Bulletin Editorial: Keep politics out of the IR debate

Today's edition of The Australian features an insightful opinion piece by AMMA chief executive Steve Knott, who argues both main political parties are denying business the reforms needed to boost productivity. Read it here.

Here we go again. In recent days, the Prime Minister has said that industrial relations will be in focus during the lead-up to the federal election and that she will take the IR fight to Tony Abbott.
Sound familiar?

This rallying cry for the political support of the PM's union comrades is not unexpected and has the added bonus of diverting attention from the fact that her IR laws are fast becoming a major barrier to doing business in Australia.

The Opposition Leader also entered the debate recently with the same tired platitudes about the position of the IR pendulum and the need for flexibility.

Here we have a background of international economic uncertainty and falling domestic productivity and the best our political leaders can come up with is a re-run of the 2010 "WorkChoices will be back/WorkChoices is dead" debate.

Australia deserves better, much better.

When Australia's IR system refused to embrace enterprise bargaining in April 1991, then-ACTU Secretary Bill Kelty rightly said 'there was no reason for the trade union movement to eat this vomit'. The resource sector supported the ACTU's position at that time as the sector had been enterprise bargaining for decades.

In 2012, the appetite for swallowing poor IR policy outcomes hasn't changed.

In choosing to play politics rather than act in the national interest, both major parties are denying businesses the necessary IR reforms to boost productivity and sustain Australia's economic prosperity.

Also disturbing is that the government, in tandem with unions, is seeking to silence any criticism of its workplace laws, even from respected people like Productivity Commission Chairman Gary Banks, Reserve Bank Governor Glenn Stevens and the Chairman of Australia's largest company, BHP Billiton's Jac Nasser.

Banks told an Economics Society conference in Melbourne last week there was a strong case for including workplace laws in a productivity review because of the pervasiveness of industrial relations regulation across the economy and its influence on the ability of enterprises to innovate and adapt and meet market opportunities and challenges.

The government and the union movement immediately vilified the comments, with the CFMEU calling the Productivity Commission a 'taxpayer-funded right-wing think tank', while Workplace Relations Minister Bill Shorten also rejected Banks' suggestion that national competition rules be applied to the labour market.

So there is paralysis on the IR debate on both sides of politics, despite incontrovertible evidence that the current laws are causing problems for the economy and detracting from harmonious and co-operative workplace relations.

Clearly the government is too beholden to its union constituency and some of its union-funded Greens partners to make meaningful changes. For the Coalition, it's about having been burnt at previous elections and trying to neuter the inevitable re-run of the ALP/union 'return to WorkChoices' arguments.

This is notwithstanding that everyone within IR circles knows Abbott was never a fan of WorkChoices and won't go back there.

With ongoing industrial unrest continuing to wreak havoc on Australian workplaces, our leaders need the intestinal fortitude to stop obscuring the real issues that must be aired.

An example this week in Victoria was the spectre of union picket lines returning, work sites being blockaded and those not involved in strikes being denied access to sites to perform their normal deliveries and duties. While the Toll/Coles picketing issue attracted media attention, other pickets affecting other employers, including in the resources sector, are regularly popping
up.

To date, Fair Work Australia has refused to stop such picketing. This inaction feeds into the intimidation and financial damage to industry stakeholders and enshrines a perception that unions are above the normal law that applies to others in the community.

Coupled with the delay in holding past and present HSU officials to account, the government's appointment of 12 ex-union bosses out of a possible 17 to FWA, and the tribunal's inaction on militant industrial activity, there is little wonder as to why the business community is fast losing confidence in the institution of FWA.

Notwithstanding the industry's fear of more IR window dressing, the current Fair Work Act review, due to be handed down by the Workplace Relations Minister later this month, presents the government with the perfect opportunity to make meaningful IR legislative changes.

A good starting point would be to fix failed attempts to deliver any meaningful flexibility to businesses and workers through Individual Flexibility Arrangements (IFAs).

Contrary to how advocates for change are being painted, flexibility does not equate to fewer and lower paid jobs. When direct employee/employer agreements were in place during the Howard years, the vast majority of which were unpinned by a no-disadvantage test, real wages grew by 12 per cent and employment increased substantially. Such agreement making encouraged innovation and was a circuit breaker to union negotiations where militant officials were often stuck in the 1970s with their trumped-up ambit claims.

Under the new Fair Work regime, the same union officials are proudly boasting that wage outcomes are being achieved with no consideration of workplace productivity issues.

It is both sad and surprising that any mention of flexibility is quickly dubbed by the PM and unions as employer code for 'stripping pay and conditions'.

This argument simply doesn't wash in a high-paying industry like the resource sector where competition is already intense for scarce labour and wages have risen significantly in recent years. Average wages in the resource sector are north of $125,000 and many tradespeople are earning well over $300,000 on oil and gas construction sites.

In a modern and mature economy, an exchange of views about necessary IR changes is not about diminishing workplace rights and should at least be dignified via a considered debate.
Some simple legislative fixes would reduce our escalating industrial conflict and demonstrably improve Australia's international workplace relations standing.

Matters like allowing employees to enter into agreements directly with their employers as long as they have an adequate safety net; breaking the union monopoly in agreement-making for new projects; restoring a strong workplace cop on the construction beat; and ensuring a majority of employees support strike action before it proceeds, would make all the difference.

Robust discussion about the key drivers of productivity and efficiency should be encouraged rather than silenced, especially as there is so much at stake. Our industrial framework can play a crucial role in this.

Those attempting to silence the debate for political reasons and suggest there is no room for improvement to our current IR laws are ignoring opportunities to both improve the economy and uphold workers' rights.

The Fair Work Act review is a golden opportunity for both political parties to actively listen to industry and make the necessary changes.

Will any of our leaders step up to the task of making changes in this vital area in support of the national interest, or will Australia's current adversarial IR environment be the only thing to flourish in the years to come?