IR positions a top election issue

With a federal election likely to be called this month, possibly this weekend, its worth focusing on the key issue of industrial relations policy.

The Howard government’s WorkChoices reforms have been one of the main debating points over the past two years, after coming under sustained attack from Labor and the union movement.

The government has responded to the criticism, and the political fallout, by introducing a range of modified rules, including a ‘fairness test’, which has created a new set of problems.

This became particularly apparent last week when the federal government’s Workplace Authority said 30,000 Australian workplace agreements had failed because employers did not provide sufficient information.

The original intent of the WorkChoices reforms was to make life easier for employers, so they could negotiate flexible agreements directly with their staff.

The subsequent changes mean that WorkChoices is anything but easy.

Like the Howard government, Kevin Rudd’s opposition team has also watered down its policy position to ameliorate concerns.

Earlier this year, Labor deputy and industrial relations spokeswoman Julia Gillard, flagged what appeared to be a major rollback of the industrial relations reforms that have contributed to Australia’s current prosperity.

This included moving to a far more centralised wage fixing structure, a bigger role for unions, and abolition of the Australian Building and Construction Commission, which has played a big role in stamping out militant union activity in the construction industry.

Subsequently, Mr Rudd has adopted a policy stance that is much closer to the Howard government’s watered down policy.

Clearly both sides of politics are focused primarily on defusing what could be an awkward issue during the election campaign.

The electorate should get a clearly enunciated statement on the policy each side plans to pursue if it wins office.

State debate doesn’t help

The state government tried to claim the release last week of new statistics on industrial disputes as a tick for its economic credentials.

The new data showed that industrial disputes had fallen to a historic low, with only 0.4 days lost per 1,000 workers during the June quarter.

Employment Minister Michelle Roberts claimed credit for this outcome, saying Labor was better at managing the issue than the coalition.

During the Court government, lost time during industrial disputes averaged 19 days per 1,000 workers.

Opposition industrial relations spokesman Murray Cowper correctly pointed out that the worst period for industrial disputes in WA’s recent history was during the Gallop government.

Time lost to industrial disputes rose as high as 50.7 working days per 1,000 workers.

The biggest change since then has been the creation of the Australian Building and Construction Commission, which has stamped on the industrial disputes that were rife in the construction industry.

WA’s Labor government responded timidly when its biggest infrastructure project, the Mandurah railway, was repeatedly disrupted by militant union activity.

It’s a bit rich for Labor to try and claim the credit for a reduction in industrial disputes.

High dollar an export concern

This week’s cover feature provides a detailed insight into Western Australia’s export boom.

The state’s total merchandise exports increased to $60.5 billion last year. That represents 37.6 per cent of Australia’s total exports, up from about 27 per cent just five years ago. Given that WA has about 10 per cent of the national population, the state’s export performance is extraordinary.

Just as extraordinary is the role played by the state’s main resources producers.

BHP Billiton and Rio Tinto are the world’s two largest mining companies, so it stands to reason they would make a large contribution to WA’s exports.

Similarly, the Woodside-operated North West Shelf venture is Australia’s biggest resources project, so would also be expected to make a large contribution.

What is surprising is that BHP, Rio and the North West Shelf venture account for more than half of the state’s merchandise exports.

That equates to a very large amount of influence being concentrated in just a few hands.

This could be a positive for the state, since groups like BHP, Rio and Woodside have the financial strength and management depth to take a long-term view on growth projects.

For BHP and Rio, the diversity of their business operations, across commodities and geographies, also means they are relatively insulated from the vagaries of fluctuating commodity prices and exchange rates.

Unfortunately, many other businesses in WA will be looking with concern at the rise and rise of the Australian dollar.

A high dollar makes it more difficult for exporters and import-competing industries to prosper. It will create a new challenge for many businesses in WA that do not have the financial muscle of a multinational.