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2019 election battle-lines drawn on industrial relations

10th March, 2019

The federal election will be held in May, only a couple of months from now.

Last week, Labor leader Bill Shorten declared that the election “will be a referendum on wages … a contest about who the economy should work for, whose interests the system should serve.” He drew attention to Australia’s recent “record lows in wages growth, stagnant real wages and cuts to penalty rates.”

The Opposition Leader argued that the wage-setting system needs reform, enabling the Fair Work Commission (FWC) to determine a “living wage” that reflects modern cost of living pressures faced by working people.

The living wage concept has been pushed by the Australian Council of Trade Unions (ACTU), which wants to see the minimum wage tied to 60% of the median wage. Shorten hasn’t nominated a target of that kind. He has simply said the FWC should set the living wage rate – presumably using differently-oriented and more prescriptive criteria than those currently used by the tribunal in its Annual Wage Review process.

The Government’s response was to fall back on more general arguments about wages growth improving through growth in the economy overall. In sync, business organisations like Australian Industry Group argued that driving up wages would harm employment levels and particularly the job prospects of the young unemployed.

The Government doesn’t have much of an agenda on industrial relations. For over 3 years, it has sat on a Productivity Commission Report which recommended some (though not extensive) revamping of the Fair Work Act framework introduced by Labor in 2009. The Government’s policy interventions are generally responsive – e.g. a regulation introduced in late 2018 seeking to address potential ‘double-dipping’ by casual employees in the wake of the Federal Court decision in Workpac v Skene, and an announcement last month of tighter restrictions on union right of entry to work sites. 

More significant was last week’s announcement of a further crackdown on exploitative businesses which engage in ‘wage theft’, including criminal liability for serious workplace law breaches. The Government’s proposals, responding to the Final Report of the Migrant Workers Taskforce, are covered in a separate post at: https://labourlawdownunder.com.au/?p=565 

Labor has made a series of wide-ranging commitments over the last 2 years to shake up key elements of the workplace relations framework. In a sense, it has been pushed to be quite bold on IR reform because of the demands articulated by the ACTU through the #changetherules campaign. So it was quite interesting to see Shorten also talking last week about the need for consensus, and the importance of businesses for job creation and national wealth. All very Hawke-esque (the ‘spirit of the Accord’ was even mentioned!). But it might also be an important signal that, if elected PM, Shorten won’t simply be in thrall to the union agenda.

Finally, last week the ACTU declared a nation-wide pre-election day of protest to take place on 10 April. By then, the campaign for the ‘referendum on wages’ will most likely be in full swing. The question is whether the Government has any more to say on IR, or will continue to play it safe (as it has mostly done since the ‘Work Choices’ election in 2007).

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