Coronavirus: Scott Morrison urged to use crisis to drive IR overhaul

Gary Banks has urged the government to use the ‘burning platform’ of the recession to make major changes to industrial relations.

Former Productivity Commission chair Gary Banks.

Former Productivity Commission chair Gary Banks has urged the Morrison government to use the “burning platform” of the coronavirus recession to make major changes to a “bygone” industrial relations system.

At a conference organised by the Queensland Productivity Commission, Mr Banks also criticised the federal government’s plans to subsidise local manufacturing and wages.

Referring to the Coalition’s plan to assign $1.4bn to six ­national manufacturing priorities as part of its “modern manufacturing strategy”, he warned: “It is not clear from the announcement why those sectors have been singled out or what the economic rationale for subsidising them might be.

“While job creation is cited, this appears an unpromising way of achieving it, especially given an acknowledged deficiency of the requisite skills locally.”

Mr Banks, who was chair of the commission from 1998 to 2012, also urged far-reaching changes to a workplace system that was a “legacy of a bygone era” a week ahead of the expected released of the Coalition’s proposals to reform the system.

“Further complexities, delays (and catch-22s) confront those enterprises and their workforces attempting to secure mutually beneficial variations,” he said.

Attorney-General Christian Porter announced in June that five “working groups” comprising union and employers groups would be tasked with agreeing on ways to improve and simplify the industrial relations system.

“(The current system is) the antithesis of the sort of regulatory system needed to secure efficient enterprise adjustment and job creation, or even equitable treatment of the wider workforce,” Mr Banks said.

“Rather than be constrained by what these parties can agree on, it is to be hoped that the government would use those lengthy discussions to gain public credibility in making its own call.”

Last week Scott Morrison told business leaders the “better-off-overall test”, which requires every employee in an organisation to be better off from any negotiated agreement, might be modified.

“I don’t expect our reforms will lead to people having parades in the streets or the opposite,” he said.

Mr Banks said caution on ­industrial reform was “understandable” in light of the Howard government’s Work Choices ­reforms, widely seen as the reason the Coalition lost the 2007 ­election.