01/11/2011 - 09:10

Analysis: Qantas is Australia's Greece

01/11/2011 - 09:10


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Australians like to think that their country is in better shape than deeply indebted Europe, but if you analyse the Qantas dispute you discover an identical set of circumstances with time the only difference.

In Europe, financial mismanagement has taken years to become the crisis which has slowed growth, destroyed jobs and stifled investment.

In Australia, a mismanaged industrial relations system threatens to do the same – slowing growth, destroying jobs and stifling investment.

The common thread linking Europe and Australia is the appeal to government of “the easy option” in solving a problem despite appeals from business to take a tougher approach to problem solving.

There’s no point in rabbiting on about the easy option being the foolish option because everyone has a mother who told them that when they tried to skip school for a day.

Sadly, lessons learned young can be quickly forgotten because in Europe’s case there is a desperate scramble underway to find an easy way to dig the continent out from under a mountain debt.

So far, the only solution offered by the governments of the region is to write off a portion of the debts of totally bankrupt Greece, effectively transferring that failed country’s problems to the rest of the Europe which has been forced to borrow even more money.

The U.S. has done something similar in borrowing more to try and fix a crisis caused by borrowing too much in the first place, but there is a difference in the U.S. because it is also making deep cuts in government spending and searching for ways to encourage business growth.

Europe is doing nothing to encourage growth, and even less to curb government spending on an unaffordable social welfare system, or stop wasting money on politically popular but unaffordable green energy schemes while shutting its cost effective coal and nuclear power stations.

Australia has just started travelling the European road to a crisis by recreating an industrial relations systems which encourages damaging disputes between labour and capital.

Even if there is some strength in the argument that the Howard Government’s industrial relations system was too friendly to business there is no excuse for the Gillard Government to swing so far in favour of organised labour that it risks stopping the country in its tracks.

If that sounds like an extreme statement then consider what one (just one) industrial dispute did over the weekend – froze half the county’s aviation industry, paralysed the tourism industry, and sent a message to international investors that Australia is a dangerous place in which to invest.

Coming on top of the carbon tax and mining tax the Qantas dispute is a disaster which will have repercussions that go far beyond aviation.

Consider what the unions have learned from the dispute and how they can behave under the banner of Fair Work Australia (FWA). Strikes can be called, but not executed, making it almost impossible to run a company.

Rolling stoppages can be legally held, with a focus on the pressure points which do the most damage to a business and least damage to employees (in the short term anyway). Recourse to an arbitrator is a last resort and only when a national emergency is threatened.

What the unions learned with Qantas can now be applied to other industries, especially in a tight labour market and in industries which qualify as class enemies of the unions – with coal and iron ore companies in the cross hairs.

What business has learned is that the only defence under the rules of FWA is a lock-out, or face a slow corporate death by repeated strikes, and threats to strike.

It is not exaggerating to say that the Qantas dispute, and what it says about the future of industrial relations in Australia, is an utterly appalling signal to send to potential international investors, or tourists.

What the Australian Government has forgotten in its rush to replace the Howard Government’s laws in industrial relations and illegal immigration is that the world has “gone global”.

There are no secrets any more, thanks to modern communications. Illegal immigrants know that Australia has porous borders, just as potential investors know that we have become an investor unfriendly country.

Just as Europe’s seeds of financial crisis took years to appear, so too are Australia’s seeds of crisis just starting to geminate, ready to bloom after the euphoria of the resources boom fades.


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