The good, the bad and the ugly

The Productivity Commission interim report on workplace relations falls short of the changes Australia desperately needs in the quest to achieve the politically feasible. Sadly, lack of political leadership will probably deliver us not even a set of hopeful incremental changes.

The good thing about the report is that it stands as the first serious opportunity to improve Australia’s workplace regulations since the introduction of Fair Work system in 2009.

In the 1,000-page draft document, there are some well-intentioned proposals to reduce business hiring costs (and therefore make job creation a less risky venture). For instance, the suggested replacement of the better off overall test for a new no-disadvantage test during the bargaining process is a welcome incremental change. Other excellent recommendations are the push for a more flexible work agreement called enterprise contract and the proposals to increase the accountability and governance of the Fair Work Commission. Additionally, the advocated penalty rate reform constitutes a good – albeit timid and constrained – start.

The bad news is that the report does not properly address the main hurdles in our workplace relations system, namely a byzantine Modern Awards system; the un-fair ‘Unfair Dismissal’ clause; a national minimum wage system that does not recognise disparate regional living costs and economic environments; the legal obligation to negotiate (the so-called ‘good faith’ bargaining requirement), which eliminates the fundamental freedom of contract; and the list goes on

ad nauseam.

On the ugly side, there is the widespread pusillanimity of politicians failing to defend and promote even the incremental changes sprinkled through the report. For one, the Opposition is hostage to the trade unions support in its caucus; whereas the Coalition is too self-obsessed with survival, avoiding the political costs associated with any resemblance to WorkChoices.

In the end, once again we as a nation risk missing the chance to take control of our own destiny by implementing productivity-enhancing structural reforms. Failing that, Australia can only rely on its luck to sail through the challenging days ahead.