Tuesday, 6 September 2011

Tony's not afraid to tackle the tough issues

Anybody can tackle the easy issues, real leaders tackle all the issues especially the difficult ones.

Last week, Tony Abbott took a big step towards becoming Australia's next Coalition PM by declaring he would not fudge on the issue which is key to jobs and living standards. It is the most difficult political contest in Australian politics; a contest with not just the hapless Labor Party but their army of trade union bosses who are the real power behind the disintegrating Gillard throne.

The Opposition Leader called for "more freedom" in Australian workplaces and was reported as mounting an argument for individual agreement-making between workers and their employers. He said, "I think we ought to be able to trust businesses and the workers of Australia to come to arrangements that suit themselves".

Labor's internal conflict over the need for an inquiry about manufacturing is a side issue. The big issue for economic management in Australia is that Labor can never admit they were wrong to give the unions so much power under the Fair Work changes.

In one aspect, it's like the policy disaster on refugee policy where Labor once fumed about Coalition policy, but now want to emulate it but can't admit Nauru was a good idea and don't have the competence to fix the problem they created.

The inquiry that should be commissioned will never happen. Industrial Relations Minster Chris Evans can never agree to an objective assessment of Fair Work Australia. He and the Labor Government can't afford to admit its failures because the unions will never allow any change that cuts back on the vice-like control they have over key sections of the Australian economy.

Tony Abbott was partially verballed. His comment could not, on the face of his remarks, be limited to individual agreements.

Let me use the circumstances of the resource sector and go back in time to explain why this is important.

Nearly 20 years ago, Labor, under Paul Keating, acknowledged that bargaining at the enterprise level was essential as a means to link remuneration to productivity. It was also a means to cater for the rising demand of workers to have working arrangements that were tailored to their personal needs on issues like work and family.

After opposing Coalition policy to provide this flexibility in the Fightback! campaign in 1993, Paul Keating introduced enterprise bargaining after the election in the Brereton legislation. The Coalition applauded the move although the concept was largely stymied by the requirement that unions had to be involved.

In 1996 the Coalition reforms were underpinned by the idea that the framework legislation should give employers and employees, at the workplace, as many options as possible to decide what form of agreement would best suit them.

So when Abbot says we ought to trust businesses and workers to suit themselves he was echoing not only an absolutely fundamental right of choice for citizens in a modern democratic society, but also a long-standing approach of the Coalition enunciated from before 1993.

The Coalition policy in 1996 allowed for awards, union collective agreements, non-union collective agreements, individual contracts (Australian Workplace Agreements AWAs) and greenfield sites.

In 2007 the options were effectively reduced to awards, enterprise agreements and greenfield sites. All agreements are, in practice, union agreements because if, in a business with a thousand employees, there is only one union member then the union with coverage becomes the default bargaining representative. The employer is not even allowed to know the identity of the member.

Chris Evans said last week that employers need to learn how to bargain. This is a very misleading comment, especially in the resource sector.

In the resource sector, once a big project is underway, any industrial action could be financially crippling. For example, drilling ships are very expensive and once in position need to keep working. Once an agreement is signed the unions can't take industrial action. So, employers must therefore have an agreement to protect themselves but agreements are only allowed with unions. So if an employer wants to even start a greenfield project they are at the mercy of the unions. The agreement-making is one-sided; no agreement, no project.

This explains how the unions can "bargain" for wages of around $400,000 per annum for six months work on offshore construction jobs. This explains why in the confined quarters of a construction facility four workers will share accommodation and receive $90 per day for the indignity of having to share the ablutions. The Bass Strait agreement says that workers should not be worse off when undertaking a training course so if a worker goes to Melbourne for a safety conference then the unions insist their members get the ablutions allowance for staying in a five star hotel.

No wonder Michael Chaney said recently that costs are getting out of control. Under a system that allows for employers to have the added choice of non-union collective agreements or AWAs, Labor's excesses and union monopolies would be curtailed. So this debate is about workers who earn a lot more than the Prime Minister and whether or not the resources sector should have the opportunity to bargain, manage their costs and better align wage pressures to productivity.

Labor will describe Abbott's suggestion for non-union arrangements as a devious plan to reduce wages but they always say that! Under the last Coalition, wages rose and more people than ever got a job. Under Labor, job losses are already with us, with more on the horizon, and the statistics released this week show that every income band except the lowest have gone backwards in the last two years. And that is without the carbon tax.

Abbott's comments follow the lead of the Productivity Commission and the Reserve Bank Governor. And they are important contributors to the debate. But yesterday the strong call for individual agreements by Heather Ridout and the Australian Industry Group gives new momentum because they represent the views of a key constituency with political clout.

The industrial relations debate is clearly heating up, it can't be ignored and Tony Abbott's comments are a refreshing commitment to a strong and effective policy to protect jobs and boost living standards for all Australians.

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