Labor-business relationship sours over IR bill’s flaws

After winning government in May, Anthony Albanese said: “We need to change the way politics operates in this country.’’ Sections of his party have done so, dragging the vital relationship between government and business, large and small, to its lowest ebb in living memory. That is bad for the economy, and contrary to the national interest. On Tuesday, Reserve Bank governor Philip Lowe gave an economically orthodox speech at the annual dinner of the Committee for the Economic Development of Australia in Melbourne. As a country, Dr Lowe said, “we need to do what we can to make sure that the supply side of our own economy is flexible”. He urged policymakers to take up the pressing challenge of lifting the nation’s poor productivity as ­a way to insulate the country against shocks. The world was more vulnerable to damaging shocks, he said, from pressures such as deglobalisation, ageing societies, more frequent natural disasters, and the green-energy transition. “We can’t affect the international environment; we can affect our own ability to produce goods and services efficiently,” Dr Lowe said. He warned against making it harder for employers to hire and fire, or for workers to move between jobs. In his speech, he did not mention the government’s controversial Secure Jobs, Better Pay Bill, which it is battling to pass before Christmas.

Industry leaders and economists backed Mr Lowe’s speech, which challenged the government to get the budget under control, avoid a “painful” recession by pushing wages growth to keep pace with inflation and make workplaces more flexible and productive.

As opposition leader, the Prime Minister wisely steered Labor away from the damaging class warfare that was Bill Shorten’s hallmark as Labor leader. On Wednesday, unfortunately, Mr Shorten’s inner class warrior broke out, despite Dr Lowe not mentioning the IR bill specifically. In an over-reaction, Mr Shorten blasted Dr Lowe’s warning of a wage spiral as “rubbish”. Environment Minister Tanya Plibersek encouraged Australians to rally behind Labor’s IR policy if they wanted a wage increase. “The people who have missed out on wage increases over the past decade are the lowest-paid workers, and that is not fair,” she said. As Australian Industry Group chief executive Innes Willox told The Australian, it was “deeply unfortunate that various political figures have chosen to attack the RBA governor for again stating what is economically obvious”. Labor senator Tony Sheldon, a former ACTU vice-president and Transport Workers Union national secretary, fanned the flames, accusing Qantas chief Alan Joyce, an opponent of the IR legislation, of “mongrel corporate gorillaship” and a “war on the middle class”.

The fate of the legislation continues to rest in the hands of independent senator David Pocock. While Workplace Relations Minister Tony Burke is considering lifting the small business exemption from multi-employer bargaining from 15 employees to 20, Senator Pocock is not convinced it’s high enough to address his concerns. Businesses are also concerned about the costs of participating in multi-employer bargaining. The government has estimated the cost would be $14,638 for a small business, $75,148 for a medium business and $94,311 for a large business. That is based on an hourly rate of $175 for consultants and negotiators, but the Australian Chamber of Commerce and Industry says a more accurate market rate was $438 an hour. Such fees would be a heavy burden for businesses with no enthusiasm for the process they would be forced to pay for. At a time of high interest rates and soaring power costs, it is the last thing business needs. Regardless of whether the bill passes, the government’s relationship with business has been damaged to the detriment of the economy.