The Liberals' Review of Workplace Relations is critical to unmaking Australia's social democracy by Terri Butler MP and Andrew Giles MP.
Published on The Guardian online on 22 December 2014.
What the Liberals really want for Christmas is a labour market overhaul, though they dare not say so aloud.
Since the Your Rights at Work campaign, most Liberals stay silent about how they’d like to reconstruct industrial relations laws. The mention of WorkChoices sends shivers down their spines.
That’s where the Productivity Commission comes in. To give themselves cover, the Liberals said that if elected they would ask the commission to review our workplace laws.
On Friday, Joe Hockey finally delivered his terms of reference for the review. They are so wide that everything that matters for everyone who works for a living is up for grabs.
The review is critical to the Liberals’ scheme to remake Australia’s social compact. Alongside the Commission of Audit, the trade unions Royal Commission, the tax white paper, and the reform of Federation white paper, it forms part of their blueprint to unravel our social democracy.
Our present industrial relations laws and institutions promote collective ahead of individual bargaining (which is consistent with our international obligations), provide for freedom of association, and help resolve disputes. It’s a better system than the Liberals’ last attempt, as well as a fairer one.
Though you won’t hear the Liberals acknowledge it, labour productivity has been rising faster under our Fair Work system than it did under WorkChoices.
Conservatives have done nothing about industrial relations in the past 20 years save to try to reduce unions’ power, undermine collective bargaining, and erode its companion, the right to strike.
These are not abstract issues. Questions of power at work, job security, and wages and conditions, affect governments, and they affect households.
These questions affect governments in obvious ways. Income tax revenue is related to incomes, and, as Myefo showed this week, bracket creep (or the lack of it) affects family tax benefits and other income-based transfers as well.
Industrial relations settings that promote inequality are bad for our economy. In a well-reported speech this year, International Monetary Fund managing director Christine Lagarde spoke of the risks of excessive inequality.
She said it makes capitalism less inclusive, creates division, and undermines democracy. The IMF’s research over the last 50 years “found that more unequal countries tend to have lower and less durable economic growth”.
Industrial relations settings that affect people’s ability to obtain a living wage, decent conditions, and a secure job, also affect households’ ability to manage their costs of living. Consumer group Choice’s pulse survey – which looks at cost-of-living stress on households – notes that people’s fear of losing their jobs contributes to financial stress, as does whether they can “get by” on their income.
So, cost-of-living pressure comes not just from prices, but from insufficient income and job insecurity.
That’s one reason why it’s important to understand what’s happening in the world of work. The Australian social compact is being eroded. That key part of the social wage, Medicare, is under attack. We are in the midst of the slowest wages growth since the wage price index began in the 1990s.
Our minimum wage, as a proportion of our average wage, has been falling. On its current trajectory, it could be where the US minimum wage is now within a generation.
Australians should not be relaxed, or comfortable, about the state of household incomes, or their prospects for curbing our nation’s growing inequality.
The Productivity Commission’s starting point shouldn’t be the “wages explosion” of conservative politicians’ imaginations. It should be how the Fair Work system can help put people in a position to support themselves, and their families, and how it can help promote growth that’s more inclusive.
And the commission should, in meeting the requirement in the terms of reference to consider “protections” for workers, offer advice about dealing with rising job insecurity. While, no doubt, casual or temporary work suits some, there are many more who want more work, more security, or both. There’s a lot of people in our community whose working life is a long way from a career, even though they may want that.
Instead, for people worried about losing their job, or about getting enough hours, work is a source of anxiety: an uncertain means of staying afloat. That so many lives are “on hold” is a tragedy and a waste. Without security, people can’t make plans confidently, and so can’t invest in their future.
Incomes, wealth, and curbing inequality affect the national interest. If we want to ease financial pressures on households, let’s not forget that the costs of living – the prices of the things that people need – is only half the story.
In this review, the commission must think broadly, and about fairness. Industrial relations settings should serve the interests of working people, firms, and everyone who relies on Australia having a strong economy.