Right to disconnect IR laws show the government is disconnected from reality

Anthony Albanese, who has never run a business, also disconnected from reality when he said the right to disconnect would boost productivity.

Long-term economic thinking matters in politics and Jim Chalmers, in his Curtin oration on Monday night, showed he had an eye on the future. The Treasurer is looking beyond 2030, when a “fourth economy” will unfold beyond the agriculture and mining, manufacturing and services economies. AI rather than IT; the care economy serving the needs of people living longer, healthier lives; renewable energy; and our region accounting for half the world’s output – these will be the contours of that fourth economy, Dr Chalmers said.

Faced with immense change over the horizon, the government is right to be looking ahead. And its guiding light, “to help ensure our people, businesses and communities are beneficiaries, not victims of churn and change”, is the right aspiration. Where the government and Dr Chalmers falter is when he says “our primary focus is on dealing with immediate challenges in our economy and easing the cost of living”.

The latest industrial relations changes, which took effect on Monday, will do neither. Rather than improving productivity, the changes are set to entrench or worsen current sluggishness at the expense of growth, living standards and inflation. At its August meeting, the Reserve Bank board noted “the need for productivity growth to recover in order to help reduce growth in unit labour costs”.

Workplace Relations Minister Murray Watt is stretching credulity when he says he wants employers and workers to “have a discussion … talk about what’s reasonable” as regards to the new right to disconnect law. From now, companies can be fined almost $20,000 for making unreasonable contact with staff outside working hours. Anthony Albanese, who has never run a business, also disconnected from reality when he said the right to disconnect would boost productivity. The Prime Minister said when “people are actually loyal to their employer and focused on what they should be doing and not being distracted during 24 hours a day but focused on eight hours a day or, if they’re working longer hours than that, longer, you’ll get a more productive workforce. The idea that you should be on call at 10 o’clock at night if you work a 9-to-5 job isn’t reasonable.”

Nor, in general, does it happen. But industries vary, which is why work practices and conditions are best worked out between employers and staff rather than a rigid, one-size-fits-all centralised system.

From miners and transport companies to services, small business and hospitality, the likelihood of productivity being crushed under what industry describes as the new “hellishly complex” 700-page rule book is evident from the nature of the rules. They clamp down on use of independent contractors, make it easier for casual workers to become permanent and empower the Fair Work Commission to set minimum standards for gig economy staff. As the screws tighten on an already over-regulated system, the style of which was superseded 40 years ago, wealth and living standards will lose out.

In looking to the future, Dr Chalmers should consider that the new IR regime will be nation-changing and implemented over years, as Robert Gottliebsen writes. Long-term, it will substantially increase union membership, even if that means gradually lowering productivity. Family enterprises are failing at a rapid rate, Gottliebsen notes, with many cutting back on hiring and considering retrenchments. GDP per capita is falling. In his oration, Dr Chalmers envisages transforming the nation’s industrial base and putting living standards on a higher trajectory, with an emphasis on human capital, investment flows, technology and the care economy. But repressive and regressive IR changes are a major impediment to that outcome.