly” at 55% of GDP[47]. This was significantly due to the strength of Australia’s shopfloor organisation in core sectors of the Australian economy like metals and building, the philosophy of the ACTU and the Left to always fight for the whole class, and the unique nature of our arbitration and award systems and particularly our institution of comparative wage justice that allowed us to flow wage breakthroughs to the whole class. But by the late 1970s says Stanford the growth in the labour share of income “reached its limits.” Stanford observes that the relatively high labour share of national income won in Australia by the mid 1970s created what he calls a “spill-over” effect. He posits that Australia’s starting place was “unusual” and hence our risk of a comparatively greater fall subsequently was relatively greater.

According to the Reserve Bank, “Australia's experience of a falling labour share (and rising capital share) since the 1970s appears to be very similar to that of other advanced economies”[48]. No serious analysis of changes in labour’s share of national income can ignore these parallel trends between Australia and the OECD countries since the 1970s, nor Australia’s particular historical circumstance as Stanford points out, nor the fact that central to the Accord’s strategy was the winning of big once-in-a-lifetime reforms to the safety net which at times involved trade off to (transitory) wage rises, nor the fact that real household disposable income rose in real terms during the Accord years.

It is open to conjecture about whether we could have achieved more in the Accord years to lift real living standards. But it borders on fanciful to suggest that a different labour movement strategy to the Accord could have achieved a significantly better outcome for labour’s share of national income. Critics who suggest this would have us believe that Australia could largely insulate itself from the changing face of capitalism and defy global trends. This, as Ian Millis puts it, “is to make an argument for socialism in one room.”[49]  

The quality of life of working people was enriched because of the Accord; working people were in real terms significantly better off because of the Accord. This is what the labour movement set out to achieve under the Accord and it was achieved. This is the metric by which the Accord should be judged.

On militancy

At the heart of the divergent views on the Left about the Accord are deep philosophical differences. The ultra-Left narrative likes to portray these as representing a fundamental divide between those who favour militant action as against those that they allege do not. They would have us believe that they are the true believers in militancy, and that those who supported the Accord were not. This is an entirely false dichotomy and an entirely flawed narrative. The real divide between those on the Left that opposed the Accord and those that supported it is to be found in a fundamentally different view about class politics.

The Left Unions knew that militant action was essential to see the Accord fully implemented in the face of strong opposition from the employing class. Here tens of thousands of building workers march for wage justice in Sydney in 1989.

In the first instance, the Accord’s ultra-Left critics point to the “No Extra Claims” commitment that unions gave during the early Accord years of centralised wage fixing system. They assert this is evidence of the unions being captured by the state and abandoning militancy. The No Extra Claims provision of the Commission’s wage fixing guidelines obliged the industrially powerful unions to limit their wage claims in return for the Commission awarding a uniform increase to all workers - including increases greater than the industrially weak would otherwise have been able to win in the free market. This was not an exercise in the powerful unions ‘abandoning militancy’ but an expression by them of class solidarity for their brothers and sisters who lacked bargaining power or, as Bill Kelty has put it, a case of the ACTU “borrowing” the power of the industrially strong to assist the industrially weak.[50]  True, the No Extra Claims commitment was a cap of wage increases[51]. But it was a commitment grounded in socialist values that saw the industrially powerless like childcare workers and clothing workers get more than they otherwise would have in return for the industrially powerful like building and metal workers get less than they would have otherwise got in the free market.

At the 1983 ACTU Congress Bill Kelty explained the class politics of the Accord strategy this way: “You can’t have it both ways…Employers are not going to give workers through negotiations $20 without a single days dispute and at the same time give every individual workplace that has the bargaining power whatever they want….if the trade union movement is about anything in this country is it about workers working together” to get what Kelty called “a collective, socialist commitment.”[52] Tom McDonald put the issue into even sharper focus in his contribution when he said “if the trade union movement cannot get workers to struggle together for wage improvements as a class, if we cannot develop a class understanding and a class approach to wages, then how can we hope to ever achieve socialism?”[53]

The Ultra Left have always championed narrow sectional interests and not the interests of the working class as a class[54]. Fundamentally, this is because they don’t comprehend strategy and the dialectics of change. Militancy is critical to advancing the interests of workers. But militancy is not enough. The ACTU leadership and the mainstream Left have always understood this. At its essence, the Accord was a strategy to advance the interests of the whole working class – the organised and the yet-to-be organised, the industrially strong and the industrially weak. This did involve militant action during the Accord such as when the building workers led the ACTU industrial campaign of site-by-site action to establish a beachhead for superannuation in the field. But winning super for the whole class also depended on a strategy that drew on the arbitration system and the power of the Labor government to spread super to the whole class. The challenge for the militant unions throughout the Accord period was always how to design a strategy to best draw on the available mix of tools (that is, sources of power) to get the best possible outcome for the whole class given the economic circumstances and alignment of class forces. This is militancy with purpose or “mindful militancy” as Carmichael called it. “Those who have got the idea” said Carmichael “that the road to socialism is by individual wage struggles in half a dozen factories without mobilising all of the workers, combined in the strength of all of the workers, have no bloody idea what it’s all about.”[55]


