Tuesday, May 01, 2007

Julia Gillard’s threats over IR won’t conceal policy stupidity

Are the wheels finally falling off Labor’s dream run? Its share of the primary vote has fallen from 52% on March 16-16 to 48% on April 27-29. This vote would still give Labor a crushing win but it was taken before the Labor Party National Conference and before the flare-up over Labor’s IR policies.

Labor’s IR policies would restore a raft of minimum conditions to non-award workers, would turn the tide back to collective bargaining, would legitimise ‘pattern agreements’ across industries, would abolish AWAs replacing them with 'common law' contracts that must comply with awards and legislated conditions and so on.

Women will be entitled to seek 2 years unpaid leave while they raise children – Rudd presumably believes this will have no effect on the decision of firms to offer young women jobs. This is economic sabotage of Australia’s successful attempt to drive down its unemployment rate – at a time where workforce participation of young women is at an all time high.

Rudd has caved in to trade union power and attempted to dress up his IR stance as a ‘family friendly’ set of policies. The unions want a more centralised, less flexible workplace where unions retain a key role. It is a total cave in to the trade unions and a backward step for Australia that would increase unemployment and reduce productivity.

The reaction to Labor's IR policies in the business community has been overwhelmingly negative. Even the Premier of Western Australia opposes the move to abolish AWA’s. Sir Rod Ellington, the businessman Labor recruited to display its ‘business friendly’ new attitude, has refused to endorse Labor’s IR proposals.

Julia Gillard’s response to business: ‘I'd be concerned if the business community got itself into the political fray,’ she said.

‘I'd be concerned if they became, if you like, propagandists for Mr Howard. I don't think that is a wise position for Australian business to put itself in.’

Ms Gillard said that during an election year, the political contest was a ‘pretty hard, fast place to be’.

‘It's a contact sport, if you like, with a lot of injury,’ she said. ‘I don't think it's a wise place for Australian business to be out on the field in the fray getting those injuries on the way through.'
Gillard is the abusive mother threatening her recalcitrant child - ‘shut up or you will cop it worse’.

Mr Rudd has claimed that, after transitional arrangements to be devised are worked out, abolishing AWA’s will leave no worker worse off. All problems with our IR policies will be eliminated by future as yet unspecified actions.

Small businessman Fred McMurray summed up the costs of abolishing AWAs as follows:

‘Banning AWAs will cause chaos, and god knows what will happen if the construction watchdog is abolished. That really will be a return to the bad old days of the unions running amok, as they did when Geoff Gallop first won office.’

‘The thing is, the award just doesn't really enter into it any more. It's different horses for different courses. Workers want conditions and pay that suit them. We have plumbers in the east Kimberley who negotiate pay and conditions that are, and should be, much different from others working on construction projects in the cities’.

‘We must compensate people properly for doing such work in such areas. If we don't pay them well above award rates, we can't attract them in the first place'.
Normally reticent big business groups such as BHP-Billiton and Rio Tinto are scathing in their assessment of the IR policies:

‘As it stands, the ALP's proposed IR policy will not only abolish AWAs, it will also effectively get rid of the mining industry's ability to capitalise on the current huge demand for minerals,’ BHP said yesterday.

The comments place BHP, traditionally a moderate on industrial relations issues, at the forefront of a growing chorus of business opposition to Labor's proposed industrial law changes.

Last month Rio Tinto's Australian head Charlie Lenegan said Labor reforms would turn the industrial relations reform clock back ‘15 years-plus’.

‘We have some concerns about the ALP's industrial relations policy and the potential for it to adversely affect the continued expansion of the minerals industry. If the ALP is committed to abolishing Australian Workplace Agreements, it is critical that it comes up with an industrial relations system that promotes, rather than stymies, Australia's minerals industry.’

‘…employees and employers also have a right to choose which industrial relations instrument best suits their needs. We do not believe that mandating third-party involvement in bargaining, or mandating collective bargaining itself, is appropriate. This is a retrograde step that will only contribute to inflexibility for employers and employees.’

‘There's no one-size-fits-all approach,’ a BHP spokesperson said.

BHP is sensitive to the individual contracts issue since it lost out heavily to Rio Tinto when Rio used individual contracts rather than collective bargaining to drive much greater productivity gains.

Finally, private job agencies state that that it is the unemployed who will be hurt worst if WorkChoices is abolished. Firms are more willing to take workers on if they know they can sack them without fuss if things don’t work out or demand changes.

‘Unfair dismissal laws did really scare a lot of small business employers.’

Today’s Australian Financial Review (subscriber only) is about as scathing as I have ever seen it on the Rudd-Gillard IR package. The AFR editorial describes it as ‘economic idiocy’ and a ‘capitulation to the union leaders worse than Mr Latham’s’. It describes their chatter about restoring ‘balance’ and a ‘fair go’ as ‘Lathamite doubletalk’. Already unions have confirmed that the major Australian Banks would be forced to reach new collective bargaining agreements with the Financial Sector Union.

‘The real reason for Labor’s 20th century workplace policies is its deep psychological need to keep the unions on side, and the belief that demonising employers will yield electoral advantage. Regardless of whether this is good politics, it is appalling economics and a blow to Labor’s credibility on the No.1 election issue’.

Labor's IR policies are scary generally - particularly if you know can appreciate the reality of what it is to be employed.

1 comment:

Anonymous said...

by gingo I would love that car with the wheels falling off with a primary vote of 48% Harry!

If the figures were perhaps 38% your comment might make sense