The challenge for the Prime Minister in his snap reform summit this week will be to overcome the doctrinaire positions of many of the stakeholders. The biggest problem will be what appears to be the denialism of business groups about industrial relations, as seen in their responses to the Productivity Commission’s draft report on industrial relations reform.
The responses of groups like the Business Council, the Australian Industry Group and the Australian Chamber of Commerce and Industry ignore the commission’s sober conclusions that Australia has an effective, flexible workplace relations system. Indeed, the Reserve Bank recently observed that the flexibility of our industrial relations laws, in allowing a trade-off between lower wages growth and higher employment, had played a key role in enabling the economy to navigate the end of the mining investment boom.
None of that matters to employer groups. They want to cut back awards, curb rises in the minimum wage, slash penalty rates in hospitality and retail and extend those cuts to all industries, and further limit the power of unions and employees to bargain with employers. Some even oppose recently established protections against workplace bullying.
Their position is not evidence-based. There is no evidence that minimum wages reduce employment. Meanwhile, we do have evidence that productivity growth under the Fair Work Act has outstripped growth under WorkChoices, and that wage cuts damage the very household demand they depend on.
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Instead, their objections are based on ideology and naked self-interest — a desire to penalise workers for the direct benefit of the bottom line of businesses. And they’re not acting in the national interest.