Nostradamus he ain’t

You could almost hear the Prime Minister’s advisers scrambling for the smelling salts last week when their boss fronted Radio National’s Fran Kelly on the anniversary of the Federal Government’s IR laws.

In a wonderfully hysterical performance, the PM breathlessly declared that the prosperity we are currently basking in - thanks to our dual ability to dig things from the ground and spend relentlessly at the local mall - would come shuddering to a halt if the ALP, stacked with merciless union bosses, began warming the Treasury benches.

The destruction of the mining industry, the re-imposition of a one-size-fits-all industrial system, union officials in steel-cap boots storming head offices across the land as our captains of industry cower helplessly under their desks - the PM’s prophesy was arguably too dire for the breakfast time slot it was allotted.

Of course, those who remember the last time the union movement had any kind of influence with the Federal Government will remember the accord period - a time when profits were sky high, real wages fell and industrial disputes dropped.

Similarly, if a change of government occurs this year, it is highly unlikely to be as devastating for the populace as Howard would have us believe.

Central to Howard’s claim that a Labor victory would force us to subsist like caveman is that the ALP would re-regulate workplace relations through the use of awards.

Awards are a set of wages and conditions that apply to every employer in a particular industry. Their historical role was to prevent an employer in an industry gaining an unfair advantage over its competitors by cutting wages and conditions.

Awards dominated Australia’s industrial landscape until the early 1990s, when the opening of the Australian economy made a uniform approach to IR difficult to sustain. Hence the introduction of collective bargaining by the ALP Government in the early 90s, allowing firms and their employees to negotiate their own wages and conditions collectively, regardless of what other firms were doing.

This development has been embraced by all and sundry: awards now cover just one in five employees, with collective bargaining now the single most-used employment instrument, covering close to 40 per cent of employees.

And no wonder; not only do they provide genuine flexibility for firms but they are good for employees too.

Figures from the ABS released in February show average hourly wages for all non-managerial employees are a full nine dollars higher for workers on a collective agreement compared to those on an award.

No-one from either side of the political divide is advocating a return to a system dominated by awards. Howard’s loud and frequent claims to the contrary are simply misleading.

If the ALP adopts an industrial policy similar to that recommended by the ACTU last year and wins this year’s election, workers will have the right to ask for a collective agreement if they want one.

This would be the biggest change: employees would have the right to ask for an agreement that is already the most popular type of instrument in the current boom settings - one that is clearly no threat to the economy’s overall health.

The other major change would be the abolition of Australian Workplace Agreements - an instrument introduced during the Howard Government’s first term and arguably one of the biggest free-kicks given to employers during the PM’s interminable reign.

Last year’s IR changes enabled new contracts to meet just five basic conditions for them to be declared legal (as opposed to before the changes where a contract had to at least equal a raft of conditions in the relevant award).

Thus, according to the ABS’s Employee Earnings and Hours Survey, individual contracts pay workers less on average compared to those on collective agreements, and make them work longer on average for the privilege.

These results - also released in February this year - explain why Howard’s effort to elevate individual contracts to messianic levels has relied on dubious arguments about productivity, as opposed to the benefits for employees.

Howard claimed that abolishing individual contracts would “rob the economy of much-needed flexibility”. This is despite the fact barely half a million of these agreements are spread throughout the economy - somewhere near 5 per cent of the labour force.

Their (lack of) prevalence simply doesn’t equate with the hallowed position given to them by the Government and its supporters.

Even in the small pockets where they do exist, there is no evidence to suggest they increase productivity faster than collective agreements.

The coal mining industry (the industry’s most highly unionised sector with nearly 60 per cent of workers as union members) has grown at a similar rate to that of the industry overall in recent years. No-one is bemoaning its inability to make the best of the current overseas demand for resources.

Indeed, this demand has been the key driver of current jobs growth, not legislative change. Howard’s claim that his laws have created a quarter of a million jobs in and of themselves in the last 12 months is absurd.

So is his rhetoric that the “greatest gift of a strong economy is a job” - no matter how poor the conditions. It is Dickensian relativism of the most ridiculous kind.

A strong economy and decent jobs are not, and never have been, mutually exclusive concepts. The number of collective agreements currently in force proves it.

More collective agreements and less individual contracts under an ALP government will not, in Howard’s parlance, turn back the clock. What will is the Federal Government allowing for contracts that provide no compensation for irregular or long hours.

The current IR debate is one about the kind of jobs Australians want. One alternative is where Australians’ working rights are respected through decent and dignified work that supports them and their families, while allowing working families to share in the abundant wealth of a growing western economy.

The other is where Australians work longer for less money, at the expense of time with families, friends and participation in their local community for the sake of higher corporate profits.

The majority of Australians want the first option, and arguably Howard does too. The problem for the PM is that the desperate defence of his IR changes sounded as though he knows his laws and what Australians want from an IR system are mutually exclusive.

He has a choice to make. So do the rest of us.