Excessive Powers of Unions Confirmed

Confirmation of the HR Nicholls Society’s view that  the existing workplace regulations are damaging productivity has emerged with yesterday’s revelation that crane lifts on wharves in the East Coast are about 20% higher than in Fremantle. The lower rate there reflects the go-slow tactics adopted by the Maritime Union of Australia in its attempt to obtain from the $52 bn LNG Chevron project in Western Australia a 26% wage increase over 4 years including a claim for personal toilets. It is little short of a disgrace that the MUA, one of Australia’s most powerful trade unions (which has  a long standing “history” of  creating low productivity working environments), is able to operate without fear of the Fair Work Commission imposing a penalty sufficient to force it to stop action that disrupts business activity and lowers productivity.

Other concerns that high costs are being imposed on companies involved in developing LNG projects also emerged yesterday. Woodside’s chief executive drew attention to the growing competition from other LNG projects and our diminishing competitiveness. Clearly, the government must give priority to putting legislation in place that will ensure Australian companies are not prevented by union activities from proceeding with projects which have national importance.

Nothing can better illustrate the  unwarranted powers acquired by unions under existing legislation than the astonishing “offer” by the Construction, Forestry, Mining &Energy Union (CFMEU) to pay a fine of $350-500,000 for blockading a Grocon construction project in Melbourne. Clearly the CFMEU, reported to have assets totalling over $60mn, had “allowed” for the incurring of such costs when planning the blockade designed to prevent independent contractors operating.

It must be hoped that the Victorian Supreme Court, now considering the fine, gives no discount on what should be done but adds a warning that the punishment for future such incidents (which the CFMEU has foreshadowed) may be extended beyond fines.

In 1986 the then Federal Labor government effectively acted to outlaw the Builders Laborers Federation. Similar action would be justified by an incoming Abbott government.

The failure of the Fair Work legislation is further illustrated by Prime Minister Rudd’s decision yesterday that, if re-elected, his government will appoint a small business adviser to help companies to navigate disputes through the Fair Work Ombudsman and provide $200,000 to the small business lobby group. This acknowledgement of defective legislation should lead to Coalition leader Tony Abbott announcing that his already promised amendments will markedly reduce the capacity of unions to engender disputes and require a mediatory type approach which treats employers and employees as equals as under ACAS in the UK.

The HR Nicholls release on Friday also drew attention to the awarding of massive increases in wage rates for apprentices by a Fair Work Commission staffed entirely by ex-unionists. This almost unbelievable action was widely condemned yesterday outside the union movement in circumstances where apprentice numbers are reportedly at record lows and where participation rates by the young have dropped dramatically from 72% in 2008-09 to 67% today.

It is now abundantly clear that Tony Abbott must make major changes to the existing legislation just to reach the “sensible centre” and remove the bias evident in the existing arrangements. It is a pity this was not made clear in today’s campaign launch. The ABBC and other minor reforms are welcome but will not change the behavior of militant unions. Unless the Coalition seriously addresses these union issues before 2017/18 the lost opportunities and costs will be significant and the economy will have endured four more years of stagnant living standards and higher unemployment.

Adequate amendments would also increase the capacity of (in particular) resource companies to employ indigenous Australian. The huge costs being imposed on that sector under Labor’s Fair Work legislation is reducing its capacity to help with that important objective.

Adam Bisits, President HR Nicholls Society (0438 405 527)

Publicity Officer: Des Moore (9867 1235)

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