tag:theconversation.com,2011:/es/topics/workchoices-803/articlesWorkchoices – The Conversation2021-02-10T19:12:12Ztag:theconversation.com,2011:article/1550332021-02-10T19:12:12Z2021-02-10T19:12:12ZLow wage, low growth: Porter’s industrial relations bill is only good in parts<p>The government’s <a href="https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r6653">Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill</a> presently before parliament was drafted at the end of a six-month consultative process that brought together employer and employee representatives to chart what the prime minister hoped would be “<a href="https://www.pm.gov.au/media/address-national-press-club-260520">a practical reform agenda, a job making agenda</a>”. </p>
<p>The agenda seems to have been confined to matters the <a href="https://theconversation.com/morrison-government-invites-unions-to-dance-but-employer-groups-call-the-tune-139469">government and business</a> had already marked for attention.</p>
<p>Whatever potential there might have been for consensus on several important issues has <a href="https://theconversation.com/so-much-for-consensus-morrison-governments-industrial-relations-bill-is-a-business-wish-list-151668">plainly not been realised</a>.</p>
<p>Nevertheless, in a <a href="https://www.aph.gov.au/DocumentStore.ashx?id=cd9110a6-ae0e-41a3-9db4-096942efcd10&subId=701278">submission</a> to the Senate inquiry into the bill, and with the backing of 18 other labour law academics, we have expressed support for many of its provisions, even though there are details we are disappointed with and elements we strongly oppose, not least for their potentially negative impacts on wage growth and job security.</p>
<p>To be supported are greater penalties for employers who underpay workers, including criminal liability for dishonest and systematic conduct, and a new small claims process that would enable the Fair Work Commission to resolve payment disputes more quickly and cheaply, which we think could be improved.</p>
<p>We concentrate here on three concerns – the changes to agreement-making; to certain forms of employer-driven flexibility; and to the regulation of casual employment.</p>
<h2>Enterprise agreement-making</h2>
<p>The most contentious proposal is a new exception to the “better off overall test” (BOOT), which ordinarily ensures enterprise agreements cannot set pay and other conditions below award standards.</p>
<p>At present, the Commission can approve agreements that fail the BOOT, but only when they are not contrary to the public interest and only in “exceptional” circumstances. </p>
<p>The new exception would operate much more broadly, with no requirement to show unusual circumstances, pandemic or not. Although the exception would last for only two years, agreements approved under it could operate indefinitely.</p>
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Read more:
<a href="https://theconversation.com/so-much-for-consensus-morrison-governments-industrial-relations-bill-is-a-business-wish-list-151668">So much for consensus: Morrison government's industrial relations bill is a business wish list</a>
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<p>We characterise the change as “tearing a gaping hole in the award safety net”. </p>
<p>Even if the Fair Work Commission took a narrow view of the exception, advisers would be lining up to encourage employers to give it a go, dangling the enticing prospect of “simplifying” pay and rostering , and reducing labour costs.</p>
<p>The bill also proposes to “simplify” the agreement-making process and make it harder for unions and others not directly involved to object to their approval.</p>
<p>This would weaken the few procedural safeguards that the Fair Work Act provides for workers, especially since there is no requirement for bargaining or negotiation to take place. </p>
<p>There would be no clear process for ensuring an agreement was genuinely made, and it would be harder to identify substandard deals, or to challenge the approval of agreements approved by small and unrepresentative groups of workers.</p>
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Read more:
<a href="https://theconversation.com/five-questions-and-answers-about-casual-employment-105745">Five questions (and answers) about casual employment</a>
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<p>The sunsetting of agreements made before the Rudd government’s 2009 Fair Work Act (some of them made under “<a href="https://www.findlaw.com.au/faqs/1916/what-was-workchoices-and-why-was-it-so-unpopular.aspx">WorkChoices</a>” is welcome and long overdue. </p>
<p>The bill would also allow “greenfields agreements” of up to eight years in duration - rather than the usual four - for construction work on certain major projects. </p>
<p>Employees engaged during that period would have no say on their pay and conditions and no right to strike – and some of these “agreements” could be made without union consent. </p>
<p>Under International Labour Organisation principles of freedom of association, workers in this position have to be afforded access to timely mediation and arbitration to resolve disputes, something the bill does not do.</p>
<h2>New forms of flexibility for employers</h2>
<p>Two other worrying proposals would permit certain employers to enter into “simplified additional hours agreements” with permanent part-time employees, and to issue “flexible work directions”.</p>
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<a href="https://images.theconversation.com/files/383454/original/file-20210210-15-148ammm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/383454/original/file-20210210-15-148ammm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/383454/original/file-20210210-15-148ammm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=969&fit=crop&dpr=1 600w, https://images.theconversation.com/files/383454/original/file-20210210-15-148ammm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=969&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/383454/original/file-20210210-15-148ammm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=969&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/383454/original/file-20210210-15-148ammm.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1218&fit=crop&dpr=1 754w, https://images.theconversation.com/files/383454/original/file-20210210-15-148ammm.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1218&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/383454/original/file-20210210-15-148ammm.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1218&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption">Part-time workers could be offered extra hours, but without penalties.</span>
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<p>The former are a method of contracting out overtime pay rates, and would disproportionately affect women, who are <a href="https://www.abs.gov.au/statistics/people/people-and-communities/gender-indicators-australia/latest-release">almost three times more likely than men to be working part-time</a>. </p>
<p>Even if some ended up being offered extra hours of work, they would come without the usual compensation for antisocial or irregular hours – and they would most likely be taken from casuals, meaning a net reduction in wage bills.</p>
<p>The proposed “flexible work directions” would extend and expand some of the special powers granted to employers under JobKeeper to redeploy workers. </p>
<p>But they could be used in situations which need have nothing to do with recovery from the pandemic, including by employers who were never eligible for JobKeeper.</p>
<p>While both changes would initially be limited to certain industries, the bill allows them to be extended by regulation to all award-covered workers. </p>
<p>No compelling evidence has been presented to justify they are needed. Nor has the government explained why the Fair Work Commission should not continue to be responsible for managing these issues on an industry by industry basis through awards.</p>
<h2>Casual employment</h2>
<p>Casual employment fell during the initial stages of the pandemic, but then <a href="https://d3n8a8pro7vhmx.cloudfront.net/theausinstitute/pages/3411/attachments/original/1609197941/Year-End_Labour_Market_2020.pdf?1609197941">rebounded strongly</a>. Around one in four Australian employees works as a casual, lacking benefits such as paid annual leave or sick leave, but generally entitled in return to a pay loading of 25%.</p>
<p>In practice, <a href="https://theconversation.com/the-truth-about-much-casual-work-its-really-about-permanent-insecurity-151687">many casuals have long-term engagements</a>, with none of the features usually associated with casual work. Among them are labour hire workers deployed not as “temps”, but to work at host firms alongside (or instead of) directly-hired employees with much higher pay and conditions.</p>
<p>The bill’s provisions respond to <a href="https://theconversation.com/what-defines-casual-work-federal-court-ruling-highlights-a-fundamental-flaw-in-australian-labour-law-139113">recent court decisions</a> which have raised the prospect of billions of dollars in unpaid leave entitlements being due to workers misclassified as casuals.</p>
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Read more:
<a href="https://theconversation.com/what-defines-casual-work-federal-court-ruling-highlights-a-fundamental-flaw-in-australian-labour-law-139113">What defines casual work? Federal Court ruling highlights a fundamental flaw in Australian labour law</a>
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<p>The bill proposes to determine whether a worker is a casual purely by reference to what their contract says, not the reality of their engagement. And it would allow employers who have misclassified casuals to deduct from what they now owe their employees any loading they have previously paid.</p>
<p>After 12 months in a job, casuals would need to have their employment assessed. In certain circumstances, the employer would have to offer to make them permanent.</p>
<p>We agree on the need for a clear definition of “casual”, but the definition proposed would entrench the practice of “permanent casuals” doing jobs which are not truly casual, without necessarily preventing legal challenges to some of those arrangements.</p>
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Read more:
<a href="https://theconversation.com/the-truth-about-much-casual-work-its-really-about-permanent-insecurity-151687">The truth about much 'casual' work: it's really about permanent insecurity</a>
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<p>Long-term casual employment does indeed suit many workers. But their lack of job security may have both individual and societal consequences. </p>
<p>That has been made clear during the pandemic, when workers without paid leave entitlements in “essential” jobs (such as cleaning and security for quarantine hotels, or aged care) have had to keep working with <a href="https://theconversation.com/workplace-transmissions-a-predictable-result-of-the-class-divide-in-worker-rights-143896">adverse consequences for public health</a>.</p>
<p>We also note that the bill will substantially increase administrative costs for employers, in support of a right to convert to permanent that few long-term casuals are likely to even try to exercise, given the loss of loading typically involved.</p>
<p>In our submission to the Senate inquiry, we have suggested that the bill could be improved in a number of ways, including by making the definition of casual employment genuinely objective, requiring offers of conversion to permanent employment after six months rather than 12, and not shielding an employer from liability if it should have known it was misclassifying a permanent worker as casual.</p>
<h2>Getting wages moving in the right direction</h2>
<p>Even before the pandemic, it was widely accepted that wage stagnation was sapping the Australian economy. <a href="https://theconversation.com/theres-an-obvious-reason-wages-arent-growing-but-you-wont-hear-it-from-treasury-or-the-reserve-bank-122041">Whatever the reasons</a>, it was clear that <a href="https://theconversation.com/the-five-not-so-easy-steps-that-would-push-wage-growth-higher-107510">something needed to be done</a> to get wages growth back above 3%.</p>
<p>If anything, the need is even greater now as we try to rebuild confidence and boost consumer spending.</p>
<p>Yet at a time when the share of national income going to profits rather than labour is <a href="https://www.smh.com.au/business/the-economy/pandemic-legacy-wage-earners-have-never-collected-a-smaller-share-of-the-economy-20201204-p56krt.html">still continuing to rise</a>, the government is proposing changes that would not just <a href="https://d3n8a8pro7vhmx.cloudfront.net/theausinstitute/pages/3417/attachments/original/1611873084/Omnibus_IR_Bill_and_Non-Union_EAs.pdf?1611873084">suppress wage growth</a>, but actually allow employers to cut some forms of pay and conditions.</p>
<p>The reforms would also entrench casual work - one of the largest forms of insecure employment.</p>
<p>As <a href="https://theconversation.com/anthony-albaneses-plan-to-boost-protections-for-australians-in-insecure-work-154953">Labor’s new platform on job security</a> recognises, this is a challenge that business, organised labour and government ought to be working together to tackle rather than exacerbate.</p>
<p>Whatever the positive elements of the new industrial relations bill, its crackdown on “wage theft” among them, its overall effect would be to take Australia even more firmly down the road of low-wages and low-growth. </p>
<p>It is not the road we should be taking.</p><img src="https://counter.theconversation.com/content/155033/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Stewart receives funding from the Australian Research Council. </span></em></p><p class="fine-print"><em><span>Adriana Orifici is undertaking a PhD with funding from an Australian Government Research Training Program (RTP) Scholarship.</span></em></p><p class="fine-print"><em><span>Joellen Riley Munton is affiliated with the Australian Institute of Employment Rights.</span></em></p><p class="fine-print"><em><span>Shae McCrystal receives funding from The Australian Research Council. </span></em></p><p class="fine-print"><em><span>Tess Hardy receives funding from the Australian Research Council. </span></em></p>It’ll be harder for employers to underpay workers, but easier to offer them extra hours without penalty pay.Andrew Stewart, John Bray Professor of Law, University of AdelaideAdriana Orifici, Lecturer, Monash University, Monash UniversityJoellen Riley Munton, Professor of Law, University of Technology SydneyShae McCrystal, Professor of Labour Law, University of SydneyTess Hardy, Senior Lecturer in Law, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1175832019-05-22T19:48:29Z2019-05-22T19:48:29ZWhere to now for unions and ‘change the rules’?<p>Very few people saw the Coalition’s win coming. If it was, as opposition leader Bill Shorten contended, “a referendum on wages” then it follows that Australians were content with sluggish wage growth and didn’t want a more substantial pay rise.</p>
<p>But that would be a great oversimplification. Labor had a more ambitious program of workplace reform, part of a much wider agenda for economic change and wealth redistribution, that it simply couldn’t sell to the electorate.</p>
<p>Where does this leave the industrial wing of the labour movement, which pushed the Labor Party to adopt sweeping re-regulation of the labour market?</p>
<p>For two years through its “change the rules” campaign the Australian Council of Trade Unions has had remarkable success in entrenching in public consciousness the twin themes of wage theft and insecure work.</p>
<h2>Broken rules on repeat play</h2>
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<span class="attribution"><a class="source" href="https://twitter.com/hashtag/changetherules">#changetherules</a></span>
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<p>It seemed to have a deliberate strategy of repeating its talking points and examples to reinforce the view that something is “broken” and needs to change.</p>
<p>But it provided very little detail about the type of change it wanted. </p>
<p>Whether it should have provided more or less detail is now very much up for debate as it and the Labor Party try to work out what went wrong on Saturday.</p>
<p>Rather than getting what they wanted, they are both on the defensive. Already business groups are weighing in, urging the Morrison government to “simplify” the industrial relations system and prevent casual workers from “double-dipping” – obtaining both a casual loading and leave entitlements.</p>
<p>Harvey Norman executive chairman Gerry Harvey put it this way on Monday, perhaps revealing something about <a href="https://www.afr.com/news/politics/national/relieved-ceos-have-a-busy-agenda-for-morrison-20190518-p51oso">how he sees his workforce</a>: “The economy works best when all the little ants out there are left to get on and do great things.”</p>
<h2>Now it’s up to the Coalition</h2>
<p>The Coalition did not advocate workplace law changes in the election campaign. It gained a mandate to do no more than implement the recommendations of the <a href="https://docs.jobs.gov.au/documents/government-response-migrant-workers-taskforce-report">Migrant Workers Taskforce</a> which it accepted back in March. As it happens, they are mostly worker-friendly measures directed at systemic underpayment and other forms of exploitation.</p>
<p>However, given the pressure that is already coming from the business community, don’t be too surprised if the Government dusts off some of the recommendations of the Productivity Commission’s 2015 <a href="https://www.pc.gov.au/inquiries/completed/workplace-relations#report">inquiry into workplace relations</a>.</p>
<p>These include “enterprise contracts” that allow businesses to vary award terms, and a relaxation of the “better off overall test” for enterprise agreements.</p>
<p>The Australian Building and Construction Commission and Registered Organisations Commission will remain in place as “cops on the beat” to combat union power, probably with increased resources.</p>
<h2>Unions have a choice of strategies</h2>
<p>So what room is there for unions in the new environment? In my view, plenty. The deep problems that “change the rules” and Labor’s policies sought to address haven’t gone away.</p>
<p>We still have a culture of wage theft in many sectors of the economy. We still have a proliferation of dodgy labour hire contractors. We still have misuse of the labour hire business model at companies like Amazon, with many workers trapped in long-term casual engagement. We still have widespread use of rolling fixed-term contracts.</p>
<p>We still have the collapse of effective collective bargaining in much of the private sector, and employer ‘work-arounds’ to avoid negotiating an enterprise agreement or get out of an existing one. We still don’t have the basis for a proper living wage.</p>
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Read more:
<a href="https://theconversation.com/how-the-major-parties-stack-up-on-industrial-relations-policy-116256">How the major parties stack up on industrial relations policy</a>
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<p>As the results unfolded ACTU secretary Sally McManus has <a href="https://twitter.com/sallymcmanus/status/1129892454868574208">made it clear</a> that the union movement would “never give up, never stop fighting for fairness for working people”. That said, it will doubtless revisit the change the rules campaign and its accompanying communications and electoral strategies.</p>
<p>Rather than shrinking back to a “small target”, as Labor is now contemplating in some policy areas, I think the ACTU should consider remaining bold in its vision for workplace reform.</p>
<p>It could prepare a clearly articulated case for “changing the rules” using detailed research that precisely measures the extent of problems employers like to downplay such as insecure work and wage theft.</p>
<p>And it should outline precisely how it wants the rules changed and what those changes would do to working lives.</p>
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Read more:
<a href="https://theconversation.com/why-are-unions-so-unhappy-an-economic-explanation-of-the-change-the-rules-campaign-105673">Why are unions so unhappy? An economic explanation of the Change the Rules campaign</a>
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<p>Of course, campaigning for legal changes can only be one part of the unions’ playbook.</p>
<p>Organising and connecting with workers on the ground in new and innovative ways is also essential, as shown by the United Voice’s new digital union [Hospo Voice] which campaigns against wage theft and sexual harassment in the hospitality industry and the <a href="http://www.youngworkers.org.au/">Young Workers Centre</a> and <a href="https://www.migrantworkers.org.au/">Migrant Workers Centre</a> which are one-stop shops run by the Victorian Trades Hall Council.</p>
<p>As the National Union of Workers and United Voice put it in the context of their <a href="https://anewunion.org.au">current amalgamation proposal</a>: “we need to change the rules, but we also need to change the game”. </p>
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<p><em>Anthony Forsyth blogs on workplace issues at: <a href="https://labourlawdownunder.com.au/">labourlawdownunder.com.au</a></em></p><img src="https://counter.theconversation.com/content/117583/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anthony Forsyth has received research funding from organisations including the Business Council of Australia, the Construction, Forestry, Mining and Energy Union, the Fair Work Commission and Victorian Government. The views expressed in this article are his own.</span></em></p>Dealing with the Coalition will more difficult than arguing than the rules are wrong.Anthony Forsyth, Professor of Workplace Law, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1133572019-03-17T18:49:23Z2019-03-17T18:49:23ZUltra low wage growth isn’t accidental. It is the intended outcome of government policies<p><em>This is the first in a three-part mini-symposium on Wages, Unemployment and Underemployment presented by The Conversation and the Academy of the Social Sciences in Australia. Read the other pieces in the series <a href="https://theconversation.com/au/topics/assa-symposium-67964">here</a>.</em></p>
