Gillard fails on need for FWA role change
letter published in The Australian Financial Review, 6 December 2011
You report, unsurprisingly, that employers are opposed to expanding the role of Fair Work Australia as adopted in the new platform at the Labor Party conference and endorsed by a one-eyed Workplace Relations Minister Chris Evans who clearly fails to understand how to maximise employment (“Bosses blast Labor on arbitration”, December 5).
The expansion envisaged apparently includes a return to compulsory arbitration, “bargaining” about job security, and measures to limit outsourcing.
Any such union driven expansion would be against the interests of most actual and potential employees because it would impose disincentives and costs additional to the many already faced by employers in deciding levels of employment.
The idea that unemployment of 5.3 per cent indicates a well-functioning labour market ignores the much higher underutilisation rate of 12 per cent. Relevant is your recent report that 1.5 million of working age are now assessed as resorting entirely to social welfare.
Unlike the Hawke-Keating governments, the Gillard government fails to recognise that genuine enterprise bargaining and minimal regulation serve to maximise employment (and hence job security) and, with the natural competition that exists between employers in our modern economy, to minimise the risk of exploitation. It is absurd that the FWA legislation is based on the idea that wages and conditions can be determined by a tribunal that cannot, by definition, assess the financial positions and risks faced by individual businesses.
The role of FWA must be fundamentally changed to one that determines no terms and conditions of employment but acts basically as a type of mediator dealing with disputes. This should be done as a matter of urgency before unemployment increases further.
Des Moore
Director, Institute for Private Enterprise,
South Yarra Vic