The Business Council of Australia has warned the Federal Government’s workplace relations changes risk increasing costs for businesses and consumers while undermining Australia’s ability to compete for global investment.
The BCA’s Closing Loopholes submission found the Government’s changes are adding complexity, cost and conflict to workplaces at a time when Australia’s productivity performance requires a significant boost.
Business Council Chief Executive Bran Black said Australia cannot afford workplace policies that add further cost pressures to business while inflation remains elevated and interest rates are rising.
“Australians are already under pressure from higher prices and rising interest rates, and businesses are facing higher costs across the economy,” Mr Black said.
“Workplace laws should be helping businesses manage these pressures and stay competitive, not adding red tape and creating more disputes in workplaces, which only add cost to consumers.”
The BCA’s Global Investment and Competitiveness Index shows Australia ranks 21st out of 42 economies globally for investment competitiveness, and has fallen from 17th in 2019, highlighting the growing risks to jobs, wages and living standards.
The Index found Australia performs strongly in areas like trade and rule of law, but falls significantly behind competitor countries on regulation, taxation and labour market settings.
“Australia ranks 37th on regulation in our Index, and workplace relations settings now risk further weakening our competitiveness,” Mr Black said.
The BCA submission warns the Government’s workplace relations reforms risk moving Australia in the opposite direction, including through;
- Expanded union access to workplaces, risking disruption and creating new opportunities to increase conflict
- Intractable bargaining rules that incentivise parties to hold out for arbitration and which take productivity off the table in enterprise bargaining
- Same Job Same Pay rules being applied beyond their intended purpose
“These changes are switching the incentives in bargaining and creating new disputes, rather than encouraging employers and employees to work together towards mutually beneficial outcomes, including lifting productivity, which is the best indicator of long-term real wages growth,” Mr Black said.
Recent ABS data shows almost 70,000 working days were lost to industrial disputes in the December quarter, the second-highest quarterly level in over a decade and a 27 per cent increase on the previous quarter.
The Business Council’s submission calls on the Government to amend elements of the Closing Loopholes legislation to restore balance and support productivity, including by;
- Modernising Australia’s federal award system to reduce complexity
- Clarifying labour hire rules so they apply only where workers are genuinely doing the same job
- Ensuring legitimate service contracting arrangements are not unintentionally captured by the new laws
- Restoring stronger guardrails around union entry to workplaces
- Ensuring workplace delegate rights do not override employees’ primary duty to perform their job
- Amending intractable bargaining provisions to ensure arbitration does not undermine enterprise bargaining incentives
Mr Black said strong productivity growth is the only sustainable way to deliver higher wages and improve living standards.
“You cannot sustainably raise wages without lifting productivity. When wages rise without productivity, they ultimately feed inflation and push up the cost of living.”
“Australia should be focused on policies that make us a top 10 destination for global investment, not measures that make it harder to do business here,” Mr Black said.