One can’t fully understand and appreciate the Accord without considering the huge structural changes that were unfolding in global capitalism in the 1970s and early 1980s. With the benefit of hindsight, a key shortcoming of the Accord was that the union movement often struggled to work out how to best engage with the rank and file when the agenda was so big, the issues so complex, and the number of voices so numerous that key decisions could not but be primarily made at the national level. At the same time, there was no shortage of meetings at all levels of the union movement in the life of the Accord and each of the Accords was negotiated ahead of each federal election and taken to the people.

Objective and scholarly analysis of the period is to be encouraged because it has many positive and valuable lessons that can empower activists. Constructive criticism is to be encouraged as a basis for learning. But critics who equate the Accord with neoliberalism do a grave disservice to the labour movement and the working class. They would have us believe that the militant unions and the ACTU as well as lifelong communist trade union leaders were naïve or willing accomplices to the rise of neoliberalism in the Accord years. Neoliberalism is not to be found in the values and strategy of the Accord but in the New Right strategy to destroy what the Accord stood for and created. The New Right’s mission was and continues to be to dismantle the Accord’s safety net and all institutions – many of them uniquely Australian – that our country has built to protect working people. Foremost amongst these are the award system, the arbitration system and trade unionism. The Ultra Left critics of the Accord masquerade under a cloak of militancy but offer the working class little more than nihilism. True militancy requires more than a preparedness to engage in struggle; it requires conscious and disciplined action in pursuit of class-based values and principles, a concrete and compelling vision, and a coherent strategy that serves the best interests of the entire class and not just the industrially powerful.

The Accord was a truly visionary, strategic, and transformative project that improved the lives of working people as a class. In 1982 the Communist Party had said that if the Accord was implemented with participation and mobilisation then progress in a socialist direction was possible. The major safety net measures won – especially universal healthcare and industry super - were forged with mass political and industrial support and they did fundamentally take Australia in a socialist direction. That’s why our safety net is the envy of the world and why employers and their allies continue to attack these institutions. But whilst ever working people remain vigilant, this great legacy of the Accord will endure because the Australian people now regard the safety net as part of the very fabric of a modern democracy.  And that’s something our labour history should honour and celebrate.

About the author

Daren McDonald is a PhD candidate at Macquarie University researching the story of Workers’ Capital and its implications for social transformation. He is a lifelong activist and Marxist. He has worked for the Seamen’s Union of Australia, Miscellaneous Workers Union and Unions NSW, and worked in senior management roles heading up strategy and policy for several major regulatory agencies. He has edited several social and labour histories, most recently Man on a Mission: 30 years of Exile with Sifiso Publishers, Johannesburg (2019). Daren is the creator of the compelling podcast series Masterclass for Activists. His 1984 honours thesis was the first comprehensive analysis of whether the Accord was a political gimmick or could be a visionary strategy.

The late Tom McDonald, former BWIU National Secretary, and the author of this article Daren McDonald



ALP, Shaping the Nation: Achievements of the Labor Government, Barton, 1995.

ASFA, Superannuation Statistics, March 2021

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[1] D McDonald, The Accord and the Working Class: Political Gimmick or Viable Strategy, 1985, Sydney, p.29

[2] Ibid, p.7

[3] Ibid p.7

[4] D McDonald, op cit, p.58

[5] Ian MacPhee quoted by D McDonald in The Accord and the Working Class, Op cit, p 46.

[6] D McDonald, op cit, p.49.

[7] ibid, p.50

[8] Ibid, p. 53

[9] For more on the influence of the Church see Brennan, F., “The Legacy of Justice Higgins: Seeking a True New Start for all Job Seekers and Workers” (2017)

[10] While no employer organisations supported the Accord, as a class the employers were divided between the emerging heavily-neoliberal and ideologically driven New Right who wanted to destroy all the traditional institutions of the arbitration system, and those employers who were more deeply invested in those traditional institutions and were open to co-operating with the Labor government and the unions through tripartite forums such as industry training councils.