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<p>The long debate over the causes of wage stagnation took an unexpected turn last week, when Finance Minister Matthias Cormann described (downward) flexibility in the rate of wage growth as “<a href="https://www.magic1059.com.au/news/national-news/88452-low-wage-growth-not-all-bad-minister">a deliberate design feature of our economic architecture</a>”.</p>
<p>It was a position that was endorsed in a flurry of confusion <a href="https://www.news.com.au/finance/economy/australian-economy/sixteensecond-backflip-turns-interview-into-trainwreck/news-story/fe62507c8e961d6381f510133cd68563">16 seconds after it had been rejected</a> by Defence Industry Minister Linda Reynolds. </p>
<p>Cormann had said policies aimed at pushing wages up could cause “massive spikes in unemployment”.</p>
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<p>The ease with which Reynolds was trapped into at first rejecting and then accepting what her ministerial colleague had said flowed from the fact that Cormann had broken one of the standing conventions of politics in Australia, and for that matter, the English-speaking world.</p>
<p>For more than forty years, both the architecture of labour market regulation and the discretionary choices of governments have been designed with the precise objective of holding wages down.</p>
<p>These policies have been quite successful, as can be seen from the graph.</p>
<p>However, at least until recently, there has been bipartisan agreement on at least one aspect of them – that no one should mention their role in holding back wages.</p>
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<span class="attribution"><a class="source" href="http://www.abs.gov.au/ausstats/abs@.nsf/mf/5206.0">ABS Australian Accounts, seasonally adjusted</a></span>
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<p>Instead, the decline in the wage share of national income has been variously blamed on </p>
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<li><p>technology</p></li>
<li><p>immigration</p></li>
<li><p>imports from China and, more recently, </p></li>
<li><p>the end of the mining boom.</p></li>
</ul>
<p>None of these explanations stand up to scrutiny. </p>
<p>The idea that technology is driving the wage share down is perhaps the most popular. </p>
<p>But technological change has been continuous, if uneven, since the beginning of the Industrial Revolution in the 18th century. Most of the time, workers have shared in the resulting productivity gains. </p>
<p>There have however, been a number of exceptional periods in which workers have been harmed. </p>
<p>They have been times when the balance of power had favoured employers. At those unusual times, any kind of disruption, whether caused by new technology or not, has had the potential to enable employers to break working conditions and cut wages. </p>
<p>Right now, for example, there is no necessary reason for the ability to do business over the Internet to harm workers. In many ways it empowers workers by reducing the information advantages of big employers. </p>
<p>But in an environment where unions are weak and working conditions are vulnerable to erosion, the outcome is firms like Airtasker, where workers bid against each other to perform outsourced tasks, <a href="https://theconversation.com/all-care-and-no-responsibility-why-airtasker-cant-guarantee-a-minimum-wage-76943">often for less than the minimum wage</a>. </p>
<p>There is nothing new about this kind of working arrangement. </p>
<p>It could be seen outside the wharves on Sydney’s “<a href="https://theconversation.com/all-care-and-no-responsibility-why-airtasker-cant-guarantee-a-minimum-wage-76943">Hungry Mile</a>” in the 1930s, where workers went from wharf to wharf each day hoping for work, or today on street corners in the United States, where (often undocumented) construction workers gather in the mornings hoping to be picked for work.</p>
<p>But if technology isn’t to blame, what is?</p>
<h2>The overlong shadow of the overhang</h2>
<p>The real story begins in the early 1970s, when there was an upsurge in inflation associated with the breakdown of the post-war <a href="https://en.wikipedia.org/wiki/Bretton_Woods_system">Bretton Woods</a> system of fixed exchange rates , and soaring prices in commodity markets including that for oil. The result was a “wage-price spiral” as both wages and prices rose at unexpected annual rates of more than 10%.</p>
<p>In a nation with a history of strong trade unions, decades of full employment, and the boundless faith in the future forged by the 1960s, wages grew faster than prices as both spiralled upwards. </p>
<p>By the time rising unemployment began to bite, and inflation slowed down, the wage share of national income had risen to an unprecedented 62%.</p>
<p>Reining in this “<a href="https://www.rba.gov.au/publications/rdp/1988/pdf/rdp8806.pdf">real wage overhang</a>” became the central preoccupation of macroeconomic policy throughout the 1970s and 1980s.</p>
<p>This made sense at the time. But, as in other fields, ideas formed in the 1970s and 1980s continued to dominate the thinking of policymakers long after they had either been proven to be failures or rendered obsolete by changing circumstances, as was the case with policies designed to hold back wages.</p>
<p>The policies had several elements. There were a series of changes in industrial relations law, most of which have attacked unions and weakened the bargaining power of labour.</p>
<p>The Fraser government introduced Sections 45D and 45E of the Trade Practices Act <a href="https://www.legislation.gov.au/Details/C2004A02274">banning secondary boycotts</a>, that is, action in solidarity with other workers. Fraser also created the Industrial Relations Bureau, the first of a series of industrial “police forces”.</p>
<p>On its election in 1996, the Howard government introduced the <a href="https://www.legislation.gov.au/Details/C2006C00104">Workplace Relations Act 1996</a> which extended scope for non-union agreements. After winning a Senate majority in 2004, Howard introduced <a href="https://en.wikipedia.org/wiki/WorkChoices">WorkChoices</a> which limited the scope of collective bargaining, and wound back protections against dismissal.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/explainer-what-are-the-abcc-and-registered-organisations-bills-56676">Explainer: what are the ABCC and Registered Organisations bills?</a>
</strong>
</em>
</p>
<hr>
<p>The Industrial Relations Bureau maintained at least a pretence of impartiality. By contrast, the organisations created by the Abbott and Turnbull governments (the Registered Organisations Commission and Australian Building and Construction Commission) have been so nakedly anti-union that they have repeatedly <a href="https://www.afr.com/news/politics/police-wanted-to-prosecute-over-awu-raids-leak-senate-estimates-hears-20190218-h1bdmu">broken the law</a> <a href="https://www.abc.net.au/news/2017-09-13/abcc-nigel-hadgkiss-resigns-over-breach-labor-pressures-cash/8942558">they are supposed to uphold</a>. </p>
<p>Labor governments have wound back some of the most extreme measures, but have not changed the general direction of policy.</p>
<p>Even measures that appeared superficially favourable to workers turned out differently. For example, in 1993 the Keating government introduced the concept of “protected industrial action”. </p>
<p>It was some time before it became apparent that the result was <a href="https://www.theguardian.com/business/grogonomics/2015/mar/16/industrial-action-is-at-near-record-lows-but-businesses-will-still-blame-unions">to abolish any general right to strike</a>, something that exists in almost every other democratic government.</p>
<p>As Minister for Workplace Relations, Bill Shorten introduced measures that were pitched as protecting penalty rates through a review process undertaken by the Fair Work Commission. A few years later, in a highly politicised process, the Commission <a href="https://www.liberal.org.au/latest-news/2017/02/23/fair-work-commission-review-penalty-rates">used the process to cut penalty rates</a>.</p>
<p>Coalition governments have also used the power of the state directly against unions. Notable examples include the string of <a href="https://www.royalcommission.gov.au/royal-commission-trade-union-governance-and-corruption">royal commissions</a> created by the Abbott government and the use, in 1998, of ex-military strikebreakers to break the Maritime Union of Australia. Their training and deployment was facilitated by a government consultant who <a href="https://www.theage.com.au/technology/battle-on-the-waterfront-20070512-ge4vby.html">worked with the major waterfront employer, Patricks</a>.</p>
<p>orchestrating the offshore training of the replacement workforce through the actions of consultant Stephen Webster and other shadowy ex-military figures.</p>
<p>Finally, macroeconomic management has operated on the basis that any increase in wages is a danger signal requiring a tightening of fiscal and monetary policy. A notable example, was the warning by then Employment Minister Eric Abetz in January 2014 months after taking office that Australia faced a “<a href="https://ministers.jobs.gov.au/abetz/industrial-relations-after-thirty-years-war-address-sydney-institute">wages explosion</a>”. </p>
<hr>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/264082/original/file-20190315-28483-4y15qz.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/264082/original/file-20190315-28483-4y15qz.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/264082/original/file-20190315-28483-4y15qz.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=296&fit=crop&dpr=1 600w, https://images.theconversation.com/files/264082/original/file-20190315-28483-4y15qz.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=296&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/264082/original/file-20190315-28483-4y15qz.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=296&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/264082/original/file-20190315-28483-4y15qz.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=373&fit=crop&dpr=1 754w, https://images.theconversation.com/files/264082/original/file-20190315-28483-4y15qz.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=373&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/264082/original/file-20190315-28483-4y15qz.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=373&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><a class="source" href="http://www.abs.gov.au/ausstats/abs@.nsf/mf/6345.0">ABS Wage Price Index</a></span>
</figcaption>
</figure>
<hr>
<p>Far from “exploding”, wage growth slid and hasn’t recovered.</p>
<p>More striking than his failed prediction, was Abetz’ assumption, taken for granted in policy debate, that any substantial increase in wages would be disastrous.</p>
<p>It is only in the last few years that this assumption, inherited from last century, have been challenged. </p>
<p>The Reserve Bank in particular has become an advocate for higher wage growth. </p>
<p>Yet as Cormann’s incautious outbreak of truthtelling has shown, the view has yet to percolate through to Australia’s elites.</p>
<hr>
<p><em>The <a href="https://www.assa.edu.au">Academy of the Social Sciences in Australia</a> is one of Australia’s four learned academies. The ASSA coordinates the promotion of research, teaching and advice in the social sciences, promotes scholarly cooperation across disciplines, comments on national needs and priorities in the social sciences, and provides advice to government on issues of national importance.</em></p><img src="https://counter.theconversation.com/content/113357/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Quiggin has been active in policy debate for many years and was an expert witness opposing cuts in penalty rates in 2014.</span></em></p>Employment Minister Mathias Cormann has let the cat out of the bag. The government has been trying to supress wages.John Quiggin, Professor, School of Economics, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/913152018-02-08T00:50:18Z2018-02-08T00:50:18ZUnions can’t just rely on promises of favourable laws to regain lost ground<figure><img src="https://images.theconversation.com/files/205248/original/file-20180207-74512-1dtdlq.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">As ACTU secretary, Sally McManus has proven effective at elevating the debate over workplace reform. </span> <span class="attribution"><span class="source">AAP/Alex Murray</span></span></figcaption></figure><p>This year has begun with an intensification of <a href="https://theconversation.com/vital-signs-jobs-may-be-increasing-but-the-real-test-is-whether-we-get-a-pay-rise-this-year-90110">the debate</a> about wage stagnation and wage inequality in Australia.</p>
<p>Research papers published this year have <a href="http://www.futurework.org.au/decline_in_strike_frequency">linked</a> the stalling of wage increases to drastically reduced levels of industrial action (and therefore unions’ collective bargaining power), and <a href="https://percapita.org.au/research/work-australia-working/">highlighted</a> the current system of workplace regulation’s focus on outdated notions of work and the workplace.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/vital-signs-jobs-may-be-increasing-but-the-real-test-is-whether-we-get-a-pay-rise-this-year-90110">Vital Signs: jobs may be increasing but the real test is whether we get a pay rise this year</a>
</strong>
</em>
</p>
<hr>
<p>The Labor Party’s national president, Mark Butler, <a href="https://markbutler.net.au/news/speeches/the-future-of-unions-in-australia-and-the-implications-for-labor/">recently urged</a> the labour movement “to have a no-holds-barred debate about the place of unions in Australia”. He pointed to the problems unions faced in terms of employer hostility and unhelpful laws, but also argued:</p>
<blockquote>
<p>Most people still imagine union organising against a backdrop of relatively large workplaces with a stable workforce – traditional factory organising … [However a] modern workplace is far more likely to be small and difficult to access, with a workforce that has high levels of turnover.</p>
</blockquote>
<p>Unions have to persuade people of the wisdom of having a collective voice in the workplace, and find a new version of solidarity for the digital age.</p>
<h2>State of play</h2>
<p>Sally McManus has been secretary of the Australian Council of Trade Unions (ACTU) for just under a year. In that time, she has <a href="http://www.afr.com/brand/afr-magazine/actu-chief-sally-mcmanus-parlays-online-support-into-power-20170814-gxvuo2">proven effective</a> at elevating the debate over workplace reform. The <a href="https://www.australianunions.org.au/change_the_rules">union movement’s mantra</a> – “the rules are broken”, “we need to #changetherules” – is biting in the community.</p>
<p>McManus recently effectively called time on the 25-year process of enterprise bargaining. <a href="https://www.workplaceexpress.com.au/nl06_news_selected.php?act=2&selkey=56458">She argued</a> unions are confronted with “a labyrinth of regulations”, and workers now have “little to trade off”.</p>
<p>The <a href="https://www.legislation.gov.au/Details/C2017C00323">Fair Work Act</a> is a legacy of the last Labor government; it’s been the subject of minimal change by the Coalition to date. </p>
<p>Unions had significant input into drafting the act when Julia Gillard was workplace relations minister in 2007-08. They ensured it included various mechanisms to support collective bargaining, in a shift from the individualised focus of the WorkChoices era.</p>
<p>However, in the decade since then, employers have found various ways to side-step many of the Fair Work Act’s requirements. And other union or employee rights have been read down by the courts and the Fair Work Commission.</p>
<h2>Finding new ways to connect</h2>
<p>Clearly, there are changes to the law that would, <a href="https://www.actu.org.au/actu-media/speeches-and-opinion/sally-mcmanus-address-to-nexgen-2017">as McManus argues</a>, help unions in their efforts to organise and represent workers. These include:</p>
<ul>
<li><p>tackling the “free-rider” issue (where non-unionists gain the benefit of union-negotiated enterprise agreements)</p></li>
<li><p>enabling unions to bargain not just with the direct employer of their members, but across franchise networks and supply chains</p></li>
<li><p>closing down the use of outsourcing, labour hire and other business entities to avoid the application of enterprise agreements, and employers making inferior agreements with small employees that are later applied to a much larger workforce (known as “no-stake” bargaining)</p></li>
<li><p>limiting employers’ ability to seek termination of expired agreements (taking workers back to the award safety net).</p></li>
</ul>
<p>Labor has <a href="http://brendanoconnor.ml.net.au/en-au/News/Brendan-OConnor-Latest-News/Post/16230/WORK-WAGES-AND-DIVISION-CREATING-A-FAIR-AND-PRODUCTIVE-LABOUR-MARKET-NATIONAL-PRESS-CLUB-CANBERRA">already committed</a> to implement many elements of the union agenda if it wins the next election. </p>
<p>But even with the most favourable laws, unions will still need to confront the reality of a dramatic transformation in the world of work: automation, the expanding “gig economy”, and what US academic David Weil calls the <a href="http://www.hup.harvard.edu/catalog.php?isbn=9780674975446&content=reviews">“fissuring” of work</a> – where business functions are split off to new entities that are forced to engage in intense competition, thus driving down labour costs. </p>
<p>Former ACTU assistant secretary Tim Lyons <a href="https://meanjin.com.au/essays/the-labour-movement-my-part-in-its-downfall/">puts it this way</a>: </p>
<blockquote>
<p>The workplaces and communities in which we organised politically and industrially have disappeared underneath us … Unions have to transform to catch up to the world as it is.</p>
</blockquote>
<p>These developments, combined with the disinclination of young workers to join unions, mean new forms of engagement have to be found outside the conventional notion of the workplace. Unions must connect with people in their communities and speak to them using technology they are familiar with.</p>
<p>Some Australian unions are taking on this challenge. They are attempting to organise workers in their homes, places of religious observance, and other focal points for community activity. For example:</p>
<ul>
<li><p>Victorian Trades Hall Council’s <a href="http://www.youngworkers.org.au/">Young Workers Centre</a> harnesses the power of social media in an effort to reach a new generation of workers in disparate, disconnected work environments. </p></li>
<li><p>The National Union of Workers has run a very effective campaign targeting exploitation of farm workers in the fresh food supply chain. It has also offered a <a href="https://www.nuw.org.au/your-fair-go-0">“FairGo” category</a> of membership, enabling non-members to participate in a class action to recover underpayments.</p></li>
</ul>
<p>However, not all union leaders are embracing these kinds of innovation. They may be at risk of placing too much faith in the capacity of legal changes to deliver a revival in membership numbers. </p>
<p>Given record-low wage increases and widespread exploitation of vulnerable workers, the value proposition of a collective voice in the workplace has rarely been stronger.</p><img src="https://counter.theconversation.com/content/91315/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anthony Forsyth has received research funding from organisations including the BCA, CFMEU, Fair Work Commission and Victorian Government. He is a Consultant with Corrs Chambers Westgarth. The views expressed in this article are his own.</span></em></p>Even with the most favourable laws, unions will still need to confront the reality of a dramatic transformation in the world of work.Anthony Forsyth, Professor of Workplace Law, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/835012017-09-12T19:42:11Z2017-09-12T19:42:11ZMarriage vote: how advocacy ads exploit our emotions in divisive debates<figure><img src="https://images.theconversation.com/files/184835/original/file-20170906-9843-1qcwy8p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The 'Yes' campaign's first ad focused on the evidential flaws with the 'No' campaign's ads.</span> <span class="attribution"><span class="source">AAP/Lukas Coch</span></span></figcaption></figure><p>The same-sex marriage debate in Australia was always bound to be divisive and emotive. And as a public vote on whether it should be legalised nears, the role of advocacy advertisements will become increasingly important in swaying the opinion of undecided voters. </p>
<p>While polls show <a href="http://cdn.thinglink.me/api/image/955846060138299394/1024/10/scaletowidth#tl-955846060138299394;1043138249">strong support</a> for marriage equality at present, the history of widespread advocacy campaigns shows that the “No” campaign has many unfair advantages – especially when it uses ads to make its point.</p>
<hr>
<p><em><strong>Further reading: <a href="https://theconversation.com/revealed-who-supports-marriage-equality-in-australia-and-who-doesnt-82988">Revealed: who supports marriage equality in Australia – and who doesn’t</a></strong></em></p>
<hr>
<h2>The No campaign’s natural advantage</h2>
<p>The efficacy of both the “Yes” and “No” arguments can be related to Mill’s <a href="http://documents.routledge-interactive.s3.amazonaws.com/9781138793934/A2/Mill/MillHarm.pdf">“harm principle”</a>: one side believes the only harm being done is to those who happen to be attracted to those of the same sex; the other side believes harm is being done to religious and moral values. How they present these ideas will dramatically affect the outcome of the vote.</p>
<p>However, the No campaign has distinct advantages when it advertises. These primarily relate to status-quo bias. <a href="https://www.princeton.edu/%7Ekahneman/docs/Publications/Anomalies_DK_JLK_RHT_1991.pdf">Research shows</a> that political actors often have an aversion to change, and will disproportionately focus on perceived losses relative to perceived gains.</p>
<p>As such, advocacy campaigns that focus on losses tend to do better than those focused on gains. On same-sex marriage, the gain is clear for some (such as those seeking to marry, and the rights this affords), but it is more reliant on more abstract notions like “fairness” for those not directly affected.</p>
