IR battle reaches deep into nation’s aspirational heart

Editorial courtesy of the Australian.

Having been caught flat-footed on the reintroduction of industry-wide wage bargaining at the Albanese government’s Jobs and Skills Summit, big business finally is showing it will not repeat the mistake as the government considers further measures to make workplaces less flexible, less productive and ultimately union-controlled.

The public entry of mining company BHP is a significant turn of events that demonstrates the stakes at play. Like Master Builders Australia and the Minerals Council of Australia, BHP is belling the cat that changes being proposed as a way to protect vulnerable workers in the gig economy have potential impacts that will be much more widespread.

The fact the latest changes are being considered when Treasury secretary Steven Kennedy is warning of the dire consequences of not addressing the nation’s productivity malaise is a poor reflection on the government’s economic approach and priorities. Dr Kennedy warned our low productivity performance would wipe out more than half the expected economic gains from full employment, record migration and the commodity price boom. Coupled with warnings that labour costs will be a priority measure for the Reserve Bank of Australia as it considers future interest rate movements, the proposed industrial relations changes are doubly alarming.

The big lesson from the federal budget is that the Albanese government now is fully responsible for what happens next in terms of inflation and interest rates. It is a message that sits at odds with government actions that appear more designed to strengthen the arm of unions. BHP says the Albanese government’s proposed same job, same pay legislation will cost it up to $1.3bn a year and will discourage enterprise bargaining, drive inflation, undermine productivity, threaten jobs, and undermine the government’s recent bargaining reforms, which have not yet had a chance to take effect. The response of unions is instructive. Australian Manufacturing Workers Union national secretary Steve Murphy said: “No one trusts what BHP has to say.” For the AMWU, productivity-enhancing labour measures represent money out of workers’ pockets to prop up “BHP’s offensive profit”. Such sentiments provide a chilling insight into where this all may lead if union interference is allowed to reassert its hold in the nation’s wealth-producing minerals sector. Breaking the restrictive practices and union featherbedding in the Pilbara in the 1980s set up a decades’ long run of national prosperity while maintaining high industry rates of pay.

The Albanese IR agenda threatens to reach deep into the aspirational heartland of modern Australia. Master Builders Australia says employee-like measures outlined by the government represent one of the most significant and real attacks on the rights of self-employed and independent contractors. Employers are concerned proposed new rules for the gig economy could be ­extended across the board. With about 20 per cent of the $245bn building sector’s 1.3 million workforce classified as self-employed tradies, MBA chief executive Denita Wawn has warned of “dramatic, massive, ­adverse implications” if the IR changes were applied to construction.

Employment and Workplace Relations Minister Tony Burke insists that details of the new policy are not settled and the government is consulting with industry. But industry groups have accused the government of indulging in sham consultation. Given the experience with industry-wide bargaining and the jobs summit, business has every right to be concerned. The signals are clear that the economy needs dramatically improved rates of productivity and that a breakout in wage costs remains one of the major dangers ahead. The government must put the community interest ahead of the special-interest demands of the union movement.