Tuesday, 8 November 2011

Gillard's 'annus horribilis'

It is folly to consider Australian politics and economic management without appreciating what we could soon face from overseas.

At no time in my political career have we experienced anything like the economic Sword of Damocles which hangs over us today in the form of Europe's economic and political crisis.

Greek sovereignty finally met the bailiff in Cannes last weekend. The Italians have been forced to let the number crunchers check their finances and maybe soon we will be hearing that Italy's finances are even worse than previously thought. Italy could then be on its knees economically and politically.

Meanwhile Julia Gillard in Cannes gave the Europeans a lecture about economics. It would be laughable if not so serious.

The Rudd/Gillard Government is about to push through its carbon tax which will put Australia at a competitive disadvantage, it has overseen waste on a grand scale and then she said to the Europeans that the economic challenge is all about jobs whilst back at home secondary students have been prevented from working after school by her Fair Work Act (FWA).

The worry is that Gillard is just as much out of her depth at home as abroad and worse still, the Australian policy debate is mired by complacency when we should be doing everything we can to guard against European collapse.

At least a moment to reflect on our situation is coming very soon.

Q&A had its final panel for 2011 last night, the Parliament will soon finish the Spring session and politicians are looking forward to the Christmas lull and summer. Of course a flood or a cyclone could bring politicians back to work, but otherwise Parliament not sitting allows some quieter time for reshuffles, to draft some new policy and maybe reconsider strategy for the new year.

This year is no different. It is an opportunity for both sides of politics.

Tony Abbott has sensibly put a lot of time and effort into attacking the carbon tax but other issues still need to be addressed. He cannot afford to underestimate Julia Gillard, not because she is a good PM but because an army of bureaucrats can provide firepower to make anyone look half respectable. And a little practice can significantly improve appearances.

Julia Gillard has had an "annus horribilis" and I personally think that she is simply not up to the job. But Labor currently has no-one else because as PM, Kevin Rudd was unbearable and the unions decided he had to go. So despite everything, Julia Gillard seems set to remain at least until February 2012 and I will need to look up the plural for "a.h".

Bill Shorten can obviously smell opportunity. Last week he promised that he "never ever" wants to be PM and by the weekend he was manoeuvring himself into Cabinet as the new Minister for Industrial Relations. From Bill's point of view, it is a good thought.

If Abbott senses that this could happen he could think of outflanking Gillard with a reshuffle. He could bring in some of the younger MPs and he could put a strong performer up against Shorten in the lower House. The unions are already demanding more from Labor to deal with "extreme" employers and regardless of reshuffles, the Coalition needs to be determined to contest union demands for further pro-union "reform".

Of course Abbott has other issues. The summer break is a good time to get on top of other policies. Allegedly Andrew Robb was kept out of the loop on the superannuation decision and press reports suggest he was unhappy. Apparently the Coalition's Expenditure Review Committee still operates so the process should be observed. Lack of due process should not be allowed to eat away at the Coalition's credibility as better economic managers.

Industrial relations is back on the agenda not because of Labor's scare campaign and not because of the occasional column by critics, but because the underlying legislation is not working and because both employees and employers are feeling the consequences. The hip pocket nerve is a vital political sensor. Julia Gillard promised that her Fair Work legislation would boost productivity but productivity in Australia is languishing. Poor productivity diminishes wages and thus living standards.

The Qantas dispute has reinforced the need for a better system. This is not rocket science. It has been obvious most of this year that the economy is going to slowly burn as a result of the Fair Work Act.

The Qantas dispute has just given the issue greater prominence. If it was not Qantas it would have been some other dispute.

The ramifications impact on both sides of politics. Most Labor politicians are union members and come from the ranks of union apparatchiks. They owe their political careers to union politics so they get very excited at the prospect of working for their factional overlords. But 2011 is not 2007.

In 2011, recent polls put the Coalition close to par with the ALP on who is best to handle industrial relations, scandals within the Health Services Union are ongoing, real wages are stagnant and strike action by militant unions is now more obviously a problem.

In my view, this presents an opportunity to go on the front foot.

Currently Coalition supporters have only heard one policy from Tony Abbott on IR and that was his statement of opposition to individual contracts. No wonder that people are uncertain what he will say next. He should not leave these doubts to grow. A limited announcement before Christmas could be well received. Some considered initiatives like better rules on bargaining would help.

Labor's "good faith bargaining" has clearly not worked. It can't be difficult to demonstrate that a union official who calls for customers to not fly with Qantas is not practising good faith bargaining. Kevin Rudd promised that industrial disputes would only be a "last resort".

Surely the Coalition could win that debate? And not to leave them out, he could offer small business an exemption from unfair dismissal, a tightening of right of entry rules and the return of the Australian Building and Construction Commissioner.

Graham Bradley, on behalf of the Business Council of Australia (BCA), has given Tony Abbott some perfectly sensible and practical suggestions on how to respond to the Qantas dispute. They are not ideology. The BCA was recently described as "pathetic" by the Liberal Party President but actually the BCA's public call for amendments for reform of the FWA are a godsend for Tony Abbott and he would be missing a good opportunity if he does not embrace their approach.

An announcement, not of the full policy, but of some elements would be a good idea before Christmas. And if Abbott consulted on this mini-package with the employer groups, his MPs and even some Labor supporters of Keating's reforms, like Michael Costa, he might also project a willingness to listen that would do him no harm at all and would give him a strong start for the new year.

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