<p>To that end, a campaign that suggests same-sex marriage will <a href="https://theconversation.com/without-proper-protections-same-sex-marriage-will-discriminate-against-conscientious-objectors-83348">somehow erode many people’s rights</a> (or those of their children) has an advantage over a campaign focused on establishing new rights.</p>
<hr>
<p><em><strong>Further reading: <a href="https://theconversation.com/without-proper-protections-same-sex-marriage-will-discriminate-against-conscientious-objectors-83348">Without proper protections, same-sex marriage will discriminate against conscientious objectors</a></strong></em></p>
<hr>
<p>The No campaign’s second advantage comes with its ability to muddy the waters and associate as many negatives with same-sex marriage as it can. Again, this uses status-quo bias: when in doubt, people typically vote no. </p>
<p>And “facts” play an almost negligible role in changing voter behaviour in the face of strong emotionally based arguments.</p>
<h2>The ad campaigns so far</h2>
<p>So far, the ads for and against same-sex marriage have been intelligently made. </p>
<p>Polls have consistently shown that as the religiosity of Australians has declined, support for gay rights has grown. This bodes poorly for the No campaign, and it knows it. As a result, the <a href="https://acl.nationbuilder.com/marriage_coalition">Australian Christian Lobby</a> has focused more on the idea that same-sex marriage will lead to a sort of social, moral decline.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/KqXLfp2sFHQ?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">An Australian Christian Lobby ‘No’ ad.</span></figcaption>
</figure>
<p>Its ad cites no evidence for the assertions in it, but facts and evidence are less relevant in political advertising than many might like to think. </p>
<p>It’s a <a href="http://www.abc.net.au/news/2017-08-30/why-the-first-no-campaign-ad-will-work/8856722">smart ad</a>: it builds an emotional connection with traditional family-oriented voters, based on fear. Importantly, it sows doubt in those it connects with, which can be hard to overcome.</p>
<p>Another ad designed to air on Father’s Day was blocked by Free TV Australia, which considered the ad political. The group behind it, <a href="http://www.dads4kids.org.au">Dads4Kids</a>, neglected to attach an identification tag, which would have resolved the issue.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/l1aTJtaT2uk?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Dads4Kids’ Father’s Day ad.</span></figcaption>
</figure>
<p>The group <a href="https://www.theguardian.com/australia-news/2017/sep/03/dads4kids-ad-is-dodgy-campaign-tactic-in-marriage-debate-says-lgbti-activist">denied</a> the ad was either political or related to the marriage vote. But two lines in the 60-second spot appear designed for the debate: first, “Your mummy and I are a perfect team”, then “I can’t wait to … watch as you put on a wedding ring”. These are presented as positive messages, but reinforce existing ideals of parenting as between men and women. </p>
<p>These kinds of ads may be used again, but are less effective for the No campaign than the more overtly stress- or fear-inducing ones.</p>
<p><a href="https://theconversation.com/factcheck-are-children-better-off-with-a-mother-and-father-than-with-same-sex-parents-82313">Experts</a> assert there is no evidence to support the No campaign’s assertions. Its messaging is, in that strict sense, irrational. </p>
<p>But that’s the point: muddying the waters in advocacy advertising plays on the unquestioning parts of the brain. Fear of the unknown and unknowable can be baseless – even silly – but it works. </p>
<p>When <a href="http://www.equalitycampaign.org.au">Yes Equality</a> launched its first TV ad, it was defensive, and focused on the evidence problems with the No ads.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/i_iQuyzS6Wk?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">A Yes campaign ad.</span></figcaption>
</figure>
<p>The <a href="http://www.theaustralian.com.au/business/media/marriage-equality-campaign-launches-tv-ad-starring-ian-thorpe/news-story/a9f221b5d05d86fc241b173f75dda18a">latest ad</a> from the Yes campaign doesn’t give viewers the time to build any connection: there are too many faces, too much going on.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/pl5pEmg4N_0?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Another ad from the Yes campaign.</span></figcaption>
</figure>
<p>Debunking and clearing up confusion is important, as is mobilising voters, but the most successful campaigns focus more on establishing emotive-empathetic links with viewers than rational ones</p>
<p>Such campaigns usually rely on stress or anger. The US campaign against “Hillarycare” did it in 1993; when unions fought the WorkChoices legislation, they did it too; and the mining industry did it in its battle against the Rudd-Gillard mining taxes in 2010.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/P5y3b9iVgGs?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">A union anti-Workchoices ad.</span></figcaption>
</figure>
<p>Giving the same-sex marriage debate relatable, likeable faces, and building emotional narratives, will be critical to countering the fear-based charge of the “No” ads. This is especially the case if the campaign maintains or increases its advertising spending.</p>
<h2>Lessons from Ireland</h2>
<p>Ireland’s 2015 referendum on same-sex marriage offers compelling – if not completely analogous – examples of what might happen in Australia.</p>
<p>Ireland <a href="https://www.theguardian.com/world/2015/may/23/gay-marriage-ireland-yes-vote">voted in favour</a> of same-sex marriage, 62% to 38%. This was well down from pre-referendum opinion polls, where support was <a href="https://www.theguardian.com/world/2014/feb/21/majority-irish-voters-support-lgbt-marriage-gay-graham-norton">as high as 76%</a>. Polling shows Australians’ support for marriage equality is similarly strong — <a href="http://www.roymorgan.com/findings/6707-australian-views-on-gay-marriage-february-march-2016-201607191635">as high as 76%</a> – and it’s likely a charged debate will bring a similar drop.</p>
<p>However, there is a key difference. In Ireland, political ads are <a href="http://www.irishstatutebook.ie/eli/2009/act/18/enacted/en/html">banned on broadcast media</a> – so, no TV spots, nor radio. Australia has no such prohibition.</p>
<p>The complexity of an issue like same-sex marriage (or almost any political issue) is not well distilled into 30-second audio-visual pitches. Instead of through ads, the Irish debate largely took place on panel discussions, in parliament, and in public and private places around the country.</p>
<p>The closest ads Ireland ran to Australia’s TV spots were internet-based, such as those made by the <a href="http://ionainstitute.eu">Iona Institute</a> and <a href="https://www.youtube.com/watch?v=zaRK-0W5HQI&feature=youtu.be">Mothers and Fathers Matter</a>. These pushed the idea that both a mother and a father were necessary or ideal for bringing up children.</p>
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<figcaption><span class="caption">Mothers and Fathers Matter campaign ad.</span></figcaption>
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<figcaption><span class="caption">Iona Institute ad.</span></figcaption>
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<p>Otherwise, the ads were made for billboards, newspapers and the internet, but their impact was likely to be lower than if TV spots were used. Internet ads generally have lower saturation and reach fewer demographics (including older voters, who are <a href="http://www.abc.net.au/news/2016-06-22/election-2016-vote-compass-same-sex-marriage/7520478">more likely to resist same-sex marriage</a>).</p>
<p>And static, image-based ads don’t have the <a href="http://www.tandfonline.com/doi/abs/10.1080/00913367.1991.10673202">same efficacy as TV ones</a> – especially in terms of emotive reactions, which lend themselves more to irrational associations.</p>
<h2>What to expect as the vote nears</h2>
<p>Ireland’s experience shows that even where ads are kept from broadcast media, there can be a dramatic drop in support for same-sex marriage after a prolonged, divisive debate. But throwing well-made TV and radio ads into the mix may well prove a critical distinction between Australia and Ireland.</p>
<p>The No campaign will continue to draw on as many negative associations as possible, especially related to children. Its campaign has been significantly dependent on fear, and shows no indication of changing.</p>
<p>Once the vote is properly underway, the intensity of the ads is likely to increase. Without an adequate counter from the Yes campaign – especially one offering more emotionally compelling messages – the advantages of the No campaign are likely to narrow the polling gap significantly.</p><img src="https://counter.theconversation.com/content/83501/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>George Rennie does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The history of widespread advocacy campaigns shows that the ‘No’ campaign has many unfair advantages in the marriage equality debate.George Rennie, Lecturer in American Politics and Lobbying Strategies, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/605692016-06-08T20:10:13Z2016-06-08T20:10:13ZLobbying 101: how interest groups influence politicians and the public to get what they want<figure><img src="https://images.theconversation.com/files/125647/original/image-20160608-15052-1417cif.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Lobby groups have a lot to lose or gain in elections.</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-396459388/stock-photo-colourful-reflection-of-canberra-s-new-parliament-building-in-a-fountain-pond-at-sunset.html?src=OuXTE_aWS93FkPSEJBvRdA-1-0">Taras Vyshnya/Shutterstock</a></span></figcaption></figure><p><em>We see their spokespeople quoted in the papers and their ads on TV, but beyond that we know very little about how Australia’s lobby groups get what they want. This is the first article in our series on the strategies, political alignment and policy platforms of eight <a href="https://theconversation.com/au/topics/australian-lobby-groups">lobby groups that can influence this election</a>.</em></p>
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<p>Over the past 20 years, lobbying activities in Australia have expanded dramatically. Following the United States’ lead, where a <a href="http://www.theatlantic.com/business/archive/2015/04/how-corporate-lobbyists-conquered-american-democracy/390822/">radical shift in ideology</a> in the 1970s led to a re-evaluation of the way corporations view their role in society, the notion of corporate <a href="https://books.google.com.au/books/about/Supercapitalism.html?id=IPmWgoKQTgUC">“civic duty”</a> has been replaced by a belief that governments and the public are <a href="http://reclaimdemocracy.org/powell_memo_lewis/">fair game</a> for special interests.</p>
<p>Now, lobbying in Australia is a <a href="http://www.parliament.sa.gov.au/Library/ReferenceShare/Documents/lobbying.pdf">multi-billion dollar industry</a> which employs a sophisticated strategy to win public opinion and political favours for its clients or members. </p>
<h2>Lobbying and the ‘revolving door’</h2>
<p>Who is able to lobby, and the methods they can employ in doing so, is determined by a <a href="http://lobbyists.pmc.gov.au/conduct_code.cfm">patchwork of laws</a> designed to add some transparency to an otherwise murky process. There are, therefore, “official lobbyists” – individuals and firms for whom the frequency and import of their work requires them to <a href="http://lobbyists.pmc.gov.au/who_register.cfm">register themselves</a>. </p>
<p>Any interested party can engage the services of these professionals for a fee, but if a board member, union official, or other “concerned citizen” wants to meet with a political decision-maker, and perhaps even discuss a policy or infrastructure proposal over lunch, there’s little – <a href="http://www.couriermail.com.au/news/queensland/names-of-13-people-who-attended-lobbying-lunch-with-minister-ros-bates-revealed/story-e6freoof-1226576200972">other than a vigilant press, perhaps</a> – to effectively prevent them from doing so.</p>
<p>So, political lobbying is not limited to those officially sanctioned as “registered lobbyists”. Its scope includes anyone who wants something and is willing to twist a government official’s arm to get it.</p>
<p>Lobbying consists of a range of <a href="http://amr.aom.org/content/24/4/825.short">strategies</a> designed to co-opt or realign policy. Broadly, these strategies attempt to influence one of two key targets: government (<a href="https://theconversation.com/to-clean-up-the-financial-system-we-need-to-watch-the-watchers-38359">including regulators</a>) and the public. </p>
<p>In order to lobby politicians and regulators, lobbyists use <a href="http://periodicdisclosures.aec.gov.au">campaign donations</a>, letter writing campaigns, and try to build personal relationships. Lobbyists can also rely on morally dubious quid-pro-quo arrangements, such as jobs for friendly politicians at retirement.</p>
<p>This can lead to potential conflicts of interest. In the US, around <a href="http://www.nytimes.com/2013/07/28/books/review/this-town-by-mark-leibovich.html?pagewanted=all&_r=1&">50% of ex-legislators become lobbyists</a>. Although not to the same extent, this also <a href="http://www.businessinsider.com.au/10-former-howard-government-politicians-who-moved-into-the-lobbying-industry-2014-3">occurs in Australia</a>.</p>
<p>Alternatively, lobbying the public relies on advertisements, op-ed pieces, <a href="http://www.bca.com.au/publications/the-cost-of-dropping-out-research-reports">commissioned research</a>, protests, and <a href="http://www.clubsaustralia.com.au/advocacy/press/news-detail/2015/03/11/clubs-up-pressure-on-government-support-for-wilkie-s-licence-to-punt">press releases</a> to try and shift public opinion on a given issue.</p>
<p>Whether politicians or the public are targeted depends on their amenability. When dealing with Labor, for example, the <a href="http://www.actu.org.au">Australian Council of Trade Unions</a> will focus its efforts on meeting privately with Labor, and attacking the Liberal Party publicly. <a href="http://www.actu.org.au/actu-media/videos/vimeo?id=128768636">Demonstrations</a> and <a href="http://www.actu.org.au/actu-media/videos/vimeo?id=114299330">ad campaigns</a> are used to try and influence public opinion to that end, and played a key role in the 2007 election in attacking WorkChoices.</p>
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<figcaption><span class="caption">The ACTU’s 2007 anti-WorkChoices campaign.</span></figcaption>
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<p>Similarly, business – which is more likely to have a combative relationship with Labor – will engage with the Liberal and (to a lesser extent) Nationals parties more positively, and engage in <a href="https://www.propertycouncil.com.au/Web/Our_Industry/Our_contribution/Web/Industry_Leadership/PropertyStory/Property_Story.aspx">“public information”</a> campaigns to exert political pressure on Labor, such as the <a href="http://www.theaustralian.com.au/business/business-spectator/the-man-who-killed-rudds-mining-tax/news-story/851da8b4dc89dc8f1d34b236eba50737">mining tax campaign in 2010</a>.</p>
<p>But these relationships make it harder for Labor to create policy at odds with union interests; and it’s similarly difficult for the Liberal Party to put “big business” off-side. Doing so for either party alienates key allies, and the question of whether a policy is actually “good” for the country can become a secondary consideration.</p>
<h2>The many faces of lobbying</h2>
<p>While lobbying in Australia represents a wide range of interest groups, it has a high cost associated. This can mean that, to the extent that lobbying is effective, it disproportionately benefits big businesses and a wealthy elite who can afford to <a href="http://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp1415/LobbyingRules">“pay the piper”</a>. </p>
<p>And if an issue isn’t adopted by unions – many important debates aren’t – then the associated public debate can be one-sided.</p>
<p>Businesses are generally well represented. Peak bodies, such as the <a href="http://www.bca.com.au">Business Council of Australia</a> and the <a href="https://www.propertycouncil.com.au">Property Council</a>, ensure that even small and mid-sized businesses have a say. Further, the largest think-tanks, such as the <a href="http://www.ipa.org.au">Institute of Public Affairs</a>, ensure that the ideology of business – low taxes and few regulations – is well reflected in public discourse.</p>
<p>By stark contrast, “grassroots” organisations such as <a href="https://www.getup.org.au">GetUp!</a> or the <a href="https://www.acfonline.org.au">Australian Conservation Foundation</a>, even when broadly representative of the views of a large proportion of the population, tend to have far fewer resources at their disposal for public relations or campaign financing. To that end, their ability to effectively lobby is severely undermined.</p>
<p>The problem is one of diffusion. Compare, for example, a lobby group that represents very few very-high-income members (be they individuals or businesses) with one that represents many of average or low incomes. If a lobby group thinks a policy might threaten its members’ livelihood, it is far easier to draw large sums of money from wealthy few because, proportionately, the risk-reward ratio is much more in their favour. </p>
<p>When a policy is at odds with well-resourced interests, chipping in a few million towards a campaign is far easier to do, as many mining magnates did in 2010.</p>
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<figcaption><span class="caption">The Association of Mining and Exploration Companies’ anti-mining tax ad.</span></figcaption>
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<p>During that same time, despite claiming a million members, GetUp! was relatively under-resourced financially, and dramatically outspent by organisations such as the <a href="http://www.minerals.org.au">Minerals Council</a>. As such, organisations like GetUp! are often forced to resort to social media, and hope that, predicated on humour, outrage or luck, their videos will go “viral”.</p>
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<figcaption><span class="caption">This January 2015 GetUp! ad explained the possible implications of the Trans-Pacific Partnership Agreement.</span></figcaption>
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<h2>Election 2016</h2>
<p>Elections unfailingly draw the attention and best efforts of lobby groups, which have a lot to gain or lose depending on which party takes power.</p>
<p>Labor has the unions on-side, which have been strangely quiet in the wake of the royal commission. But big business is disproportionately in the Coalition’s camp.</p>
<p>The Property Council, along with the state and federal <a href="https://reia.asn.au">Real Estate Institutes</a>, clearly view the mooted changes to negative gearing laws as a threat. To that end, they’re pushing the message that removing negative gearing will <a href="https://negativegearingaffectsyou.com">devastate housing, one of Australia’s biggest industries</a>. </p>
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<figcaption><span class="caption">The Property Council of Australia’s Don’t Play with Property ad.</span></figcaption>
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<p>(The imagery of this ad is a strange choice – is this an admission that Australia’s property market is indeed a house of cards?)</p>
<p>But the dark horse in this race is the banking industry. When Opposition Leader Bill Shorten signalled a royal commission into banks, the immediate response by the industry was to threaten a <a href="http://www.smh.com.au/federal-politics/political-news/it-would-cost-them-seats-banks-refuse-to-rule-out-mining-taxstyle-campaign-against-royal-commission-20160412-go4ay8.html">“mining tax-style campaign”</a>. </p>
<p>Labor is still licking its wounds from the 2010 mining industry assault and is keen to avoid a repeat from a similarly well-resourced foe. But it knows the banking industry would be risking a lot in the battle for public sentiment, should it decide to wage a public relations war on Labor. </p>
<h2>The proper role of lobbyists</h2>
<p>Lobbying plays a critical role in Australia’s representative democracy. The sheer plurality of voices in a country of 23 million ensures that Australia needs a system to filter and convey the views of the many to the few who represent them. To that end, the role of the lobbyist is critical.</p>
<p>However, the dangers of lobbying are great. The potential for regulatory and government capture by special interests, as well as the ability of powerful concentrated interests to drown out other voices in public debate, presents significant challenges for Australian democracy. </p>
<p>Consequentially, Australia would benefit from changing to disclosure rules on campaign financing. We should also re-evaluate the permissibility of the “revolving door” of politicians and the lobbying industry. More pressingly, <a href="http://www.smh.com.au/nsw/liberal-donations-scandal-highlights-icacs-important-work-20160324-gnqer9.html">in the wake of recent scandals around political donations</a>, Australia may need a national corruption watchdog along the lines of NSW’s <a href="https://www.icac.nsw.gov.au">Independent Commission Against Corruption</a>. </p>
<p>Not all of these challenges can or should be tackled legislatively, but the potential of lobbying to undermine democratic ideals means reform is needed. The sooner the better.</p>
