Labor’s IR agenda ‘anti-productivity’, Innes Willox says

Employer lobbyist says government driven by ‘outdated union fixations’.

Australian Industry Group chief executive Innes Willox.

Much of the Albanese government’s workplace relations ­agenda is anti-productivity and driven by “outdated union fixations”, Australian Industry Group chief executive Innes Willox says.

In an address to the National Press Club on Wednesday, Mr Willox will say there are “red flags” in Australia’s economic performance due to the closely related slowdowns in productivity growth and the pace of improvement in real wages.

He says the stalling of productivity and real wages rates in the pre-Covid years “left us highly vulnerable to the inflation surge from mid-2021”.

“What has boosted average household income from wages is the surge in labour market participation, especially among women, and a strong growth in full-time employment,” he says.

“For very many households, the growth in incomes during this surge in employment has been higher than the sudden increase in consumer prices in the past couple of years.

“Let us not understate the pain thousands of households and businesses are going through right now as inflation and the necessary interest rate rises to curtail it take hold. And, sadly, there is more pain to come as hundreds of thousands of mortgages roll into the new world over the coming months, and energy, rents and other costs rise. We all know it hurts.”

According to extracts of his speech released ahead of his ­address, Mr Willox says the recent erosion of real wage rates driven by inflation is “not due, as some would argue, to the systematic failure of our labour arrangements”. “Rather, wage rates have recently lagged the sudden and unexpected price increases because of the inherent inertia in annual wage setting and multi-year agreements,” he says.

“There is a systemic problem in that we have seen a sustained drop in productivity growth for some time. We need to address that to fix the associated slowdown in the growth of real wages.

“Our government budgets are stuck in structural deficits disguised only by windfall commodity profits. Our geopolitics is uncertain. That is why we need to act quickly.

“Instead, here we are spending time talking about what is at its heart a misguided workplace agenda – driven by outdated union fixations – which threatens to make achieving the vital productivity growth we need even harder”.