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Where is the middle ground on IR? – #TheDrum #Ausunions @#Auspol

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30 May 2012

For Tony Abbott, the middle remains a long way from a hypothetical balance of worker and employer power (AAP)

Where is the middle ground on IR?

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Greg Jericho

Greg Jericho

When it comes to debate on industrial relations, all sides wish to be in the middle, to be flexible and to be productive.

The policy pendulum is said to swing from the employers to the employees, and in the middle is where all sides assume their own policy rests.

Julia Gillard, when introducing the Fair Work Act (and the use of ‘fair’ itself implies this ‘balance’), said: “The new system will balance the needs of employees and employers.”

Tony Abbott a couple weeks ago said of the current system: “What we’re looking at is careful, cautious, responsible change that will bring the workplace relations pendulum back to the centre where it should always be.”

But where is the centre?

If you were to plot the history of Industrial Relations Law and policy in this country since the 1980s, it would show a shift from power of workers and unions to that of employers.

On a scale of minus 1 to 1, with minus 1 being union power and 1 being employer power, the Keating Enterprise Bargaining reforms of the 1993 Industrial Relations Act took the position from around –0.6 to around –0.2. Peter Reith’s Workplace Relation’s Act of 1996 put it to around 0.2, Work Choices in 2005 took it to about 0.7, and the Fair Work Act in 2010 took it back to around 0.2 or 0.1.

Some (such as Peter Reith) might argue that the Fair Work Act goes back past the Keating reforms, but given aspects such as voluntary unionism remain, I’d argue such a position is based more on politics than law.

So when you hear Tony Abbott talk about it being time to bring the pendulum back to the middle, the middle remains a long way from a hypothetical balance of worker and employer power.

This tactic is common to both parties – accuse the other side of being extreme, and suggest your own position is thus neutral. What such a tactic engenders, however, is a push to move to more extreme positions – thus forcing the ‘middle’ ever further to the right or left of the political spectrum. In essence, the ‘middle’ becomes flexible.

We can see evidence of this aspect most prominently in the United States. The blog VoteView analysed the votes by the members of the House of Representative to see how the parties had changed their ideological stance. They found that since 1975 the Republican Party has shifted significantly to a more conservative position, while the Democrats in that time had only marginally drifted towards a liberal (small ‘L’) position (and mostly due to the decline in power of the so-called ‘Southern Democrats’).

In 1975, the ‘middle’ on this scale was around –0.05; by 2011, it had shifted to 0.15.

It is impossible to create such a graph for Australian politics, given both parties vote in blocs, but if you think of it in terms of IR, you can get a sense of how talk of the ‘middle’ is disingenuous.

This also has issues when it comes to journalists suggesting they don’t take sides, but are balanced. When the middle drifts one way, that means their reporting also drifts.

On IR, this drift is even more pronounced when you consider that the only two national newspapers in this country – the Australian Financial Review and The Australian – both advocate editorially (and in their reportage) pro-employer IR policy, and are thus themselves pushing away from any hypothetical ‘middle’ position.

The issue of IR has heated up of late mostly due to the Liberal Party now feeling that their position in the polls is so strong that they can talk about the issue that for them still contains the electoral stench of WorkChoices, and because they believe they can use HSU scandals to taint all unions.

It has led to claims that have some strength of rhetoric, but which sadly lack the power of evidence.

Two weeks ago the Australian Bureau of Statistics released the latest labour price index figures. They showed little rise and were nicely ignored by the media the next day in favour of statements made by BHP Chairman Jack Nasser in a speech to the Australian Institute of Company Directors.

He stated:

In recent years, it’s hard not to feel as if our industrial relations system has been like a pendulum, swinging from one approach to another.

And that:

The Government’s review of the Fair Work Act [to be released soon] is an opportunity to move the pendulum back to a more appropriate balance.

Tony Abbott quickly took up these comments to suggest the Fair Work Act and WorkChoices were polar opposites, and thus the Liberal Party’s IR policy (when they actually come up with one) will be ‘balanced’. To support this he said:

Now, I’ve made it very clear that we have a flexibility problem, we have a militancy problem, and we have a productivity problem…

Mention of a militancy problem would have you thinking we’re in some 1980s Thatcherite UK where mining unions are striking across the nation. Clearly they are not. Pattern bargaining, secondary bans, boycotts and solidarity strikes remain outlawed under the Fair Work Act, and a cursory glance at the number of days lost to industrial disputes over the past 27 years shows if the pendulum is swinging, it is not swinging back to the 1980s, but to what I guess now the Liberal Party suggests are the dark days of 2005. (The latest Industrial Disputes figures come out next week.)

Similarly, you only need to see the reaction of unions to the news to the sensible and necessary decision to bring in foreign workers under an Enterprise Migration Agreement to work on the Roy Hill Iron Ore project. There is “anger”, but no talk of strikes that you would likely have heard in the 1970s and 1980s.

