Workplace Relations: Abbott IR Policy A Reasoned, Reasonable Start

TONY ABBOTT today released the Coalition’s Workplace Relations policy for the looming election; it retains the bulk of the Fair Work Australia regime with incremental changes only. Even so, Labor and the unions are up in arms, and they risk fighting a “WorkChoices” election campaign at their peril.

One indisputable measure of how far removed the Liberals’ new Workplace Relations policy is from WorkChoices can be seen in the reaction of Australia’s business lobby; it is not happy, and for the most part has been forthright in saying so.

The noises from the business community have been mildly positive, but muted; “a step in the right direction” best sums up the benign but non-committal response.

To listen to the Labor Party and the unions, however, you’d think the world was about to end; and given they are about to be hurled from office in a landslide, the end of the world as they prefer it to exist may well, indeed, be nigh.

I am talking of course about a crackdown on the trade union movement as a whole; a law unto itself and largely unaccountable in any meaningful sense compared to equivalent corporate entities, the days of doing what it likes and on its own terms, untroubled by standards of governance applied to the capital sector it so despises, will soon end.

This column heartily endorses the proposed re-establishment of the Australian Building and Construction Commission, in addition to a previously announced Royal Commission into the trade union movement, as part of a co-ordinated assault on union corruption and to haul unions into line with the stringent regulations (rightly) applied to corporate governance in the business community.

Tony Abbott should be taken at his word in saying that the only people with anything to worry about from this policy is dodgy union officials and their supporters.

To some extent, the Coalition’s hand has been forced on Workplace Relations by the relentless (and to some extent, misleading) campaign the union movement waged against WorkChoices in 2007, whose impact was renewed by the reprise to the campaign in 2010.

Even so, the positions announced today by Abbott and his shadow minister, Eric Abetz, represent a moderate and sensible course between the Howard government’s WorkChoices regime and the present government’s Fair Work Act, which went so far in the opposite direction to WorkChoices as to roll back labour market flexibility to a point predating the then-controversial reforms of the Keating government in 1993.

Initiating a Productivity Commission review into the Fair Work Act to recommend labour market changes — which would be presented to the electorate in 2016 to obtain a mandate — should take the sting out of IR for the Coalition in the medium term, and provide a point around which to build a more consensus-based approach to reform beyond that.

The allowance of Individual Flexibility Arrangements, or IFAs, is welcome, and The Red And The Blue notes they will be permitted provided any worker entering into such an agreement is not worse off as a result — effectively restoring the “no disadvantage” test to individual contracts that WorkChoices abolished under the Howard government.

I believe there should be no impediment to employers and employees striking direct agreements to the betterment of both, by consent, rather than a legislated requirement for collective agreements based on a lowest common denominator.

That said, if Abbott’s political opponents insist on calling such agreements “AWAs” then so be it: such contracts were common many years before the advent of WorkChoices, and deserve to be so again as a mechanism to provide additional flexibility and cater for the specific circumstances of particular employment situations.

Abbott’s indication that penalty rates and unfair dismissal provisions will remain unchanged — at least for his first term — should be interpreted by the unions in particular as an opportunity to pull back from their confrontational rhetoric, and to explore potential avenues through which to work in partnership with the new government.

I am aware that such a statement may lead some to accuse me of hypocrisy; after all, I really do endorse the crackdown on unions that comes as part and parcel of this package.

However, the fiasco of the Health Services Union — and the cavalcade of criminal charges flowing from it — neatly highlights one area in which the union movement have enjoyed differential standards, and that variance needs to be eliminated.

And again, any unionist not seeking to engage in dodgy practices will have nothing to fear.

The response from the Left, however, has been predictable if not a little tired.

The Murdoch press reports that the Greens “immediately jumped on the announcement,” saying they would try to block the proposals, but their specific objection is difficult to ascertain beyond a vague reference to WorkChoices and — unsurprisingly — an attempt to co-ordinate their attack with the ALP.

“Labor needs to make clear where it stands before the election so voters know that the Greens would be able to block these laws if they come before the Parliament,” Greens MP Adam Bandt was quoted as saying.

