By Professor David Peetz
Choosing the Productivity Commission (PC) to review industrial relations could prove politically embarrassing for both Workplace Relations Minister Eric Abetz and Prime Minister Tony Abbott.
Australia’s federal government has made a major political error, possibly terminal, in asking the Productivity Commission (PC) to inquire into industrial relations.
Before the 2013 election, the strategy of the Coalition appeared to be to say as little as possible, especially about industrial relations. It would then go to the 2016 election, bolstered by the “sophomore surge” of new members building their personal support, and seek a mandate for a bold plan, to get an otherwise “once in a generation” reform through the parliament. This would follow the model of John Howard’s 1998 electoral success with the goods and services tax after promising, some time before the 1996 election, to “never, ever” introduce one.
While some IR changes were foreshadowed in 2013 and have yet to make it through the parliament, the key part of this strategy involved setting up a promised PC inquiry. The expectation was it would make recommendations for “bold” changes for which the Coalition sought justification. The Coalition could pick and choose those recommendations it wished to pursue. The PC could be relied upon to make bold (some would say, “politically correct”) recommendations, as it is seen as a body of overwhelmingly liberal market economists.
The Productivity Commission and IR
Indeed, the IR issues papers released last week show the PC adopting a very broad-ranging approach to the topic, consistent with ultimately making “once in a generation” recommendations.
The PC is challenging some issues, such as the distinction between competition law and IR law, that are fundamental to the nature of IR and to the concept, underpinning IR law, of achieving some sort of balance of power in the workplace.
While the issues papers raise questions in a fairly even-handed way, not wanting to appear to pre-empt the PC’s findings, it is no friend of the union movement.
The focus of the review is revealed by its use of language. It is a review for employer issues of productivity and flexibility, not employee issues of equity and justice. In the issues papers, there are 40 mentions of “flexibility” and 50 of “productivity”, but only three of “equity”, while “justice” is only mentioned in others’ titles. “Penalty rates”, “dismissal”, “minimum wages” and “awards” – all sources of employer complaint – get 45, 50, 142 and 123 mentions respectively; “women” gets three (mostly historical), “gender” another three, “inequality” two and “poverty” one.
Observers on both sides either expect or hope the PC will recommend radical change: substantial deregulation in some form of penalty rates, dismissal provisions, minimum wages and awards, with the intent of boosting productivity and flexibility. There is strong reason, though, to be sceptical of both outcomes. History tells us the results, if implemented, would include lower real wages, especially for low-paid workers, and probably increased insecurity for them.
The demise of the 2013 strategy
The government’s poor showing in opinion polls, though, has undermined its original political strategy. It cannot guarantee re-election even with its current policies, let alone with the addition of radical IR changes.
The union movement could be expected to campaign against the expected changes. It may well argue the Coalition would plan a return to “WorkChoices”. Literally, this would be untrue, as the Coalition has been keen to bury and cremate the phrase and to avoid repeating the exact components of WorkChoices, which principally caused its defeat in the 2007 election.
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Choosing the Productivity Commission (PC) to review industrial relations could prove politically embarrassing for both Workplace Relations Minister Eric Abetz and Prime Minister Tony Abbott.
Australia’s federal government has made a major political error, possibly terminal, in asking the Productivity Commission (PC) to inquire into industrial relations.
Before the 2013 election, the strategy of the Coalition appeared to be to say as little as possible, especially about industrial relations. It would then go to the 2016 election, bolstered by the “sophomore surge” of new members building their personal support, and seek a mandate for a bold plan, to get an otherwise “once in a generation” reform through the parliament. This would follow the model of John Howard’s 1998 electoral success with the goods and services tax after promising, some time before the 1996 election, to “never, ever” introduce one.
While some IR changes were foreshadowed in 2013 and have yet to make it through the parliament, the key part of this strategy involved setting up a promised PC inquiry. The expectation was it would make recommendations for “bold” changes for which the Coalition sought justification. The Coalition could pick and choose those recommendations it wished to pursue. The PC could be relied upon to make bold (some would say, “politically correct”) recommendations, as it is seen as a body of overwhelmingly liberal market economists.
The Productivity Commission and IR
Indeed, the IR issues papers released last week show the PC adopting a very broad-ranging approach to the topic, consistent with ultimately making “once in a generation” recommendations.
The PC is challenging some issues, such as the distinction between competition law and IR law, that are fundamental to the nature of IR and to the concept, underpinning IR law, of achieving some sort of balance of power in the workplace.
While the issues papers raise questions in a fairly even-handed way, not wanting to appear to pre-empt the PC’s findings, it is no friend of the union movement.
The focus of the review is revealed by its use of language. It is a review for employer issues of productivity and flexibility, not employee issues of equity and justice. In the issues papers, there are 40 mentions of “flexibility” and 50 of “productivity”, but only three of “equity”, while “justice” is only mentioned in others’ titles. “Penalty rates”, “dismissal”, “minimum wages” and “awards” – all sources of employer complaint – get 45, 50, 142 and 123 mentions respectively; “women” gets three (mostly historical), “gender” another three, “inequality” two and “poverty” one.
Observers on both sides either expect or hope the PC will recommend radical change: substantial deregulation in some form of penalty rates, dismissal provisions, minimum wages and awards, with the intent of boosting productivity and flexibility. There is strong reason, though, to be sceptical of both outcomes. History tells us the results, if implemented, would include lower real wages, especially for low-paid workers, and probably increased insecurity for them.
The demise of the 2013 strategy
The government’s poor showing in opinion polls, though, has undermined its original political strategy. It cannot guarantee re-election even with its current policies, let alone with the addition of radical IR changes.
The union movement could be expected to campaign against the expected changes. It may well argue the Coalition would plan a return to “WorkChoices”. Literally, this would be untrue, as the Coalition has been keen to bury and cremate the phrase and to avoid repeating the exact components of WorkChoices, which principally caused its defeat in the 2007 election.
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