On this issue of wages, it was not surprising the Labour Price Index figures did not get much coverage – after all, they failed to show any evidence of the long predicated Fair Work Act wages breakout. The 0.8 per cent increase in the March quarter was down from 0.9 per cent in the previous quarter.

But as we know, overall figures can hide what is happening in specific industries, so how was the mining sector fairing?

There was a big increase in the March quarter, but the trend has remained steady since 2005. And if we compare the mining sector with the all industries, what we see is that in annual terms the growth of mining wage is above that of other industries at a level similar to that of 2004-05.

As well as seeking the middle position, what many (such as Tony Abbott, above) try to do is frame the IR debate as being one of productivity. Judith Sloan (paywalled) in The Australian recently bemoaned:

Documents released under Freedom of Information revealed the government’s reluctance to accept the department’s advice to include productivity in the [Fair Work Act] review. In response, the minister has pointed to the fact that the objects of the act cover ‘economic goals such as economic growth, productivity and economic prosperity’.

She also noted that while those in favour of the Fair Work Act can point to low unemployment, low inflation, and low level of industrial disputes, so can those who (like her) believe WorkChoices was a better policy.

What proponents of either policy should be more willing to admit is that both can point as well to low productivity growth.

Productivity is notoriously difficult to measure. The standard “Labour Productivity” of GDP per hour worked is a very rough and ready measure, whereas the measure of “Multi-Factor Productivity” is more favoured as it is (to use the description given it by Treasurer Secretary Martin Parkinson) “how clever we are at combining labour, capital, resources and ideas”.

The ABS has attempted to measure this at an industry level, and what it displays for the mining sector is quite stunning, especially when you consider our economy’s growth in the 2000s has been driven by the mining sector:

For the past decade, multi-factor productivity in mining has been declining. A very similar path is also observed in the utilities sectors of ‘electricity, gas, water and waste services’.

Given that from 2000 to 2007 there was a strong decline in industrial disputes and also an increase in ‘flexible’ workplace arrangements, such a decline in productivity clearly has little to do with industrial relations policy.

In 2009, when Parliament conducted an inquiry into raising the level of productivity growth in the Australian economy, economist John Quiggin (who disputes the notion of a 1990s productivity surge) noted in his submission:

The major microeconomic reforms of the Howard government, including the GST, privatisation of Telstra and other Government Business Enterprises, the replacement of the CES by the Job Network and a series of labour market reforms culminating in WorkChoices, all took effect during this period.

Thus, the best those who argue such reforms improve productivity can say is that the policies reduced the decline in productivity growth. Hardly the most winning of arguments.

In fact, the decline has a lot to do with the mining boom – rising minerals prices meant low-productive mines were profitable, and thus the extraction of minerals from those mines actually assisted in lowering the sector’s and the economy’s productivity.

The Productivity Commission in its submission to the parliamentary inquiry suggested the reasons for the decline in Australia’s productivity since 2000 were due to:

  • exhaustion of quality reserves in some existing mines and oil and gas fields
  • drought effects on agricultural and utilities productivity
  • a wave of investments in utilities [ie electricity, gas, water and waste services] after the uptake of excess capacity from earlier investments and the productivity reforms of the 1990s

And here’s the kicker: the commission suggested that these three reasons:

… contributed about 70 per cent of the productivity growth slowdown since 2003-04, relative to the 1998-99 to 2003-04 productivity cycle.

Seventy per cent of the decline in productivity growth is due to ‘quality’ (i.e. high productive mines) being exhausted, drought, and an increase in investment, which by its very nature reduces productivity in the short-term while leading to increase in productivity in the long-term.

For all the talk on both side of politics about not being complacent about productivity, if the decline in productivity since 2003 was 70 per cent less than what it was, ‘productivity’ would not be the buzz word it currently is in political circles.

What is curious about this decline in productivity from 2003-04 is that it hasn’t affected national income – in fact, quite the opposite:

Since the mining boom hit in 2003, Gross National Income (what used to be known as Gross National Product) has for the first time outpaced GDP – meaning the growth of economic production within Australia has fallen behind the growth of the income of Australians (whether earned in Australia or overseas).

Firms during this period, perhaps not coincidentally, have also increased their share of profits:

Little wonder that the Productivity Commission would note in its submission:

This adjustment neatly underscores that businesses need to pursue opportunities to maximise profits, not target productivity as an end in itself.

This is worth remembering when listening to chairmen of mining companies talking about productivity…

The debate on industrial relations is likely to continue right up till the next election (and beyond). Those on both sides will talk about balance. That balance will be in the eye of the beholder.

To defend their position, most will also talk of productivity and do so by suggesting the link between more flexible workplace agreements and productivity is axiomatic – doing so nicely avoids the need to actually prove the link.

The decision to bring in foreign workers for the Roy Hill Iron Ore project is a microcosm of our productivity problem, and it has nothing to do with industrial relations. The reason these workers are coming in is that the work is in an area many Australians neither wish to move to due to the costs (economic and social) of living in those areas, nor fly in/fly out of due to the disruption it creates for families.

