Modern Australian
Times Advertising

Morrison's industrial relations peace gambit is worth a shot. Even if it fails, it's shrewd politics

  • Written by Richard Holden, Professor of Economics, UNSW

Australian Prime Minister Scott Morrison this week announced plans for a potential “grand bargain” on industrial relations.

Speaking at the National Press Club, he framed the issue as one of boosting economic productivity:

We must enable our businesses to earn Australia’s way out of this crisis. And that means focusing on the things that can make their businesses go faster.

Rather than directly introducing legislation into the parliament, Morrison’s plan involves creating five “working groups” of union and business advocates to look at issues from simplifying awards and the enterprise bargaining system to the treatment of casual workers and “greenfields” agreements for new enterprises.

Read more: Morrison government invites unions to dance, but employer groups call the tune

This is shrewd politics. If the working groups find agreement, the government can push the required legislation through parliament with a claim to a mandate. And claim the credit.

If it fails, Morrison can say nothing can happen without business and workers agreeing. So the government avoids blame.

But it may also be canny economics.

Going for broker

Perhaps Morrison has realised his real power is not as an advocate but a broker.

This process might have less in common with Australia’s prices and incomes accords of the 1980s, where unions agreed to limit wage claims, than with the Dayton Accords, the peace agreement that ended the Bosnian War in 1995.

The accords between the Australian Council of Trade Unions and the Hawke and Keating governments between 1983 and 1991 were a response to the wage-price spirals that plagued advanced economies in the 1970s and early 1980s.

High inflation led to large wage claims, which further fuelled inflation. The 1983 accord broke this spiral by guaranteeing wage increases every six months tied to the consumer price index. As I’ve noted previously:

Once people knew that wages weren’t going to gallop ahead of prices, there was less of a reason to raise prices, which put less pressure on wages, and so on.

The Dayton Accords (officially the: General Framework Agreement for Peace in Bosnia and Herzegovina) were brokered by the US administration in Dayton, Ohio, in November 1995 between the presidents of Bosnia, Croatia and Serbia.

Booking a room

The shadow minister for industrial relations, Tony Burke, reacted to Morrison’s announcement by saying:

Let’s be clear: all the government has done so far is book a room. This is not an IR agenda – it’s a series of meetings.

Burke meant this as a criticism, but in fact it might be a virtue. It’s hard to imagine a deal on industrial relations without representatives of employers and employees agreeing. That agreement may be better served by a government acting as a broker rather than pushing its own specific agenda.

There is an emerging school of thought in economics that coordinating beliefs plays a crucial role in reaching value-enhancing deals. Having the participants believe there can be a deal might be the heart of the issue.

That was arguably the role US chief negotiator Richard Holbrooke played in the Dayton Accords, and the role federal industrial relations minister Christian Porter will need to play in this rather different setting.

Very different starting points

That said, the parties don’t agree on all that much – at least as a starting point. ACTU secretary Sally McManus has emphasised that:

We can only secure a better, stronger Australia if working people have permanent, well-paid work and the entitlements that come with it.

The head of the Business Council of Australia (BCA), Jennifer Westacott, says the issue is needing:

… a system that delivers higher productivity, letting people work more effectively, produce more and find new and innovative ways to work.

Can permanence and job security be reconciled with effectiveness and innovation in the workplace? I’m an optimist. But we shall see.

Are the representatives representative?

This possible grand bargain needs to be between employers and employees. Those at the table will be representatives of those groups – namely unions and employer groups such as the BCA and Ai Group.

A crucial question is how representative these representatives are.

As Leigh Sales observed on the ABC’s 7:30 program this week:

The vast majority of Australians aren’t members of unions, only 14% of people are. In this process, shouldn’t workers be represented by other voices that more likely speak for them?

In the private sector, union membership is even lower – about 10%.

Read more: Three charts on: the changing face of Australian union members

One should ask similar questions of the BCA and Ai Group. For instance, do they represent the views of smaller businesses as faithfully as they do the big ones?

This is crucial because it affects the credibility of any potential deal, and how any benefits are spread. A cosy deal between big business and unions on greenfield construction sites is one thing. A grand bargain that helps workers not in unions and employers across the economy is quite another.

Will it work?

