Industrial Relations in Australia: a Handbrake on Prosperity

Since the defeat of the Howard Government, industrial relations has come to be seen as the third rail of Australian politics. However, Australia faces a number of major demographic and technological challenges that require much more than piecemeal changes to penalty rates. In order to overcome these challenges, we need substantial reforms to our industrial relations framework.

Unfortunately, the fundamental structure of Australia’s employment law has broad, bipartisan support. There is, at least publicly, a consensus that a statutory agency with no special economic expertise should lay down a set of national pay rates and working conditions for 122 occupations that cover a sizeable share of Australia’s workforce of over 12 million people. There’s also consensus that collective agreements which diverge from these national minimums should be negotiated within a strictly regimented framework that grants extraordinary power to trade unions and next to no autonomy for individual workers.