• John McDonnell

Crossbenchers sink Industrial Relations legislation

South Australian senators Stirling Griff and Rex Patrick seem to have lost the plot wen it comes to economic recovery. They appear to be unaware that business confidence is fragile, and that many employers need a more certain industrial relations framework before they will invest again.


They are also ignoring the fact that the current enterprise bargaining arrangements are moribund, a factor that is making workers worse off.


As former Labor economic adviser, Professor Ross Garnaut points out, before the global financial crisis average wages in Australia were 25% higher than in the United States, now they are 25% lower. This due to the fact that the enterprise bargaining system doesn’t work anymore. Senators Griff and Patrick seem to think that the enterprise bargaining system needs to be left as it is because reform is too difficult. As Stirling Griff said on Thursday:

“This is a complex and contentious bill, and we recognise that attempting detailed amendments to the remaining parts of the bill runs the risk of unintended consequences for employees and employers."

This statement was accompanied in ‘The Advertiser’ by a self-important photograph of the senators in front of parliament house. Their approach could be a grave political miscalculation. Voters expect their legislators to fix difficult problems not to abrogate their responsibility. Senator Griff has the background as a business representative that should have qualified him to negotiate a successful outcome for the bill. Instead, he has bowed to union pressure and decided to run dead.


The government was in a cleft stick. The legislation had to be passed through the senate on Thursday if it was not to be postponed until the budget session. Postponement would have left the labour market in limbo for several months and would have inhibited economic recovery. As a consequence, the government gutted the bill and passed what is a travesty of economic reform. It not only removed the provisions related to enterprise bargaining and awards but also removed the provisions relating to wage theft that had been included as a concession to unions.


The only thing left are some provisions related to the definition of what is a casual employee, and the right of a casual to permanency after 12 months of regular hours work. The message to the cross-bench is that if they are not prepared to be part of the reform process the government is not going to waste its time putting reform measures forward.


After all, it is being criticised at the moment for not having brought forward reforms based on the recommendations in the Jenkins report on the abuse of women.


Ironically, the unemployment figures were released on Thursday. They showed that the unemployment rate had fallen to 5.8%, a much better number than that forecast by Treasury and the Reserve Bank. This is a clear indication that the economy is recovering rapidly, and the labour market is likely to tighten even further in the second half of the year. Three times as many jobs than the market anticipated were created and 80% of the new jobs went to women. In normal circumstances these conditions would lead to wage rises but the current industrial relations system makes it virtually impossible to negotiate above award wages.


That this situation will continue is entirely due to the intransigence of Stirling Griff and Rex Patrick. You have to ask why these people are in parliament.