The Only Way Forward Is to Keep Moving Forward

30 March 2007

The Age

By Charlie Lenegan
Managing Director, Rio Tinto – Australia

Over the past 20 years, reforms to the way Australians work have been a fundamental part of our economic success story.  

There have been several reforms since the 1980s that have introduced greater flexibility in workplace arrangements. Before these reforms, Australia’s work culture was largely characterised by inflexible work practices and a culture of “them” and “us” that combined to stifle productivity and innovation. 

Employer–employee relationships reflected distrust, high levels of frustration and low to non-existent levels of collaboration.  

A tremendous amount of time and energy went into the creation, management and resolution of disputes.  

The concept of working together to meet business challenges was often rejected.  

Since then, Australia’s workplaces have undergone significant changes aimed at increasing choice and flexibility in agreement-making, and in turn lifting the productive performance of our economy.  

The ALP governments, under Hawke and Keating, first recognised the challenges posed by the changing economic and trade environment in the early 1980s and set about making our economy more competitive.  

They instituted a broad range of micro-economic reforms, liberalised the economy and, importantly, saw the need to move the focus of workplace relationships to the enterprise.  

The Keating government instituted the first of a series of workplace reforms that continued following the election of the Howard Government, and that helped to create a workplace where:  

Individuals were keen to take up challenges and test themselves.  

Custom, practice and rules preventing employees from contributing to new and more productive ways of working were replaced by an environment where employees were valued and were able to grow.  

Safety performance improved dramatically as it became the focus of shared efforts rather than a tool for an outdated industrial relations model.  

The changes were part of a broader shift that has seen Australian society move to an aspirational and “can do” focus rather than a defensive protectionist position.  

The changes, together with the “welfare to work” initiatives, are also providing opportunities for many who were previously excluded from mainstream employment by the rigidities and practices enshrined in the old system. The results, on a broad economic level, have been quite marked.  

Since the 1980s, the number of jobs created directly by labour market reforms has totalled 315,000.  

Successive workplace reforms over the past two decades have also played a major role in raising our living standards from 17th in 1991 to 7th among OECD countries.  

As well, we’ve seen strong wages growth and increased participation in the workplace, particularly among women, young people and the semi-skilled.  

In short, workplace relations reforms have played a major part in spreading growth and prosperity.  

With all these benefits flowing to the economy and to the vast majority of Australians, the way forward is obviously more of the same, rather than turning the clock back to the bad old days of declining productivity and industrial strife.  

Yet that is exactly what is being proposed by those seeking to dismantle WorkChoices, which must be seen in the context of being the latest instalment in the series of workplace relations reforms starting in the 1980s.  

There is obviously a high level of spin being used by opponents of workplace reform.  

Much of this rhetoric claims workplace reform strips protections from workers and propels a drive to the bottom in terms of wages and conditions. This ignores the statutory protections that form part of WorkChoices.  

The reality is that jobs growth, competition for skills and flexible workplace arrangements provide the best path to creating jobs and opportunities.  

As history has shown, regulation and rigidity make it harder for businesses to employ and retain people, and therefore work to disadvantage the very workers they seek to protect.  

Opponents of workplace relations reforms have particularly targeted AWAs by stating that, on the one hand, they reduce pay and conditions, and, on the other, they are a minor part of the workplace relations system that can be cast aside.  

In reality, AWAs play a major role for the resources industry, which has been the driver for Australia’s growth and prosperity in recent years.  

AWAs provide packages that are competitive and reflect market conditions. In the resources industry, AWAs are delivering packages well in excess of any award conditions.  

The challenges and opportunities that the Australian economy will face over the next decade mean it is imperative to stay the course on workplace flexibility and innovation.  

The challenges include globalisation and the emergence of economies such as China and India, the need to pursue increased participation in the workforce, and the opportunities provided by changing technologies that will profoundly influence the way work is done and the type of workforce required.  

While the overwhelming proportion of employers meet and exceed their employment obligations, there will be exceptions.  

But the response must be effective controls to prevent or deal with these issues rather than outright rejection of the concept of providing employment choice. We must avoid re-implementing policies of the past that drive the continuous erosion of opportunities for Australia to succeed and to create jobs.  

The best protection for workers now and in the future is a dynamic economy with significant employment opportunities and competition for skills – not reversion to the model that demonstrated its entrenched shortcomings more than two decades ago.   



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