Jun 29, 2011

Liberals in search of the case for IR reform

Since IR reformers won't explain why we need it, we've looked at what WorkChoices accomplished. It wasn't much.

Bernard Keane — Politics editor

Bernard Keane

Politics editor

Now that Tony Abbott has been forced into an industrial relations policy — recall that he literally had no policy on the issue last year, in a mostly successful attempt to defuse the threat of WorkChoices — it will be intriguing to see how the Liberals sell the need for industrial relations reform.

As Crikey has repeatedly pointed out, so far Labor’s IR framework has accommodated the return to near full employment without any surge in wages growth or rise in industrial disputation levels. Under the Fair Work regime, the economy is producing hundreds of thousands of jobs with no wages explosion and no surge in strike action as workers and employers tussle over the spoils of the recovery.

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42 thoughts on “Liberals in search of the case for IR reform

  1. Cuppa

    The Liberals – WorkChoices yesterday, today and forever!

  2. billie

    Is “Productivity Chairman Gary Banks” the same Gary Banks who ran a successful professional personnel placement firm up until the 1990s?

    I dispute that Australia has returned to near full employment because the unemployment rate is determined as people who were actively looking for work did not have an hour of work paid or unpaid in the survey period. The ABS also keeps track of underemployment, recognising that many “employed” rely on Newstart of $234 per week to provide and income or top up their income.

    About 25% of Australian workers are employed casually, yes it includes university students working in retail and hospitality but also many professional people who are hired at the start of a shift like nurses, teachers and miners. These workers the requisite training, registration and experience are expected to perform their duties in a professional manner. Casual teachers in Victoria are paid $256 per day but after paying agency fees they are likely to take home $176. They deserve a better deal than the proposed by HR Nichols Society.

  3. Pamela

    DIRECT ACTION IS A FIZZER so back to core business arguing that the screws be applied to workers.
    As it is Australians now work longer hours than many other countries, the weekend is dead, our kids are working 2 and 3 jobs with no security as a standard.

  4. freecountry

    The problem is, those comforting economic indicators you cite, such as full employment and low (official) inflation, are caused not by productivity improvements but by things like resource price increases and immigration. Look beyond those figures to “total factor productivity” (TFP, i.e. cancelling out the effects of changes in population and global markets) and it’s a different story, as RBA Assistant Governor Philip Lowe said late last year.
    [“But of course, everything else is not constant. In particular, total factor productivity growth has slowed significantly over the past decade. Indeed, according to the national accounts, almost all the growth in output since the early 2000s has been accounted for by growth in labour and capital inputs, rather than by improving the way we use that labour and capital.”]
    (( ))

    Without TFP improvements, Australia is just riding the currents and hoping our luck lasts. TFP can potentially be increased by microeconomic reforms such as smoothing out tax distortions and increasing labour market flexibility, and by investing strategically in common productive assets such as transport infrastructure and better urban design. If done right, the effect of these is to maximize economic competition throughout the system–including both competition for the best workers and competition by workers for the best jobs–and it is competition that leads to real productivity increases.

  5. david

    @ FC […The problem is, those comforting economic indicators you cite, such as full employment and low (official) inflation, are caused not by productivity improvements but by things like resource price increases and immigration.]

    I notice FC you conveniently ignore the almost halt in stoppages due to industrial action and the very modest rise in rates of pay. Conveniently apple picking those that suit your line huh?
    Excellent article Bernard and there is no doubt Abbott has two fronts attacking him now, the Reith mob and the Turnbull mob. His continual lies and negativity will be the undoing of him.

  6. Jimmy

    FC – “almost all the growth in output since the early 2000s has been accounted for by growth in labour and capital inputs” So neither work choices nor the previous system and current system have had an impact on productivity. Wouldn’t this indicate that investing in infrastructure like high quality broadband or as you suggest transport and urban design has more of an impact and therefore this is where we should be concentrating?

  7. Rob

    WorkChoices was wonderful because it inadvertently revealed the true face of the Liebral/Nasty Party – well off people resenting workers being paid a fair wage because it reduces income to them, to shareholders and to other parasites on the rotting corpse of Fundamentalist Capitalism.

  8. rossco

    When the Libs and employers talk about IR reform they mean slashing wages and conditions for workers and wiping out unions. This might reduce labour costs and increase profits but doesn’t increase productivity. Real long term increased productivity comes from investing in infrastructure, new technology, training, improved occupational health and safety, changed work practices and giving workers the opportunity to have real input into how productivity can be improved. The problem for employers is that requires them committing to expenditure up front for long term gains and that might mean they miss out on this years bonus. Where is the vision?

  9. ronin8317

    The high Australian dollar pretty much condemns to death the Australian manufacturing industry, and why would anyone invest in an industry when you can become much, much richer by selling real estate? Note that the productivity decrease started around 1999/2000, which is also when the real estate bubble took off.

    My boss has been running a small IT company for 30 years. For the last two year, he switched his focus to building an apartment block instead. He’ll probably reap more from the block of apartments than what his IT business made for the last 30 years combine. Something definitely isn’t right with this scenario.

  10. Damien

    The reason there’s been no wages blowout or increase in industrial disputes since the FWA arrangements came in seems to be because it’s not that good for workers and there’s not that much left to do.

    Employers have enormous scope to exploit vunerable employees. For example, I understand enterprise agreements are not reviewed to assess potential disasdvantage on adoption, only if challenged through arbitration. That’s a potential bonanza for SMEs employing the young or disadvantages who are generally unempowered in industrial issues. Fair Work has done little to address that issue.

    Even the unions, for all the talk, appear uninterested. Young kids entering the workforce and marginalised, disadvantaged groups have few friends in IR these days, including the Labor Government. how’s that for labour market flexibility.

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