'RED Wonthaggi' was the Depression-era name given to the battlers' town on the South Gippsland coast where unions struggled for better conditions and wages at the large state-owned coal mine.
Surrounded by a conservative agricultural community, Wonthaggi became known as an Australian hot spot in the pitched industrial and class battles of the time. When the mine closed in the 1960s, the town's reputation for industrial militancy faded and it settled into a new role as a regional centre.
Decades later, Wonthaggi is again the focus of a national industrial relations debate. This time, unlike in the 1930s, the debate is not about blue-collar workers dying in mines or being paid a pittance. It is about allegations of workers being paid too much in conditions that those miners could not have dreamt of.
The saga of the desalination plant - the monster water factory that will cost Victorians as much as $24 billion over 28 years - has had far-reaching implications that go well beyond questions about Melbourne's water supply.
It has sparked a heated debate about the environment, played a significant role in the demise of the Brumby government and continues to send shudders through parts of the corporate world about the pitfalls of public-private partnerships and doing business in Victoria.
While in its first guise Red Wonthaggi was a beacon for socialists, this time the right-wing warriors who cluster around the revived H.R. Nicholls Society are leading the crusade against ''Wonthaggi''.
Many of the same names that pushed for reform in the 1980s have plenty to say.
Why has Wonthaggi re-emerged as an IR rallying point and who are the real winners and losers in the desal drama?
Underpinning all that has happened around this controversial project is the fact that it was commissioned by the Bracks government at a time when inflows into Melbourne's dams were at an all-time low and there were great fears the city could run out of water.
''The environment we started the job in, we were responding to pretty well blind panic,'' says John Barraclough, project director for builder Thiess Degremont. ''There was a need to build this thing … we responded to this process.''
And respond to the panic they did. The builders threw billions at the project and its ambitious - arguably unrealistic - deadline. Money has been no object, whether it was for wages, machinery, strike-breakers or lawyers.
Had they succeeded, the builders looked forward to as much as $500 million in pre-tax profits, to be shared between Thiess and Degremont, firms owned by industry giants Leighton and Suez respectively. But they didn't - the production of the first water from the plant could be a year late and the plant is not expected to be fully operational until early 2013. This frenzy around the deadline has reshaped IR in Australia, some say for the worse.
The wages at Wonthaggi are as much as 40 per cent higher than at desal projects in other states, according to calculations by The Age. For example, electricians on the project can earn $150,000 a year, even more when generous allowances are factored in. Also, unions have negotiated extensive rights to consultation and restrictions on outside labour.
All this has stoked the fire in the bellies - if it was needed - of right-wingers intent on IR reform.
Eric Abetz is a veteran IR campaigner who has had to publicly soften his stance on reform as the federal opposition's workplace relations spokesman. But he returns to type when asked about the desal plant. He slams Thiess as ''weak'' for agreeing to the ''extreme'' deal.
''Those sort of agreements become the benchmark. All you need is one extreme example such as Wonthaggi,'' he says.
Abetz warns of ''rippling'' effects around the country. Others in industry have echoed this sentiment.
Since coming to office a year ago, the Baillieu government has used the desal agreements to justify a planned Howard-government-inspired ''code'' for state-funded projects to try to stamp out ''undesirable'' union work practices.
''The rates at the desal plant have migrated to other projects,