Apr 13, 2016

Self-serving industrial relations club is destroying jobs



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Who can forget former Labor minister Craig Emerson’s impromptu gig in the Parliament House garden, gyrating as he sang: “No Whyalla wipe-out there on my TV shocking me right out of my brain.”
This cringe-worthy performance followed an April 2011 visit to Whyalla by then opposition leader Tony Abbott, who predicted the city would be “wiped off the map” by Julia Gillard’s carbon and mining taxes.
Well, five years on, despite attempts to prop up Whyalla by centring several government services there, the mainstay of the city’s employment, the Arrium steel mill is in administration as attempts are made to save it from bankruptcy. Thousands of jobs are at stake and a metaphorical “wipe-out” could be on our TV any time soon.
Of course we are told the collapse of the steel mill has nothing to do with the carbon and mining taxes (since removed thanks to Abbott). Nor does it have anything to do with high wage rates, antiquated work practices, uncompetitive coastal shipping charges or high energy costs, particularly in South Australia where, because of the heavy investment in renewable energy, electricity prices are among the world’s highest.
Labor, the trade union movement and their fellow travellers will argue the problem is poor management, bad investment decisions, cheap imports and the high dollar.
No doubt these points have limited validity and are similar to the arguments used to lament the passing of our car industry, two of our six primary aluminium smelters, the dramatic shrinking of our oil refining capacity, the disappearance of several food processors and the collapse of our wool processing industry.
In other words, if only we had smarter managers who, rather than seeking taxpayer support, would keep pouring endless private capital into loss-making ventures. And smarter governments that, instead of signing free-trade agreements that facilitated competitive imports, would erect tariff barriers to keep out cheaper foreign goods. Let’s go back to the good old days with a fixed exchange rate and high import barriers, when trade unions flourished and protected industries produced inferior expensive products and service was dismal.
Maybe, with taxpayers standing behind our banks, and with government back into telecommunications, it won’t be long before we are de facto owners of steel mills too.
Why not yield to the industrial relations club and embrace compulsory trade unionism? Let’s have the Fair Work Commission decide how many hours we work, our pay and conditions. How simpler life would be.
Fanciful? Perhaps. But the tentacles of government are so deeply embedded within every aspect of commerce that many small businesses are closing or breaking the law to survive.
Under the motherhood catch-all of safety, unions have shamelessly used their political muscle to place metaphorically a government official into every workplace, unionised or not, to enforce costly standards that are more self-serving than safety related.
Witness the minimum rates the Road Safety Remuneration Tribunal can set for owner-operators. It is an example of government doing the bidding of organised labour to push owner-drivers into bankruptcy and drivers into union membership. But if the ends justify the means, so be it.
In an election year don’t expect any light to shine on the root causes of our disappearing manufacturing sector, least of all industrial relations. Such is the awe the political class has for the industrial relations club that the parliament, faced with compelling evidence, still condones a union protection racket by rejecting the reinstatement of the Australian Building and Construction Commission. In a similar abrogation of responsibility, the Turnbull government will defer the abolition of the RSRT until after the next election.
How convenient, then, that Industry Minister Christopher Pyne can take a “bipartisan position” on Arrium, claiming with opposition infrastructure spokesman Anthony Albanese that management “clearly stuffed this up”. What a relief. Bad management was to blame. Why then the need for Pyne to back Labor’s plan to require federal, state and territory infrastructure projects to purchase Australian steel?
And how does this reconcile with the Prime Minister’s slogan urging us to be “more innovative, more competitive and more productive”? Of course it doesn’t. But better to sound all-knowing and act like a benevolent uncle, promising to care for vulnerable workers, than address the government imposed rigidities at the heart of Arrium’s woes.
Of course attacking bosses plays to the politics of envy. But it’s ingenuous. Not all manufacturers have poor management and, competent or not, they all have to deal with suffocating policies imposed at the behest of a collapsing labour movement representing only 15 per cent of the workforce. Indeed, unions have negotiated an unmatched place in the law. If not above it, the state extends completely disproportionate power and privileges to them. Despite having significant commercial interests, they enjoy legislated exemption from income and capital gains taxes. Their officers are largely free from provisions of the Competition and Consumer Act and, they are overseen by a judicial system where umpires are drawn from a sympathetic gene pool.
No government has yet demonstrated the courage to deal with this inequity. Malcolm Turnbull has ruled out changes to workers’ conditions. He told the Business Council of Australia last year his government was for “high wages and generous welfare”. So no hope there. A new wave of nation building projects will be promoted as an economic cure-all, further distracting from the task of industrial relations reform.
But the truth will out and as more Arriums present, the cumulative damage from Australia’s job-destroying industrial relations club finally may be exposed for what it is: a self-serving cartel. Perhaps this will encourage someone with the will, tenacity and support to finally break it up.

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