Industrial relations reforms offer more bang for the buck

How do you prefer your industrial relations reforms? Do you prefer quiet macro reform, with low risk and a high return, or noisy micro reform with high risk and a low return? If the former is preferred, then move beyond the penalty rates issue.

We have an urgent reform journey to undertake. The benefits are enormous. Australia could be transformed. It is such a shame, then, to find ourselves, before we have begun, waylaid by a meaningless diversion. Here we are, wringing our hands over a coffee shop worker’s Sunday pay rate, contemplating if we could be so bold as to reduce it to a Saturday rate.

The hyper focus on this issue has become tiresome. The debate is absurd and the angst unnecessary. Does anyone really think reducing the Sunday pay rates to Saturday rates for retail and hospitality workers not already covered by enterprise agreements will have a substantial economic benefit?

Does anyone imagine people considering investing in this country will change their decision if someone shrieks, “Stop! For Christ’s sake, don’t invest in Australia! Don’t you know that some Sunday workers there get double time and a half?”

This week, Malcolm Turnbull said of possible changes: “Any reform has got to be able to demonstrate that people are certainly not going to be worse off and, overall ideally in net terms, better off.”

If this is the intended outcome of any future reform, then we can stop talking about the issue now because this capacity has existed since 2009.

Even though employers don’t know about it or won’t even try it, penalty rates can be eliminated with individual one- page contracts providing the worker is better off overall, with non-monetary benefits permitted to be factored into the equation. These contracts do not have to be lodged with the Fair Work Commission.

The penalty rates issue is a symbolic one fraught with political danger. Some put it up as the key reform willingness test of the government. Legislating to cut people’s pay is presented as a minor reform that we could begin with. In reality, it is a major reform the government should prioritise last. Haven’t we learned that people are not willing to vote for the idea of cutting their own or someone else’s pay?

In any case, now the Prime Minister has ruled out making any changes that leave people worse off, there is nothing left to talk about. The next person to mention bloody penalty rates will be tasered, OK? Let us begin our reform efforts with meaningful changes that will deliver impressive results.

The industrial relations changes Australia most needs to make are low risk and high return and don’t even require changes to the Fair Work Act. Believe or not, they will be easy to implement. They require small changes to corporations and competition law, fit neatly into the belief system of a true liberal mindset, will prove immensely popular electorally and, as far as economic outcomes go, offer a whole lot of bang for the buck. Here they are, in order of importance/benefit.

● It should be illegal for any person employed by or acting on behalf of a corporation to propose or require that a person employed by or acting on behalf of another corporation might or should make contact with a union official or enter into any form of agreement with a union official. It also should be illegal for any company to interfere in or seek control over the internal employment arrangements of any other company. These changes would drop the cost of our infrastructure by 30 per cent and revolutionise work practices in transport, maritime, resources and construction sectors.

● It should be illegal for any person employed by or acting on behalf of any corporation to have any financial transaction with a union official or have, at the suggestion of a union official, any financial transaction with any other business or person. This would cripple the corrupt unions financially and force all unions to focus on looking after their members. It also would wipe out the revenue of all dodgy union-owned businesses.

● All workers must have the right to join a union of their choice, or not join any union. It should be illegal for any employer to join people up to a union. This change could halve the levels of union membership in the private sector.

● Employer groups, unions and the businesses they own should be brought under the Corporations Act and made to pay income tax. This will bring these institutions into the real world and stop the cosy deals we all pay for in the long run.

Expect the employer groups and the unions to pooh-pooh these reforms. Many of these institutions are the recalcitrant shop stewards of our nation and the biggest obstacle to progress. We should force them to modernise and offer value for money. For instance, employer groups might learn to show the business sector how easy it would be to exit the enterprise bargaining treadmill permanently. They might stop frightening people about the unfair dismissal system and show how simple it would be to dismiss people legally.

These reforms would be nationally transformative and revolutionise our economy, and they would not leave a single worker worse off. In fact, they are premised on protecting the rights of individuals and the liberties of the free market.

Now all we need is someone with the moral fortitude to ensure their implementation. Is there anybody out there? Pray that there is.