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The debate over workplace regulation has increased but without the release of the review of Fair Work Australia. This despite the review being with Minister Shorten for several weeks. Today we are told that Prime Minister Gillard is to dine tonight with union leaders but that seems more about her leadership than IR reform. At the same time the CEO of the Business Council writes in The Australian proposing some specific changes but accepting “the broad architecture of the act”. Yet in reality the main problem is the union power enshrined in the act and the accompanying tribunal. As has so often been the case in the past, the business community seems unable to identify not only its own interests but those of Australia.

My letter below attempts to set some of the underlying facts that should form the basis for regulation in a modern economy.

Des Moore

Shorten views just outdated
(letter published in The Australian Financial Review, 20 July 2012.)

Workplace Minister Bill Shorten’s unthinking dismissal of the proposal by Productivity Commission head Gary Banks for a competition review of workplace relations regulations indicates Shorten should not have a portfolio that requires the interests of employers and non-union employees, as well as those of unionists, to be recognised (“Industrial relations stuck in the past”, July 14-15).

His notion that a competitive labour market would necessarily involve exploitation is outdated in our modern economy.

Australia has more than 800,000 employing businesses operating with a workforce of more than 11 million and those businesses actively compete with each other in the labour market. Employers as a group cannot force wages down or impose unfair conditions on employees as a group.

But existing regulatory arrangements give the union movement a quasi-monopolistic position that limits productivity improvements and the capacity of businesses to respond to changes in economic conditions. The system (sic) of awards and other conditions fixes wage rates and requirements, such as penalties and dismissal procedures, until the next review is concluded and new decrees are set by officials with no experience of managing changing market conditions. In aggregate, the incomes of both businesses and workers are adversely affected.

Recall that, even under the Howard government’s excessive regulations, unemployment fell from 8 to around 4 per cent, the participation rate jumped three percentage points to 76 per cent and real wages rose strongly. We wait to hear of achievements under Fair Work Australia.

Des Moore (Former deputy secretary, Treasury) South Yarra Vic

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