BHP says same job, same pay will be an economic drag on Australia

BHP boss Mike Henry says same job, same pay will be a ’productivity killer’ and make it harder to justify investing in Australia.

Same job, same pay will be a “productivity killer” which will cost BHP $1.5bn a year and create an economic drag on the nation, the global miner’s chief executive Mike Henry says.

Speaking at a Business Council of Australia forum in Adelaide on Wednesday, Mr Henry said Australia had to address labour productivity and regulation if it had any hope of competing for investment on the world stage, adding it would be “crazy’ to try and out-do jurisdictions such as the US when it came to subsidies.

Mr Henry said Australia needed to be best in class when it came to the ease of doing business, but said the nation was actually going in the wrong direction at the moment and implored the political class to “stop doing more harm’’.

“For us to make these investments ... reality, it’s all going to be about productivity - how quickly, how low cost can we get a project built?’’ Mr Henry said.

“How can we ensure that the workforce is as productive as possible once the facility is actually up and running?”

Cutting permitting times was key to this, Mr Henry said.

“The other one though, is going to be labour productivity, and you ask the question, what can we do to enhance productivity?

“ I would put my hand up and said stop doing more harm.

“Because some of the policies that are getting deployed, in particular on the industrial relations front at a national level ... these are going to be productivity killers.

“You look at ‘same job, same pay’, cost-wise alone, that will cost BHP in this country $1.5 billion per annum.

“The implication of that is it makes investments much harder, returns drop relative to competing investments elsewhere in the world.’’

Mr Henry said that money would not come out of a “pile of gold” somewhere within BHP, but out of the pockets of BHP shareholders, including 17 million Australians.

“This is taking out of retirement savings for all of those shareholders in BHP to address something that we don’t see as a real issue here and inhibits productivity, which is going to create economic drag on the nation.’’

Same job, same pay was a Labor pre-election promise, and would force employers to pay labour hire workers the same as other employees in the same roles. But defining what “same job” meant was at the crux of the issue, BCA chief executive Jennifer Westacott said.

Ms Westacott said it made no sense that someone coming into an organisation should immediately be granted the pay and conditions of a seasoned employee.

“My question is, how fair will it be?’’ Ms Westacott said.

Ms Westacott said the integrity of the enterprise bargaining system set up by the Hawke-Keating government could be undermined by same-job, same pay, which would leave the broader economy much worse off.

“The enterprise agreement system developed by Bob Hawke and Paul Keating is the system that has driven and given us labour productivity,’’ she said.

“And it has given us cooperative workplaces, it has given us innovation.’’

Ms Westacott said the new regime risked EBAs being seen as too difficult and risky.

She said the BCA was not opposed to higher wages, and had never opposed an increase in the minimum wage.

“We want people to earn better wages, we want them to be in better jobs,’’ she said.

“But if we don’t create the conditions for productivity, and we don’t create the conditions for investment, we make it really, really hard particularly for small businesses. They’ve got two choices - you put your prices up or you hire less.

“What we’re calling for is just some common sense, saying ‘what’s the problem here we want to solve for, solve for that’.

“But if it’s an ideological thing about getting the unions into the gig economy or running some agenda on same job, same pay, that is not the answer to our problems.’’

Originally published as BHP says same job, same pay will be an economic drag on Australia