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<p><em>Stay tuned for the rest of <a href="https://theconversation.com/au/topics/australian-lobby-groups">The Conversation’s Australian lobby groups series</a>, which will profile individual interest groups.</em></p><img src="https://counter.theconversation.com/content/60569/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>George Rennie does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Lobbying in Australia is a multi-billion dollar industry which employs a sophisticated strategy to win public opinion and political favours for its clients or members. Here’s how.George Rennie, PhD Candidate, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/572112016-04-20T20:14:12Z2016-04-20T20:14:12ZThe state of the union(s): how a perfect storm weakened the workers’ voices<figure><img src="https://images.theconversation.com/files/118835/original/image-20160415-11420-1lf6n81.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Just after the second world war, union membership was almost 65% of the workforce. Now it is just 15%.</span> <span class="attribution"><span class="source">Wikimedia Commons</span></span></figcaption></figure><p><em>With the Senate again rejecting the government’s bill to restore the Australian Building and Construction Commission, Prime Minister Malcolm Turnbull has the triggers he needs for a double-dissolution election on July 2. Unions will be a key issue in the campaign. In a <a href="https://theconversation.com/au/topics/changing-face-of-unions">series</a> starting today, we take a close look at the history of trade unions in Australia, their political links, why their membership bases eroded and where they need to go from here in order to be a relevant and constructive force in Australian working life.</em></p>
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<p>The governance, conduct and purpose of trade unions in Australia have been the focus of much recent <a href="https://theconversation.com/bringing-back-building-watchdog-helps-a-political-agenda-but-not-concerns-about-union-corruption-54051">political debate</a>, not to mention <a href="http://www.smh.com.au/federal-politics/political-news/lawyers-enjoy-25-million-windfall-from-unions-royal-commission-20150710-gia0wo.html">public expenditure</a>. Given the level of interest, you could be forgiven for assuming Australia’s union movement is at the height of its power and, as such, a key political and economic issue.</p>
<p>But Australia’s union movement is facing a perfect storm. Union membership is at its lowest point since before federation. Only 15% of employees are <a href="http://www.abs.gov.au/ausstats/abs@.nsf/MediaRealesesByCatalogue/A4A44798D68CAFB9CA257EEA000C5421?OpenDocument">union members</a> in their main job. That number drops to 11% in the private sector.</p>
<p>This is a far cry from the peak of 64.6% in 1948 and the consistent minimum of close to 40% the union movement enjoyed continuously from <a href="http://www98.griffith.edu.au/dspace/bitstream/handle/10072/40801/69891_1.pdf?sequence=1">1913 to 1992</a>.</p>
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<p>Union membership has fluctuated over the last century. But, it has plummeted since the early 1990s. What caused this? And what are some of the solutions being raised to stem the decline?</p>
<h2>Falling membership base</h2>
<p>A list of suggested triggers and exacerbating factors has emerged. Many reflect the international trend of union decline in advanced economies – but with an Australian twist. </p>
<p>The Australian system of conciliation and arbitration was born as a “historic compromise” between capital and labour. It was brokered just after federation in an attempt to circumvent industrial unrest, particularly in the maritime and agriculture sectors. </p>
<p>It enshrined a system in which representation of worker and employer interests was formally institutionalised. This led to growth in the number of unions, as well as unions’ significant engagement with – if not reliance on – the arbitration system.</p>
<p>The demise of the “blue-collar working class” and structural change that reduced the Australian manufacturing sector, beginning in the mid-1970s, struck at the heart of male-dominated union membership. The move towards a service-based economy further aggravated the situation. Unions lagged in attempts to organise low-paid female-dominated sectors.</p>
<p>It has been suggested that this factor was the king-hit for Australian unionism. But political and regulatory change arguably amplified its impact.</p>
<p>The election of the Hawke Labor government and the inception of the Accord between it and unions (via the ACTU) in 1983 could be seen as a high point of union political power. Though theoretically a tripartite agreement including employers, under the Accord unions essentially negotiated with the government to determine wage claims in exchange for improvements to the social wage through Medicare, superannuation and changes to tertiary education. </p>
<p>The Accord era undoubtedly placed Australian unions close to the heart of national policymaking. But that influence had currency only while Labor was in power. And it was not consistent even across the life of the Hawke/Keating governments.</p>
<p>Some argue that the Accord accelerated the decline in union membership (by more than 15% during the Accord years of 1983 to 1996) and reinforced union dependency on the state at the expense of rank-and-file activism. Also, the amalgamation process that began in the late 1980s – which was intended to provide economies of scale in “super-unions” – weakened many unions’ occupational identity.</p>
<h2>What’s happened recently?</h2>
<p>Regulatory change (beginning in the Accord years and ongoing), which decentralised bargaining and gradually dismantled the arbitration system, has relegated unions to the political and economic periphery. </p>
<p>A situation has emerged where unions cannot effectively challenge the proliferation of “non-standard” work arrangements – such as increased casualisation and independent contracting. As a result, unions are institutionally marginalised. Paradoxically, their capacity to effect change on the ground through membership power is limited by the difficulties in organising “non-standard” workers. </p>
<p>Australian unions have faced an increasingly hostile political environment which has fuelled regulatory change. This began with the Howard government’s notorious WorkChoices framework, which privileged individual bargaining, limited union access to workplaces and imposed greater barriers to industrial action. </p>
<p>Unions have not been passive recipients of these changes. They have tried – through amalgamations, the adoption of new organising techniques, and political campaigning – to reverse their fortunes. </p>
<p>But they have faced an almost perfect storm that is set to continue with the disruption of traditional industries and jobs, the intensification of competitive pressures on labour through the implementation of multilateral trade agreements and the political focus on industrial relations reforms.</p>
<p>Regardless of how unions survive this tempest, they will need to innovate and adapt to a continually evolving climate. If not, a key element of Australian social democracy will shrivel.</p><img src="https://counter.theconversation.com/content/57211/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Sarah Kaine is a member of the NTEU.</span></em></p>A diminishing membership base, changes to labour and industry and heightened political attention has left the once-powerful trade union movement flailing.Sarah Kaine, Associate Professor in Human Resource Management and Industrial Relations, University of Technology SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/456522015-08-04T19:36:56Z2015-08-04T19:36:56ZEnterprise contracts echo ‘take it or leave it’ world of WorkChoices<p>The Productivity Commission’s newly released draft report into <a href="http://www.pc.gov.au/inquiries/current/workplace-relations/draft/workplace-relations-draft-overview.pdf">Australia’s workplace relations framework</a> must be treated with great caution. </p>
<p>Prima facie, it appears supportive of “the Australian way” to developing and enforcing labour standards. </p>
<blockquote>
<p>Contrary to perceptions, Australia’s labour market performance and flexibility is relatively good by global standards, and many of the concerns that pervaded historical arrangements have now abated. Strike activity is low, wages are responsive to economic downturns and there are multiple forms of employment arrangements that offer employees and employers flexible options for working.</p>
</blockquote>
<p>Closer reading reveals, however, it is committed to deepening the further erosion of Australia’s distinctive approach to achieving fairness as well as productivity at work. </p>
<p>This corrosive dynamic commenced under the Keating government in 1991. It was turbo-charged in 2006 when the Howard-era WorkChoices redefined the terms around which the debate on workplace relations reform has been couched.</p>
<p>The report makes some sensible suggestions. Prime amongst these are its proposals for a more realistic (that is, tolerant) approach to pattern bargaining and controls on non-union bargaining agents (who it suggests should gain 5% employee support to gain recognition).</p>
<p>The core recommendations, however, concern three fundamental matters.</p>
<p>First is the erosion of the independence of Australia’s labour standards setting authority.</p>
<p>The Productivity Commission report claims “several major deficiencies” must be addressed, criticising the FairWork Commission for being overly-legalistic in the way it determines awards and claiming the appointment process for FWC members leads to inconsistencies in its decisions.</p>
<p>In place of tenure, Fair Work Commissioners are to have five year contracts, be subject to performance management and be appointed by the relevant Federal minister alone. Labour standards are to be set be people with research and analytical expertise alone. </p>
<p>Those with practical experience of the operation of labour standards are to be excluded from shaping them in any way. Any notion of a quasi-judicial process to determine labour standards would be completely eradicated if these recommendations are implemented. It would mark the complete severance with Australia’s distinctive - and well respected – regime of labour standards determination.</p>
<p>The second concern is the further fragmentation of bargaining with employer driven “collective contracts”.</p>
<p>The report asserts there is “a gap in contract arrangements between individual arrangements (broadly defined) and enterprise agreements” (page 37, 57). It proposes this “gap” be filled by employer-determined collective “enterprise contracts”. There are strong echoes here of “take it or leave it” collective Australian Workplace Awards (AWAs) of WorkChoices. </p>
<p>The Commission appears to be totally unaware of decades of industrial sociology and industrial psychology on workplace dynamics. Social space of work is governed as much, if not more, by trust as well as contractual relations. Improving “trust relations”, not creating yet another form of contract is needed to fill this alleged “gap”. </p>
<p>Introducing the notion of “contract” in this context only has relevance if one is endeavouring to weaken the coherence and effectiveness of a labour standards regime.</p>
<p>The final one is further erosion of union bargaining power.</p>
<p>The final swag of recommendations have a very strong WorkChoices flavour of tilting bargaining power towards employers. The proposal that strike action can be terminated if it does “significant economic harm to the employer alone” betrays either naivety or bias of the highest order. That is the primary reason why strikes are undertaken.</p>
<p>In short, while the Commission advocates “repairing not replacing” our current system, the effects of its proposed changes would profoundly shift power in it. This would be achieved by weakening the independent standing of the Fair Work Commission as a body comprised of thoughtful practitioners and a major erosion of unions’ ability to act effectively in the labour market.</p><img src="https://counter.theconversation.com/content/45652/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span> John Buchanan is Director of the Workplace Research Centre. This is a self-financing research unit based in the University of Sydney Business School. The Centre is funded by end users of the research it produces. Clients are based in the government, non-government and private sectors. Between 2011 - 2013 he lead two large scale projects worth just over $2m for the Fair Work Commission that examined the reach of award across the private sector and the impact of minimum wage decisions on the incentive to bargain. These projects were awarded to the Centre after an open tender process.</span></em></p>Echoes of WorkChoices? The Coalition is keen to avoid any whiff of the failed policy, but some of the Productivity Commission’s recommendations have a strong flavour of it.John Buchanan, Director, Workplace Research Centre, University of SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/456472015-08-04T04:21:57Z2015-08-04T04:21:57ZChange penalty rates, reform work agreements, urges Productivity Commission: experts respond<figure><img src="https://images.theconversation.com/files/90712/original/image-20150804-15137-19ljvdl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Cafe workers are among many that stand to lose Sunday penalty rates.</span> <span class="attribution"><span class="source">Felipe Neves/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span></figcaption></figure><p>Hospitality, entertainment, retail, restaurant and cafe workers will have their Sunday penalty rates cut, while minimum wage workers can expect modest pay rises, if draft workplace reform recommendations from the Productivity Commission are accepted by the Coalition government.</p>
<p>Despite criticism from business lobby groups, the Commission has described the current system of minimum wage setting as “justified”, saying the view that existing levels are “highly prejudicial to employment is not well founded”.</p>
<p>But it says significant minimum wage increases pose a risk for employment, especially against a weakening labour market. It also says the Fair Work Commission should be allowed to make temporary variations in awards “in exceptional circumstances after an annual wage review has been completed”.</p>
<hr>
<p><a href="https://theconversation.com/sundays-are-similar-to-saturdays-for-workers-productivity-commission-45643">Michelle Grattan</a>: <em>“Nevertheless, whatever reforms the government proposes for its next term will face tough counter-attack from Labor and the unions”.</em></p>
<hr>
<p>The Commission recommends that Sunday penalty rates be removed for hospitality, retail and entertainment workers, aligning them with Saturday rates. The Commission believes lower regulated Sunday rates would increase opening hours and encourage higher staffing ratios and job opportunities.</p>
<p>Rebutting business complaints that the system needs comprehensive reform, the Commission found Australia’s labour market was performing relatively well against global standards. </p>
<p>But among other major recommendations on reforming Australia’s enterprise agreement system, the Productivity Commission has suggested the creation of an enterprise contract, a new type of enterprise agreement allowing business to negotiate individual flexibility arrangements without the need for an employee ballot. The report said the Australian Government should also replace the better off overall test for approval of enterprise agreements with a new “no-disadvantage” test.</p>
<p>The report suggests employees could only receive compensation for unfair dismissal if it was found they had been dismissed “without reasonable evidence of persistent underperformance or serious misconduct”. It also recommends the emphasis on reinstatement as the primary goal of the unfair dismissal provisions, be removed from the 2009 Fair Work Act.</p>
<p>Among recommendations that will anger unions, the Productivity Commission has said the Fair Work Commission should only grant a protected action ballot order to employees if enterprise bargaining has commenced, and suggests the Fair Work Commission be allowed suspend or terminate industrial action causing, “or threatening to cause, significant economic harm to the employer or the employees… rather than both parties (as is currently the case)”.</p>
<p>It also suggests increasing the maximum penalty for unlawful industrial action to reflect “the high costs that such actions can inflict on employers and the community”. </p>
<p>The report also addresses the potential exploitation of migrant workers by employers, suggesting penalties for underpaying staff be boosted. </p>
<hr>
<h2>Enterprise Contracts</h2>
<p><strong>David Peetz, Professor of Employment Relations at Griffith University:</strong></p>
<p>The Productivity Commission says its recommendation of an “enterprise contract” will “go a long way in allowing enterprises to negotiate with individuals without union representation if that is their wish”.</p>
<p>Unfortunately for the Productivity Commission, it would not be an “agreement”, because the Commission recommends employers be able to establish an enterprise contract “without having to negotiate” with anyone. Indeed it could be offered “to all prospective employees as a condition of employment”. </p>
<p>The EC would not be subject to the existing “better off overall test” that currently applies to enterprise agreements and individual flexibility arrangements. Instead, it would be tested against a weaker “no disadvantage” test.</p>
<p>It therefore has the key features of two previously abandoned instruments. One is “employer greenfield agreements” (EGAs), which only existed under WorkChoices. These enabled an employer to agree with itself the conditions that would apply to new employees – but only in a new establishment, whereas ECs would apply in any establishment of any size. These greenfield agreements led to frequent cuts in penalty rates and other conditions.</p>
<p>The second is Australian Workplace Agreements (AWAs), which even when they were subject to a no-disadvantage test (before WorkChoices), were shown to lead to lower pay and conditions (and/or to be used for union avoidance), and which under WorkChoices could be offered as a condition of employment. AWAs were a major factor in the defeat of the Howard government.</p>
<p>It is hard to believe that the Productivity Commission really expects that the government would agree to this recommendation, as it would form an easy basis for another political mobilisation by unions against any reform package. More likely, it would end up a sacrificial lamb, dumped by the government to protest it is only after moderate reforms.</p>
<hr>
<h2>Minimum wage</h2>
<p><strong>Rob Bray, Research Fellow at Australian National University:</strong></p>
<p>The Productivity Commission is quite cautious in its discussion, in many ways reflecting the extent to which submissions did not argue too strongly for change, and the considerable weakness of the available data. It supports the maintenance of a national minimum wage, recognising a need to “address bargaining power imbalances”, but makes <a href="http://www.pc.gov.au/inquiries/current/workplace-relations/draft/workplace-relations-draft-overview.pdf">some recommendations</a> for change in the setting of this. These are a mixed bag. </p>
<p>Responding to special pleading from the rural sector and an employer organisation, it suggests that there should be capacity to vary awards in “exceptional circumstances” (without really saying why this mechanism, rather than say drought relief is appropriate). The Productivity Commission also suggests that the Fair Work Commission “systematically considers the risks of unexpected variations in economic circumstances” – a rather challenging concept, and one that tends to ignore the extent to which changes in wages tend to be retrospective; that is, justified on the basis of what has happened.</p>
<p>While discussing the interaction with the tax and transfer system the Productivity Commission comes to no conclusion, doesn’t come to grip with family payments, and simply issues another “Information Request” for further input from participants. Tucked away in the discussion of the minimum wage is a call for a comprehensive review into apprenticeships and traineeships, and another information request about the structure of junior wages.</p>
<p>Looking at the report overall one can only get the impression that while the Productivity Commission may have taken its first wobbling step in considering these issues it has a long way to go. Given the timing it may be sensible for it to consider what it can and cannot feasibly cover in the time available to it.</p>
<hr><img src="https://counter.theconversation.com/content/45647/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>As a university employee, David Peetz has undertaken research over many years with occasional financial support from governments from both sides of politics, employers and unions. His most recent major consultancy was for the New Zealand government. At present he is involved in several Australian Research Council-funded and approved projects which included contributions from the employer body Universities Australia, the superannuation fund Unisuper, the National Tertiary Education Union and the Construction, Forestry, Mining and Energy Union. The projects do not concern the subject matter of this article. He is a research associate of the T J Ryan Foundation in Brisbane and the New Zealand Work Research Institute in Auckland, a co-researcher of the Inter-University Centre for Research on Globalisation and Work (CRIMT) based in Quebec, and a Fellow of the Academy of the Social Sciences in Australia.</span></em></p><p class="fine-print"><em><span>Rob Bray received funding from the HC Coombs Policy Forum in 2013 which supported his initial research on the Australian Minimum Wage.</span></em></p>Sunday penalty rates will go under Productivity Commission recommendations, but overall our workplace system was basically operating well, it found.David Peetz, Professor of Employment Relations, Griffith UniversityRob Bray, Research Fellow, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/414482015-05-07T19:55:53Z2015-05-07T19:55:53ZWill Hockey really put ‘tough choices’ behind him for sake of survival?<p>Every budget is a combination of political theatre and hard policy. What sets each one apart is which element gets the most emphasis. It is now part of the national legend that the Abbott government’s <a href="https://theconversation.com/infographic-federal-budget-at-a-glance-26658">first budget</a> was overwhelmingly a policy exercise. In it, Treasurer Joe Hockey got to try out all of the memes and “tough” policy choices that he’d played around with in his head during his time in opposition and perhaps even well before that.</p>