“Tony Abbott is a wolf in sheep’s clothing. The history of WorkChoices shows that the Coalition promises one thing and does something else in government.”

Julia Gillard’s response, in sum, was to talk about WorkChoices: a policy proclaimed “dead, buried and cremated” by Abbott prior to the 2010 election, and there is nothing in today’s announcement to encourage the view that that particular status will in any way change.

And ACTU President Ged Kearney zeroed in on IFAs — as she would, representing as they do the anathema to everything unions and their collective bargaining agenda stand for — before rattling on, at length, about WorkChoices.

Kearney indulged herself with a vitriolic and ideology-driven rant about the loss of pay and conditions, to the extent that it was difficult to believe she was talking about the same policy announcement: after all, the response from the business community should have been enough to knock that on the head, and even if it wasn’t, the changes announced by Abbott and Abetz are hardly what anybody could construe as radical.

Then again, this is the same Ged Kearney who recently told a meeting of teachers that the ACTU would launch a “pre-emptive strike” on Tony Abbott and the Liberal Party ahead of the September election — whatever that means.

And this in turn evokes the memory of the meeting between the ACTU executive and new Prime Minister John Howard at Parliament House in mid-1996, when Howard terminated the meeting exactly seven minutes after it started, as reports of ACTU protesters outside the building throwing projectiles and causing criminal damage as part of a “demonstration” filtered through to him in the conference room.

It’s clear that anything short of a re-elected Gillard government — which simply isn’t going to transpire — will see the unions itching to cause trouble; it is to be hoped that smarter figures within their ranks, such as ACTU Secretary Dave Oliver, are able to ensure cooler heads prevail and that talking is attempted first, at the very least.

There is a difference between commitment to a cause and a fight for beliefs and values, and embarking on counter-productive and organisationally suicidal crusades: I think Oliver knows the difference, even though I fundamentally disagree with his politics. It remains to be seen how many of his contemporaries are able to draw the same distinction.

My final comment is on the ALP, and touches on a colossal political mistake it seems hellbent on making.

Even Mark Latham wasn’t stupid or pig-headed enough to attempt to run a third consecutive election campaign on the GST; the issue had brought Labor close to an upset in 1998, but was politically useless to the party by 2001, and not worth revisiting in 2004.

This year’s election will be the third consecutive campaign the ALP has tried to turn into a referendum on WorkChoices: it worked in 2007, after Howard legislated WorkChoices without the policy rating a mention during the 2004 election, and after the union movement bankrolled and undertook a massive mid-term media blitz against the laws.

But I contend the issue was as good as neutralised by 2010, and nothing in today’s announcement will render any WorkChoices scare campaign in 2013 remotely credible.

The danger for Labor here is that all it talks about is WorkChoices; given its record on the economy — which nobody would stand on except to hide — it can hardly campaign on that.

Come 2016, if Labor is still talking about WorkChoices, it will confirm just how irrelevant — and beholden to the unions — the party has become.

And if it gets to that point, and Labor is still trying to win elections on WorkChoices, it’ll be a potent symbol of the malaise that now afflicts the Labor Party, and threatens to destroy it as a viable, broad-based party of the Centre-Left in Australian politics.

Bill Shorten Attacks Conservatives; Proves Unready To Lead

In a speech to the ACTU Congress today — variously described as “powerful” and “rousing” — Bill Shorten claimed, extraordinarily, that conservatives seek to adopt “third world work practices.” Not only is he wrong, but he is out of step with an evolving, changing Australia.

I want to go through the key points of what Shorten has had to say fairly carefully, and comment on each; in some ways Shorten is right in his remarks, but in others — like his claim that conservatives advocate “third world work practices” — he is delusional. And on other markers again, I’d question whether his perspectives are soundly based.

Shorten’s speech has been comprehensively covered by both the Murdoch and Fairfax press, and rightly so; it is fitting that what is essentially a keynote speech to a union conference, by a man who aspires to one day lead the ALP, should be given airtime.

But this coverage has not — as yet — been matched by any critical comment or analysis and, whilst attempting to be concise, I want to pick through what he has had to say. In no particular order. And with no holds barred.

