The difference between Swan and Paul Keating, and the modern leadership of the ACTU with Bill Kelty, could not be starker.
The new ‘Fair Work’ legislation entrenched the position of unions and replaced the no disadvantage test with the aptly anagrammed ‘Better Off Overall Test’ (BOOT), which requires employers to sign a statutory declaration that workers are better off – not that they’re no worse off. The test creates a due diligence nightmare for companies because of the way it combines monetary and non-monetary conditions, but without being clear about the latter.
The review of the Fair Work Act released yesterday was nobbled from the beginning by terms of reference that directed the panellists to look only at whether it was working “as intended”, and whether it could be improved “consistent with the objects of the legislation”.
Naturally enough the review concluded that the Act is working as intended. No surprise there. The Business Council described the review as a lost opportunity, but it was always going to be.
In general the Fair Work Act is a legalistic quagmire designed principally to guarantee unions a place in the system. In new projects it even gives them a monopoly, which has dramatically increased the cost of new projects. This something the Review Panel specifically commented on, recommending that “good faith” bargaining rules should apply, as well as recourse to arbitration.
The review is not a total dead loss: it recommends that Individual Flexibility Agreements be made easier to access and “more attractive” to both employees and employers, whatever that means. This is what Tony Abbott has already flagged as the focus of his attention for reforming the system.
The Panel has also recommended that the BOOT be amended to clearly include non-monetary benefits, although that doesn’t seem to solve the problem of how to measure them before signing a stat dec.
In any case, Australia’s productivity problem is only partly about legislation – albeit an important part. It’s mainly about leadership and, yes, rhetoric.
Hawke, Keating and Kelty led the nation towards recognition of the need for productivity and creating wealth; Rudd, Gillard, Swan and a succession of non-entities at the ACTU have led it back towards redistribution.
This article first appeared on Business Spectator.
