IR laws take effect

The new industrial relations system kicked off yesterday, with opinion predictably mixed about how it will affect Australian workplaces. Somehow the government have managed once again to make everyone upset, even Peter Costello's own H R Nicholls Society. Indeed, quite remarkably, the right do indeed have a point when they argue that the "reforms" do nothing to deregulate the IR system, and in many respects make the system more complex.

One of the more startling changes has been to centralise more control over the system into the hands of Kevin Andrews. It was this change that prompted the Nicholls Society to label the reforms as "like going back to the old Soviet system of command and control." The most shocking of these controls is the power to strike down parts of individual contracts which aren't to the government's fancy.

This is on top of the range of "prohibited content" which simply can't be included in any contract between employer and employee. Although the stated aim of the reforms is to increase choice, employers and employees are prohibited from agreeing between themselves to include clauses for protection from unfair dismissal in their contracts. Employers are also banned from offering employees leave for union training and offering them payroll deductions of their union fees. Surely if businesses want to offer these options to workers as part of their wage and benefits packages, in order to attract the best employees, they should be able to do so? So much for freedom of contract. Kevin Andrews defends these regulations, saying that:

"The Government's view is that the employment arrangement should relate to employment conditions and terms and conditions of employment itself - not to a whole range of extraneous matters."

Sure. Promoting choice by telling employers and employees what they can choose.

To illustrate the scope of the re-regulation the government is engaged in, the new laws run to 1,500 pages at the smallest, to 2,500 pages at the largest, depending on who prints them out for you. Andrews justifies the sheer volume of regulation by saying that a third or so are transitory provisions, and that they partially replace the state IR systems. But that doesn't change the fact that businesses and employees will still have to learn all these new laws, even if they can forget about them when the transition period runs out.

IR barrister Tony Slevin notes that not only do employers and employees have to navigate the Act and the Regulations (which, for some bizarre reason, are printed with inconsistent numbering) but employers also have increased reporting requirements, since they must:

"...provide in their time and wage records an account of every industrial instrument under which their employees gain entitlements, an employer in an ordinary workplace wouldn't know where to start. The number of industrial instruments that are created by the legislation just increased by four, five, six fold the places that entitlements are to be found."

If the barristers are having trouble understanding the raft of new regulations, how on earth are small business operators and individual employees going to cope?

So that's a "no" in the box for deregulation. But what about the central claim of the government, that the "reforms" will increase productivity? Even on the laws obvious effect there are doubts about this.

Dr Michael Schaper, the Small Business Commissioner in the ACT, points out the troubles businesses will face without refernce to the award system to set wages:

"Whereas large firms and government bodies have access to sophisticated HR (human resources) systems and benchmarks, or can employ consultants to advise them on a fair market rate, most of Australia's 1.2 million small business can't afford to do this."

At least the introduction of the BAS, as part of the broader GST reform package, managed to consolidate some other paperwork. Businesses certainly struggled with it at first, but in the long haul the system does appear to be simpler. But these IR changes are different: without awards or at least mean industry wage data as a reference, small businesses will surely struggle to set wages to attract potential employees, since they will be having to constantly calculate for themselves what is a competitive package.

The government is tipping the IR changes as the major source for productivity growth in the Australian economy over the next decade or so, yet Treasury's own figures indicate that Australia will still lag behind the United States in terms of productivity growth, even with the dramatic new changes. We are already starting from 25% behind.

So that's a "no" in the productivity box too.

Everyone in the federal government seems to have forgotten the reason why productivity growth is important: it boosts the total output of the economy, enabling a high standard of living to be maintained. Yet the reforms will sacrifice living standards (wages, working hours) in favour of lower wage costs for employers. The only real, sustainable way to increase productivity in the long term is to spend on education, technology and general business investment. Let's hope these objectives will become a priority sometime soon, before we create a working poor.

The Democrats are dead, long live the Democrats

So the weekend's two state elections are done and dusted, with Labor governments returned in both South Australia and Tasmania. The results were not so rosy for the Liberals, with massive swings against them. Indeed, the Libs did so poorly in South Australia's Legislative Council that their miserable 3.1 quotas only barely scraped ahead of the one man tour-de-force that is anti-pokies independent candidate Nick Xenophon. With an incredible swing of 20.2%, Xenophon captured 2.6 quotas, electing not only himself but also his running mate Ann Bressington, who has hastily had to give up her job in preparation for entering parliament.

But as bad as it got for the Liberal Party, things were far worse for the Australian Democrats, who slumped to a measly 2.8% of the primary vote in the lower house, and an even lower 1.7% in the upper house. They now look set to elect no candidates in either house. Even middle-of-the-road-politics glamour girl Nat is at risk at the next federal election. An outgoing Democrat parliamentarian was quoted as saying:

"No, we have not been wiped off. Certainly we have been bumped along the bottom."

Because that's so much more comfortable.

Down in the barren state, Paul Lennon retained his job as Premier, despite all the speculation about him having to form a minority government with the support of the Greens. I think the pundits were all a little too excited thinking about Lennon, the rabid Gunns man that he is, having to cooperate with the quaintly named Peg Putt to actually consider the possibility that Labor might not lose government.

Lennon has indicated that there are a few surprises in store for his first term as legitimately elected leader, as he included among his priorities an intention to lead the nation on reconciliation, without once mentioning the plan to Destroy All Forests. Lennon will certainly be relishing the chance to govern in his own right, out of the shadow of the much-loved Jim Bacon, the former Premier under whom Lennon served as chief head-kicker.

At a federal level, Johnny claimed that Rann and Lennon were capitalising on the Coalition's success at a federal level on the economy (evidently not appreciating the irony of riding on the Labor successes of the Hawke and Keating years). Big Kim congratulated the triumphant Labor leaders, with an attempt to make some mileage on IR. Federal Labor could learn well from the state Labor governments (who collectively should pass twenty consecutive election wins within the next twelve months) and start drafting some stronger talent into the rank and file.

Last word goes to the Tasmanian Greens, who seem more worried about losing their taxpayer funded mobile phones and cars than losing twenty percent of their seats in the Tasmanian parliament. Gotta get your priorities straight.

Yet Another First Post

I'm starting this blog mainly because everyone else has one, and dammit, I want one too.

I expect this mostly to consist of musings about politics and such, liberally sprinkled with sarcasm and Simpsons references, in the tradition of all great writers before me. I suppose I come from a left of the middle viewpoint, although if Johnny hangs around the Lodge for much longer I might be forced to drop the "middle" part. In fact, that's probably happened already.