This opinion article by Business Council chief executive Jennifer Westacott was first published in The Daily Telegraph on Wednesday 23 November 2022
I want, and the Business community wants, higher wages and better living standards for all Australians. That’s good for businesses and good for families.
Australians are doing it tough at the moment. They’re struggling with cost-of-living pressures and making ends meet. Across the country, Australians need more money in their pockets and they need their wages to go further.
But the government’s workplace relations bill – which proposes the most sweeping changes in 20 years to the way Australians work – won’t solve these problems.
The way the bill is currently written will actually make things worse, particularly for small businesses.
The consequences are real and damaging. If passed, they will strangle small businesses in red tape, snuffing out their ambition to grow.
They will put out a welcome mat for unions in family-owned businesses; and they will require mum and dad business owners to have the skills and knowledge of HR experts or pay for their services.
And importantly, these changes will not deliver much needed wage rises.
At the moment, small businesses just get on with it.
We have a complex system of awards that sets out a safety net for minimum pay and conditions. Small businesses can pay above that safety-net if they sit down with their teams and figure out what works best for them through an agreement.
The government’s plan could change all of this.
Plans before the Parliament now would create a new system of multi-employer bargaining where different businesses would be required to negotiate together with a union or multiple unions, irrespective of whether or not they are fundamentally different businesses.
They’d be swept up in this system because the new rules give unions the power to drag businesses into these agreements if they have a “common interest”.
The problem is, no one seems to know what a common interest is, it could be that they’re all in the same industry, located in the same shopping centre or have the same set of rules and regulations.
Multi-employer bargaining will see businesses with as few as 15 casual employees – that’s a busy coffee shop in Parramatta – forced to have their rosters, rates of pay and conditions dictated by a union with members working in another business on the other side of the city.
Hundreds of small businesses could be swept up in a system dominated by unions and lawyers who’ll be left to fight over who should be included in an agreement in a drawn out and complicated process.
Talk about a lawyers’ picnic. This could be bickering over whether a coffee shop and clothing retailer have a “common interest” just because they’re in the same shopping centre, or whether an advanced manufacturer building airline parts in Sefton has the same interests as a surfboard manufacturer in Byron Bay.
Unions with any members in a workplace – or even potential members – could use the new laws to force multiple businesses to bargain together.
Each business will have to share information with its competitors and if they can’t agree, strikes could shut down every business at the table. Surely, the good people of NSW don’t need the inconvenience and hassle of any more strikes!
How can a small business be expected to reach an agreement with other businesses they’ve never met before, maybe even direct competitors or big businesses with thousands of employees?
Once they’re swept up, the bill even outlaws the right of a small employer to sit down and offer their workers a better deal unless a union gives them permission.
The government hasn’t modelled the total economic impact these changes and it can’t even say how much it thinks wages will grow.
But their own Regulatory Impact Statement expects that small businesses will have to spend at least $14,000 on consultants to help them navigate this mess of red tape, and $75,000 for medium sized businesses.
And it even says even the smallest employers will also have to spend an extra four and half hours per day to get through this new paperwork, which is time spent away from training new staff or serving their customers.
None of this is fair.
Small business is a crucial engine for our economy.
It’s where big businesses grow from. It’s where a lot of exciting things are happening, particularly in places like Western Sydney, which I see every day.
Western Sydney businesses have all the get up and go needed to drive the renewal of the Australian economy and set us up for the future with new cutting-edge industries. They are working with larger businesses, they’re developing new technologies, creating highly paid new jobs, and exporting services and products around the world.
They really are the beating heart of NSW.
These hardworking businesses don’t need any roadblocks in their way that will limit their capacity to grow, to expand, to pay people more, look after their teams, and hire more workers.
They don’t need anything that will make it harder to sit down and talk with their teams and just get on with the job.
This bill must be fixed because in its current form the only people getting a pay rise are lawyers and union officials.
Jennifer Westacott AO is the chief executive of the Business Council of Australia