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Policy advice on IR
Letter by Des Moore published in The Australian September 21, 2011

IT is not surprising that, while drawing attention to "the success of the deregulatory and liberalisation agenda of the last quarter century", Treasury secretary Martin Parkinson appears to claim in his speech to the Australian Industry Group on Monday that public support for industrial relations reform "completely misjudge(s) the magnitude of the transformation underway" in structural change in the economy and the main sources for improved productivity.

When I resigned from Treasury in 1987, the predominant view was that the department needed to tailor its policy advice on industrial relations reforms to improve productivity to take account of the government's support for a centralised wage system.

Fortunately, partly driven by pressure from the Business Council and initiatives by companies such as Robe River, the government moved away from that policy and many examples emerged of improved productivity.

While industrial relations reform is only one way of lifting productivity, it is an important one and it would be a shame if Treasury under Parkinson were to return to the hands-off approach previously adopted.

Des Moore, South Yarra, Vic

Make IR an election focus, says Peter Reith
Letter by Christian Kerr published in The Australian, 21 September 2011

HOWARD government workplace relations minister Peter Reith has told Tony Abbott he must make industrial relations reform a major issue for the next election, which would give him a second double-dissolution trigger alongside the carbon tax if the Coalition wins.

Speaking at the National Press Club yesterday, Mr Reith said changes to Labor's Fair Work Act were needed to lift productivity and boost employment. "I think the Coalition needs to do more to highlight some of the problems," he said, warning that the Coalition had "spooked itself" over Work Choices.

"(Work Choices) has been inflated as a bogyman, ridiculously inflated, and I think that's a political mistake the Coalition has made and I think it's about time they grew out of it and started getting back into the real debate, which is not about Work Choices, it's about fixing the real problems."

Mr Reith said the Coalition needed "to do more" to highlight issues with Labor's workplace relations regime. "If the public don't understand there are problems, they won't understand why they need to be supporting reforms."

Mr Reith called for the creation of a backbench committee to highlight issues with the Fair Work Act and urged the Opposition Leader to become an active participant in a wider debate for IR reform.

"In the next election, he needs to have a mandate," Mr Reith said. "And you only have a mandate if you tell the people well in advance what the problems are.

"I don't want to see a policy in the last eight days of the campaign. I want to see a policy released beforehand so there can be a public debate, so if he's successful then he'll be able to say to the Senate, probably then run by the Greens, 'I've got a real mandate and I'm going to throw workplace relations legislation in with the carbon tax for the double dissolution so we can fix all these problems at once'."

Mr Reith negotiated a package of industrial reforms with the Australian Democrats in 1996.

In contrast, the Greens strongly support collective bargaining. They have also received large donations from hard-left trade unions, including more than $500,000 from the Electrical Trades Union and more than $100,000 from the construction division of the CFMEU.

Mr Abbott yesterday ruled out a return to individual contracts under a Coalition government, saying he was focusing on "practical problems" with current legislation. "We don't support statutory individual contracts," he told the ABC's 7:30 program. "We did once. We don't now."

Mr Abbott said his aim would be to unlock greater flexibility within the government's Fair Work Act and encouraged business and industry leaders to make their own suggestions. He said the Coalition would put forward an IR policy in good time before the next election. "I'm not going to pre-empt the kind of feedback we've got to get from the community."

Greens workplace relations spokesman Adam Bandt said Mr Reith had revealed the Coalition's real agenda. "The Coalition is banging the same old drum, insisting that people must have fewer rights and work longer and harder," he said. " If the Coalition wants to take that policy to the election, good luck to them."

Re-balance workplace relations
Editorial published in The Australian, 21 September 2011

TREASURY secretary Martin Parkinson is correct when he says that quality infrastructure, a competitive tax system and top-notch management, as well as a highly skilled and flexible labour force, are needed to reverse Australia's productivity slowdown. The case for industrial relations reform as part of a wider productivity strategy was well made at yesterday's National Press Club forum.

If Julia Gillard and the world's greatest treasurer (see above) are serious about making good their concerns about lifting productivity, they will act on the problems identified by economist Judith Sloan and John Lloyd, director of the Work Reform and Productivity Unit at the Institute of Public Affairs. Labor's traditional fallback position of herding more school leavers into TAFE courses will not suffice given the competitive challenges facing the economy. And Tony Abbott would do well to adopt Howard government minister Peter Reith's advice and release a comprehensive IR policy well ahead of the next election in a bid to secure a mandate for reform that a hostile Senate should feel compelled to pass.

Yesterday's press club discussion highlighted serious imbalances that have emerged under the Gillard government's Fair Work Act and which are undermining productivity. These include retail penalty rates of 200 per cent on Sundays and 250 per cent on public holidays; cafes closing on public holidays because they cannot afford to pay waiters $50 to $70 an hour; Australia falling to 116th out of 142 countries on the flexibility of its wages system; protracted campaigns reinforced with strike action, such as that which disrupted Qantas services yesterday, and 60 sections of the Fair Work Act increasing the role of trade unions in the IR system. Such influence is out of all proportion when just 14 per cent of private sector workers belong to a union. As Professor Sloan said, the industrial system needs a safety net for workers, not a straightjacket impeding productivity.

In order to restore balance, reforms should provide for individual workplace contracts backed up with a no-disadvantage test, rule out strike action before and during negotiations and ensure that employers are not restricted from hiring casual workers on the spurious pretext that such arrangements undermine job security. Greater flexibility is essential to shore up living standards.

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