But most importantly, the foreign workers are being brought in to work on the Roy Hill project because there is a shortage of workers with the skills to work in that mine. You can’t just send the unemployed off to the mines (as Tony Abbott suggested back in 2010).

The Productivity Commission suggested three aspects needed to be addressed to improve productivity:

  • incentives – the external pressures and disciplines on organisations to perform well
  • flexibility – the ability to make changes to respond effectively to market pressures
  • capabilities – the human and knowledge capital, as well as infrastructure and institutions, that are needed to make necessary changes

Economic policy by both the ALP and LNP of the 1990s and 2000s was all about increasing ‘incentives’ through competition policy and ‘flexibility’ through workplace relations. Clearly the productivity growth from these low-hanging fruit areas has long since washed out.

When talk comes to productivity, we shouldn’t be focussing on the pendulum of workers and employers, where talk of productivity gets confused with business’s profits and costs. We should instead be worrying about the imbalance of attention during the past 16 years to ‘incentives’ and ‘flexibility’ over that of ‘capabilities’.

Greg Jericho writes weekly for The Drum. His blog can be found here. View his full profile here.


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62 Comments

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  • Dan :

    30 May 2012 9:31:14am

    Good article. A true middle ground is difficult, if not outright impossible to achieve. It’d have to be some kind of harmonious union (no, not THAT kind of union) between employers and employees, where everyone is satisfied with the deals they’ve been made.

    Sadly, I don’t think anyone on either side of the fence will ever be fully satisfied. So in the meantime, we’ll get both sides of politics trying to shift the ‘middle’ to whatever suits their agenda the best.

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  • Gr8Ape :

    30 May 2012 9:24:16am

    It’s all very well to say that you wish to return the IR pendulum to the center. The problem is though, the center appears to be in different places and is dependent on which direction and by how much you tilt your head.

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  • martin :

    30 May 2012 9:15:17am

    Where is the middle ground ANYWHERE ?
    Our workplace relations, as they call it, are tiny problems.
    Look at Europe, simultaneously being torn between austerity and some-or-other bond stimulus measures. That’s like stepping on your “debt speedometer on your economic dashboard”, in the irrational hope it will slow down the fall.
    Look at the US, no common ground. Polarization towards the more extremes is apparent all around the world.
    Democracy itself is under threat when nobody wants to compromise.

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  • IR Reality :

    30 May 2012 9:09:05am

    When I employ someone I have in mind paying a fair days pay for a fair days work. Instead I end up with an adopted child that cries a lot, whinges and calls in the union every five minutes. The Union then gives me a hard time because I asked someone to do their job. Quite often it’s the good, honest workers, who form the minority, that suffer the most as a consequence of the union hacks. The fact that staff disappear for an hour on their 15 minute break, leaving the business unattended is of no consequence to the union. The Business I am talking about is a nursing home where the elderly are often left in pain or are injured because staff won’t do their job. They don’t care because they have the unions and the welfare system to back them up. It is not possible to run a high standard nursing home in Australia. Nursing homes in the US generally leave ours for dead. The Union recently forced us to give more shifts to certain people. They then decide if they will show up. They don’t even phone in to let us know.

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  • Big Ben :

    30 May 2012 9:09:04am

    Thanks Greg – excellent offering. Very informative.
    I have to admit though that I was filled with cruel thoughts when confronted by the photograph you used of the little man.
    I could not help but wish he would bite that tongue of his off; maybe a little clip under the jaw by one of the poison pink protrusion’s many lashed victims. I have no doubt that the queue would include some from his side of politics.
    Without that slippery menace of his I believe the Liberal Party would romp it home to government at the next Federal election.

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  • John Md :

    30 May 2012 9:07:46am

    This contribution is a refreshing change from the opinionated posturing that we get in far too many of these contributions to the Drum. For once, we have a piece that is backed up by extensive detailed factual information. The -1 to 1 scale for the union/employer balance is maybe a bit arbitrary — though it does no doubt get the shifts in the balance qualitatively correct.

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  • Craig :

    30 May 2012 9:03:16am

    Sorry Greg,

    You’ve taken much too general a view this time.

    A single number to measure the balance between Union and employer power is a furfy.

    Different industries and different organisations have different balances – influenced by national legislation, but also state considerations, local environments and the talents and abilities of individuals.

    Over simplification of the debate into a search for the middle overlooks the complexities of the working place and the majority of Australian employees – self-employed, small business people and non-unionized workers.

    The unions have significant legacy power through their past majority control of large workplaces, their deep pockets, networks and affiliation with the Labor party.

    All of these conditions are fading and unless unions can create a new value proposition for the workers they seek as members, they will continue to fade into the future.

    Ironically the best thing that could happen for unions is for a rampant right-wing government to give large employers the majority of power over their workers. This would tip workers into the union tent. Therefore, speaking pragmatically, unions should be working to achieve the worse possible workplace situation (so long as they can blame it on e government and big employers) as this justifies their continued existence.

