Unions Want to Turn Back the Clock

26 March 2007

The Australian Financial Review

Michael Chaney
Business Council of Australia.  

It may well go down as one of the biggest attempted cons in recent times.  

Unemployment is at 30-year lows, skilled labour is in short supply and record levels of wages and prosperity prevail throughout the community. Yet, as the country’s union leadership tell it, the Australian workplace has been dramatically unravelling since March 27, 2006 – the day WorkChoices came into effect.  

According to union leaders, that day was meant to mark the start of mass sackings and the emasculation of pay and conditions for those remaining in the workforce.  

When that didn’t occur, the union leadership, which has based its campaign on portraying all Australian workers as potential victims, now says it's only a matter of time.  

Yet, with every reform to workplace relations since the 1980s, even when the changes were initiated by a Labor government, unions have been claiming the same thing. Of course it didn’t happen then either.  

The fact is that WorkChoices is not the revolutionary change that unions portray it as. Rather it represents the latest episode in a logical progression of reform that has been made to Australia’s workplace relations over the last two decades.  

Workplace relations reform has clearly been at the heart of Australia's continuous economic growth since 1991.  

Business Council of Australia-commissioned research by Access Economics has shown that labour market reforms over the previous 20 years directly contributed to the creation of 315,000 new jobs by 2004.  

Since March 27 last year – far from the collapse of job opportunities, wages or conditions – more than 200,000 additional full-time positions have been created.  

Instead of a race to the bottom in terms of pay and conditions, wages have continued to rise, as they have done since the early 1990s.  

Instead of a dog eat dog world with pitiless bosses pitted against their workers, industrial disputation remains at its lowest level since 1913.  

Yet opponents of the reform continue with a deception that is not supported by the actual experiences of the vast majority of Australian workers, or by economic evidence.  

As Access Economics research for the Business Council of Australia has concluded, the move towards greater flexibility in workplace relations has led to wages being more closely linked to productivity. According to Access, productivity increases as a result of more flexible workplace relations because “it reduces the role of third parties with agendas less linked to productivity gains”. 

Productivity gains lead to increased wages and employment opportunities. As a result more people, including women and the semi-skilled, are encouraged to join the workforce.  

Much of this is self-evident for those who have a deep interest in Australia's prosperity and for ordinary Australians who want a workplace relations system that rewards them for their hard work.  

It’s unfortunate for a movement that claims to represent the interests of working Australians to be opposed to changes that have contributed to the creation of new opportunities, significant real wage growth and general prosperity.  

By focusing their campaign on isolated instances, the union leadership is seeking to ignore the critical link between workplace relations reform and the economy's capacity to create jobs and spread prosperity.  

Opponents of WorkChoices are seeking not only to roll back the latest reforms. They want to return employer and employee relations to a system that has more in common with some of the worst elements of Australia's workplace relations from the 1980s, and even the 1970s.  

This runs the risk of returning Australian workplaces to the “them versus us” culture that resulted in high levels of industrial disputes, reduced employment opportunities and pattern-bargaining induced inflation.  

Supporters of winding back WorkChoices need to ask themselves how they can expect the Australian economy to compete effectively in a 21st-century world with a 1980s workplace relations system.     



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