"The Federal Government should not proceed with its proposed Secure Australian Jobs Framework or the Commonwealth Supplier Code of Conduct, which are economically irresponsible, deeply flawed and will inevitably drive-up government spending," said Innes Willox, Chief Executive of the national employer association, Australian Industry Group.
"No costings or economic modelling have been provided on these proposed changes which directly link government procurement to pro-union industrial relations outcomes and will result in the spending of significant taxpayer dollars to fund the growth and reach of unions.
"The proposed implementation of the Secure Australian Jobs Framework is intended to enable the Government to use its procurement practices to drive employers it contracts with, as well as potentially ultimately those it funds through grants and other arrangements, to adopt a range of pro-union workplace relations practices well beyond current legal requirements.
"The proposal will inevitably greatly reduce competition in government procurement, reduce workplace flexibility and greatly raise the costs of businesses providing services to government. The Federal Government has clearly learnt nothing from the Victorian experience of waste and cost blow-outs from involving unions in the procurement process.
"Elements of the framework are clearly calibrated to pressure employers to agree to engage in enterprise bargaining with a union. Discriminating against employers on this basis was unlawful until recent legislative changes were pushed through parliament despite strong industry objections," Mr Willox said.
"While the Government has stopped short of a blanket requirement that employers enter into enterprise agreements with unions in order to obtain work with it, the proposal makes it clear that whether an employer has an agreement covering a union will be weighed in procurement decisions.
"A big risk is that the changes will make unions the 'gate-keepers' on who can have a procurement arrangement with the Government. They will inevitably leverage this new framework to pressure employers into entering into unsustainably costly agreements.
"Equally troubling is the expectation that employers will be expected to facilitate new workers meeting with unions as part of their workplace induction. This is little more than a Government-funded union recruitment drive.
"The Commonwealth spent $105 billion on procurement in the 2024-25 financial year, equivalent to 3.8% of GDP and 14% of all federal spending. The proposed code will greatly raise these procurement costs for the taxpayer.
"Ultimately, we will all pick up the bill. We only need to look at the shameful waste of public spending in the construction sector in Victoria and Queensland flowing from linking Government procurement to industrial relations.
"The framework would also compound existing labour-supply constraints by placing further limits on the lawful forms of labour that suppliers may use. Preferencing particular employment models, workforce compositions or sources of labour would reduce suppliers' capacity to respond to skills shortages, fluctuating demand, project-based work and regional or specialist requirements.
"Compliance with the framework may also exclude otherwise suitable workers who prefer or are available only through casual, fixed-term, labour-hire or other lawful arrangements.
"A smaller effective labour pool would increase recruitment, retention, overtime, travel, accommodation and training costs, delay mobilisation and service delivery, and reduce supplier participation and competition.
"Procurement policy should not constrain lawful workforce models.
"The framework would overlay our already complex and highly prescriptive workplace relations laws with another layer of costly expectations on employers. The dust has not yet settled on an avalanche of changes to workplace relations laws introduced during the last term of Government.
"Separate to any concerns over specific elements of the framework, the Government has done no economic analysis of the impact of the proposals. Higher Government spending on procurement will put further pressure on the budget and significant upward pressure on inflation and interest rates.
"Set against a sustained lack of any meaningful productivity growth and an absence of any identifiable plan to turn this around, proceeding with the proposal in its current form would be economically reckless. Precise modelling of the expected impact of the Framework should, responsibly, be developed and released for consultation and scrutiny prior to its finalisation," Mr Willox said.
Australian Industry Group's submission on the Secure Australian Jobs Framework is available here