    Barring this, unions need to internally find their own new reason for existence.

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  • Mog57 :

    30 May 2012 8:59:40am

    As Abbott skips down the yellow ‘economic illiterate’ road and dreams of getting out of Kansas and into the Lodge he adds nothing of weight nor do his shadows to this debate.

    Or should I say Kirribilli, will he do a Howard family colossal expense move and have to stay Sydneyside.

    1000s of jobs gone in manufacturing in the last months but the energy of the Opposition is all aimed at only one job, PM for Abbott.

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  • Paul :

    30 May 2012 8:56:16am

    By capabilities I take it you mean that we need to have a smarter and better educated workforce and the institutions and infrastructure to achieve that.

    If so I could not agree more and while the media never reports it the current government is investing huge sums in this area.

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  • grega :

    30 May 2012 8:51:47am

    “flexibilty” is the new word that the coalition will use for work choices.
    Flexible hours,flexible workers,flexible work agreements,removal of penalty rates all code for work choices with the pendulum swinging to more part time positions and less fulltime work especially for young workers and women.
    grega

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    • Mr Zeitgeist :

      30 May 2012 9:11:05am

      By the party that claims to champion “family values”.

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    • Alf :

      30 May 2012 9:12:05am

      “Flexibility in the workplace is critical for men and women to deal with family issues, Acting Prime Minister Julia Gillard says.”. Quoted from the SMH 2009.

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    • Mike :

      30 May 2012 9:18:33am

      Business uses the term “flexibility” too. Every form of “flexibility” is designed to add to the business bottom line. None are ever about improving the lot of their workforce.

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  • Blzbob :

    30 May 2012 8:51:27am

    I can tell you now, as an Australian employee, we don’t want to be where Abbot and co want to take us.
    It is all about the masses serving the wealthy and the wealthy getting richer off of it.

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    • Andrew Thomas :

      30 May 2012 9:08:58am

      Yet most people like you will vote for the LNP at the next federal election if you believe the polls. Similarly, many of those in America who vote for Republicans are working class, even though they favour the wealthier end of the populace (e.g. many people who came out against Obama’s health care were working class).

      I find this on of the most interesting anomalies in democracy and am at a loss to explain it. Any ideas?

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    • dean :

      30 May 2012 9:12:46am

      I can tell you as an Australian Employer, the lack of flexibility imposed under the current IR laws have reduced our employees, is stopping us from providing further services and stopping us from growing.

      We have the work, we have many people more than happy to work but the penalty rate systems do not make any sense.

      We pay well above award, we had great agreements pre Fair Work that our employees are pleading for us to put back in place, but we would be breaking the law.

      Even the union has told us off the record that some of the issues are ridiculous.

      Labor (the Unions) clearly have no idea what employers and employees on the ground want.

      Unless I missed something, we no longer have underground dangerous coal mines any more.

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    • the yank :

      30 May 2012 9:17:05am

      Probably best not to use thw word “we”.

      While I agree with you there are a whole lot of others that don’t seem to either care or worry about what Abbott might do to their working conditions.

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  • Rose :

    30 May 2012 8:50:10am

    The mining companies are clever for sure….their workplaces should provide family friendly enclaves…good schools, medical treatment, leisure activities….a village any family would enjoy…instead….workers are “fodder”…. Fed on high wages but only at the huge cost of losing vital contact with their families. We stopped the live cattle trade to overseas venues until they changed their ways….same goes for these conniving mining companies….provide proper working communities or go without workers.

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  • Dugong :

    30 May 2012 8:48:07am

    “We’re supposed to be attacking these guys”

    Paul Howes – referring to Gina Rinehart, and the policy regarding the employment of foreign workers which a committee THAT HE WAS ON developed.

    Not even a token effort at compromise, win-win or anything other than “attack”.

    So much for middle ground.

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    • Negadividee in Austraya :

      30 May 2012 9:25:41am

      Agree. There was not a single mention of productivity – let alone the need to increase it – in any speech at the ACTU’s conference.

      Union leaders are dinosaurs and would take us back to the 1970s.

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  • Gravitas Dignitas :

    30 May 2012 8:33:26am

    Anyone working for Corporate Mining in Australia knows that they do not want organised labour there{unions].They would if they could replace all Australian workers with 457 foreign workers so as to Americanise these workplaces.The battle for the middle ground is a misnomer.The working conditions and rights that our forefathers fought so hard for through the 20th century have been eroded by governments and big business since Keating`s 1993 labour reform.Keating was the first neo-con in the ALP swinging to right wing politics.It then opened the way for the Corporate takeover of us culminating with the ALP/LNP rushing to sell everything we Australians owned to their corporate buddies.The ensuing result is that privatisation cares only for profit and not society.So Greg this is the axiom of the scales tipping toward a controlled society,corporation style.Let`s see if Australia has become as apathetic as the US in this regard,minimum wage $7 plus a few cents per hour.No holiday pay.No sick pay.Casual employment only.Meanwhile corporate execs get $squillions.Meanwhile in QLD the LNP will sell all government buildings,have corporations build new ones,pay rent to corporations forever.Greece in the making.Let`s hope for Australia`s sake that the union movement grows after kicking out these shonks there now,Keating style union bosses.Bring back the common man,who had common sense and most of all,a common sense of decency.