Morrison did frame the issue adeptly in his address. He was clear about the inputs needed to increase the economic pie:

The skilled labour businesses need to draw on, the affordable and reliable energy they need, the research and technology they can draw on and utilise, the investment capital and finance that they can access, the markets they can connect to, the economic infrastructure that supports and connects them, the amount of government regulation they must comply with, and the amount and the efficiency of the taxes they must pay.

Given all that, Australia’s industrial relations system does arguably need reform. And it won’t happen without the key players agreeing to it themselves.

Morrison’s gambit may not work, but it is certainly worth a shot.

Authors: Richard Holden, Professor of Economics, UNSW

Read more https://theconversation.com/vital-signs-morrisons-industrial-relations-peace-gambit-is-worth-a-shot-even-if-it-fails-its-shrewd-politics-139459

Custom Photo Frames: Turning Everyday Moments into Lasting Displays

Photos capture moments, but how you display them determines how they’re experienced every day. A meaningful photograph deserves more than a generi...

Managed IT Services: A Smarter, More Predictable Way to Run Your Business Technology

If you’ve ever had your systems go down in the middle of a busy day, you’ll know how quickly things can unravel. Phones stop ringing, emails sto...

Landscaping Geelong — Coastal Elegance Meets Practical Design

A Landscape Shaped by Location Geelong occupies a unique position within Victoria’s broader landscape. It carries the energy of a growing city, y...

Electric Adjustable Beds: A Simpler Way To Sleep Better

Sleep should feel natural. It should come easily, without discomfort, without constant repositioning, and without waking up feeling sore. But for ma...

Healthy Snacking Sorted: Premium Beef Jerky

In today's fast-paced world, finding a snack that's both satisfying and genuinely good for you can feel like a mission. Many readily available optio...

What to Know Before Getting Dental Implants: A Guide for First-Time Patients

Dental implants Perth patients often look for a long-term solution for missing teeth without the hassle of dentures or bridges. If you are thinking ...

Why Protective Packaging Matters More Than Ever In Modern Shipping

In today’s fast-paced world of logistics and eCommerce, ensuring that products reach customers safely is a top priority. This is where a bubble wrap...

Pest Control Albury: Protecting Your Property From Hidden Damage And Health Risks

Pests rarely announce their arrival. They creep into spaces quietly, turning small, unnoticed corners into breeding grounds for bigger problems. Tha...

Why Root Canal Treatment Melbourne Is Essential For Saving Natural Teeth

Tooth pain has a way of demanding attention at the worst possible time. When the discomfort becomes persistent and intense, it often signals an infe...

How Bird Flight Diverters Help Protect Wildlife Around Power Infrastructure

Power infrastructure plays an essential role in modern life, but it can also create risks for wildlife, particularly birds moving through establishe...

What Businesses Should Look for in a Commercial Coffee Partner

Choosing a commercial coffee partner is not the same as choosing a machine. It is a broader decision that affects beverage quality, staff efficiency...

3PL Logistics Australia Driving Smarter Supply Chains And Faster Deliveries

In a world where customers expect speed almost as much as quality, logistics has become the silent heartbeat of every successful business. Behind th...

Why Professional Electrical Services Are Essential For Modern Properties

Electricity powers almost every aspect of daily life, from lighting and appliances to complex systems in homes and businesses. This makes choosing a...

What Not to Pack When Moving: The Essential Guide to Smart Packing

Moving house is one of those all-encompassing events in life and most people focus their energy on deciding what to pack. But knowing what not to pa...

From Assistance to Independence: Progression in Daily Living Skills

The ultimate goal of many support systems is to empower individuals to lead lives defined by autonomy and self-reliance. While some support requiremen...

The Cost Difference Between Early Repairs and Delayed Replacement

Automotive maintenance often involves a choice between addressing a small issue immediately or waiting until a component fails completely. When it c...

What Is a Stainless Steel Bar? Applications, Benefits, and Buying Tips

Stainless steel is one of the most widely used materials across industrial and commercial sectors, known for its strength, corrosion resistance, and...

Scholars in Developing Nations Depending on Z library

Access to books often shapes the course of study for scholars who live in regions with thin library shelves and slow supply chains. Many students wo...