Building capacity in Australian industries

What these changes are going to is undermine all the advances of the last century and bring back the master/servant as the underlying theme to the employment relationship. It will be the greatest social tragedy that this nation has seen and will cause irreparable damage to our cultural worship of the fair go.

The tragedy of this legislation is it focuses attention away from the real issue. That is the underlying fault of the Anglo-American Liberal Democratic model. If we look at the United States and the Australian economies we see crippling current account deficits. Approximately 7 per cent of GDP is the level of the current account deficit. This is occurring at a time when we see a coal and mineral boom occurring at unprecedented levels.

What would the deficit be without this boom? Probably 8 or 9 per cent. We see advanced manufacturing at historically low levels. The focus on individual enterprises and deriving policies to atomise industry has thrown out any benefits for industry accruing from collective action among employers. We see in isolated examples, and with the support of the state Labor governments, efforts from enterprises to form clusters (ie, Gladstone) to compete for major contracts: but this goes against the grain of industrial policy advocated by the Business Council of Australia.

The focus is on competition as some sort of holy crusade. Previously we saw large enterprises training more apprentices than they would require for their own operations. It guaranteed a sufficient skills base for their industry and ensured volume of work was maintained across the industry. But now large enterprises only train sufficient numbers for their own needs, hence we face skills shortages across all facets of industry and all regions.

Coupled with ideologically driven policies of outsourcing maintenance and service functions, the Australian manufacturing industry has lost all capacity to control its own destiny.

Sure you can reduce costs by having your six or seven fitters form their own company and then contract their services to you. You don’t have to pay the costs of training new apprentices. But there is no free lunch: the contractors have no desire to provide a service into the next generation, hence they won’t engage apprentices.

This strategy commenced in the 1980s and has a limited lifespan. And we are now seeing the consequences. The age profile of tradesmen who were outsourced in the 1980s would lead you to conclude the vast majority of them are now reaching retirement age and this is one of the major reasons for the crippling skills shortage.

When will Australia learn that we cannot achieve the optimal result by simply copying overseas models for industry structure.

What is needed is a policy direction that focuses on industry development which encourages co-operative capacity building to enable Australian enterprise to bid and obtain work. This will not be achieved when company after company is locked in battles to drive the workers’ conditions down. Many enterprises do not have the size to undergo workplace reform, niche market-building and research and development. The government’s focus on workplace reform will mean Australian enterprises focus not on the issues that challenge their capacity for growth and survival but will focus their attention on third and fourth rate issues.

Building the skills base along with research and development are the key issues to drive productivity, not taking penalty rates or smokos off workers.

It is time for the institutional investors in our public corporations to discard decrepit ideology and stand up and demand that management devise strategies to increase the skills base of the workforce and increase research and development activities.

It is time that the Federal Government focused on building capacity across industries instead of frowning upon collective action among employers.