[11] D.McDonald, op cit, p.9

[12] ibid, p.45

[13] Bill Kelty in “The winning strategy that built Australia’s safety net”, Masterclass for Activists podcast series, episode 5 see

[14] D McDonald, op cit, p.41

[15] Ibid, p.43

[16] Ibid, p. 166

[17] Shaping the Nation: Achievements of the Labor Government, ALP, Barton, 1995, p. 56.

[18] Ibid, p.xiv.

[19] Anna Booth, “The winning strategy that built Australia’s safety net”, Masterclass for Activists podcast, episode 5 see

[20] The Washington Centre for Equitable Growth see

[21] Based on OECD statistics. See

[22] In 2021 Luxembourg’s minimum wage is reported to have overtaken Australia’s.

[23] Bill Kelty, op cit.

[24] The Commonwealth Fund is a foundation established in 1918 to enhance the common good by promote a high-performing health care system that achieves better access, improved quality, and greater efficiency, particularly for society’s most vulnerable.

[25] The Commonwealth Fund, “The United States System falls short” (2017)

[26] Burgess, M., “These are the world's best (and worst) pension systems” in Australian Financial Review 21.10 19

[27] ALP, op cit, p.89.

[28] Ibid, p. 88.

[29] G Duménil and D Lévy “The Neoliberal (Counter-)Revolution” in Neoliberalism a Critical Reader, A Saad-Filho and D Johnston (Eds) Pluto Press, London, 2005, p. 9.

[30] Ibid, p.11

[31] A Saad-Filho and D Johnston, Neoliberalism a Critical Reader, Pluto Press, London, 2005, p. 4.

[32] The first casualty of the Howard Government was the abolition of the National Occupational Health and Safety Commission.

[33] Ian Milliss, personal correspondence, June 2021.

[34] A Forsyth, P Gahan, M Michelotti, A Pekarek and R Saibi, Collective Bargaining & Union Recognition Rights: Policy Issues for Australia, Australian Institute of Employment Rights, Monash University, 2006, p. ix

[35] A Donado and Klaus Walde, How Trade Unions Increase Welfare, (Universities of Wurzburg and Mainz) 2011

[37] On occasions the unions traded wage increases for improvements in the social wage or tax relief.

[38] The implications of this for unions in reaching agreement on wages policy is vividly told by Tom McDonald in Dare to Dream (2016) pp 280-282

[39] Bill Kelty, op cit.

[40] For decades before centralised wage fixing many unions relied on the Commission’s acceptance of the age-old principle of comparative wage justice. Under comparative wage justice large sections of the working class who had little or no bargaining power got wage rises through their unions making application to the Commission to “flow on” wage gains actually won by the powerful metal and building unions. Essentially, comparative wage justice meant that many workers did not have to engage in direct struggle themselves and some unions had to do little in the way of hard bargaining. This is not to deny that beyond the powerful unions others did not have militant intent; rather to state a fact that their members were not industrially powerful. 

[41] T McDonald, Dare to Dream, 2016, Sydney.

[42] Shaping the Nation: Achievements of the Labor Government, ALP, Barton, 1995, p. 115.

[43] Ibid, p. xvii.

[44] Ibid, p. xi.

[45] ALP, op cit, p. xvi.

[46] APRA dated quoted in Superannuation Statistics, ASFA March 2021

[47] J Stanford, “The declining labour share in Australia: definition, measurement, and international comparisons” Journal of Australian Political Economy No. 81, pp. 11-32

[48] Reserve Bank of Australia, “The Labour and Capital Shares of Income in Australia” (2019)

[49] Ian Milliss, op cit.

[50] B Kelty, Masterclass for Activists, opt cit.

[51] It should be noted that the requirement for unions to give No Extra Claims commitments pre-dated the Accord years. It should also be pointed out that the No Extra Claims applied to wages and did not stop unions pursuing claims in relation to conditions of employment such as superannuation.

[52] B Kelty quoted by D McDonald, op cit, pp 167-168

[53] T McDonald quoted by D McDonald, op cit, p 168.

[54] The ultra-Left critics of the Accord commonly point to Norm Gallagher’s BLF as the embodiment of militancy. This is highly revealing. Leaving aside Gallagher’s collusion with the employers to oust Jack Mundey and his shameless corruption, Gallagher brought anarchy not militancy to the building industry. He was never a class warrior and - unlike the AMWU, BWIU or Storemen and Packers Union - was never in the vanguard of any major advance for his industry or the class. Rather, he pursued narrow sectional claims for the sole benefit his best organised members to the exclusion of any consideration about delivering results for all building workers or the working class as a whole.

[55] Laurie Carmichael quoted by McDonald, D., op cit p 168.

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