ACTU's "Change The Rules" would be economically disastrous

The Australian 25 October 2018

While Australia burned through five prime ministers in the past decade, our global competitiveness ranking sank from 16 to 21.

This would be the worst time to “Change the Rules”, as the unions sought in their marches this week.

The World Economic Forum says “restrictive labour regulations” are the biggest single drag on our competitive position.

Nations enter permanent decline when narrow vested interests work against the greater good and are given what they want.

However, we now face dropping to 30th place if the most powerful vested interests in Australia, the unions, are allowed to have their way on their insular Change the Rules agenda.

We have to be competitive to attract foreign investment, which has paid our way since European settlement.

In a place such as the north of Tasmania, foreign capital pays for the slaughterhouse, the fertiliser distributor, the cheese factory and the aluminium smelter.

These jobs are the direct result of foreign investment.

In the past decade, unions have taken on an anti-worker program of higher taxes, less free trade and endless regulation to undermine new employment opportunities.

If adopted, three policies in the ACTU’s Change the Rules list will further erode the nation’s competitiveness and hurt workers.

First, ending enterprise bargaining and replacing it with industry or “pattern bargaining” is the radical proposal in the Change the Rules pack. It says: “The rules around enterprise bargaining are too restrictive and bosses have found ways to exploit them.”

Since 1993, Australia has had agreements negotiated workplace by workplace, reflecting the varying needs of businesses.

The threat of pattern bargaining was reinforced in ACTU secretary Sally McManus’s Press Club speech in March in which she said workers should be allowed to negotiate “across a sector or industry, should they choose to do so”.

Think about it from the business point of view: two or more unrelated enterprises having to bargain collectively for no reason other than the unions have relevance deprivation syndrome.

The bigger problem is not enough flexibility. The WEF says two of the primary contributors to our restrictive labour regulations deadweight are “hiring and firing” rules and “flexibility of wage determinations”. Multi-employer or industry-wide bargaining would set Australia back 30 years, to the pre-internet days.

Pattern bargaining would be like demanding houses have to be the same price, even though in Burnie the average house price is $279,000 and in Sydney it is $1.1 million.

It would be an act that fails to acknowledge the technological, globalised world in which Australia must compete at the small and medium enterprise level.

While we are at it, should we also raise tariffs, increase taxes and lower the pension age?

Second, killing flexible work will be next. The ACTU wants to grant casual employees the right to convert to permanent employment after six months.

It also wishes to restrict labour hire and abolish independent contracting as found in the so-called gig economy. Millions of Australians who undertake this type of work would be at risk.

Levels of casual work have not changed much in the past decade. What has changed is the opportunities.

Ten years ago, we didn’t have iPhones that allow rapid food delivery on bikes to hungry people, or match nannies with families in need of urgent cover.

This provides casual work opportunities for Australians from all walks of life.

Third, abolishing institutions that insist on the rule of law is also on the agenda.

One of the areas Australia has made a marginal improvement in the WEF’s index is in such institutions. This refers to the revival of the Australian Building and Construction Commission and establishment of the Registered Organisa­tions Commission after the last election. 

The ABCC is trying to rein in unlawful behaviour in the building sector, which is led by the CFMEU. Last month Federal Court judge Richard Tracey said of the CFMEU: “The union has adopted the attitude that it will not comply with any legislative constraints placed on its operations with which it disagrees. Such an approach is an anathema in a democratic society.”

We clearly need this regulator. It should not be abolished.

If we end up with a trifecta of pattern bargaining and abolition of flexible work as well as regulators like the ABCC, we can kiss goodbye to more investment and any growth for jobs in Australia.

These policy changes will be sought by the richest campaigners in Australia. The Menzies Research Centre believes the top 15 unions earned $750m in revenue last year and sit on $1.5 billion in assets. Prepare to hear “change the rules” regularly and mindlessly uttered by activists.

The Labor Party did the right thing by ignoring union demands to block the Trans-Pacific Partnership trade deal. The Change the Rules madness must also be rejected. For all of us.

Andrew Bragg is author of the trade and foreign policy book Fit for Service (Connor Court 2017).