<p>Medicare was declared unaffordable, so Australians would have to pay more to go to the doctor. The age pension was also becoming unaffordable, so the way in which future rises were calculated was to change too. Welfare costs were unsustainable, so under-30s would have to wait six months before qualifying for unemployment benefits. </p>
<p>University fees were to be uncapped. The Gonski funding plan for schools would be dumped in 2017-18. Thresholds and access to Family Tax Benefit B were to be tightened.</p>
<p>For those who had paid attention to Hockey’s <a href="http://www.joehockey.com/media-files/speeches/ContentPieces/100/download.pdf">2012 speech</a> to the Institute of Economic Affairs in London, these measures, along with many others contained in that budget, would not have come as a surprise. In the speech, Hockey declared an end to “the age of entitlement”. </p>
<p>As treasurer, Hockey applied a more positive spin on the same idea in his <a href="http://www.smh.com.au/business/federal-budget/federal-budget-2014--full-speech-20140513-3887i.html">budget speech</a>, saying of Australians:</p>
<blockquote>
<p>We are a nation of lifters, not leaners.</p>
</blockquote>
<p>The implication was clear: the bludgers in Australian society had a target on their foreheads.</p>
<p>It could be said that Hockey and Abbott’s policy toughness was itself the key theatrical element of the 2014-15 budget, that in making the “hard choices” they were demonstrating their political courage and resoluteness. It’s quite possible that in the cocoon in which leaders of modern governments operate, with their every public appearance being organised and sanitised by their advance staff so that no nasty surprises ever await them among the great unwashed, this was what Abbott and Hockey told themselves as they prepared the budget.</p>
<h2>The backlash and the backdowns</h2>
<p>But it was never going to fly. Despite the steady dismantling of conventional communications through the heritage media and the collapse of membership across all of the older political parties, there remains within the public a strong desire for accountability and authenticity from our politicians. If a leader and his chief economic spokesman spend three years in the lead-up to an election guaranteeing that they will <a href="http://www.smh.com.au/federal-politics/political-news/abbotts-about-face-on-surplus-guarantee-20130127-2dfn9.html">repair an ailing public balance sheet</a> simply by being elected, <a href="http://www.abc.net.au/news/2014-05-07/abbott-promises-no-cuts-to-education-health/5436224">without the need to embark on cuts</a> in services or <a href="http://www.abc.net.au/news/2014-07-27/no-tax-increases-promise-check/5429922">new imposts</a>, they cannot deliver a first budget that goes back on those repeated undertakings.</p>
<figure>
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<figcaption><span class="caption">Tony Abbott promises ‘no cuts’ in key areas the night before the 2013 election.</span></figcaption>
</figure>
<p>And yet that is what Abbott and Hockey did. They said there would be <a href="http://www.liberal.org.au/latest-news/2013/09/02/tony-abbott-address-national-press-club-election-2013">no surprises and no excuses</a> for as long as they governed. Yet for the vast bulk of voters, who take only a passing interest in politics and do not read speeches given to London think tanks, this was a government full of unwanted surprises. </p>
<p>And the government <a href="https://theconversation.com/grattan-on-friday-budget-blues-as-government-reels-under-the-blows-27081">paid a terrible price</a>. The Labor Party and the Senate crossbenchers resisted most of the budget’s harshest measures in the upper house with the public’s support throughout the rest of 2014 and early this year. Things got so bad for the prime minister that he was subjected to a mock execution by his party room in February, with 39 Liberal MPs <a href="https://theconversation.com/abbott-left-deeply-wounded-by-narrow-victory-37339">supporting a spill</a> of his leadership, 61 voting against and one voting informal.</p>
<p>The single-most important political event to lead to Abbott’s near-defenestration (and Hockey’s too, because as the leader goes, so goes his treasurer) was the budget. This was not just because of the accountability issue and the fact that the government was going back so early and so comprehensively on its pre-election pledges. It was also because of the public’s assessment of the measures themselves. </p>
<p>Clearly, such measures as the GP co-payment and the uncapping of tertiary education fees have not accorded with the expectations held for Australian society by a very large cohort of the electorate. Would voters “buy” these policies if they were prepared for it and given eloquent and deeply felt explanations for the changes? It’s at least an intellectual possibility.</p>
<p>But it’s worth looking at the previous experience of a policy that comes from the same neoliberal, deregulatory impulse – the <a href="http://en.wikipedia.org/wiki/WorkChoices">WorkChoices</a> laws introduced in 2005-06 by the Howard government. Those laws took Australia’s labour market closer than it’s ever been to operating with what’s known as a market-clearing wage, in which the providers of labour have substantially reduced powers to set their price. Collective action was to give way, over a relatively short space of time, to individual negotiations and individual contracts.</p>
<p>The public would not cop it. The conception of Australian society held by most voters was that it was “fairer” than that. Pollsters calculated that more than <a href="http://www98.griffith.edu.au/dspace/bitstream/handle/10072/37764/66954_1.pdf?sequence=1">2% of voters were shifted directly</a> from the Liberal to the Labor column at the 2007 election because of the policy, guaranteeing victory to the ALP under Kevin Rudd.</p>
<h2>Can this budget pass the fairness test?</h2>
<p>Interestingly, it was the same “fairness” test that rendered the first Abbott-Hockey budget so toxic.</p>
<p>Which brings us to budget number two, to be handed down next Tuesday. We will need to see it and absorb it before being able to judge if the apportionment of theatre and policy of last year’s effort has been inverted.</p>
<p>Most of the signs in the last three months suggest very strongly that the ideology has been set aside in order simply to survive. Indeed the entire intellectual and analytical framework that motivated the 2014-15 budget – that there was a <a href="http://www.sbs.com.au/news/article/2014/04/30/budget-now-debt-and-deficit-disaster-pm">desperate need</a> to reduce the size of government in order to produce a budget surplus and reduce debt – <a href="https://theconversation.com/from-debt-disaster-to-good-result-a-budget-message-lost-39299">has been discarded</a>.</p>
<p>Now, Australia will balance its books some time. There is no longer any urgency, according to the government. It will be, the prime minister assures us, <a href="http://www.abc.net.au/news/2015-03-18/abbott-says-budget-will-be-dull/6328400">a dull budget</a> - a remarkable claim by a serving leader, when you think about it.</p>
<p>The white pointer appears to be to transforming into a gummy shark, snapping away but incapable of doing much damage, either to voters or itself. But can it be that Abbott and Hockey have really abandoned entirely the <a href="https://theconversation.com/hockeys-first-budget-redefines-the-role-of-government-in-australia-26573">nation-changing project</a> contained in last year’s budget and that they want to be known more for winning elections than for leaving their mark?</p><img src="https://counter.theconversation.com/content/41448/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Shaun Carney does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>In just a year, the Abbott government has gone from a radical nation-changing budget to promising a ‘dull’ one. Are we to believe the ideological zeal is gone, or has the survival instinct kicked in?Shaun Carney, Adjunct Associate Professor, School of Social Sciences, Monash UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/366052015-01-23T04:34:27Z2015-01-23T04:34:27ZWorkplace inquiry attempts to move beyond WorkChoices<p>The release of the Productivity Commission’s <a href="http://www.pc.gov.au/inquiries/current/workplace-relations/issues">five issues papers on Australia’s workplace relations framework</a> has already fanned inevitable claims from the federal opposition and unions that it will pave the way for a “return to WorkChoices”. </p>
<p>This highlights the political dangers associated with the review: the Abbott Government may well be heading into the next federal election carrying the weight of some contentious proposals for industrial relations reform. Even now, Premier Campbell Newman is facing difficult questions about possible changes to federal workplace laws in the context of the Queensland election campaign.</p>
<p>The issues papers explore options for change – and poses questions for stakeholders – in relation to key aspects of the Fair Work Act. These include minimum wages, statutory minimum standards, awards, penalty rates, enterprise bargaining, industrial action, unfair dismissal, general protections and the new anti-bullying provisions.</p>
<p>It is clear that the PC review will involve a more far-reaching assessment than the <a href="http://docs.employment.gov.au/node/29150">2012 Fair Work Act Review</a> under the previous Labor Government, which business groups regarded as something of a whitewash.</p>
<p>But will the PC necessarily recommend extreme deregulation of the labour market, as critics of the review process (and of the Abbott Government’s intentions) claim?</p>
<h2>Carefully crafted</h2>
<p>The issues papers seem to have been carefully crafted to consider the arguments and counter-arguments on each of the key issues, including the views of employer bodies, unions and other interest groups.</p>
<p>The PC indicates that its overall approach is intended to maximise the wellbeing of the whole community, not particular interest groups, and to address the social as well as the economic aspects of workplace laws.</p>
<p>However, there is also evidence that the PC review will challenge some long-standing tenets of Australia’s system of workplace regulation.</p>
<p>This is made clear from the outset, with the PC stating: </p>
<blockquote>
<p>Australia appears to give more weight than other Anglo-Saxon countries to elaborate rules about WR processes and, most particularly, to the centralised determination of wages and conditions for many employees. (Issues Paper 1, page 9)</p>
</blockquote>
<h2>Minimum wage</h2>
<p>On the minimum wage, the PC says that: ‘No nation aspires to be a low-wage economy’ (Issues Paper 1, page 15). However, it raises the question of how to achieve the high productivity required to sustain higher incomes. </p>
<p>A series of queries are outlined which suggest there will be a fundamental reconsideration of:</p>
<p>• the appropriateness of Australian minimum wages (e.g. do they fail to target poverty and inequality by lowering employment?);</p>
<p>• the current process of minimum wage-setting by the Fair Work Commission. </p>
<p>The National Employment Standards, which set minimum conditions for all employees such as four weeks’ annual leave, will not be subject to holistic analysis. But the PC asks whether the NES entitlements impose costs on employers that exceed the marginal benefits of hiring employees, with adverse implications for employment.</p>
<p>Modern awards, which establish more detailed employment standards on an industry or occupational basis, are also in the PC’s sights. It raises questions about the efficiency and regulatory burden of awards, and whether they “lock in” a pre-determined backdrop of minimum requirements for enterprise agreements. The PC goes so far as to invite views on moving away from awards to “reliance instead on other safety nets in the WR system” (Issues Paper 2, page 13).</p>
<h2>Penalty rates</h2>
<p>The role of award penalty rates will be one of the most contentious issues addressed in the PC review. This is a major gripe of employer organisations, particularly in retail and hospitality employment, while the union movement seeks to defend existing penalty rate provisions as a key workplace entitlement. </p>
<p>The PC has opened up for consideration a choice between accepting penalty rates as an inherent principle of employment regulation; or regarding premiums for weekend and evening work as a matter of choice for individual enterprises and their employees – that is, penalty rates would be “market-determined”. (Issues Paper 2, page 15).</p>
<p>Further, the PC asks: </p>
<blockquote>
<p>Were penalty rates deregulated, would wages fall to those applying at other times or would employers still have to pay a premium to attract labour on weekends and holidays? (Issues Paper 2, page 16)</p>
</blockquote>
<p>Interestingly, the PC issues paper on the bargaining framework seems fairly moderate, given the extent of employer agitation about the current “union-centred” bargaining laws. That said, the PC seeks views on several aspects which provide important protections for employees in the negotiation of enterprise agreements, including the procedural steps that employers must follow and the “better off overall test”. </p>
<p>Hotly-contested issues such as greenfields agreements for new business ventures or projects, the permitted content of agreements, the role of “protected” industrial action and individual flexibility arrangements will also be addressed. And while the PC does not invite consideration of a return to individual statutory agreements (AWAs under WorkChoices), it does want to explore whether there might be a greater role for individual employment contracts which operate under the common law.</p>
<h2>Unfair dismissal</h2>
<p>The PC also intends to explore a wide range of features of the current protections against unfair dismissal and other forms of adverse action against employees, and the interaction between anti-bullying provisions and workplace safety laws.</p>
<p>Overall, there is much in the issues papers for unions and federal Labor to latch onto in their campaigning against further workplace reform. And it will be interesting to see how the Abbott Government responds to the PC’s final recommendations (due by 30 November 2015).</p>
<p>Putting the politics to one side, the PC review is an important opportunity for the presentation and analysis of evidence on the operation of the Fair Work Act since 2009. In that sense, the PC’s report could enable us to move beyond slogans in the debate over IR reform … but I doubt that it will.</p><img src="https://counter.theconversation.com/content/36605/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anthony Forsyth consults to Corrs Chambers Westgarth. However the views stated in this article are his own and do not represent the views of the firm. Anthony has previously received funding from organisations including the Business Council of Australia, CFMEU (Mining & Energy Division), Victorian Government and Fair Work Commission.</span></em></p>The release of the Productivity Commission’s five issues papers on Australia’s workplace relations framework has already fanned inevitable claims from the federal opposition and unions that it will pave…Anthony Forsyth, Professor, Director of Juris Doctor Programs, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/310972014-09-01T20:29:36Z2014-09-01T20:29:36ZIndividual contracts come back – but don’t mention the WorkChoices<p>The government is proposing <a href="http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query%3DId%3A%22legislation%2Fbillhome%2Fr5174%22;rec=0?#billText">amendments to the Fair Work Act</a>, including to the operation of “individual flexibility arrangements” (IFAs). The amendments are attracting a lot of attention, including from unions, some of whom claim they will make IFAs like the Australian Workplace Agreements (AWAs) that were prominent in the WorkChoices period and that famously <a href="http://www98.griffith.edu.au/dspace/bitstream/handle/10072/29660/59864_1.pdf?sequence=1">cut overtime pay, penalty rates</a> <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1468-2338.2009.00537.x/abstract">and other “protected” award conditions</a>. </p>
<p>The Government claims it is just implementing recommendations of the <a href="https://docs.employment.gov.au/documents/towards-more-productive-and-equitable-workplaces-evaluation-fair-work-legislation">Review of the Fair Work Act</a> that was commissioned by the previous Labor government, as per its election commitment.</p>
<p>So will IFAs be the new AWAs? Or is this just the benign fulfilment of an election commitment?</p>
<h2>What are IFAs?</h2>
<p>The Fair Work Act abolished AWAs and required that all awards include a standard <a href="http://www.austlii.edu.au/au/legis/cth/consol_reg/fwr2009223/sch2.2.html">“flexibility term”</a>. This provision enables the establishment of IFAs between individual employees and an employer, identifies which terms of a modern award may be varied by an IFA, specifies that the employee and the employer must genuinely agree and that the agreement must satisfy a “better off overall test” (BOOT) for the employee, along with various other procedural requirements. </p>
<p>Enterprise agreements must also contain a flexibility term, but unlike awards the flexibility term may be negotiated between the parties.</p>
<p>IFAs are not lodged with any agency, but can be inspected on site by the Fair Work Ombudsman (FWO). If the IFA is below the legislative standard, the employer is then liable at law.</p>
<h2>How are IFAs used at the moment?</h2>
<p>The best source of information on IFAs is a <a href="https://www.fwc.gov.au/documents/documents/IFA.pdf">survey undertaken by Fair Work Australia</a> in 2011. The key things we learnt from that are:</p>
<ul>
<li><p>Very few employers (about one in nine) use IFAs, because most say they don’t need them. Less than 1% think the provisions are too inflexible. Overall, probably fewer employees are on them than were on AWAs at their peak.</p></li>
<li><p>Most IFAs were initiated by employers, not employees. So the flexibility is predominantly for the benefit, in the first instance, of the employer.</p></li>
<li><p>Many employees on them were required to sign as a condition of getting or keeping their job – this was the case in half the employers who used IFAs. This appears a frequent breach of section 344[c] of the Fair Work Act.</p></li>
<li><p>Many IFAs (three quarters) are used to formalise what were previously informal and, by implication, illegal practices.</p></li>
<li><p>Many employees (about four fifths) believe they are better off as a result of an IFA, but we cannot objectively tell, and over a quarter of employers don’t scrutinise them against the BOOT test.</p></li>
</ul>
<p>So, many IFAs operate to formalise previously illegal practices and many are then formalised illegally. We have to think about IFAs in the context of the overall problem with compliance with the minimum wages and conditions in awards. </p>
<p>AWAs were routinely scrutinised by a government agency, the “Employment Advocate”. Scrutiny was <a href="http://www.allenandunwin.com/default.aspx?page=94&book=9781741148657">sometimes weak</a>, but it was a constraint on badly designed AWAs. </p>
<p>IFAs are not routinely scrutinised by anybody. They are held in the payroll office of the employer. If the FWO comes around to inspect the wage records, and an IFA is below standard, then the employer is in breach of the award. </p>
<p>But this only happens if they are found out. Either the employee has to know to make a complaint (and if they knew they were being ripped off, they might not have signed) or the FWO has to know to do an inspection of that workplace. </p>
<p>There is little doubt that <a href="http://eprints.qut.edu.au/26979/1/26979.pdf">compliance</a> with industrial law has <a href="http://www.fairwork.gov.au/ArticleDocuments/763/melbourne-uni-report-on-enforcement.pdf.aspx">improved</a> since 2005, through both the Workplace Ombudsman and the FWO, and FWO <a href="https://www.fairwork.gov.au/ArticleDocuments/764/Natalie-James-speech-for-the-ALERA-national-conference.pdf.aspx">focuses</a> its efforts on the industries where workers are more likely to be vulnerable. But it can’t be everywhere.</p>
<h2>Why are the changes controversial?</h2>
<p>The changes that get a lot of press from the government are extending full IFAs to enterprise agreements (EAs) whether unions agree or not. About half of EAs have unrestricted IFAs, the other half have some restriction on them. But even if they have no formal role, unions in workplaces with agreements will be keen to ensure that any new IFAs do genuinely satisfy the BOOT test. It’s the IFAs in workplaces that don’t have unions – especially where pay is set mostly by awards – that are a concern anyway.</p>
<p>The bigger issues are two lightly heralded changes to IFAs. The government claims these are implementing the recommendations of the Review of the Fair Work Act that occurred under Labor, but this is not quite the case.</p>
<p>One amendment makes it easier for employers to avoid prosecution for IFAs that are sub-standard. </p>
<p>This is done by requiring employer and employee to sign a “genuine needs” statement indicating both agree the employee will be better off. This is then prima facie evidence that the parties genuinely believed the IFA met the BOOT test and typically prevents the employer from being prosecuted if it is sub-standard. </p>
<p>No doubt, the consultants that advise employers on making agreements will advise them that, if they get their employees to sign this, employers will be safe, no matter what is in the agreement.</p>
<p>The Fair Work Review recommended that employers have some improved defences against alleged breaches but that, importantly, this should only occur where employers have notified the FWO they have signed IFAs with employees, how many and with whom. </p>
<p>There is no such employee protection in the new Bill and this condition is not mentioned in the <a href="http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id:%22legislation/ems/r5174_ems_dce8061f-6031-419d-b863-4cd30318c285%22">explanatory memorandum</a>. Yet the Coalition’s pre-election policy promised to implement the recommendation that contained this condition. </p>
<p>The Review team thought long and hard about making its recommendations here, and regarded all of them to be necessary to prevent exploitation. Cherry-picking parts of a recommendation while ignoring other parts is a recipe for heightened exploitation. </p>