And from, of course, a conservative perspective.

Which makes the obvious starting point Shorten’s remarks about conditions; he takes aim at unnamed “conservative commentators” who purportedly advocate the idea that to achieve competitive workplaces in Australia, wages and conditions must be slashed; he speaks of “conservatives (selling)…this myth that our workers can’t compete … unless we slavishly imitate the (work practices) of Third World nations.”

Australian workplaces — and the laws and regulations that govern them — need to change; the days of a heavily regulated, arbitrated and protected industrial system are long gone. Similarly, nobody (reasonable) advocates the adoption of hourly pay rates at $4 or $5 per hour.

What is required is a balance; and thus far neither of the major parties have found it.

I have written previously that WorkChoices was actually a fairly sensible, and reasonably modest, policy platform; however, it was never presented at an election, it was abominably sold, and it left hundreds of thousands of unduly terrified workers fearful that their pay would drop by hundreds of dollars per week — a fear fuelled by a $13 million union scare campaign that probably won the ALP government in 2007.

And the ALP’s record in this area hardly shines either; restored to government in 2007, it set about not just repealing WorkChoices, but removing flexibilities that had been introduced to the labour market, re-regulating to some extent industrial laws, skewing the employer-employee balance far too far in the direction of the employee, and generally winding back 20 years of IR reform delivered by the Keating and Howard governments.

I think the initial basic approach of the Howard government was probably correct, and remains a model on which to build: binding minimum conditions and a no-disadvantage test. Perhaps one way forward is to look at agreements that replace things like penalty rates, leave loading and the like — inflexible fixed costs offering no additional incentive — with negotiated and binding bonuses for achieving mutually agreed productivity targets.

Most employers are willing to pay more in return for better outcomes, and such a change would mean that rather than simply being entitled to a pot of money each week — regardless of how little or how much work is actually done — employees would be given more control over how much they could earn over and above an agreed basic wage, with real incentive for hard work and delivery of results.

I understand where Shorten is coming from, but the world is changing, whether he or we like it or not; and just as an example — I can wander down to any number of dealerships selling imported new Japanese cars, and for the same price, or less, than a comparable Australian-made car, buy something that is better designed, better engineered, better manufactured, more reliable, and backed by better aftermarket support.

And before anyone yells about falling tariffs — an artificial industrial protection at any rate — it bears remembering that cuts in tariffs have largely been offset by direct subsidies to the automotive industry from government of billions of dollars each year.

It is just one example of why Shorten is wrong; there are many, many others.

(If readers feel I am glossing over issues as I move on, I apologise — and the debate on industrial relations could easily fill a 2,000 word column on its own — just for starters. However, the focus of this article is Shorten’s speech rather than any single issue; if people want a dedicated IR debate, I’m happy to kick it off with a dedicated column if a reasonable number of people indicate so by way of comments).

Shorten also took aim at “elements” who sought to use the scandal engulfing the Health Services Union as a tool with which to attack the union movement generally, and to tar other unions with the same brush.

On one level, this is fair enough — unions that abide by the requirements of the law and conduct themselves appropriately do not deserve to be stained by the misdemeanours of those in the HSU who have dragged it into disrepute.

By the same token, I don’t think it’s an objective of mainstream elements to use the HSU to attempt to break all of the other unions; what I do see is that legislative changes to bring the standards of governance across the union movement in line with what would be expected of business is welcome, and perhaps even urgently required — it simply isn’t good enough to have one set of rules for everyone else, and another arrangement for the union movement on the basis they will, effectively, give their word of honour that what has happened at the HSU won’t happen anywhere else.

And Shorten himself acknowledged that unions could “always improve governance.”

Rather than have the good sense to stay away from the hornets’ nest Wayne Swan has attempted to stir up and leave well alone, Shorten plunged into the debate over “class warfare” and its role in contemporary Australian politics.

It has happened so many times over the years that Labor has sought to play the class card; traditionally a socialist party and seemingly returning to that position under the tutelage of its coalition partners in the Communist Party Greens, the resentment and envy, coupled with the dogma of punitively redistributive income programs, has often coloured the ALP approach.

