Passage of disappointing IR Bill delivers nothing for economy, productivity or employment growth

“The passage through Parliament today of the Government’s industrial relations proposals will burden employers with a dud piece of legislation delivering zero productivity growth and imposing regressive changes to Australia’s workplace relations arrangements with no guarantee of wages growth. It puts at serious risk the recent strong gains in employment and the inroads that have been made into unemployment and underemployment,” Innes Willox, Chief Executive of the national employer association Ai Group said today.

“Employers are deeply disappointed with how the Bill was rushed into law with no time to look seriously at many hundreds of amendments. Some of the late changes that dealt with key provisions of the Bill such as the operation of the single-interest bargaining stream remain far from clear.

“Previous Labor and Coalition governments spent weeks in responsive consultations with experts from unions and employer groups before introducing IR law changes through the Committee on Industrial Legislation (COIL) processes. For example, there were two weeks of formal consultations before the Fair Work Act was introduced in 2009 – consultations which the then Minister, Julia Gillard, said considerably improved how the Bill would operate.

“This Government allowed only one day of COIL meetings weeks ago before introducing a raft of new amendments on a Bill implementing the biggest changes in workplace relations arrangements for many years.

“It was a flawed process that is delivering confused and vague legislation that will lead to a costly lawyer’s picnic.

“The Government has signalled that there will be a further tranche of IR changes next year. We would urge the Government not to rush through that legislation and to take the time for detailed consultation through COIL and other means.

“The very justification for the laws as being a means to address the decline in the wages share of income is based on a misrepresentation of the facts. ABS data show that, outside of the extraordinary circumstances of the mining sector, the wages share of national income rose over the period between June 2010 and June 2022.

“Inflation is clearly creating difficulties for households. But agreements being negotiated at the enterprise level this year are showing significantly larger rises in nominal wage rates and the process of catch-up from the in-built inertia in wage setting is clearly in train. It should be noted that private sector wage increases are far exceeding those for the public sector and the Federal Government’s current wage offer to its employees is well below both inflation and the bulk of the private sector.

“Instead of improving the enterprise bargaining system to help deliver outcomes suited to individual workplaces, we are now lumbered with backward-looking initiatives to expand multi-employer bargaining and reintroduce near-compulsory arbitration that is simply incapable of considering the circumstances of, and opportunities for productivity gains at individual workplaces.

“Employers are not suggesting the sky will fall in tomorrow. But that is a very low bar. It will take time for the damage to appear. But there is extreme concern from employers around how the legislation will impact their businesses in the medium and longer terms.

“The winners from this new legislation are the unions. The losers unfortunately will be the community because of higher costs, inflation, more disruptive industrial action, lower growth of employment opportunities and higher unemployment.

“Next year, the Government must shift its focus to initiatives that will make a real difference to productivity and sustainable real wages growth. It could start with looking at the Productivity Commission’s last five-yearly review of Australia’s productivity performance and acting on its recommendations and then taking seriously the current Productivity Commission review when it is released next year,” Mr Willox said.

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