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  • paulh :

    30 May 2012 8:29:52am

    Fair work Australia is a labor governed ,Union led ,debacle, it has gone too far.Just look at the actions of FWA over the Thomson affair, basically ex union hacks looking after ex union mp’s.FWA has seen a RECORD rise in industrial actions.There appears to be NO common snense used at all,it appears its either Gillards and the Unions way of NO-WAY. People should never forget that without EMPLOYERS there are NO jobs.A balance is needed,but we are not getting it with FWA.

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    • Peter :

      30 May 2012 8:50:45am

      paulh, could you provide figures to substantiate your claims. If you read Mr Jericho’s article properly, you would see that he is saying precisely the opposite. If you can disprove him, please do.

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    • James in Brisbane :

      30 May 2012 9:05:11am

      @paulh – and without workers, capitalists have no way of getting rich. It works both ways – employers don’t give employees a job out of a sense of charity.

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    • Mark From Launceston :

      30 May 2012 9:05:49am

      paulh

      I agree, airwork really does meed to go.

      However we dont want the “sign here or else”attitued of workchoices.

      If people want to join a Union then the employer should be made to bargin IN GOOD FAITH.

      The words “IN GOOD FAITH” lie at the heart. Does the employer treally making a realist effort to bargin or do they have no intention of it?

      On the other side “REASONBLE ” claims should only ever be made by Unions.
      A 5% pay rise and paid shower time demanded by the AWU on Bluescope is NOT “reasonable”.

      The current strikes in the Coal industry has nothing to do with wages . It has to do with who controls health and safety and who controls the workforce. Unions want ther reps to be in Health and Safety….Management want themselves to control it.

      It should be both.

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  • JohnnoH :

    30 May 2012 8:19:46am

    The middle ground in IR is a myth. There is no middle ground. Abbott has no idea about IR he thinks that WH&S and workers’ conditions and pay aren’t important. The only thing important to him is the bottom line. Workchoices was a disaster for lower and middle income families and Abbott would like to see nothing more than a return to this. Lord of the manner and peasants attitude. Gillard’s view is exactly the opposite. Alf’s claim about Labor’s class war cuts both ways, what about Abbott’s class war on the poor. Goes to show Abbott may be a Catholic, but he is definitely not a Christian.

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    • Mike :

      30 May 2012 9:20:11am

      “The only thing important to him is the bottom line.”

      The only thing important to any economic neo-liberal is the bottom line. The market is always right and market forces must drive pay and conditions.

      “Workchoices was a disaster for lower and middle income families and Abbott would like to see nothing more than a return to this.”

      On top of that, several of the Opposition front bench are on record as saying WorkChoices didn’t go far enough.

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  • peter :

    30 May 2012 8:17:51am

    Well listening to Abbott, he still does not get it, if he goes ahead with his so called balance in IR, it will be all one way just like Workchoices, the Libs seem to have this dream that low wages will cure everything, but all they achieve is hurting people, perhaps the Libs should be looking at why so many businesses fail within 18 month, poor management is one thing, and high rents charged by Landlords is the other, lets see some leadership from both parties and see fair rents charged instead of Mom and Dad employers bring ripped off by Landlords

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  • the working man :

    30 May 2012 8:16:04am

    Greg, please can we stop this silly agreement. At the last election Abbott indorsed
    the fair work act and supported the PM’s agenda, so the balance is right at this time.
    Now if you want a debate let’s get the coalition policy out and we can have that
    debate. Every man and his dog knows o’dwyer, Abetz and friends want the hash
    work choice agenda back, but Abbott being the gutless wonder won’t have that debate until the lazy journalists do their job instead of letting this guy walk away
    when he likes.

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  • Alpo :

    30 May 2012 8:10:57am

    I fully agree that the “middle ground” of politics is a shifting entity. It is, however, a perceived psychological optimum for many voters. The aim of political propaganda is to try to shift the perception of the “middle” towards your side (left or right). One way of achieving that is through “fear of the opposite side”, compounded with the “goodies of this side”. All parties do that, all parties will always do that (although one current mistake of the Abbott strategy is to rely exclusively on ‘fear of the opposite side’; whereas Labor is using both approaches simultaneously). So, what’s left for the People to do? There is only one thing left: increase your knowledge, acquire your knowledge from different and high quality sources, be critical, give priority to hard evidence…. at least, in that way, the middle ground will be defined by us, not the propagandists….

