Action plan for Labor needed after Business Council lecture

Anthony Albanese and Jim Chalmers. Picture: Glenn Hampson

Many of Australia’s top chief executives would have left last week’s Business Council dinner frustrated and even angry at the lecture they were given by the federal treasurer.

Businesses large and small are struggling to cope with the recent government industrial relations revolution that in essence requires the management of enterprises – particularly large ones – to be shared with the union movement. Naturally, such a basic change in enterprise control reduces productivity and increases costs over a wide area.

Now the government is adding to that burden, wage rises across the board as it advocates minimum low income payments increases that will spread across the total wage spectrum.

The combination of wage rises and lower productivity will create a nasty situation for Australia and probably means that interest rates will stay high for the foreseeable future.

Jim Chalmers recently during Question Time at Parliament House in Canberra. Picture: Martin Ollman/NCA NewsWire

The inevitable consequence – labour shedding – is yet to show in the statistics but, as I have pointed out during the last two weeks, it has started in many enterprises and will now accelerate.

Instead of apologising for the various productivity reducing industrial relation actions, Jim Chalmers set out a vision for Australia that was led by investment. Everyone in the room agreed with the vision, and many believed that the Chalmers’ vision for Australia can be achieved. But it requires different government policies.

Chalmers’ lecture to the CEOs was delivered on the basis of the Chatham House Rule, but we can be grateful for Paul Kelly’s guide to the Treasurer’s Business Council statements published in The Weekend Australian.

I will quote a short extract from the Kelly coverage and then set out actions the government could undertake to enable the Chalmers vision to be at least considered seriously instead of its current status of political irrelevance in vast areas of the nation.

Chalmers: “We have to decide as a country whether the long-term moderate growth set out in the intergenerational report is acceptable to us. It’s not acceptable to me or to the government that Anthony Albanese leads,” he said.

“That’s why we are putting in place new foundations for growth in a world that is very different to what we saw between the end of the Cold War and the start of the global financial crisis.

“I want to foreshadow with you tonight that how we attract, absorb and deploy investment will be the big question the budget will seek to answer.”

Anthony Albanese and Jim Chalmers announcing additional disaster assistance funding. Picture Glenn Hampson

Sadly, in my view, the budget can’t answer that question without a change in Albanese government policies.

In most areas, any investment incentives will be used to save labour, not expand.

The first focus of the Treasurer should be examining how government’s industrial relations strategy can be aligned to a growth agenda.

In theory, he could start by explaining to the CEOs that they can avoid joint union/management control of enterprises if they set up a management structure with proper independent contractors where contractors are well rewarded for the extra productivity delivered and have documentation that respects the rights of both parties.

Many Australian companies whose existence requires high productivity do this successfully, but in most it is opposed by corporate human resource departments, whose very existence requires a continuation of the current system.

Of course, in reality, Chalmers can’t advocate such a strategy because he would be shredded by the union movement.

So let’s try some easier courses to lift productivity and investment.

One clue on how higher productivity changes might be engineered is contained in the so-called “Amazon clause” in the 700-page business blueprint called the “loopholes” of industrial relations legislation.

The “Amazon clause” enables couriers working for all delivery enterprises (not just Amazon) to deliver parcels to homes for individual consumption free from all the myriad of new rules and regulations designed to engineer joint union management control of Australian road transport to lower productivity and increase costs.

All deliveries to homes can now be made efficiently, almost certainly providing better rewards for the drivers.

It is totally ridiculous that parcels couriered to an enterprise must be the subject of the cost-increasing, legislative morass while to the home there is an efficient, low-cost, high driver reward system.

It will damage Australia Post.

The “Amazon clause” should be applied to parcels delivered to commercial enterprises as well as homes.

But why stop there?

An efficient road transport system is essential to many investment decisions, and we have now legislated a very inefficient system so let’s extend the “Amazon clause” to the entire road transport system which would make it far more efficient and lower costs while increasing rewards for truckies.

BHP will spend its money developing copper in countries that understand productivity and energy costs. Picture: William WEST / AFP

One of the biggest single investment projects ever conceived in Australia is the BHP South Australian copper belt expansion which not only covers copper, gold and uranium mining but extends to smelting, refining and power generation.

As a result of the Albanese government measures, the previously virtually locked in investment now has, at best, a 50 per cent chance of going ahead.

BHP will spend its money developing copper in countries that understand productivity and energy costs. Clauses in the Albanese 700-page blueprint send the South Australian mining costs through the roof.

Once again, let’s apply the “Amazon clause” to the South Australian copper expansion and make it completely free from the productivity-lowering and cost-increasing legislative morass.

Australia is pursuing a high cost set of energy policies.

BHP looks set to enjoy low nuclear power costs in Canada, so there should be no restrictions on the use of nuclear power in the South Australian copper belt if, of course, it makes economic sense.

Extending the “Amazon clause” into other areas is the biggest single action Chalmers could take to kick-start investment.

A flexible, lower cost low emissions energy strategy would be equally beneficial.

In Chalmers’ electorate, south of Brisbane, there are many people who are struggling under rent and mortgage stress.

Like elsewhere in Australia, lots of people have a second job as a casual and enjoy a 25 per cent premium in their take home pay.

The Prime Minister has endorsed a definition of casual work that is so complex that it effectively bans casual work. The loss of the 25 per cent premium will devastate those who are struggling.

I implore the Treasurer to take pity on those whose lives are under stress, not only in his own electorate but around the nation. It won’t foster investment, but it will make Chalmers feel as though he has done something tangible for those who are suffering.