Certainly, there was plenty of it in last week’s budget.

But Shorten has gone a step further, and a step too far; in attempting to turn the tables on the Abbott-led Coalition, declaring the Liberal Party is waging class war on families and the working class, Shorten is on dangerous ground: living conditions for families and members of the working class rose significantly under the last Liberal government; since 2007, they have fallen sharply, as cost of living pressures and uncertain economic circumstances conspire to drastically reduce real wages.

Voters are smart enough to make this distinction; just as they are smart enough to recognise that the so-called “schoolkids bonus” was, largely, a simple repackaging of monies already available in a different form under a previous scheme, and hardly constitutes anything extra.

Shorten should be more worried about the carbon tax — which, as we have oft discussed, will jack up living expenses well beyond the quantum of any so-called compensation measures — irrespective of anything Shorten or his colleagues care to say to the contrary.

Voters are smart enough to work that out, too, and there is plenty of anecdotal evidence that they have already done so.

Shorten also treads dangerous ground in rattling off lists of the government’s achievements; Gillard is already damned by nominating things like the carbon tax as enduring and crowning achievements of her government, but I would expect Bill Shorten to be astute enough to sidestep such obvious electoral poison, and come up with some original matter of his own.

Which he did, to some extent, talking of better pay for women, and of transport conditions, for example; but including things like the NBN in his snapshot of achievements — with the NBN already perceived as a white elephant stomping along at a snail’s pace, and at ridiculous (and unnecessary) cost, he skates a little too close to the line.

But his arguments about the number of women on company boards, for example, is spurious, and — like the issue of women in politics — it ignores other factors, and not least the fact that fewer women than men actually aspire to those types of roles (in the same way, for instance, the ladies virtually “own” the profession of nursing — for most males, it’s not a career choice).

I do agree with him, however, that the important thing is that the climate exists in which any woman who wishes to aspire to politics, or company directorship and the like should and must be able to do so; he and I would also agree there is more work to be done in this regard.

Shorten was correct to identify in his speech that the burgeoning Asian middle classes represent an opportunity for Australia, not a threat; late last year I posted on a Coalition policy discussion paper for a proposal to turn vast tracts of viable land into foodbowls which collectively could feed 120 million people.

Perhaps — when Shorten is opposition leader after next year’s election — he could provide bipartisanship support for such a policy.

But the issue is also relevant, and provides a tieback to the wages and conditions discussion we started with.

Food security (like minerals and energy) is, potentially, Australia’s own competitive advantage in the 21st century, and beyond. Other countries, including those in Asia, may have inexhaustible stocks of cheap labour to undercut us in some parts of our industrial base, but by contrast, they can’t adequately feed themselves and will become increasingly reliant on food imports — whether through lack of expertise or, through topographic considerations, degradation and pollution caused by explosive populations and the like, they simply don’t have the arable land.

And governments shouldn’t be allowing foreigners — least of all state-run enterprises from Asia — buy up Australia’s prime agricultural lands. It is one thing to buy imported cars, computers and electronic goods from these places, for example; it is another thing altogether to make policy decisions today that will tomorrow also see us buy food from them, grown on our own soil, and at ridiculous markups.

And that should give Bill Shorten something to think about, by way of balance, when he talks about working conditions: things have to change as the world changes around us; the sorts of jobs unions protect today are disappearing, and one day may not exist. But there are plenty of opportunities for new jobs to be created in areas and industries that will underpin workers’ futures — as well as that of the country.

I think Bill Shorten is a work in progress; he is an obviously capable individual and despite sometime denials, possesses considerable ambition.

But he isn’t ready yet, and today’s speech has shown it; there is still some work to do on “the product” before Shorten presents it, in the first person, to the Australian public as the leader of his party.

And he should take his time; acknowledging that the present political climate is extremely difficult for the ALP, he said it wasn’t hopeless. I would have to disagree, not as a conservative but as a realist: the Labor Party will lose the next election, and probably very badly.

Shorten has a few years to work on the finished version of his product.