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Crikey Says

Jan 29, 2014

Crikey says: no facts, just ideology, from Abetz

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Myths die hard when it comes to industrial relations. When the previous government introduced the Fair Work Act, then-opposition leader Malcolm Turnbull predicted it would destroy jobs. Around 670,000 jobs have been created, in net terms, since then. Business and the conservative commentariat have insisted for two years that the Fair Work Act has reduced labour productivity, despite growth in labour productivity data every quarter — and despite how labour productivity fell under WorkChoices (nor do they point out that productivity growth was very strong under the heavily regulated IR system of the 1970s). They’ve claimed the Fair Work Act caused a surge in industrial disputes, when the average level of industrial disputation in 2013 was below even that achieved in the WorkChoices era.

They’ve also insisted the Fair Work Act would cause a union-led wages breakout — but it’s now solidly linked to moderate, and even low, wages growth, especially in non-resources industries where mining companies aren’t bidding against each other for labour to build new projects. In the September 2013 quarter, private sector wages growth was the second-lowest figure ever recorded by the Australian Bureau of Statistics. Just yesterday, the NAB stated that “labour costs growth has held steady at restrained levels”.

Enter Employment Minister Eric Abetz, addressing the Sydney Institute last night, and paying homage to Gerard Henderson, who coined the term “industrial relations club” in the 1980s. After a long period of IR reform, Abetz argued, we’re now back to the days of an IR club. He urged unions and employers to understand that pay rises cost jobs and that they should take responsibility for the cost of their deals. He also declared he was intervening on the side of Toyota in its dispute with the Australian Manufacturing Workers Union over reducing conditions in its operations.

Abetz’s speech is long on anecdotes and short — extremely short — on hard data. You’ll search it in vain for reference to the actual statistics about the impact of the Fair Work Act on jobs growth, productivity, industrial disputes and labour costs. That’s because the evidence is that, at every turn, the Fair Work Act has failed to produce the outcomes predicted or claimed by its critics.

Abetz says he wants to direct IR debate back to the “sensible centre”. Maybe he could start with facts rather than ideology.

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