No time for yesterday’s heroes as Scott Morrison seeks a new accord

If Scott Morrison’s labour summit is conducted correctly some of the major participants, led by the unions and the large corporates are in for a shock: the Australian working community is totally different to the traditional stereotypes in the popular media.

The construction of JobKeeper and his National Press Club speech showed Morrison now understands employment creation in many areas is being dominated by networks of smaller enterprises and independent contractors, which requires a new approach to award setting and skills training.

But, as I describe below, even in larger enterprises, COVID-19 has triggered deep changes. The US has led the world in some of these trends, so it was stunning that just two weeks ago in the US we saw the Democrats trying to turn the clock back, making President Trump a clear favourite to gain a second term.

The Democrat-dominated legislature in California is wedded to the old ways and decided to ban independent contracting, hoping to take the highly entrepreneurial Californian community back to working in “secure” jobs with regular hours.

Stupidly, Joe Biden plans duplicate the Californian bans across the US. Two weeks ago there was a US version of an Australian by-election in California for the House of Representatives. The Democrats held the seat with a margin of about 10 per cent and, like Australia, it’s very rare for a US government to win a “by-election” in office.

Jubilant Republicans won with an incredible margin of 10 per cent – an unheard of, but not surprising, 20 per cent swing. Trump supporters now believe that unless he makes a serious mistake — always possible — he has a second term in the bag. He may even control both houses.

Changed employment landscape

As in the US, the change in the Australian employment landscape is not understood by our popular media, which thinks the summit is all about big business and big unions doing a deal – a repeat version of the Hawke summit that led to The Accord.

But those days have well and truly gone in both the US and Australia, even though significant segments of both the Coalition and the ALP parties think nothing has changed and that the old wars can still be fought.

In Australia, the leadership of both the Coalition and the ALP both know that what Joe Biden is doing in attacking the small business employment segment is suicidal.

But the change in the labour force is much deeper than an increase in entrepreneurship, small business and independent contracting. At the moment the unions’ catch cry is “job security”.

What Morrison brilliantly described to the National Press Club was that you get job security from business and government prosperity. If a business or government is suffering then labour is shed and job security disappears.

The aim of the Morrison summit is to create stronger businesses while distributing the rewards on a fairer basis. A group of ministers led by finance minster Mathias Cormann and employment and small business minister Michaelia Cash have a clear understanding of this fundamental workforce change and treasurer Josh Frydenberg made sure JobKeeper looked after badly affected sole traders and small enterprises.

The Australian Taxation Office’s weakness in form design and wording was clearly displayed, but in the actual working of the scheme and the help given to smaller enterprises was first class — a total reversal of the ATO’s former ways and a return to the traditions of the great tax commissioner Michael Carmody. If current commissioner Chris Jordan can maintain the momentum it will represent a major contribution to the changes Morrison is trying to engineer.

Similarly, the graduates coming out of most universities and many skills centres are not “job ready” for smaller and medium sized enterprises.

Every business affected

But COVID-19 has also created even deeper changes among traditional employees and every Australian business is now thinking through the ongoing consequences of the COVID-19 downturn. Few expect business to be the same again.

Business people are telling me that this crisis has created in many enterprises a team spirit akin to the “Team Australia” that Morrison talks about politically.

Many business proprietors have tried really hard to protect staff from the potentially horrific consequences. And the troops know it. The worker response, both tangible and intangible, has created a very different environment in so many enterprises.

Workers are as keen as mustard and anyone who is not pulling their weight is quickly identified by the workers themselves. The same applies to the networks of small contractors that enhance workforces.

On the other hand Zoom meetings have proven penetrating. There is nowhere for executives to hide. Executive weaknesses are exposed because everyone see the lines on executive faces close up. Talking “bullshit” is obvious. Screen meetings will shorten the careers of marginal executives who previously felt safe.

At the same time enterprises have discovered there are many external expenses that can be curtailed or cut without damaging the business. Customers who think they can delay payments are likely to have difficulty getting supplied. Everyone is quick to cut off further credit.

Most are not thinking about a pay increase and in many enterprises pay cuts from the bottom ranks to the chairman are prevalent.

And most surviving business are trying to work out what they should do to thank their workforce. Morrison has tapped that mood. Whether his summits capture it is yet to be seen.