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    • Ravenred :

      30 May 2012 8:28:16am

      The golden mean fallacy also needs to be avoided, the idea that between the poles is by default the best policy position. How you disengage that from ideological identification is always tricky, however.

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      • Alpo :

        30 May 2012 8:54:07am

        “The golden mean fallacy also needs to be avoided”… Perfectly correct. The optimum is not necessarily the mean strategy between the two (or more) extremes.

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      • magoo :

        30 May 2012 9:01:03am

        In any relationship there is a screwed and a screwee.

        In union organized negotiations, many employers get screwed and their businesses go bust.

        In individual bargaining, some workers get screwed, some get a fair deal and others walk away with a smile.

        Labor voters seem to still believe in the soviet dream as a paradise for workers. Unreality it is hell for the majority and a very shaky Eden for most of the party hacks.

        Why is it that so many union bosses have the same body shape as Clibe Palmer, I wonder?

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  • CANOPUS :

    30 May 2012 8:08:01am

    How many times have we heard the resource companies complain about being unable to find Australians to work in their mines? It’s disingenuous nonsense. There are thousands of unemployed and underemployed people around the country who would gladly take up positions in the mines including FIFO if only the companies and their agents, would not impose such strict minimum experience requirements.

    The so-called skills shortage could be easily, though not immediately, remedied: those companies crying out for skilled labour could invest some of their not-inconsiderable profits in training Australians to do the work, something they have purposely failed to do. And let’s not get too excited about the perceived need to dig it all up now before it’s too late. That’s hysterical nonsense too; the resources will still be there whether they’re mined in ten years or a hundred.

    Investment in training is the only sensible approach, and if the resource companies won’t do it, then a bipartisan approach to, erm, encourage them to train Australians to do this essential work would in time solve the skills shortage (such as it is).

    The problem we have politically is that the current government talks about creating jobs for Australians but no longer has the courage to take on the mining industry, especially not with an election imminent, while the current opposition doesn’t appear to see any need to. In fact, I seem to recall the opposition leader stating recently that a LNP government would make it easier for companies to import foreign workers (I paraphrase). Big help that would be.

    A bipartisan approach to solving the “skills shortage” seems therefore to be a long way off, and unemployed Australians will have to continue to watch helplessly as this apparently essential work goes increasingly to underpaid foreigners.

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    • Gollygosh :

      30 May 2012 9:23:16am

      I wonder what sort of “encouragement” you envisage for people who do not want to leave their families, or work in mines at all? (No one is more aware of their rights than the person on long-term welfare, I can assure you).

      The danger, the heat, the long hours, and separation from life-style, family and friends – not a PR dream, is it?

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  • Alf :

    30 May 2012 8:02:57am

    Nothing like a Labor ‘class war’ to polarise industrial relations. Labor and the unions with their ‘us verses them’ attitude does nothing for business confidence and employer/employee relations.

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    • Marty :

      30 May 2012 9:16:27am

      and the LNP and big business have the us versus them attitude. Have you forgotten Nick Mionchin apolgising to the HR Nichols society because work choices didnt go far enough. Big business is about maximising profits to the shareholders first and foremost , anythiong other than that is of little concern to them. Great if you are a shreholder , not so great if you are a worker

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    • Dan :

      30 May 2012 9:28:01am

      I could say the same for every business owner, rich magnate or high-income snob who says the lower class are just trying to leech their ‘hard-earned success’ for nothing.

      Face it. Politics comes down to ‘us vs. them’ between the upper classes and lower classes, whether you want to believe it or not. It’s all about which income class gets the most benefit from government policies and business arrangements.

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  • 2dogs :

    30 May 2012 7:59:35am

    The DLP claim to occupy the middle ground on IR. When they take the balance of power in the senate after the next election, the IR issue may finally achieve some balance.

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    • peter of mitcham :

      30 May 2012 8:31:43am

      You refer to the “Disguised Liberal Party”, two dogs? What contribution could the DLP make to the contemporaneous IR situation in Australia. No seriously, that’s a genuime question.

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  • Turing :

    30 May 2012 7:54:52am

    Abbott’s IR policy is to sneak WorkChoices whispers. He has told the Liberal Party they are to have no conscience votes anymore, and are to live by the religious beliefs he has, for better or worse, till political death do they part.

    Abbott told people like his sister, he supports the exclusion of gay people in the Federal Equal Opportunity Act, giving little workplace protections for many people on Federal Awards.

    I just cannott understand why Abbott is trying to force other Christians to live and work according to Abbott’s religious beliefs. They are his, not mine, and mostly not yours. They are not even representative of the majority of Catholics who support equal rights in the workplace for gay Australians.

    I just don’t think religious fundamentalism should be at the heart of the Liberal Party IR policy, to exclude some people from jobs simply because of their sexuality.

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    • Alf :

      30 May 2012 8:27:24am

      “Abbott told people like his sister…” Are there many people like his sister? You have gone straight to the source for this piece of valuable insight Turing.