<p>The second major change is allowing non-monetary benefits to be taken into account in assessing whether workers are better off. Although done by a “legislative note” rather than a substantive amendment, it’s led to claims that employees could be paid in <a href="http://www.brisbanetimes.com.au/comment/fair-work-amendment-bill-is-a-recipe-for-exploitation-20140901-10b13y.html">pizza</a>.</p>
<p>The Fair Work Review dealt with this issue, but it recommended that in such circumstances “the value of the monetary benefit foregone is specified in writing and is <strong>relatively insignificant</strong>”. No such limitation appears in the legislative note.</p>
<h2>Will IFAs be the same as AWAs?</h2>
<p>IFAs cannot be too like AWAs because that would be politically too risky for a Government keen to <a href="http://www.abc.net.au/7.30/content/2009/s2760191.htm">avoid any mention of WorkChoices</a>. But nor do the changes simply implement an election promise or Labor’s Fair Work Review. The government is keenly committed to <a href="https://theconversation.com/what-do-new-disclosures-reveal-about-coalition-ir-policy-17689">industrial relations reform</a> and seeks another mechanism for individual contracting.</p>
<p>So if you hear someone saying that the government is reintroducing the WorkChoices AWAs, it’s not really. Instead it is are doing something quite different, something that focuses much more on vulnerable workers’ lack of knowledge of their rights and entitlements under industrial law, and the difficulty that enforcement agencies, unions and others have in reaching, advising or protecting them.</p>
<p>It is something that will make exploitation of vulnerable workers through underpayment easier to undertake than at present, while being much harder to research and detect than it was with AWAs. </p>
<p>The proposed amendments involve heightened risk for vulnerable workers.</p><img src="https://counter.theconversation.com/content/31097/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>As a university employee, David Peetz has undertaken research over many years with occasional financial support from governments from both sides of politics, employers and unions. The research underpinning this article has no current financial support other than from his university.</span></em></p>The government is proposing amendments to the Fair Work Act, including to the operation of “individual flexibility arrangements” (IFAs). The amendments are attracting a lot of attention, including from…David Peetz, Professor of Employment Relations, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/220052014-02-16T19:14:34Z2014-02-16T19:14:34ZWorkplace ‘flexibility’ on insecure ground<figure><img src="https://images.theconversation.com/files/41456/original/bb633rqv-1392271180.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Flexible work practices: for employees or employers?</span> <span class="attribution"><span class="source">Tracey Nearmy/AAPImage</span></span></figcaption></figure><p>If you were to choose one buzzword that, despite its vagueness, has dominated industrial relations debate over three decades, it would be “flexibility”. It has emerged again in rhetoric surrounding Toyota’s closure.</p>
<p>We love the sound. It’s undeniably good, seen beside its evil twin “rigidity”. If only we knew what it meant. Or at least, knew what others using it mean.</p>
<p>Words convey emotions that legitimise the user’s perspective.</p>
<p>One person’s flexibility is another person’s uncertainty. Just as one person’s stability is another person’s rigidity.</p>
<p>So flexibility might be “good” or “bad”. First, we need to distinguish between flexibility <em>for</em> workers and flexibility <em>by</em> workers.</p>
<h2>It depends on your interest</h2>
<p>Flexibility <em>for</em> workers occurs when companies change work practices or working time to better suit worker needs. Allowing workers to take time off to attend school concerts, enabling job sharing, permanent part-time work, ‘<a href="https://www.usq.edu.au/hr/empcond/catemploy/4852">48/52</a>’ arrangements – these are all examples of employers being flexible for workers. Research shows these things are <a href="http://journal.anzsog.edu.au/publications/10/EvidenceBase2013Issue4.pdf">mostly effective</a> in enabling better work-life balance, and are often aimed at increasing job satisfaction, <a href="http://realbusiness.co.uk/article/25418-ignore-flexible-working-at-your-peril">attraction, or retention</a> of valuable employees.</p>
<p>The Fair Work Act contains a “right to request” enabling some employees to request changed working arrangements to help them care for certain dependants. It might include different start or finish times, shorter hours, or a changed location of work. But it is merely a “right to request”, not a “right to have”. There is no appeal from the employer’s decision. It echoes, but is <a href="http://www.mngt.waikato.ac.nz/departments/Strategy%20and%20Human%20Resource%20Management/airaanz/proceedings/melbourne2008/nonref/papers/S.%20Charlesworth,%20I.%20Campbell.pdf">“generally weaker”</a> than, legislation in various European countries.</p>
<p>But when employers or politicians complain about a lack of flexibility, they usually mean flexibility <em>by</em> workers.</p>
<p>Here researchers distinguish between two types of flexibility <em>by</em> workers.</p>
<p>One is <em>functional flexibility</em> – the employer’s ability to move workers between activities and tasks, in line with changing workloads or production methods. It often requires multi-skilling of workers. It may lead to employees doing more work because they do more varied work.</p>
<p>The other is <em>numerical flexibility</em> – the employer’s ability to adjust labour inputs to changes in output. That means cutting or increasing the number of workers or their hours worked, classifying them as casuals or contractors, or varying the wages they are paid.</p>
<p>Numerical flexibility is sometimes linked to loss of quality in output, and often to loss of <a href="http://jir.sagepub.com/content/53/1/49.full.pdf+html">job quality</a>– because workers typically don’t like uncertainty in wages, hours or job security.</p>
<p>This is the sort of flexibility that critics of the Toyota unions claimed was needed, and frustrated by the “no extra claims” provision in the enterprise agreement. The whole point of two decades of enterprise bargaining has been to give employers and workers the flexibility to negotiate agreements suiting their particular circumstances.</p>
<p>A key element of that, and indeed of wage negotiations since the <a href="http://news.google.com/newspapers?nid=1301&dat=19830812&id=voZWAAAAIBAJ&sjid=ruYDAAAAIBAJ&pg=4958,3123872">early 1980s</a>, has been <a href="http://www.airc.gov.au/safetynet_review/decisions/G0700.htm">“no extra claims”</a>. This was an important source of stability for employers, who <a href="http://www.airc.gov.au/safetynet_review/decisions/G6800.htm">advocated it</a> and did not want unions reopening wage claims after agreements were made. Even the <a href="http://www.pc.gov.au/__data/assets/pdf_file/0018/63045/ca2007.pdf">Productivity Commission’s enterprise agreement</a> had a “no further claims” clause.</p>
<p>Now suddenly <a href="http://www.pc.gov.au/__data/assets/pdf_file/0006/132981/automotive-position.pdf">“no extra claims” is a rigidity</a>, because it inhibits an employer demanding more while an agreement is in place. And, according to some politicians, it is the <a href="http://www.abc.net.au/7.30/content/2013/s3942670.htm">fault of the Fair Work Act and of unions</a>, even though this was <a href="http://www.abc.net.au/worldtoday/content/2013/s3942975.htm">denied by Toyota</a> and indeed the same provisions existed under Coalition legislation. A virtuous stability has become an evil inflexibility because interests have changed.</p>
<h2>You can’t take that away…</h2>
<p>Unions actively oppose cuts in pay and conditions, because that’s what workers want them to do. There is nothing unusual about resistance to having things taken away from you. Losses are felt far more strongly than gains. It’s an innate part of human and indeed animal nature. </p>
<p>It’s a phenomenon <a href="http://books.google.com.au/books?id=oV1tXT3HigoC&pg=PT315&lpg=PT315&dq=%22the+concept+of+loss+aversion+is+certainly+the+most%22&source=bl&ots=bXQxID6rm_&sig=wt3H_XM0mi7mtcoHJfvunIyqLx8&hl=en&sa=X&ei=1237UqK7OMmBkQXyjYGgAw&redir_esc=y#v=onepage&q=%22the%20concept%20of%20loss%20aversion%20is%20certainly%20the%20most%22&f=false">repeatedly found</a> in psychological experiments. It’s why, when an animal attempts to invade another’s territory, the animal on “home” territory “<a href="http://www.bloomberg.com/news/2011-10-26/bias-blindness-and-how-we-truly-think-part-3-daniel-kahneman.html">almost always wins the contest</a>”. It’s why, despite <a href="http://www.crikey.com.au/2013/10/29/crikey-says-news-corp-is-threatened-by-aunty/?wpmp_switcher=mobile">reported deficits of over A$10 million per year</a>, Rupert Murdoch continues to publish <em>The Australian</em>. Resistance to losses is not restricted to workers; but workers have the least they can afford to lose.</p>
<p>So is “flexibility” in labour markets (which, for those who write about it, means flexibility by workers) necessarily a good thing? In the lead up to WorkChoices, and since its repeal, there were claims our industrial relations system lacked flexibility.</p>
<p>Yet by objective measures, the level of flexibility <em>by</em> employees in Australia is amongst the highest.</p>
<p>The Organisation for Economic Co-operation and Development (OECD) analysed a number of aspects of “inflexibility”, referring to them as “employment protection legislation”. <a href="http://www.oecd.org/els/emp/34846856.pdf">It found</a> (even before ‘WorkChoices’) that Australia had one of the lowest levels of job protection in the OECD (see chart). Several countries had high job protection and low unemployment, including Norway and the Netherlands.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/41371/original/7h2c4zrr-1392210969.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/41371/original/7h2c4zrr-1392210969.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=404&fit=crop&dpr=1 600w, https://images.theconversation.com/files/41371/original/7h2c4zrr-1392210969.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=404&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/41371/original/7h2c4zrr-1392210969.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=404&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/41371/original/7h2c4zrr-1392210969.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=508&fit=crop&dpr=1 754w, https://images.theconversation.com/files/41371/original/7h2c4zrr-1392210969.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=508&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/41371/original/7h2c4zrr-1392210969.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=508&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Source: OECD, Employment Outlook 2004, Chapter 2: Employment Protection Legislation and Labour Market Performance, Paris, p72.</span>
</figcaption>
</figure>
<p>Overall, compared to other OECD countries, Australia also has high rates of part-time employment, temporary employment and people working very long hours. </p>
<p>Most countries do not allow long-serving employees to be denied sick or recreation leave. We call it casual employment, and it affects a quarter of employees.</p>
<h2>Lessons from elsewhere</h2>
<p>The OECD was one of the strongest advocates of labour market “flexibility”. Yet during the global financial crisis, something happened to force a rethink of its position.</p>
<p>Across the North Atlantic, gross domestic product (GDP) fell as the crisis deepened. Theory said the US labour market, with its far greater flexibility than that in Europe (for example, workers could be fired “at will” in the US), should adapt better than its European counterpart.</p>
<p>Reality was the reverse. The US experienced a smaller fall in GDP between 2008 and 2009 than did Europe yet it suffered a <a href="http://books.google.com.au/books?id=gbLQAQAAQBAJ&pg=PA194&lpg=PA194&dq=%22Yet+GDP+fell+by+considerably+more+in+the+EU%22&source=bl&ots=r8cd8VPn3o&sig=KgV6oYBUsJbLI_DOz2Rh8Wg5et8&hl=en&sa=X&ei=YWr7UuX9HcXPlAWd2YCwCQ&redir_esc=y#v=onepage&q=%22Yet%20GDP%20fell%20by%20considerably%20more%20in%20the%20EU%22&f=false">greater drop in employment</a>. </p>
<p>The OECD saw through the flexibility fairytale. So <a href="http://www.oecd.org/els/emp/45219634.pdf">in 2009 it found</a> no evidence that “reforms” to promote flexibility had made labour markets “less sensitive to severe economic downturns than was the case in the past”. It recommended improvements in income security it had previously dismissed as inhibiting flexibility.</p>
<p>We can no longer say that flexibility by employees is necessarily a good thing.</p>
<p>But we can say that the rhetoric of flexibility is often a device for transferring risk onto workers – who can least afford it.</p>
<hr>
<p><em>This is the first piece in our Insecure work series. Click on the links below to read the other pieces.</em></p>
<p><a href="https://theconversation.com/is-job-insecurity-becoming-the-norm-for-young-people-22311">Is job insecurity becoming the norm for young people?</a></p>
<p><a href="https://theconversation.com/viewpoints-should-penalty-rates-be-abolished-22819">Viewpoints: should penalty rates be abolished?</a></p>
<p><a href="https://theconversation.com/online-labour-marketplaces-job-insecurity-gone-viral-20020">Online labour marketplaces: job insecurity gone viral?</a></p><img src="https://counter.theconversation.com/content/22005/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Peetz receives funding from the Australian Research Council and, as a university employee, has undertaken research over many years with occasional financial support from governments from both sides of politics, employers and unions.</span></em></p>If you were to choose one buzzword that, despite its vagueness, has dominated industrial relations debate over three decades, it would be “flexibility”. It has emerged again in rhetoric surrounding Toyota’s…David Peetz, Professor of Employment Relations, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/228802014-02-06T03:19:49Z2014-02-06T03:19:49ZHowls of horror understandable, but Howes half right about IR reform<figure><img src="https://images.theconversation.com/files/40848/original/wsrkh7mv-1391648906.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Calls by AWU chief Paul Howes for a "grand compact" are fanciful, but he's right we need to shift our thinking away from a focus on yet another round of IR reform.</span> <span class="attribution"><span class="source">AAP</span></span></figcaption></figure><p>It is easy to see why media coverage of <a href="http://www.smh.com.au/federal-politics/political-news/paul-howes-speech-to-the-national-press-club-20140206-322hv.html">Paul Howes’ National Press Club</a> address has focused on his claims that wage growth has been too high in some areas and that the adversarial industrial relations system is killing productivity. These claims by Howes, who is the Australian Workers Union national secretary, seem difficult to sustain, but they make for dramatic headlines and certainly look like more evidence of disunity in Labor Party and labour movement ranks.</p>
<p>But is there any merit in Howes’ bigger argument about the need to change the national approach to industrial relations?</p>
<p>Let’s start with the idea a “grand compact”. I wouldn’t want to speculate about Howes’ motivation for presenting this idea, but it seems to me a fanciful one. In terms of the politics of the situation, it seems difficult to believe that the key players would have an interest in pursuing this kind of arrangement. In a practical sense, even were there the will to do so it’s hard to see how the Coalition, the ALP, unions and employer groups would actually negotiate and implement such an arrangement. While it may be appealing to look back to the apparent golden age of reform in the 1980s and 90s, it is important not to mythologise the past.</p>
<p>The Accord was an agreement between the ALP opposition and the ACTU, signed in 1982, in the lead-up to the 1983 Federal election. The Accord was a bipartite agreement between the ALP and the peak union body. Put simply, it promised the union movement some input to policy in return for moderation of wage claims and keeping the lid on industrial action. </p>
<p>It should be understood as an agreement which was expedient for both the union movement and the ALP, in political and economic conditions that were vastly different from those which exist today. Undoubtedly, the Accord played a role in the steady reduction of days lost to industrial disputes during the 1980s and 1990s and in keeping real wage growth relatively low, while allowing Labor to pursue its reform agenda. </p>
<p>Clearly the Accord was a significant development in Australian political and industrial history, but it is difficult to see why anyone would entertain the idea of an Accord-like compact which included the major political parties, unions and employer groups or how it might be implemented.</p>
<p>Having said this, one part of Howes’ argument seems to me to have merit. In arguing for a compact, he is making the point that we need to shift our thinking away from a focus on yet another round of IR reform. While I don’t think a compact is a plausible solution, I think he’s correct that yet another wave of reform of the industrial relations legislation is unlikely to generate productivity gains and greater prosperity for Australia. There is little evidence, for instance, that either WorkChoices or the Fair Work Act had any significant impact on any economic outcomes. In my view, a shift away from IR reform as the proposed driver of economic performance is long overdue.</p>
<p>A greater focus on encouraging workplace innovation through training, research and development, investment and so on is much more likely to deliver performance gains. Precisely how this would be achieved is open to debate, but there are plenty of useful examples, from around the world, of government policies which have encouraged workplace innovation and delivered performance gains. Moreover, it is clear that such policies are most likely to be effective when there is some degree of cooperation between management and workers, including their collective representative bodies. The challenge is for government, business, unions and researchers to develop policies of this kind which are appropriate for contemporary Australia.</p>
<p>I think we should be very sceptical about claims that adversarial industrial relations and excessive wage growth are damaging the economy. There simply is no credible evidence to support such claims. Similarly, the advocacy of a “grand compact” is fanciful. But the argument that more reform of IR legislation is unlikely to deliver benefits is spot on.</p><img src="https://counter.theconversation.com/content/22880/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bill Harley has received funding from the Australian Research Council. He has acted as a consultant to the OECD and the ILO. He is affiliated with the Centre for Workplace Leadership at the University of Melbourne, which receives funding from the Commonwealth Government. </span></em></p>It is easy to see why media coverage of Paul Howes’ National Press Club address has focused on his claims that wage growth has been too high in some areas and that the adversarial industrial relations…Bill Harley, Theme Leader, Centre for Workplace Leadership, Professor of Management & Associate Dean (Global Engagement), The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/140992013-05-10T06:04:58Z2013-05-10T06:04:58ZTony’s timid IR strategy – not much there for small business<figure><img src="https://images.theconversation.com/files/23509/original/q3y65khj-1368164402.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The coalition's industrial relations policy is likely to disappoint small business.</span> <span class="attribution"><span class="source">AAP</span></span></figcaption></figure><p>Tony Abbott’s <a href="http://www.liberal.org.au/sites/default/files/13-05-09%20The%20Coalitions%20Policy%20to%20Improve%20the%20Fair%20Work%20Laws.pdf">industrial relations strategy</a> has received a less than rapturous response from both business and trade unions.</p>
<p>The Business Council of Australia and the Australian Industry Group have criticised it for being too timid and not going far enough to address their concerns for greater flexibility.</p>
<p>The peak small business group, the Australian Chamber of Commerce and Industry (ACCI) said small business owners would be disappointed because Australian Workplace Agreements (AWAs) were not being reintroduced and the current collective bargaining rules would remain.</p>
<p>For their part, unions fear the plan will revise the role of the Individual Flexibility Arrangements (IFAs), introduced by Labor to replace the highly contentious WorkChoices individual workplace agreements or AWAs. </p>
<p>The Coalition has gone to great lengths to demonstrate there will be no return to AWAs. Existing provisions to protect workers from abuse, known as the “Better Off Overall Test” (BOOT), will be retained. </p>
<p>Nevertheless, it will be a key battleground for the coming election.</p>
<p><strong>What’s in it for small business?</strong></p>
<p>The policy specifically targets small business concerns over red tape and the burden of rules and regulations. A key plank is a set of assistance programs designed to help the small business owner hire and manage employees.</p>
<p>These include a guidebook called “Your First Employee”, offering “simple, plain English” advice for small business employers from micro non-employing enterprises, about hiring staff. This will be supported by a dedicated small business helpline to be established within the Office of the Fair Work Ombudsman and tailored to the needs of small firms. There will also be a smartphone or tablet App providing real-time information and assistance on wages and conditions for employees. </p>
<p>There will also be provisions to grant immunity from prosecution by the Fair Work Ombudsman for small business owners who mistakenly breach the conditions of the Fair Work Act. The main caveat is the employer must have sought advice on such provisions from the Fair Work Ombudsman beforehand.</p>
<p>These proposals are certainly useful, particularly for those with little past experience in hiring and managing employees.
