Radical industrial relations reform an economic risk Australia can’t afford

22 January 2024

This opinion article by Business Council Chief Executive Bran Black and the Council of Small Business Organisations Australia Chief Executive Officer Luke Achterstraat was published in The Australian on 22 January 2024.

Bad policy does not discriminate: radical industrial relations reform is a key economic risk in 2024. Whether it is small or big business held back from being productive, the ramifications are felt by all.

There’s an economic storm coming for businesses of all sizes this year, which will be made worse by the hand of government.

The government’s radical workplace relations agenda will bring self-inflicted damage to our economy at a time when we can least afford it, creating ripple effects for all.

The remaining “Closing Loopholes” legislation, which the government will try to pass next month is going to make offering casual jobs far less appealing for employers, and finding those kinds of jobs far harder for employees.

It’s difficult to overstate the importance of casual jobs to our economy, they make up almost a quarter of all jobs. Try telling an events business to function without casuals. Or a seasonally driven business such as a beachside cafe.

Whether you’re a small local business trying to work through rostering, or a larger business looking to hire and grow, it’s about to get harder, riskier and more expensive to do so.

Meanwhile, more than two million Australians enjoy the flexibility of casual work, including students, carers and parents. For many Australians, their first job is a casual job.

The ability to take home an additional 25 per cent casual loading is highly valued in our current cost-of-living crisis.

While small and bigger businesses will not agree on everything, it is clear that when bad policy is presented, the opposition is unanimous.

And when it comes to something as fundamental as the ability to hire workers, it is little surprise that if a policy is bad for small businesses, it is bad for medium and larger businesses too.

Employers of all sizes are in it together to push back on these damaging changes for one reason: we need a strong economy to enable the success of all businesses.

Small businesses are key drivers of innovation in the economy, representing the majority of entrants and exits in the economy each month. In other words, they are the incubators for new ideas and products.

Small businesses are also customers and suppliers to larger businesses, with well-established interdependence.

It is self-evident that we need to foster an environment where small businesses can start, survive and then also thrive. It is just as evident that we need an environment where big business can continue to create jobs while supporting thousands of small and medium-sized businesses.

When a proportion of the 2.5 million small businesses in Australia are pushed to the wall by industrial relations red tape and having to decide whether to shut up shop or cut staff, it hurts the economy, consumers and other businesses.

Conversely, when larger businesses are held back from running productively, from creating jobs and investing more, they reduce their spending and smaller businesses inevitably suffer.

This is already evident from the belt-tightening happening across all parts of our economy. According to the ABS, spending on services (often smaller businesses) has dropped quarter on quarter. In other words, the ability for small business to benefit from larger businesses is undermined.

When major projects don’t get off the ground, or close (in the recent case of Alcoa’s Kwinana refinery), the knock-on effect hits small businesses that might have supplied those workers with much-needed accommodation, hospitality and food services particularly in regional communities.

Unworkable changes to casuals are just one of many potholes in the Closing Loopholes Bill that will make the road rockier for all businesses.

Anti-productive changes to the trucking industry will push up prices in the supply chain that feed through to Australian firms of all sizes that receive road-transported goods. Radically overhauling the definition of employment, and making it harder to be your own boss, will tie a rope around the 1.1 million self-employed contractors in Australia working as tilers, scaffolders, architects and builders on projects both big and small.

Excessive interference in the gig economy runs the risk of making successful food delivery models unviable, a service relied on by 97 per cent of small hospitality businesses, but also numerous larger firms.

The government’s radical workplace relations agenda will make it harder and more expensive to run a business for every enterprise in Australia, small, medium or large. That’s going to make our dismal productivity growth worse and the next generation will be left to pay the bill of lower living standards.

Australian businesses of all shapes and sizes are appealing to Workplace Relations Minister Tony Burke as he puts forward this remaining legislation: this policy will leave all Australians worse off.


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