David Leyonhjelm on Workplace Laws

Industrial relations laws have the power to determine whether this century will be one of prosperity or stagnation for Australia.

Yet despite bills to establish the Australian Building and Construction Commission and the Registered Organisations Commission serving as the official triggers for the early double dissolution election in 2016, not a whimper was heard about industrial relations during the election campaign. And since then, the government has done little more than tinker.

The re-established ABCC will enforce existing industrial relations law, but the CFMEU will retain its privileged place at the bargaining table of Australia’s construction industry. And although the supervision of union officials has shifted from an organisation stacked with Labor appointees (the Fair Work Commission) to an organisation stacked with Coalition appointees (the Registered Organisations Commission), there has been no reconsideration of why union officials should be supervised at all.

If legislation didn’t give unions special privileges, there would be no need for separate legislation to supervise unions.

Then there is legislation like the ‘Corrupting Benefits’ and the ‘Proper Use of Worker Benefits’ bills, which attack union officials who look after themselves rather than members. These may force some union officials to change their behaviour and slow the flow of funds to Labor and its mates, but any impact on the workplace will be marginal.

Government tinkering to industrial relations also includes, in the case of the Victorian Firefighters legislation, banning enterprise agreements that fail to promote respect for volunteers. This is not a record of visionary reform.

Visionary reform would remove unwarranted privileges for unions, remove unfair dismissal laws and, above all, reduce the regulation of wages.
Australian workplaces need wage deregulation to promote productivity and innovation and restore wages growth, in the face of challenges from automation and international competition.

Workplaces will never encourage individual workers to take on roles that make the best use of their skills and enthusiasm so long as they are paid at rates identical to other workers in the business, the industry or across the country. And yet the proportion of workers paid at a one size fits all regulated wage rates, otherwise known as awards, is on the rise.

From the time Keating first promoted enterprise bargaining as a better way for setting wages, through to the end of the Howard era, the share of workers on award wages fell. But from 2010 that share has risen and is now at levels not seen since the turn of the century.

What changed in 2010 was ‘modern’ awards. These involved replacing thousands of wage regulations with a little over a hundred regulations. The problem was, whenever multiple regulations were rolled into one, the highest wage rate from the original regulations applied. This removed the capacity to have diversity in wage rates for workers who make different contributions.

The change was implemented by Rudd and Gillard, and Labor now wants to continue it by banning the regulator from ever reducing an award wage or even a component of it, including Sunday penalty rates.

Paying workers the same higher rate has not helped wages growth. Following an initial bump with the introduction of modern awards, wages growth has been poor. Forcing employers to treat all workers the same is a recipe for apathetic workplaces and stagnant wages. A pay rise can be an incentive and a reward, but not if your employer also has to give it to your workplace’s resident slacker.

Thriving workplaces also need owners and managers who are willing to hire without being forced to pay new starters more than they are worth and fearing that, once hired, they can never be fired.

Official unemployment, a decade on since the Global Financial Crisis, remains at 5.4 per cent, well above the rate that prevailed when small businesses were exempt from unfair dismissal laws under Howard. More than 700,000 Australians are in unemployment queues while small business owners struggle to do everything themselves.

The Government says the current Senate wouldn’t support attempts to wind back unwarranted privileges for unions. It may say the same about attempts to abolish or reduce award wages, or to exempt small businesses from unfair dismissal laws.

But such reforms will only happen if the Coalition campaigns on them and Australians have a chance to vote for a Senate that will support them. Reforms like these are sorely needed.

David Leyonhjelm is a Senator for the Liberal Democrats

A bonus. William H Hutt demolished eight myths which protect the “the bloody aristocracy of labour”. The main thing to understand is that the community at large and most of the workers in other industries suffer directly and indirectly from the abuse of trade union power.

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10 Responses to David Leyonhjelm on Workplace Laws

  1. Bruce of Newcastle

    The NSW State government missed a chance this week. The Rail union is striking on Monday over a pack of ambit stuff so stupid it makes my brain hurt. As Seven News mentioned train drivers average $75,000 to bus drivers $55,000 annually. Train drivers want 6.5% a year wage rise for the next 4 years.

    The error the state government made was not to announce a plan to convert all Sydney suburban trains to driverless, which is what the new NW line and the metro will be.

    If unions want to be bloody minded – let them. Computers are much cheaper.

    I hope other unions draw the lesson from this comment that they should.

  2. Well said Senator – Here is some more grist for the mill

  3. Arky

    yeah, good.
    What about the other sides of the big government, big union, big business triangle?

  4. Wil

    Why don’t you and Cori Bernardi get together and create a formidable party that can take your powerful arguments to the people ?

  5. Tim Neilson

    Labor now wants to continue it by banning the regulator from ever reducing an award wage or even a component of it, including Sunday penalty rates.

    Surely not! The visionary genius Peanut Head explained clearly after the Cleanevent award came out that sometimes it was in wukkas best interests to be paid below the award.

    That was why he signed the AWU up to it, he’s told us, not because of the clauses forcing the wukkas to pay part of their below award wages to the AWU for membership fees, thus increasing the number of delegates Peanut Head controlled at ALP national conferences.

    And if we can’t trust Peanut Head to be sincere what can we trust?

  6. rickw

    Why are there any workplace regulations or minimum wages when there is the dole?

    Surely the dole sets a minimum?

  7. nemkat

    Governments that keep picking fights with the Union Movement end up down the gurgler.
    Not because anyone is on any doubt about the trustworthiness of Union Officials, but because it raises the question of whether the Government might have more pressing concerns.
    One more pressing issue might be the $tupendou$ amount$ Union Super Funds are holding.
    Ran across a bloke before Christmas who decided to retire early and claim his contributions. 40 years a Union member, they refused to release the money, and a solicitors letter was required to do the trick.
    It’s become a compulsory Ponzi Scheme.
    The least Turnbull could do would be to fold the levy into wages, then workers can make their own decisions.

  8. EvilElvis

    We all know this and yet this is only a call to the coalition to campaign for reform. How about you campaign a bit DL.

    And, Wil. DL needs to leave Bernardi alone, we don’t need a conservative party watered down with libertarians, that’s the ‘broad church’ of the liberals job…

  9. struth

    Who will you be preferencing next election?

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