Labor rejects Productivity Commission head Gary Banks's workplace challenge

WORKPLACE Minister Bill Shorten has rejected a push for competition rules to be applied to the labour market, declaring “people are not products”.

WORKPLACE Minister Bill Shorten has rejected a push for national competition rules to be applied to the labour market, declaring "people are not products".

Mr Shorten said a Labor government would never allow wages and conditions to be determined by the market alone.

Productivity Commission chairman Gary Banks had challenged the government to expose industrial relations laws and unions to greater scrutiny under a sweeping review of laws governing anti-competitive conduct.

He questioned the long-standing rationale for exempting unions from anti-competitive conduct provisions - that labour markets are more complex than product markets because they involve a human dimension.

Mr Shorten said the Fair Work Act was designed to limit competition in the labour market, through the mandating of minimum employment standards.

“This does not mean that labour markets are not competitive, but that the labour market is not unfettered,” he told The Australian Online.

“A Labor government will never support leaving the wages and conditions of Australian workers to the market alone.

“The bottom line is that people are not products.”

Earlier, Tony Abbott vowed to tackle productivity constraints in the labour market if elected to government.

“We will come up with a policy in good time before the next election which will address the specific problems we've got,” he said.

“We do need to tackle this issue, but as far as workplace relations are concerned, it's got to be careful, cautious, responsible, pragmatic, and that's what people will get from an incoming Coalition government.”

Mr Banks told an Economics Society conference in Melbourne that the commission's recent review of the retail industry had raised questions about whether Labor's Fair Work legislation had shifted the cost-benefit balance “adversely”.

The commission had highlighted problems faced by retailers caused by the legislation's test for whether workers were better off overall, individual flexibility agreements and high penalty rates of pay.

Similar concerns had been raised in the commission's current review of the default arrangements under which superannuation contributions were allocated to industry funds.

“While ensuring people are treated fairly, any trade-offs with productivity and competition with specific regulatory instruments need to be carefully considered and reassessed over time,” Mr Banks said.

Mr Shorten said the government wanted to boost productivity and prosperity, but not through a “race to the bottom”.

He said the Fair Work Act, with its focus on collective bargaining, allowed plenty of scope for deals that benefited both workers and firms.

“We will always stand by the safety net, while those on the conservative side of politics believe that the only way to increase competition and productivity is to strip away safeguards and entitlements from Australian workers,” he said.

“That has never been consistent with Labor values, and it never will be.”

Opposition workplace relations spokesman Eric Abetz said Mr Banks's comments vindicated the Coalition's call for the Productivity Commission to undertake the current Fair Work Act review.

“This highlights the Productivity Commission's frustration after it was deliberately sidelined by Labor,” Senator Abetz said.

“The Coalition said last year that the Productivity Commission should conduct the Fair Work Review but Labor refused to allow it to do so.

“The Fair Work Review should have been given the freedom to explore all of the issues that impact on job security.”