However, there is already a good deal of information available via the <a href="http://www.fwc.gov.au/index.cfm?pagename=agreementsmakeabout">Fair Work Commission</a> and <a href="http://www.fairwork.gov.au/employment/employers/new-employers/pages/default.aspx">Fair Work Ombudsman</a> that provides guidance to employers of this kind.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/23511/original/6qm4xgzg-1368165228.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/23511/original/6qm4xgzg-1368165228.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=419&fit=crop&dpr=1 600w, https://images.theconversation.com/files/23511/original/6qm4xgzg-1368165228.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=419&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/23511/original/6qm4xgzg-1368165228.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=419&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/23511/original/6qm4xgzg-1368165228.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=526&fit=crop&dpr=1 754w, https://images.theconversation.com/files/23511/original/6qm4xgzg-1368165228.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=526&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/23511/original/6qm4xgzg-1368165228.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=526&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The Coalition’s policy courts small business - but how much is in it for them?</span>
<span class="attribution"><span class="source">AAP</span></span>
</figcaption>
</figure>
<p><strong>Bullying, bargaining and unfair dismissal</strong></p>
<p>The policy criticises the current approach that places bullying into the realm of IR under the Fair Work Act, rather than treating it as an occupation health and safety issue. It suggests the system has been abused by unions and seeks to address this by including alleged bullying by union officials of managers and employees.</p>
<p>There was nothing mentioned about unfair dismissal provisions which under the current system have special exemptions for businesses with fewer than 15 employees. Employees from such firms have no right to make unfair dismissal claims within their first year of employment, while those from larger firms can claim after only six months.</p>
<p><strong>Flexibility and the spectre of WorkChoices</strong></p>
<p>The opposition’s plan to amend IFAs by removing the current restrictions limiting their use in the presence of an enterprise agreement is potentially the biggest change, as unions have been accused of misusing these provisions.</p>
<p>This part of the policy has attracted the most criticism from business groups, which have pushed for more radical changes.</p>
<p>Yet the plan will give employees more choice, reduce union influence and have no downside impact. This last point will be guaranteed with the requirement that IFAs will remain optional and must pass the BOOT provisions already in the Fair Work Act.</p>
<p>The current IFA system works within the context of the modern industrial awards and enterprise agreements system, which are essentially collective in nature. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/23510/original/q4hzxrmw-1368164838.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/23510/original/q4hzxrmw-1368164838.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=394&fit=crop&dpr=1 600w, https://images.theconversation.com/files/23510/original/q4hzxrmw-1368164838.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=394&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/23510/original/q4hzxrmw-1368164838.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=394&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/23510/original/q4hzxrmw-1368164838.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=495&fit=crop&dpr=1 754w, https://images.theconversation.com/files/23510/original/q4hzxrmw-1368164838.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=495&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/23510/original/q4hzxrmw-1368164838.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=495&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The central plank of WorkChoices, individual workplace agreements, will not return under a coalition government, despite support from business groups.</span>
<span class="attribution"><span class="source">AAP</span></span>
</figcaption>
</figure>
<p>Under the <a href="http://www.austlii.edu.au/au/legis/cth/consol_reg/fwr2009223/">Fair Work Regulations 2009</a>, all modern awards and enterprise agreements must have a flexibility term allowing employers and employees to vary conditions to meet the genuine needs of both parties, say for flexible working hours for parents and carers.</p>
<p>The IFA is treated like an award or enterprise agreement under the law, and can be negotiated at any time once employment commences.</p>
<p>Under the BOOT provisions employers must not disadvantage the employee as a result of the IFA. Flexibility within the current IFA system is only permitted around working hours, overtime and penalty rates, allowances and leave loadings where a modern award is in place.</p>
<p>For enterprise agreements, the IFAs only apply to terms and conditions already set out in the agreement’s flexibility terms. If these terms state any terms can be varied, then there is little to restrict further discussions. However, if the agreement restricts further variation to only a specific set of terms, the IFAs are limited to these.</p>
<p>Excluded from IFAs relating to enterprise agreements are conditions that might discriminate against employees, introduce objectionable terms, alter the unfair dismissal provisions of the Fair Work Act, limit industrial action, union right of entry entitlements or override the occupational health and safety laws. They can include matters relating to the relationship between the employer and the union.</p>
<p><strong>Put the politics aside</strong></p>
<p>It is probably too much to ask for our politicians to put aside ideological crusades for a more efficient and equitable IR system. Much of the thrust of Abbott’s IR policy seems aimed at further eroding the power and influence of the trade unions. At the end of the day, however, it doesn’t really offer much at all to small businesses.</p>
<p>Most small businesses are not overly unionised and many rely on industrial awards as their mechanism for setting employee wages and conditions. I referred in an <a href="http://theconversation.com/industrial-relations-and-the-award-reliant-small-business-12269">earlier article</a> to a report from Fair Work Australia indicating around 13% of small firms were award-reliant. Most of these were likely to suffer from lower productivity, profitabiliy and survival rates.</p>
<p>The pattern emerging from this research was that firms commenced using only awards, then moved towards non-awards or a combination of award and non-award arrangements as they grew. However, the lack of reliable data made it difficult to draw any firm conclusions over causality.</p>
<p>While the Coalition’s proposed changes to the way IFAs are used within the IR system is likely to generate a heated political debate in the run up to the election, it is doubtful that they will have much of an impact on small business. </p>
<p>What is needed is a review of the industrial awards system and action to streamline what is essentially a complex environment for most small business owners, particularly the majority who operate micro enterprises with fewer than five employees.</p><img src="https://counter.theconversation.com/content/14099/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tim Mazzarol receives funding from the Australian Research Council. He is also the President of the Small Enterprise Association of Australia and New Zealand (SEAANZ), a not for profit association founded in 1987 that its dedicated to enhancing small business research, education, policy and practice.</span></em></p>Tony Abbott’s industrial relations strategy has received a less than rapturous response from both business and trade unions. The Business Council of Australia and the Australian Industry Group have criticised…Tim Mazzarol, Winthrop Professor, Entrepreneurship, Innovation, Marketing and Strategy , The University of Western AustraliaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/140882013-05-09T20:33:51Z2013-05-09T20:33:51ZThe end of the IR wars? Coalition moves to neutralise Labor<figure><img src="https://images.theconversation.com/files/23423/original/pnk5gsdp-1368078013.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Tony Abbott's industrial relations policy launch attempts to neutralise Labor's advantage and bed down fears of a resurgence of WorkChoices.</span> </figcaption></figure><p>Industrial relations is the one area of public policy that traditionally marks a major fault line between the Coalition parties and Labor. It is also one area of policy where neither side finds it easy to defend itself against accusations that it favours one interest group over the public good. </p>
<p>It is especially problematic for the Coalition since its disastrous WorkChoices experiment. Five years since the November 2007 federal election, the Coalition is still struggling to shake off the stigma of WorkChoices. </p>
<p>Labor has been particularly effective in maintaining the line that should an Abbott-led Coalition government win, its real modus operandi will be to pursue a far more radical agenda, with WorkChoices as the blueprint. Rather than being <a href="http://www.theage.com.au/federal-election/abbott-cops-grilling-on-workchoices-20100719-10gfm.html">“dead, buried, cremated”</a>, they have prosecuted the case that WorkChoices is waiting to be resurrected, rebadged and re-instated.</p>
<p>This view has resonated for a number of reasons. To begin with, the WorkChoices reforms were introduced at a time when the economy was strong – at the height of the mining boom and at a time before the world financial crisis gave us a real sense of just how fragile our economic good times might be. </p>
<p>Profits were at record-high levels, but many employers still sought to take unfair advantage of the freedom and flexibility afforded by WorkChoices, stripping penalty rates and other entitlements from employees.</p>
<p>Now, as the mining boom enters a new phase and the world economy continues to look weak, insecurity has become a major political issue for whoever wins office. Both sides appear to be aware of its importance. So far in this election campaign, Labor has managed to take the running – around disability insurance, 457 visas, and job security. </p>
<p>The view that Coalition policies will only add to job insecurity has not been helped by its supporter base in the business community. The Australian Mines and Metals Association and a number of major employers, for example, have urged a radical overhaul of the Fair Work legislation along the lines of WorkChoices.</p>
<h2>The spectre of WorkChoices</h2>
<p>All of this has only served to heighten the expectation a Coalition government would bring back some version of Work Choices, albeit without that Orwellian title. So, once again, Labor had managed to wedge the coalition on IR – and all because of its form in introducing WorkChoices. </p>
<p>Not surprisingly then, the release of a <a href="http://www.liberal.org.au/sites/default/files/13-05-09%20The%20Coalitions%20Policy%20to%20Improve%20the%20Fair%20Work%20Laws.pdf">Coalition IR policy</a> was eagerly awaited by almost everyone. For some, it was to bring the hope of significant reforms; for others, a possible weak link to expose in the upcoming election campaign.</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/23456/original/v82tftvq-1368102699.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/23456/original/v82tftvq-1368102699.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=902&fit=crop&dpr=1 600w, https://images.theconversation.com/files/23456/original/v82tftvq-1368102699.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=902&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/23456/original/v82tftvq-1368102699.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=902&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/23456/original/v82tftvq-1368102699.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1133&fit=crop&dpr=1 754w, https://images.theconversation.com/files/23456/original/v82tftvq-1368102699.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1133&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/23456/original/v82tftvq-1368102699.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1133&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Abbott’s IR policy has sought to neutralise Labor’s advantage.</span>
<span class="attribution"><span class="source">AAP</span></span>
</figcaption>
</figure>
<p>Nor was it surprising that yesterday’s launch of the Coalition’s IR policy was intended to neutralise Labor’s position in all these respects. The policy announced appears to be framed around the political lessons from WorkChoices: any reforms intended to cut business costs by undermining worker entitlements would be political suicide. </p>
<p>Importantly, the Coalition will retain most provisions contained in the Fair Work Act: minimum employment standards, penalty rates, and the “<a href="http://www.workplaceinfo.com.au/resources/employment-topics-a-z/better-off-overall-test-boot">Better Off Overall Test</a>” intended to protect workers from unscrupulous employers. </p>
<p>It will surprise – and disappoint – many employers that a Coalition government will not touch the current unfair dismissal protections or the general protection provisions in the Fair Work Act. Both of these provisions have caused so much agitation among employer groups and many employers, especially small business.</p>
<p>There are also other policy promises intended to allay any fears of a return to “slash and burn” approach taken under WorkChoices. </p>
<p>Not only does the new policy highlight the Coalition’s commitment to its paid parental leave scheme, it also promises to introduce new provisions ensuring workers who receive unpaid wages recovered by the Fair Work Ombudsman are paid interest on recovered wages.</p>
<h2>No Fairwork reforms - for now</h2>
<p>Like Labor’s own <a href="http://www.afr.com/p/national/business_council_slams_labor_changes_vHrdhqpRZze7OfVFA4FF4M">Fair Work amendments</a> now before Parliament, it will also extend the Commission’s jurisdiction to deal with workplace bullying, albeit in a different form.</p>
<p>It also promises to implement a series of recommendations made by the Labor-appointed Fair Work Review panel in 2012. </p>
<p>The Coalition has also promised to seek no further reforms – with the exception of any minor amendments and “house-keeping” amendments – for the remainder of its term of office. The decision to do so will perhaps be the most singularly important step it takes in neutralising the WorkChoices bogeyman in the upcoming election. </p>
<p>Indeed, it all looks as if the Coalition has accepted that the Fair Work Act provides a fair balance between protecting worker rights and ensuring business can work to improve productivity and remain competitive.</p>
<p>There are, however, a number of significant amendments foreshadowed in the Coalition’s policy, some of which involve a partial return to WorkChoices. These elements, which the Coalition expects (probably correctly) to have little electoral impact, centre on reforms that restrain union access to the workplace and their position at the bargaining table.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/23459/original/mj69d7p9-1368104261.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/23459/original/mj69d7p9-1368104261.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=399&fit=crop&dpr=1 600w, https://images.theconversation.com/files/23459/original/mj69d7p9-1368104261.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=399&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/23459/original/mj69d7p9-1368104261.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=399&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/23459/original/mj69d7p9-1368104261.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=501&fit=crop&dpr=1 754w, https://images.theconversation.com/files/23459/original/mj69d7p9-1368104261.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=501&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/23459/original/mj69d7p9-1368104261.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=501&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Right of entry for unions will be restricted.</span>
<span class="attribution"><span class="source">AAP</span></span>
</figcaption>
</figure>
<h2>Right of entry restrictions</h2>
<p>A Coalition government will, for example, re-introduce the WorkChoices provisions restricting union right of entry, and will place further restrictions on their ability to take protected industrial action. The policy will amend the legislation to prevent unions taking protected industrial action before any negotiations have taken place. A Coalition government will also extend the powers of the Fair Work Commission, but only to intervene where unions delay <a href="http://www.fairwork.gov.au/employment/agreements/pages/types-of-agreements.aspx">“Greenfield agreements”</a> and to determine whether industrial action is unreasonable.</p>
<h2>Flexibility arrangements</h2>
<p>One of the more controversial elements will be a plan to rework the current provisions around Individual Flexibility Arrangements (IFAs). IFA provisions were originally introduced by Labor as part of the Fair Work reforms. </p>
<p>Under the Fair Work Act, every workplace agreement must include an individual flexibility arrangement clause. These were intended to allow individual workers to create tailored flexibility arrangements with their employer.</p>
<p>At the time, they were framed as a means to ensure employers retained the flexibilities associated with AWAs, but without the capacity to undermine conditions. If a workplace agreement includes no such provision, then a “model clause” is read into the agreement. </p>
<p>Not surprisingly, many unions have ensured that agreements contain “union-friendly” IFAs. Under its proposal, however, the Coalition will remove the capacity of unions and employers to include restrictive IFA clauses. This move will no doubt be presented as re-introducing a weak form the much maligned — but little used — AWAs.</p>
<p>But the Coalition is hoping that such suggestions will be countered by the fact that IFAs will be subject to the “better off over all test” – supposedly ensuring no worker will be made worse off.</p>
<h2>ABCC returns</h2>
<p>It has also promised to reintroduce the <a href="http://home.deewr.gov.au/abcc/index.html">Australian Building and Construction Commission</a> – a central part of the Howard government’s IR system – a move that is clearly designed to rein in the militant elements of unions in the commercial end of that sector. A resurrected ABCC will sit outside of the Fair Work institutions, albeit with some external oversight of how it uses its more draconian powers. </p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/23457/original/n7j3xy96-1368103219.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/23457/original/n7j3xy96-1368103219.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=859&fit=crop&dpr=1 600w, https://images.theconversation.com/files/23457/original/n7j3xy96-1368103219.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=859&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/23457/original/n7j3xy96-1368103219.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=859&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/23457/original/n7j3xy96-1368103219.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1079&fit=crop&dpr=1 754w, https://images.theconversation.com/files/23457/original/n7j3xy96-1368103219.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1079&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/23457/original/n7j3xy96-1368103219.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1079&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">The Australian Building and Construction Commission will return under a coalition government.</span>
<span class="attribution"><span class="source">AAP</span></span>
</figcaption>
</figure>
<p>Following the alleged corrupt and criminal actions of officials in some unions, the Coalition has also vowed to more closely regulate the internal affairs of unions, and place greater external accountability and scrutiny on their affairs. Union officials, many of whom have no legal or business education, will face the same fiduciary duties as company directors.</p>
<p>All in all, it seems like a clever designed piece of policymaking – especially in an area that has been a source of so much controversy and heartache for both sides of politics.</p>
<p>WorkChoices has been recast in the image of Fair Work. Ironically, the Coalition’s version of the Fair Work Act is likely to look very much like the system first envisaged by Paul Keating <a href="http://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22media%2Fpressrel%2FJ0OO6%22">in his controversial speech</a> to the Australian Institute of Company Directors in 1993, in which he predicted we would evolve towards a system in which awards and tribunals payed a minimal role, with employers, unions and employees directly determining wages and conditions.</p>
<h2>The end of IR wars?</h2>
<p>Is this the end of the “IR Wars”, then? Does this policy shift represent the beginning of a new period of consensus between the major parties around industrial relations? Unlikely.</p>
<p>Employers have already begun to voice some degree of dissatisfaction and disappointment. Clearly, they expected deeper and more profound reforms. The disappointment will not be limited to the big end of town. The policy contains very little that will directly address the demands of small business. It promises them little more than a helpline, a fact sheet and a mobile phone app. Small business too has expressed its disappointment with the new policy. There will, as a consequence, be ongoing pressure on the Coalition to push ahead with a more radical agenda for reform. </p>
<p>This type of reaction was no doubt anticipated, as the Coalition’s new workplace relations policy also commits an Abbott government to a new review of the Fair Work system to be undertaken by the Productivity Commission, which will inevitably focus on efficiency and competitiveness rather than the protective function of industrial legislation. </p>
