Future Made in Australia must not mean higher costs, lower productivity

The criminal excesses of the CFMEU provide ample warning of the dangers that can come if government gives preferential treatment to union organisations where large sums of taxpayer money are at stake. Only a forensic investigation could come close to establishing how much the costs of major infrastructure projects have been inflated because of corrupt and intimidatory dealings by unions. It is for this reason that business leaders are right to question where the federal government’s Future Made in Australia policies are heading.

We have been critical of the Albanese government’s attempts to use industry policy to try to pick winners and achieve ideological ends. The danger is that scarce resources risk being allocated to preferred government objectives rather than areas that provide a better financial and social return for taxpayers and citizens. The difficulties being experienced in establishing a commercial hydrogen industry at scale, even with generous government subsidies, is a timely reminder that government has no place mandating what the next big business opportunity should be.

As the Business Council of Australia has warned, the Future Made in Australia agenda goes much further than this. It is an extension of the Albanese government’s industrial relations reform agenda that seeks to strengthen the role of trade unions throughout the economy. The Future Made in Australia legislation could pave the way for industry-wide, union-mandated agreements that increase costs and duplicate existing workplace regulations.

The Electrical Trades Union has set out how it believes trade union interests should be prioritised through the already expensive and complicated energy transition. The ETU wants government to mandate industry rates and conditions across all areas of the energy transition and establish a clean energy jobs co-ordinator to administer employment throughout the sector. The aim is to preference high-paid trade union workers over skilled migrants. The end result will be wage-price inflation that will affect the whole economy. As the BCA warns, setting union-endorsed agreements as part of government procurement requirements can limit competition and increase costs. The corrupt practices surrounding the CFMEU provide a critical example of what happens when unions are given too much power and politicians are too weak to rein them in. The Albanese government must concentrate on getting Labor’s house in order on the CFMEU before it spreads the dangers more broadly through the workplace as it repeats mistakes of the past with misguided industry policy.