It's just immoral to lock people into unemployment

07 January 2019

This opinion article by Business Council chief executive Jennifer Westacott was published in The Australian Financial Review on Monday 7 January 2019.

The question of what type of workplace relations system Australia needs is back in the frame again.

The contest is between a strike-ridden regime that encourages conflict or a system where we work together to protect the Australian workforce, the safety net and an enterprise bargaining system that is essential for managing the huge technological transformation underway in our economy.

The consequences of making the wrong choice are enormous.

The bottom line is if the nation does not create a system that can effectively manage this period of transition, and we put blockages in the way of adapting to change, more jobs will be at risk.

Business stands ready to take responsibility and show leadership for the change cascading through our workplaces.

Our underlying belief is that no Australian should be left behind as we adjust.

Business knows people are at the heart of our success.

As we plan for the future, individuals will need to do their part by continuing to improve their skills and keep learning to keep pace with this evolution.

As a nation we need the right settings for small, medium and large companies to thrive, encouraging investment, innovation and enterprise.

McKinsey estimates that embracing digital technologies could add up to $250 billion dollars to the Australian economy by 2025.

The head of the Department of Prime Minister and Cabinet, Martin Parkinson has said, "Done right, this technological revolution will drive the next wave of jobs, and growth in productivity and living standards".

The opportunities are significant, but there are also challenges.

The Business Council and AlphaBeta embarked on a project in 2018 to stress-test whether the nation's structures and institutions are set up to manage this period of change in a fair and just way.

Our research reveals the most significant impact on the working lives of Australians will be in the way we perform the tasks that make up our jobs.

Over the past five years, the average level of change in tasks within an occupation has been almost 10 per cent.

Australian workers now spend about half a day a week doing different tasks than someone with the same job just five years ago.

Significantly, the data tells us that over the past five years, workers in low-skilled jobs had the lowest rate of task change but the highest rate of retrenchment.

Workers in high-skilled jobs were the reverse. They had the highest rate of task change and the lowest rate of retrenchment.

This means that to keep people working and to keep jobs in Australia, we need to embrace the change within our jobs and be ready and flexible enough to adapt.

To do this we need to start by getting the macroeconomic settings right to encourage job creation.

Economic and social policies must work in tandem to deliver productivity, participation and well-managed population growth.

Australia has powered ahead on participation. On population, we need to better target the skills we need. But it is on productivity where we lag.

If we want to drive growth, including the benefits of higher wages and accelerated job creation, we must get serious about productivity and competitiveness.

The best, and most sustainable way, to see wages growth is by lifting productivity. I'm not talking about people working harder for less money. What I am talking about is companies expanding, innovating and investing so that people can work more efficiently.

The link between productivity and wages growth is not broken. The link between productivity and investment is inextricable. Investment is low and that should be the focus of public policy.

Australia cannot be at the losing end of the global competition to attract the capital to fund the development of new technologies and investments.

So, if we are incapable of lowering the company tax rate for all companies, let's do something meaningful on investment or depreciation allowances.

One of Australia's best chances of navigating this period of adjustment is a modern workplace relations system.

Our system needs to work at an enterprise, indeed a workplace level, where workers and managers can sit down together to manage change.

But, sadly, this is not the system the ACTU wants. Instead, they want a return to industry-wide one-size-fits-all bargaining that restricts choice and bakes in rigidity.

We cannot throw out the enterprise bargaining system – a system Labor created that is responsible for driving Australia's productivity growth – if we are going to effectively manage this period of transition.

Enterprise agreements have delivered wage increases. The test of good policies is what are we trying to fix, and will this fix it?

I want to see workers protected but dismantling a system where conditions can be tailored to the circumstances of individual enterprises will put more jobs at risk.

It's just not good enough to promise to work the details out later. Australians, whether they are workers or someone running a business, are entitled to know the fine-print of the system being proposed. It's not good enough to say we'll work it out in government. We've heard that before and Australians have been massively let down.

Under the ACTU's plan, somewhere in Australia irrespective of your town, your circumstances and your conditions, your agreement will be negotiated by a big union, potentially in another state.

An industry-wide agreement that imposes the same standards on all companies, irrespective of their needs, is unworkable.

The simple reality is that you have to change someone's job, in order to keep that job. To protect their job, you have to change their job.

As workplaces change, businesses need to be able to rapidly change rosters, implement new machinery and equipment and have the capacity to retrain workers quickly.

A system set in stone with no room to pivot, dictated by a big union somewhere else, puts these Australian workers at the greatest risk of their jobs disappearing.

It will hurt workers in regions, and it will hurt the least skilled. It will also hurt small business owners trying to adjust to change, and keep pace with global competition.

And in return for a massively rigid agreement dictated by a big union in another part of the country, workers might be charged for the privilege of participating in the agreement process.

This is because, according to the ACTU, apparently the 86 per cent of all working Australians who choose not to be in a trade union are now "free riders".

But it is not just at the industry-wide level that the ACTU is pushing for change. They also want to open up enterprise agreements.

This means everything single thing in a business could be subjected to negotiations in what is already a complicated and lengthy process. And, that means nothing would get done.

Quite simply, anything that makes it harder to adjust or change is the enemy of job creation.

Let's remember that one of the most immoral things we can do during this period of technological change is to make a set of choices that lock people into unemployment.


Latest news

Opinion articles

Opinion articles

Opinion articles