There are lessons for modern governments in the historic Accord between Labor and the ACTU, signed 35 years ago this week, which gave Australians many of the provisions we take for granted, from Medicare to superannuation.

The agreement, which underpinned the economic success and social progress of the Hawke-Keating era, showed what's possible when unions, government and business truly collaborate.

It also reflects the leadership skill of Bob Hawke in selling a vision to the electorate — of raising the "inspirational umbrella", before pushing through major reforms.

Thirty-five years on, do our leaders — on either side of politics — have the storytelling skills it takes to sell the at-times politically unpalatable reforms that will push Australia forward?

A compact that would change Australia

The Accord between Labor and the unions was signed in 1983. Under the agreement, workers would stop seeking wage increases, and in return the government would deliver a "social wage" — entitlements and benefits that would improve Australians' quality of life and working conditions.

The arrangement was intended to keep inflation under control, create jobs, bring unions into the policy-making process and give Labor more time in power.

Mr Hawke saw the Accord as a necessary precondition to the structural reforms his government would need to undertake to modernise the Australian economy:

"The concept is we would provide improvements, particularly in health and education, which they [the unions] would regard as an offset to increase in money wages, so they wouldn't look for the same degree of increase. That meant they were protected, employers didn't have to pay as much, so it increased their competitive position. That was the overall concept of justice all round.

Before he was PM, Bob Hawke was the leader of the ACTU during the Whitlam government. ( Robert McFarlane )

Accord was born from failure

While the Accord was signed in 1983, the idea of greater collaboration between the unions and Labor was floated in the dying days of the Whitlam government. The economy was in near-crisis and Labor's support had deteriorated: leaders from both were reflecting on their mistakes.

In the year of his dismissal, Gough Whitlam addressed a hostile ACTU congress at South Melbourne Town Hall. Mr Hawke, then president of the ACTU, implored the audience to be respectful before introducing Mr Whitlam, whose speech was met with a few quiet boos and jeers.

Tensions between the unions and the Labor party simmered in the room — industrial disputes and demands for wage increases had caused the Whitlam government immense political pain.

A Stewart McCrae cartoon satirises the Whitlam government's struggles to get on top of the 1970s economy. ( Stewart McCrae, National Library of Australia collection )

Laurie Carmichael, one of the Left's most influential union leaders was standing beside fellow unionist Bill Kelty. At the end of the speech he mused to Mr Kelty:

"Bill, the Labor Party will win again. We must give them more time. We need to get some better understanding with them before they get to power, rather than after."

For Mr Kelty, Mr Carmichael's ruminations opened the door to the possibility of a formal agreement between the union movement and the parliamentary party before Labor returned to government.

Mr Carmichael's support would later be crucial when Ralph Willis, shadow minister for industrial relations, proposed a formal compact between the Labor Party and the ACTU that would facilitate economic reform and social progress.

Widely regarded as the architect of the Accord, Mr Willis worked with ACTU research officer Jan Marsh, Mr Kelty and others to make the agreement a reality before Labor returned to government.

By 1982 the economy was in a parlous state with inflation at 11 per cent, 7 per cent unemployment and negative growth. By the time Malcolm Fraser called the election the following February, the Accord between the ACTU and Labor was ready to be ratified.

How to secure a mandate

According to Mr Kelty, Mr Hawke raised the "inspirational umbrella" under which the practical work of negotiating the detail was done.

Hawke secured a mandate for change through frank conversations, like the economic summit he held at Old Parliament House within weeks of forming government, attended by government, business, trade unions, churches and welfare organisations. The purpose of the summit was twofold:

"One, to explain to the people of Australia the enormity of the challenge facing us and two, from that get a mandate for change. And so it was a promise that, 'We'll give you the information and we'll take it from there', and that's exactly what happened".

Two and a half years later, in September 1985, the government and the ACTU recommitted to the Accord.

Labor reported that since April 1983 employment growth was at 3.3 per cent — the highest in the OECD, unemployment had fallen more than 2 per cent and in 1984 1.3 million working days had been lost to industrial disputes, the lowest number since 1968.

The Accord appeared to be working.

Iconic former Labor Prime Ministers Hawke, Keating and Whitlam reunite in 2007. ( ABC News: Giulio Saggin )

Ultimately, unions paid the price

In the short term, the agreement secured a place for the unions at the policy-making table, but as Mr Kelty acknowledges, "it wasn't without its pain and cost to the union movement".

Unions were drawn into the decision-making process and their trade-offs secured benefits for all Australians, but former ACTU secretary Greg Combet says many of the changes to the economy and the industrial relations system ushered in by the Accord have had long term implications for the movement.

"One of the consequences of changing [the] economy and the … restructuring done during the Accord period, has actually been the decline in the level of union membership in the Australian workforce, and that has weakened the influence of trade unions".

Could we have an Accord today?

If there are lessons from the Accord for modern governments they are about leadership and good policy-making. The process demonstrates that successful policy reform requires a full and frank conversation with the electorate about proposed changes and governments who spend time arguing the merits of their case.

It shows that if they can be justified, Australians will accept trade-offs in the short-term for longer-term benefits.

The Accord was a product of its time, a manifestation of social democratic ideals and the work of a particular group of people who believed in those principles.

It's tempting to think the Accord could be emulated but it's unlikely Australia will see an agreement of its kind in the 21st century.

The economy has changed, the industrial relations system has changed and so, too, has politics.

Perhaps most importantly, as Bill Kelty observes, the people who sold the vision have moved on too:

"I actually think the greatest explanation is we lost the storytellers".

Former prime ministers Bob Hawke and Gough Whitlam. ( ABC Archives )

Bob Hawke, Bill Kelty and Greg Combet revisit the historic Accord, formalised 35 years ago this week, in Hawke: The Larrikin and The Leader, on i-view now.