<p>Just how radical Abbott’s second term reforms will be — and how much further they will go — can only remain to be seen.</p><img src="https://counter.theconversation.com/content/14088/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Gahan receives funding from the Australian research Council for a major project exmaining the evolution of business regulation in the Asia-Pacific.</span></em></p>Industrial relations is the one area of public policy that traditionally marks a major fault line between the Coalition parties and Labor. It is also one area of policy where neither side finds it easy…Peter Gahan, Professor of Management in the Department of Management and Marketing, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/85982012-09-02T20:09:04Z2012-09-02T20:09:04ZCoalition must come clean on plans for GST<figure><img src="https://images.theconversation.com/files/14813/original/s8vthrc4-1346304220.jpg?ixlib=rb-1.1.0&rect=32%2C32%2C1958%2C1281&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The Coalition has ruled out increasing GST, despite calls from former Prime Minister John Howard for GST to apply to food. But could a policy change be in the wings?</span> <span class="attribution"><span class="source">AAP</span></span></figcaption></figure><p>There is almost unanimous agreement among mainstream economists, tax experts, Treasury, business and even politicians (albeit very quietly) that the Goods and Services Tax will have to be increased and broadened. </p>
<p>We can leave aside the flat earth Hayekians and their prescriptions to abolish most taxes and almost all Government spending. At the moment, the GST is at the rate of 10% and applies to about 60% of all transactions. Fresh food, health, education and childcare are among the exemptions, costing about $15 billion in “lost” revenue.</p>
<p>The current consumption wariness among Australia’s workers means that the GST collections have slowed over the last few years. </p>
<p>For example, the <a href="http://www.ato.gov.au/content/downloads/cor00305922_2010CH12GST.pdf">Australian Taxation Office’s statistics</a> say: “For the 2010–11 financial year, net GST liabilities totalled $46 billion, an increase of 2.4% from 2009–10.” </p>
<p>It was only a few years ago that collections were growing at 8%. That $46 billion is distributed to the states and territories. The integration of the Australian economy into the global economy, its dependence on capital imports to grow, its aging population, the expectation of workers for decent public health, public education and public transport systems all mean that the ruling class and their economists are looking for ways to increase tax on workers in the coming years, or to cut government spending enough to fund tax cuts for business and the rich. Or do both. </p>
<p>The <a href="http://www.taxreview.treasury.gov.au/Content/Content.aspx?doc=html/home.htm">Henry Tax Review</a> took the approach that if it moved finance capital (for example), tax it lightly; if it didn’t move workers’ consumption (land, resources and labour), tax it more highly. Big business and other members of the one percent have been very loud in their support of an increase in the GST rate and a broadening of the base to tax fresh food, health, education and child care. </p>
<p>At a recent forum I attended at the ANU, John Hewson mentioned a <a href="http://www.theaustralian.com.au/national-affairs/treasury/higher-gst-rate-looms-as-population-ages/story-fn59nsif-1226427567438">possible 20% rate</a>. John Howard is the latest to join the screeching banshees. </p>
<p>In his now-famous <a href="http://afr.com/p/national/revive_ir_reform_howard_N8f3wRatkWELbJkEBGK9rM">“Bring back WorkChoices” speech</a> to the Westpac Deeper Insights Forum, the former Prime Minister also argued that the decision to exempt fresh food from the GST, imposed on him by the Democrats in 1999, meant there was now “a painful effect on state revenue”. </p>
<p>This is not some genteel walk down memory lane. It is Howard arguing for an incoming Coalition government to impose the GST on fresh food. </p>
<p>If the base is broadened and/or the rate increased the State and federal governments could then use the extra GST revenue and the gains from a broad-based land tax to abolish inefficient state taxes like stamp duties and the exemption ridden payroll taxes (which are consumption taxes under another name) and, here’s the main game: deliver tax cuts to companies and the rich. </p>
<p>The GST was deeply unpopular. Although John Howard won the majority of seats in the 1998 election, he lost the popular vote. The Liberals and Nationals formed government with 48.1% of the vote on a 2 party preferred basis; the Labor Party won 51.9% but not government.</p>
<p>Any attempt to increase the rate or expand the base of the GST would produce an electoral backlash.Tony Abbott recently ruled out any increase in the GST. </p>
<p>He has previously ruled out expanding its base to include fresh food, education, health and childcare.</p>
<p>But the plot thickens, because a few weeks ago Shadow Treasurer Joe Hockey said: “If you are going to have a discussion about changing the GST, the states have to lead the argument because they are the ones that need the revenue. They have to take the community with them and they are not doing that.”</p>
<p>Hockey is not ruling out increasing the rate or expanding the base. This is because business wants both and the Abbott government will, like Labor, be a government of business. The difference is that at this juncture they will be even more brutal in their attacks on workers. </p>
<p>The attacks on jobs and government spending on the poor and less well off and workers in Queensland, Victoria and New South Wales will be magnified and deepened across the country by Abbott in power. </p>
<p>Abbott is not a fool. He knows a Labor scare campaign about the GST might cost him some votes. So his strategy is to promise not to touch it before winning government.</p>
<p>Perhaps Abbott should come clean and say “there will be never ever by any GST changes under any Government I lead”. You know, just to provide that level of Howardian certainty we all crave. But because the bosses and their capital accumulation process demand tax cuts for business, the Liberals need to let their rich mates know the issue is still on their agenda. </p>
<p>That is why Joe Hockey put the pressure on the four conservative-run states to lead the push. Abbott might be tempted to do a John Howard and, once elected and in the run-up to the next election, announce his intention to increase the GST rate and/or expand its base if his government is re-elected at the 2016 election. </p>
<p>By then, if the states have joined all the economists, tax experts, senior public servants and the like in publicly pushing for major changes to the GST, there will be real momentum for increasing the consumption tax burden on workers by upping the rate and expanding the base. </p>
<p>This would especially be the case if some of the business tax cuts could be diverted to income tax cuts for workers; tax cuts that are eroded over time through bracket creep. </p>
<p>Of course, as China slows and Europe and North America prove incapable of escaping the Great Recession, the Australian economy could take a dive before that far-off 2016 election.</p>
<p>The response of the parties of austerity from left and right in Europe to economic crisis has been, apart from sacking people and slashing government services, to increase their consumption taxes. Given the electoral unpopularity of the GST in the 1990s, the Coalition will be careful about the way it deals with the tax. </p>
<p>But make no mistake: its goal is to increase the GST and expand it, probably in the longer term but possibly short term, especially if the economy tanks when they are in power.</p>
<p>It is time for Mr Abbott to tell us his long-term plans for the GST and tax reform.</p><img src="https://counter.theconversation.com/content/8598/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Passant is a graduate teaching fellow in the School of Politics and International Relations at the ANU. </span></em></p>There is almost unanimous agreement among mainstream economists, tax experts, Treasury, business and even politicians (albeit very quietly) that the Goods and Services Tax will have to be increased and…John Passant, Tutor, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/85842012-08-01T20:32:00Z2012-08-01T20:32:00ZAustralia’s productivity problem: why it matters<figure><img src="https://images.theconversation.com/files/13719/original/ytby3mwj-1343802667.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">If the government is serious about maintaining its economic prosperity into the future, it needs to address Australia's historically poor productivity growth.</span> <span class="attribution"><span class="source">Ann Douglas</span></span></figcaption></figure><p>The majority of Australians would prefer higher living standards. This can take the form of better access to better healthcare services and education, better environmental outcomes, more time for friends and play, more support for the disadvantaged, as well as lower cost, higher quality and new versions of food, clothing, housing and so forth.</p>
<p>Ultimately, someone has to produce the additional and better goods and services. Productivity growth, or producing more with less, is the only sustainable way for Australians as a country and as individuals to provide the expected increases in living standards. A <a href="http://www.theaustralian.com.au/national-affairs/treasury/productivity-gap-holding-back-growth-as-survey-ranks-australia-second-last/story-fn59nsif-1226439881599">report released yesterday</a> by the Economist Intelligence Unit highlighted Australia’s poor productivity growth (ranked second worst out of 51 countries) and its struggle to remain globally competitive over the past decade. </p>
<p>As noted by David Gruen in his address to the Economic Society of Australia last month, since about 2000, rising living standards of Australians has been supported primarily by a near doubling of the terms of trade, or the quantity of goods and services we can import per unit of goods and services we export. Productivity growth has been negligible, and well below the rates achieved in the preceding 50 years. With the almost certain fall in the terms of trade over the next decade, and continuation of the poor productivity of the 2000s, our expectations for rising living standards will not be met.</p>
<p>Productivity across most segments of the Australian economy is well below world-best practice. The Business Council of Australia, for example, estimates that construction costs of Australian hospitals, schools, and oil and gas plants are 40% or more below US levels. In terms of education, Australian students have fallen further behind the best performing countries according to OECD data on literacy, numeracy and science over the last decade. The good news from this sorry picture is that there is a large potential for catch-up productivity growth to support the aspirations of higher living standards.</p>
<p>So, what is meant by productivity growth, and how is it achieved? At its simplest, productivity growth means producing more valued goods and services per unit of labour, capital and natural resources, or producing the same with less inputs. Increasing productivity involves all of us: politicians, bureaucrats, business managers, employees and households. It involves changes in the way we do things. Higher productivity involves, for example: the production of new and better products which better meet evolving changes in household preferences; the adoption of production processes generating more output per unit of inputs, or working smarter; investing in the development of, and the adoption of, new technology, R&D, better work and management practices; and moving labour, capital and natural resources from less productive uses to more productive uses.</p>
<p>For the private sector, which is responsible for about three-quarters of the goods and services produced in Australia, the profit motive and competition are the drivers of productivity. Firms which deliver better products to buyers at lower costs (that is, improve their productivity ahead of the pack) gain the reward or carrot of higher profits and market share. Their competitor firms, who are slower to improve productivity, lose market share and profits from the competitive stick. For competition and the changes that bring higher productivity to work, firms need the freedom to make changes to the products they produce and the way they undertake production. Also, effective competition requires minimal barriers to enter and compete for innovative and new firms.</p>
<p>Government policy has many important influences on effective competition in the private sector and its adoption of productivity improvements. Unnecessary and over-lapping regulations not only add to costs, but also they act as a brake on the development of new products and technology. Furthermore, many regulations significantly raise the barriers to entry for new firms. A flexible industrial relations system should support the ability of different firms in an industry, and firms across industries, to change work arrangements necessary for the adoption of new technology, better work and management relations. There is a growing list of anecdotal evidence that the Fair Work system is restricting the ability of some managers to adopt better productivity systems. However, it also is the case that the current productivity slump occurred while WorkChoices was in place.</p>
<p>A more neutral and less distorting tax system, such as many of the reforms proposed by the <a href="http://www.taxreview.treasury.gov.au/Content/Content.aspx?doc=html/home.htm">Henry Review</a>, would facilitate the reallocation of capital from less productive to more productive uses. A relatively stable macroeconomic environment of high employment and low savings, with ticks for performance over recent times, provides an important background for a productive private sector. Subsidies to struggling industries slow down the transfer of resources from lower productivity to higher productivity options.</p>
<p>Governments are primarily responsible for the supply of about a quarter of the goods and services of the Australian economy, including education, health, law and order, and much of our transport infrastructure. These areas offer considerable - and not before time - opportunities for productivity improvements. In the absence of competition, formal, transparent and public benefit cost assessment of such major government investments as the NBN and desalination plants are vital to avoid repeating the likely misallocation of large sums of limited capital. New technology and reconsideration of management and work practices, and especially sorting out the duplication and blame games of multi-level governments in the provision of health, education and the NDIS, are promising productivity reforms.</p>
<p>Productivity growth comes at the cost of changes to the way we do things. But it is a positive sum game, and it is the only sustainable way of meeting our expectations of higher and higher living standards.</p><img src="https://counter.theconversation.com/content/8584/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Freebairn does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The majority of Australians would prefer higher living standards. This can take the form of better access to better healthcare services and education, better environmental outcomes, more time for friends…John Freebairn, Professor, Department of Economics , The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/21052011-06-30T23:42:00Z2011-06-30T23:42:00ZLet’s resist these efforts to bring back labour market reform<figure><img src="https://images.theconversation.com/files/2026/original/reith2.jpg?ixlib=rb-1.1.0&rect=199%2C106%2C1665%2C1132&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Back in the day…. the electorate rejected labour market reform the first time, so why push for a return? </span> <span class="attribution"><span class="source">AAP</span></span></figcaption></figure><p>When it comes to improving living standards in Australia today, labour market reform is not a first-order issue. </p>
<p>Achieving better health and social outcomes for the Indigenous population - yes. Increasing education attainment, particularly through early interventions targeted at children from disadvantaged backgrounds - yes. New infrastructure projects, tax reform, dealing with environmental degradation - yes. But extra labour market reform - no. </p>
<p>The 2007 election showed that a majority of the Australian population would regard re-deregulation of the labour market in the way that is <a href="http://www.theage.com.au/opinion/politics/why-is-abbott-so-spooked-by-the-workchoices-bogyman-20110627-1gne2.html">being proposed by Peter Reith</a> as away of lowering living standards – with adverse consequences for workplace equity and fairness that outweigh any benefits there might be to efficiency.</p>
<p>From the early 1990s onwards regulation of the Australian labour market has altered dramatically. Wage-setting, which used to happen via centralised tribunals, is now largely decentralised, occurring primarily between workers and the enterprise that employs them. </p>
<p>The process through which bargaining over wages and conditions for employment are determined is vastly changed. </p>
<p>Involvement of third-party tribunals in bargaining and their scope to arbitrate on disputes has been reduced, and trade unions generally have a lesser role in representing workers (although there are other reasons apart from labour market reform why this has happened). </p>
<p>Ways in which government intervenes to directly regulate outcomes in the labour market – such as in specifying minimum conditions that a worker must receive – have been a further dimension of the reform of labour market regulation.</p>
<h2>Improved efficiency?</h2>
<p>Theory tells us that all this should have improved efficiency in the Australian economy. Enterprise bargaining allows wage-setting to be tailored to conditions facing individual businesses and industries, and at the macro-level has reduced flow-on effects in wage-setting. </p>
<p>The capacity to negotiate with workers on their overall set of wages and conditions introduces the possibility of removing inefficient work practices. </p>
<p>And changes to the bargaining process or to the role of trade unions may provide businesses with greater security about the outcomes from future bargaining over wages and conditions that gives greater incentives for undertaking new projects.</p>
<p>For all that, when you look at data on Australia’s recent economic performance, it turns out to be difficult to identify the efficiency benefits of labour market reform. </p>
<p>Take the case of productivity. The rapid growth in productivity that occurred in Australia between 1993-94 and 1998-99 is often attributed in part to the initial phase of labour market reform in the early 1990s. </p>
<p>But the problem is that it is difficult to separate the effects of labour market reform from other influences - such as increasing computer and IT usage, growth in competitive pressure from increases in international trade, and reforms to other areas like the finance sector. </p>
<p>As well, the timing of the productivity growth happens too soon after the commencement of labour market reform to think it could be the only explanation for the productivity surge. As the Melbourne Institute’s Professor Mark Wooden has written, “…the evidence could hardly be described as conclusive”. </p>
<h2>Benefits and costs</h2>
<p>My own view is that a balanced reading suggests that labour market reforms are likely to have had some benefits for efficiency in the Australian economy – neither as large as the strongest advocates would suggest, or as weak as the strongest critics argue; and that the largest benefits came from the initial phases of reform such as the shift towards enterprise bargaining in the mid-1990s.</p>
<p>What of the costs of labour market reform? Labour market deregulation is often characterised as bringing a trade-off between efficiency and equity. Efficiency may be improved, but at the cost of some loss of equity. Think about the decreasing role of trade unions in setting wages and conditions for employees. </p>
<p>By increasing the bargaining power of employers compared to workers, this may for example give employers more confidence about future wage outcomes, and hence provide greater incentives to undertake investment activity. Efficiency is improved, and the total value of economic output is thereby increased. </p>
<p>This doesn’t however mean that workers are better off. With less bargaining power they are likely to receive a reduced share of the total value of output. If their bargaining power falls by enough then they may even be worse off in absolute terms.</p>
<h2>WorkChoices and productivity</h2>
<p>Importantly, the trade-off between efficiency and equity is likely to vary with the amount of regulation of the labour market. </p>
<p>When Australia began reforming its labour market regulations in the early and mid-1990s, in response to growing exposure to international competition and a changed macro economic policy setting environment, the benefits to efficiency from reforms such as the shift towards enterprise bargaining and award restructuring, are likely to have been relatively high, and the costs to equity relatively small. </p>
<p>A decade later, reforms such as WorkChoices appear to have had less effect on efficiency, and larger adverse consequences for equity. </p>
<p>Changes under WorkChoices such as the introduction of minimum standards to replace the ‘no disadvantage’ test, and provisions for awards and conditions of employees transferring between businesses, gave rise to a voluminous literature on workers who had been made substantially worse off by these reforms.</p>
<p>This week Peter Reith has claimed that because Australia’s productivity performance has been poor in recent years, and because “labour market issues are at the heart of productivity”, therefore we need more reform. </p>
<p>Interestingly, the period of poorest recent productivity growth in Australia, from 2003-04 to 2007-08, coincided with the introduction of WorkChoices. </p>
<p>And the productivity data for 2009-10, in the first year after introduction of the Fair Work Act, show an improvement in productivity growth. </p>
<p>Now I don’t really believe that the slow productivity growth at the time of WorkChoices, or the pick up post-Fair Work, have much to do with labour market regulation.</p>
<p>As the Productivity Commission has shown, most of the slow-down in productivity growth in the mid-2000s can be explained by one-off factors affecting the agriculture, mining and utilities sectors. </p>
<p>It does however make the point that it is difficult to justify extra labour market reform based on analysis of Australia’s recent productivity experience. </p>
<p>The big efficiency gains in this area have already been made. Add this to the equity costs of deregulating again, and you get the answer that there are much more important ways for government to improve living standards in Australia than labour market reform.</p><img src="https://counter.theconversation.com/content/2105/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jeff Borland has received funding from the Australian Research Council to work on the labour market in Australia. No other disclosures.</span></em></p>When it comes to improving living standards in Australia today, labour market reform is not a first-order issue. Achieving better health and social outcomes for the Indigenous population - yes. Increasing…Jeff Borland, Professor of Economics , The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.