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      • Marty :

        30 May 2012 9:20:25am

        Probably alluding to the fact that Abbott’s sister is openly lesbian , so by default he is tellign people like his sister that he supports them being excluded in the equal opportunity act

        It is quite well known –
        SAME-SEX marriage advocates hope the Opposition Leader, Tony Abbott, will change his stance now that his sister Christine has come out as a lesbian and equal rights campaigner.

        Christine Forster, one of three Abbott sisters, posed for photographs with her partner Virginia Edwards at a ”Lesbians in the (Opera) House” event in support of same-sex marriage

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      • the working man :

        30 May 2012 9:20:26am

        Alf, Abbott didn’t have the guts to stump up with an IR policy at the last election.
        The IR policy of this government is the one he supports but we know ODwyer, Briggs, Abetz and the HR Nicloes mob have work choices mark two ready to go.

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      • Turing :

        30 May 2012 9:31:42am

        There were 57 facebook friends of Abbott’s beloved Christian Lobby, and a few hundred thousand like Abbott’s sister at Mardi Gras. Yes there are other same-sex attracted Australians, just a few more. But Abbott will treat the 57 of friends of the Christian Lobby equally, but not people like his sister when it comes to IR policy.

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  • Negadividee in Austraya :

    30 May 2012 9:16:10am

    There’s endless carry on about the effect of Abbott’s religious beliefs. However:

    – At least he believes in something, unlike Gillard.

    – Unlike Rudd, he’s never held a press conference outside church, with the church carefully framed in the background.

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  • Edge :

    30 May 2012 7:52:09am

    The one certainty that appears to have escaped those who discuss industrial relations is that one policy will never fit all.

    IR is always about a balance of negotiating power. Some workers need assistance. Some employers need assistance.

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  • Negadividee in Austraya :

    30 May 2012 7:43:26am

    Gillard claimed that her IR legislation would be good for ‘producdividee’. The evidence is to the contrary.

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    • JohnnoH :

      30 May 2012 8:22:20am

      Where is the proof of that statement?

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      • Alf :

        30 May 2012 8:50:43am

        In 2008 the Minister for Worplace Relations – Julia Gillard made the following statement to parliament when introdcing the Farir Work Bill: “This Bill provides a system that has at its heart bargaining in good faith at the enterprise level as this is essential to maximise workplace cooperation and improve productivity and create rising national prosperity.”

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      • Ian :

        30 May 2012 8:52:12am

        Read the article above. Greg Jerico documents the ongoing decline in productivity, but attributes it to a range of factors, many not related to legislation. Negadividee is correct however, the FWA hasn’t been “good for productivity”. Greg Jerico’s argument appears to be that it hasn’t been any worse than any other measures tried and that there are more important outcomes anyway, however so far the Prime Minister’s claim does appear to be incorrect.

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      • Dugong :

        30 May 2012 8:52:24am

        http://www.rba.gov.au/publications/confs/2011/eslake.pdf

        “Growth in market sector multifactor productivity slowed from an average of 2.1 per cent
        per annum in the 1993/94 through 1998/99 cycle to –0.3 per cent per annum in the 2003/04
        through 2007/08 cycle (or to –0.8 per cent per annum including the four additional market
        sectors), and has averaged –1.0 per cent per annum in the as yet incomplete cycle, which
        began in 2008/09.”

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  • Kevin :

    30 May 2012 8:56:16am

    Productivity is on the rise. i suggest you check your facts

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  • R.Ambrose Raven :

    30 May 2012 7:36:34am

    Good wages actually matter. “… for a capitalist society the labour market is THE mechanism through which income is generated and distributed for most citizens.” Justice Henry Higgins also emphasised that point in his celebrated Harvester judgement.

    Employers, as always, demand sweatshop labour, to be paid only when those pairs of hands earn them money. Such short-sighted measures always retard economic development in the short run and retards economic development and social inclusion in the medium and longer run. In other words, employers want what they can get now, even when doing so is costly to workers, and society, and even to them in the long run. They will do better only when forced by government (and unions) to do so.

    Training integrated with workplace experience and a demonstrated commitment by the employer to providing a career for committed employees improves the quality and productivity of the work, the level of satisfaction of supervisors, and the commitment of the lower-level employees. That view is supported by both practical evidence and academic research. It is not supported by management, which is concerned much more with power, exploitation, and its own remuneration.

    So does a fair system. Governments (and unions) therefore need to have an active role in ensuring high standards in employment and training. A skilled, stable, committed, confident and professional workforce is highly productive, and also contributes to a stable and harmonious society. An interventionist but apolitical IR system is a further great asset.

    Currently, market forces have not and will not reliably and fairly match supply and demand of labour, the quality of training will deteriorate if left to competitive forces, while unions are a participant with a vested interest in excellence. That real unemployment in almost all countries is the highest since the Great Depression with minimal comment and no policy action simply demonstrates how business has taken over society.

