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Here’s hoping ScoMo’s new consensus with the unions is not what it appears

By Graham Young - posted Thursday, 28 May 2020


But then again, if there are enough of them – and small to medium-sized business should have the majority of seats at the table given that they employ 68% of the workforce, and the unions only represent 14% - then they could change the dynamic. And there are people outside the mainstream who understand what the employment system needs, like, for example Graeme Haycroft, a labour hire grandee who has now set up two alternative unions – one to service nurses and the other teachers. So there is potential here for some real firecrackers and genuine reform.

I'd also expect most of those from government to be at the margins. They will have some resources, but their understanding of the sector will be mostly theoretical, which is no match for the experiential knowledge of people whose livelihood depends on exploiting the complexities of the system.

On top of that the key politician running this process is Christian Porter, who will have to chair 5 working groups, and come up with a consensus by September, in time for the October budget. Porter has shown poor judgment in a number of his portfolio areas, and now he is being asked to do the job of 5 men. Ominously, he will have a "civil servant, or ex-civil servant" as deputy chair (effectively the chair). Not only does this signal that he knows he doesn't have the time to do this job, but he sees it as bureaucratic.

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The union movement as it exists today, is institutionally corrupt, with super-unions being granted monopolies over entire industries and protected from competitors through exemptions from competition policy.

Outside the public service they barely exist at all proving that most workers see no need for them. The movement has spent most of the last two decades ensuring that those who run it are insulated from the overall decline of the movement and can have good careers in politics or related fields.

One of the tools that it has to slow its decline is to make awards as complicated as possible, so employees need an expert, and employers are at a disadvantage, even with a lawyer. It also has a vested interest in FairWork Australia maintaining its dominance of the sector, because its bench is part of the career path for union officials, the real reason the unions exist.

Sally McManus is the most left-wing leader that the movement has had for decades, and has spent most of her term in office complaining that the wage share of the economy has fallen, and that there is too much "insecure work" – what others might call "flexible work".

So how likely do you think it is that this movement will agree to be part of a consensus to simplify employment conditions, decentralise industrial relations power (which would include alternative avenues of employee representation), encourage informal settlement of employee complaints, have more flexibility in employment contracts, and ultimately encourage more workers to become contractors?

Then we have the employer organisations. These are amongst the most cowardly of public organisations, and tend to be staffed by people with political rather than business skills.

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The businesses they represent are very large ones in industries where scale counts. Many of these companies have a high degree of internal inefficiency because they are protected from competition by their scale.

When these companies want to make a process more efficient they often don't reform internally, they outsource the process to a smaller business that has been forced to be efficient because it has lots of competitors.

These organisations have been doing cosy deals with unions forever, and they prefer centralised and difficult awards because they are another barrier to entry to competitors. Many of them have also had lazy growth leveraged off the economies of scale delivered by two decades of above average migration and population growth.

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This article was first published in The Spectator.



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About the Author

Graham Young is chief editor and the publisher of On Line Opinion. He is executive director of the Australian Institute for Progress, an Australian think tank based in Brisbane, and the publisher of On Line Opinion.

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