NAB warns industrial relations changes risk creating more complication

The NAB boss has indicated concerns with changes to industrial relations laws which could hit hard specific industries like agriculture and retail.

NAB chief executive Ross McEwan.

The boss of National Australia Bank, the country’s biggest business lender, has warned the government’s proposed changes to industrial laws risks baking in complexity to the economic system and endangering the agricultural sector.

Speaking on the sidelines after delivering a $7.73bn cash profit on Thursday NAB chief executive Ross McEwan said the bank was concerned about the proposed “same job, same pay” industrial relations changes.

Mr McEwan said the current industrial relations system was a “struggle” to administer already, with complex awards and enterprise agreements creating the potential for underpayments.

NAB, the biggest business lender in Australia, has a massive network of bankers who deal with corporations and small and medium enterprises who use the bank’s services.

“One of the things that disturbs me with the industrial relations legislation is the complexity we struggle today to administer,” Mr McEwan said.

“To think that we don’t want to pay them the right amount and are stealing money off (workers) is not true.”

Mr McEwan said he had concerns the proposed legislation would bake in complex regulations for businesses to abide by.

“It’s not about the money, it’s about the complexity that’s being built in,” he said,

“Businesses are going to end up making mistakes.”

The Coalition has savaged the government over its proposed bill, warning it would damage the Australian economy.

The proposed bill would allow workers or unions to apply to the Fair Work Commission for orders to receive the same pay if they “supply employees to work for a host organisation”.

Unveiling its results on Thursday NAB revealed the bank was seeing signs of stress throughout the economy with construction, retail, tourism, and hospitality companies at the forefront.

Mr McEwan said he was concerned the new laws risked making “this even worse”.

“How on earth a business is able to keep up with it, that is a real worry,” he said.

“If you look at the agricultural sector - we are in danger of making this far too complicated.”

Mr McEwan said the proposed laws risked making it too difficult to attract people to the agricultural sector.

“We have to step back and have a think about what the real important issues are. If it‘s around pay then it’s around pay,” he said.

Mr McEwans remarks come after BHP Australia CEO Geraldine Slattery warned on Wednesday the proposed legislation would add to costs for employers and break the relationship between work and productivity.

Ms Slattery said the laws would compel companies to pay people with little experience the same as veterans.

“That removes the opportunity and also the incentive for businesses to invest in their training capabilities and investments in technology to improve productivity,” she told The Australian’s Competitive Advantage forum.

Ms Slattery said BHP feared the new legislation would add as much as $200m to its costs for a proposed major investment in South Australia.

Lendlease Australia chief executive Dale Connor also noted his concerns the legislation could add another level of “complexity and bureaucracy” to doing business in Australia.