Folly to Shackle Growth

20 November 2006

The Australian

By Michael Chaney
Business Council of Australia

Unions seek to rewind Coalition and Labor industrial reforms, warns Business Council of Australia president Michael Chaney

A CALL by the ACTU last week for a raft of workplace regulations and conditions to be mandated highlights what has become a fundamental debate about the future direction of Australia's economy. 

On the one hand, there are those, including the Business Council of Australia, which believe that workplace reform is a necessity if we are to maintain our competitiveness as an economy. As a nation, we have chosen to take this path during the past two decades and this has delivered real outcomes for many Australians. 

Access Economics research undertaken for the BCA last year showed that labour market reforms over the past 20 years have directly resulted in 315,000 more jobs for Australians. According to this research, without these reforms Australia's unemployment rate would be 2 per cent higher. 

The other route being mapped out by those opposing the Work Choices legislation, including the union movement, is being offered as nothing more than a detour. But in reality it involves a significant U-turn and travelling backwards in time to rigid workplace arrangements, higher unemployment and wages stagnation. 

The ACTU's call, made the same week when the jobless rate fell to 4.8per cent, marks the latest episode in a concerted effort to re-regulate Australia's labour market in ways that can only lead to significant barriers to productivity growth and job creation. 

In June, federal Labor pledged to abolish Australian Workplace Agreements, replacing them with some other form of individual contract. 

The announcement followed a concerted campaign by the ACTU against AWAs. 

Recently, Labor appears to have put some flesh on its industrial relations policy by announcing proposals to re-establish the primacy of collective bargaining in workplace negotiations. The ACTU has since offered a plan to give unions the right to collectively bargain in any workplace, even if only one employee is a member of a union, and for pattern collective bargaining to be enshrined in law. 
The ACTU's plan goes further than Labor's. But the principle behind both is the same: a return to collective bargaining as the core of Australia's workplace relations system. 

The BCA recognises that collective bargaining is an important option for agreement making. But collective bargaining cannot be the only approach, to the exclusion of all other means of agreement making. There must be other options available to businesses and their employees, including individual contracts and AWAs. 

The BCA has long argued that the focus of workplace regulations must be on flexibility, choice and enterprise-based agreement making. In the increasingly competitive and dynamic global market in which Australia operates, local companies increasingly need flexibility in working arrangements so they can quickly adapt to changing patterns and processes of production and service delivery. 

Constraining the options available to employers and employees flies in the face of these principles and does not have the support of business. 

Let us be clear about what this means in practice. What is being proposed is not just a winding back of Work Choices. Instead, this has the potential of winding back workplace relations policies to pre-reform days and unravelling many of the gains in workplace reforms that have been made during the past two decades. 

The weight of independent research shows much of Australia's economic gains in recent years -- including productivity increases, wages and job growth -- have been achieved by greater flexibility in workplaces, not through the imposition of uniformity by outside parties. 

The rest of the world is moving forward. As a country that has rarely shirked the challenge of reform in the past 20 years, Australia cannot afford to go in the opposite direction. 

In responding to Labor's announcement in June to abolish AWAs, the BCA was critical of what it saw as the ALP's fragmented approach to what has been such a fundamental driver of Australia's recent prosperity. 

We particularly highlighted the lack of any real explanation or policy alternative by Labor on how productivity might be further improved in the context of its road map for workplace relations. 

Since then, business has been calling for Labor to release the full detail of its industrial relations policy so that everyone can be clear about the extent to which it proposes to change our workplace laws. 

Recent announcements give some insight into the direction and intent of the party's policy in this important area. But it only confirms in the mind of the business community that this approach will take Australia down the wrong path. 





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