Gillard's time bomb bid to duchess business leaders

With a federal election due in the second half of next year it is hard to be other than cynical about Julia Gillard's decision to create a high profile business leaders' forum to integrate with the Council of Australian Governments- the policy gabfest for state and federal governments.

For a start it coincides with Treasurer, Wayne Swan's, full frontal attack on billionaire business leaders, Gina Rinehart, Andrew Forrest and Clive Palmer who he claimed were trying to dress up their self interest as the national interest.

Gillard has not resiled from Swan's comments which were originally made in an article for The Monthly magazine but it is clear that she wants some clear air with the business community in the run up to the election now that she has swept the Rudd leadership issue aside or at the very least swept it under the carpet for the time being.

The relationship between the big business groups and the Coalition sank dramatically in the run up to the 2007 election probably because business realised that the then Government's mishandling of the Work Choices policy created an insurmountable obstacle for the conservatives in this poll.

In the wake of Labor's resounding election win the new Prime Minister, Kevin Rudd, moved quickly to institutionalise the division betweeen business and the Coalition opposition by appointing Heather Riddout, the head of the peak employers' body, the Australian Industry Group, to seemingly every possible government committee which had anything at all to do with business or the economy. Riddout has more recently become a Government appointee to the board of the Reserve Bank of Australia.

When Rudd became Prime Minister COAG was dominated by State Labor Governments.Now the balance of power has well and truly swung towards the conservatives. So why wouldn't Gillard try to woo business into a battle with the growing conservatively dominated COAG on the sensitive issue of reform.

Putting that aside there are no clear signs that despite Labor's poor showing in the opinion polls there is a growing rapprochement between the business community and the Coalition.

For example both business and the conservatives agree that Fair Work Australia is a less than satisfactory industrial relations platform . But does business believe that Opposition Leader, Tony Abbott, has the stomach for a political fight at the next election which will embrace the best, but not the worst, of the ill-fated Work Choices policy?

Abbott was quick to rush into the public spotlight after he became leader to say that Work Choices was dead and buried. Clearly this was designed to neutralise any " son of Work Choices" campaign which the Labor movement would run in the next election . But the political and industrial wings of the movement will do this anyway - regardless. It's their ace card.

With the price of labour now a major disencentive to employment particularly to small business as on costs are accounting for around 50 per cent of the total labour bill Abbott must get a mandate from the electorate at the next poll for sweeping industrial relations reform. He will not get away with a back door policy such as Gillard used for a carbon tax.

Employer representatives are welcoming Gillard's pre-COAG forum as a move towards action on their long term campaign for regulatory reform withn a corresponding reduction in red tape.

History says dream on. Red tape reform should start with Fair Work Australia but don't hold your breath. Meanwhile Labor's carbon tax will give birth to a whole new world of tax regulation and bureaucratically backed up implementation when it comes into play on July 1.

Paul Keating talked about the recession we had to have. This is Gillard's version: It's the regulatory and bureaucratic explosion we have to have if we are going to lead the campaign to save the planet from human indifference on climate change.

The employers should take a cold shower before they rush to accept Gillard's COAG offer otherwise they may well find themselves embarrassingly duchessed and for no tangible gain.