Union Activity During the Election Campaign

Although unions appear in this campaign to have less funding to help Labor (and themselves) than in 2007, union criticism of Coalition policies (or supposed policies) is increasing and there is precious little analysis in the media of such critiques. The AFR report (below) on union advertising is basically descriptive and, while my attempt to draw attention to the internal contradictions was published (see letter below), the editor chose to omit the important last sentence.

The acknowledgement in the PEFO that the economy may grow at a much lower rate than the official forecast adds weight to the need for structural reforms that would help lift investment, employment and productivity, such as IR and regulatory (particularly environmental) reforms. It almost takes us back to the early 1980s when Hawke called a meeting of business leaders and Wran ran with “a jobs, jobs, jobs first” agenda. Today, we don’t have the inflation problem that existed then but, with people dropping out of the work force, we need a reforming program to help/encourage business to create jobs. The steady downward trend in business confidence (the latest NAB survey is almost down to levels reached in the GFC) highlights the many regulatory problems faced by business, but which have so far received little attention in the election campaign. Important as the budget figuring is, the micro reforms are being overlooked.

It is of some importance that Holden workers appear to have accepted some kind of wage freeze. With our unit labour costs now being much higher than most other countries in the OECD, the case for changing out award system is very strong.

Des Moore is a member of the HR Nicholls Society Board of Management Read more

When Labour Lawyers Get Together

Des Moore Write:

As some will already be aware, Workplace Express (WE) is an organisation which publishes daily reports on decisions made by the Fair Work Commission and by courts on workplace relations. It also publishes reports on events where presentations are made on workplace relations issues.

On 22 July WE published reports on the annual labour law conference held at the Hilton in Sydney under the auspices  of the University of Sydney’s Workplace Research Centre.  One of the eleven speakers was Josh Bornstein, a Principal of Maurice Blackburn and a  self-described “employment lawyer”. Bornstein is well-known  as a strong supporter of the regulatory system and as a critic of any who oppose that approach. On this occasion he did not hold back.

Below are the WE report of the speech by Bornstein and of my critique (made after forcing myself to read the full text). WE agreed to publish my critique after I contacted it and pointed out that Bornstein had made an error in his calculation of the increase in productivity over the past year. An AMMA official, Scott Barklamb (just back from a spell at the ILO), apparently also complained to WE about aspects of the Bornstein address and he (Scott) makes some very useful additional criticisms.

Given the current state of our universities, it is not surprising that even though the University of Sydney has a Workplace Research Centre, it appears to have arranged this conference without inviting speakers who advocate a deregulated system. Almost all the speakers appear to be regulator advocates or sympathisers, although the title for this year’s conference  “Beyond ‘Groundhog Day’: Can productivity and fairness be improved without further ‘labour law reform’?” suggests that even those advocates may be thinking it has gone far enough.

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Productivity and the Pathway to Success

My letter in Saturday’s Australian (below) contains, naturally, only a limited coverage of developments under Labor in productivity and labour costs.  Although these developments reflect various influences,  there is an important question as to why they did not perform better in circumstances where Labor has continually boasted about the growth in the economy  being in line with trend of 3-3.5% per annum and economic growth also being much better than in most other countries.  The following might be added.

>The graphs attached to Rudd’s address to the Press Club show the changes in economic growth in selected other countries compared with Australia under Labor since the December quarter  2007. The comparison is not on a per head basis. I have not done the per head calculation but it would probably deflate the aggregate comparison favouring Australia by 4-5 percentage points. The graphs also show one year comparisons of budget balances and net debt (including on a per head basis) but no data on employment growth or increases in labour costs.

>During the 11 years the Coalition was in office labour productivity grew at an annual rate of about 2 per cent, much faster than under Labor.

>Labor has frequently boasted about the 900,000 jobs created (sic) during its period in office (recently this seems to have been increased to 1,000,000). But the rate of growth in employment  has averaged much less than under the Coalition – 1.6 per cent per year (now down to 1.3%) compared with 2.7 per cent per year over a similar period of time.

> Under Labor the unemployment rate has increased by 1.8 percentage points. Under the Coalition it fell over a similar period of time by 1.2 percentage points.

>Prima facie the diminishing growth rate in employment, and increase in unemployment, in circumstances where the economy has grown at trend confirms a faulty regulatory system. Indeed, one could equate the diminishing employment growth with the  increasing regulatory growth. Read more

Rudd on the Economy

In yesterday’s Press Club address Prime Minister Rudd rightly argues for policies that lift productivity and improve Australia’s international competitiveness. The address, text attached, contains numerous assertions about what is needed to attain such objectives. But Rudd fails to explain why previous Labor policies did not achieve them and he is short on detail about the policies which Labor will now be able to adopt successfully.

It is, for example, easy to assert that we need “a new approach to the regulatory impost on business from all levels of government”. But how then to now achieve the “one single integrated assessment system” Labor failed to reach? Rudd has apparently discussed (!) this with NSW Premier O’Farrell – but how to get agreement with State and Local governments on a matter that has long been disputed in our federation and in regard to which the Commonwealth itself under Labor has failed miserably, particularly in regard to environment decisions. In short, as Labor has tried and failed already, including under Rudd Part 1, how might it now succeed? Read more

Labor’s Poor Record on Jobs

Below is an extract from an article published on Wednesdays’ AFR opinion page, with the addition of the last half of the article in italics. This analysis has been put together as part of a series of Fact Sheets being published by the HR Nicholls Society in the lead up to the election scheduled for 14 September.

Wednesday’s article addresses the oft repeated claim by the Gillard government  (most notably by Treasurer Swan) that 900,000 jobs have been “created” under Labor. Even leaving aside the question of whether governments create jobs, the analysis below shows that the growth in employment under Labor has been relatively poor when compared with the recent past – certainly nothing to write home about.

Of particular interest is that more Australians are now out of work than during the height of the global financial crisis.

The poor performance of the labour market under Labor undoubtedly reflects in part the increased regulation under the so-called Fair Work legislation and the administration thereof. This regulation, which considerably increases the power of the union movement, will be examined at the conference on “Unions in Control?” being held by the HR Nicholls Society on 8 July at Morgan’s 401 Collins St.  Read more