    People – trained, skilled, and involved – are our nation’s greatest asset. Employers tend to regard them as an enemy. Thus the class struggle is a threat that the Thatcherites et al have themselves created, since the rebellion of labour is driven not by desire but by self-preservation given the harsh and unpleasant existence that the Thatcherites would have us live if they but could.

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    • Feet Slipper :

      30 May 2012 7:58:30am

      You would be surprised how business has changed in order to keep,both productive, efficient and worker friendly.

      Here is a link to a book from I have only read excerpts , since it is only just available.

      http://www.retailcustomerexperience.com/article/2949/NRF-Tesco-CEO-Sir-Terry-…

      I believe that the culture has changed – and others have to catch up. So it is ‘not’ all doom and gloom!

      This is a good example. Serco is a bad example. The successful will win through. And as you can see they are global.

      A man from the shop floor.

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  • the yank :

    30 May 2012 7:20:14am

    You do like your graphs Greg.

    I especially like your last comments “imbalance of attention during the past 16 years
    to ‘incentives’ and ‘flexibility’ over that of ‘capabilities’.”

    That to me is the bigt difference between what present day Labor and especiall the LNP offer and what Keating and Hawke delivered.

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    • the truth :

      30 May 2012 7:47:15am

      Abbott disgracefully called the Stimulus package that saved hundreds of thousands of Australian jobs .. a waste.

      Amongst other things Abbott cannot be trusted with Australian jobs .. something along the lines of WORKers CHOICES would be dead, buried, cremated.

      Investment in Australian jobs and Families is not a waste Tony.

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      • Feet Slipper :

        30 May 2012 8:02:59am

        The opposition supported the first round of cash stimulus.

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        • Drum Major :

          30 May 2012 8:31:06am

          In Parliament, the Opposition have supported most of the things that the Government has wanted to do – 75% Christopher Pyne said on Q&A a few weeks ago – all the while running around telling people what a disaster the government is and claiming the sky is falling in. Go figure.

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        • Ian :

          30 May 2012 9:03:55am

          A total of 25% or more than 30 pieces of bad legislation isn’t good – quite a lot for the incoming Abbott government to repeal after the next election. However it isn’t just that which makes this government a disaster. There’s also the lies, betrayals, the sleeze, incompetance, debt and attempts to set groups of Australians against each other. It’s the whole package really. Why else would the ALP be polling with primary support of less than a third of the electorate?

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        • Kevin :

          30 May 2012 9:02:53am

          It took both rounds to save our economy and in fact the second round, in particular the BER project is precisely the measure that saved most of those hundreds of thousands of jobs and without this spending we would definitely have gone into recession.

          Of the deficit, $150 billion in lost revenue, which would have happened regardless of who was in power and if you have any economic understanding at all, you would know that had we gone into recession (Abbott’s plan), the deficit would be far greater than it currently is. This is not only based on my education but also the view of many of the world’s best economists.

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    • the yank :

      30 May 2012 9:09:09am

      I agree that Abbott is not for the battler but I don’t think Labor’s approach is working as well as Keatings did.

      Reply Alert moderator

  • When it comes to debate on industrial relations, all sides wish to be in the middle, to be flexible and to be productive.

    The policy pendulum is said to swing from the employers to the employees, and in the middle is where all sides assume their own policy rests.

    Julia Gillard, when introducing the Fair Work Act (and the use of ‘fair’ itself implies this ‘balance’), said: “The new system will balance the needs of employees and employers.”

    Tony Abbott a couple weeks ago said of the current system: “What we’re looking at is careful, cautious, responsible change that will bring the workplace relations pendulum back to the centre where it should always be.”

    But where is the centre?

    If you were to plot the history of Industrial Relations Law and policy in this country since the 1980s, it would show a shift from power of workers and unions to that of employers.

    On a scale of minus 1 to 1, with minus 1 being union power and 1 being employer power, the Keating Enterprise Bargaining reforms of the 1993 Industrial Relations Act took the position from around –0.6 to around –0.2. Peter Reith’s Workplace Relation’s Act of 1996 put it to around 0.2, Work Choices in 2005 took it to about 0.7, and the Fair Work Act in 2010 took it back to around 0.2 or 0.1.

    Read more: http://www.abc.net.au/unleashed/4039940.html

    About Darin Sullivan (1967 Articles)
    President of the Fire Brigade Employees’ Union and a professional firefighter with more than 25 years’ experience. Father of two daughters, he lives and works on the NSW South Coast, Australia. He is a strong advocate for firefighters and emergency service workers with an interest in mental health issues and caring for those around him. He is a Director on the NSW Fire Brigades Death and Disability Super Fund and works with charities including ‘The Movember Foundation’. As a leader and activist he has long been active in the campaign for action on climate change. Now a Station Commander in the fire and rescue service in NSW and has decades of experience fighting fires, both rural and urban. He is passionate about highlighting the impact climate change is having on fire preparedness and fire behaviour in Australia, and the risks associated with inaction on climate change. Darin is also a spokesperson for the Australian Climate Media Centre.
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