It's Business As Usual In Duping Game

by Mike Steketee - The Australian

It sounds scary: if workplace reforms are scrapped, interest rates will rise by 1.4 per cent, business investment will fall by $11billion and Australia's standard of living will fall from eighth to 14th in the world.

More political hot air? No, this is based on independent economic research, commissioned from the consultancy Econtech by the major employer group, the Australian Chamber of Commerce and Industry. Moreover, it is quoted in television and print advertisements funded not just by ACCI but by 18 other business groups, including the Business Council and the Minerals Council. In the words of the Business Council's Michael Chaney: "We're not interested in how people vote, frankly; what we're interested in is good policy ..."

But why then are they duping voters by misrepresenting research and using it against Labor? They can barrack for the re-election of the Howard Government by means foul and fair if they choose but they should spare us the hypocrisy of pretending they are doing otherwise.

The most blatant omission from the advertisements is that the figures they quote are based on reversing all the industrial relations reforms undertaken since 1993. Whose policy is that? Perhaps the odd trade union leader fantasises about such a return to the good old days but it is not the position adopted by any major party, including Labor.

It was in 1993 that the Keating government changed industrial relations policy to encourage a move away from centralised wage determination through the Industrial Relations Commission to negotiations at the enterprise level. The substantial boost in labour productivity that followed was not coincidental: according to the Organisation for Economic Co-operation and Development in a report last year, "enterprise bargaining allows firms to adopt productivity enhancing practices and promises a more co-operative work environment where performance and reward are more closely linked."

Labor's policy, released in April, says "collective agreements will be at the heart of Labor's industrial relations system" and that "collective bargaining will be based on bargaining at the level of an enterprise". Shadow employment minister Julia Gillard wrote on this page last week that "Labor's laws will enable non-unionised employees to make collective agreements with their employers without any involvement of unions. Indeed, unions wouldn't even know the employer and employees were making an agreement."

Freehills, one of the law firms that helped draft the Work Choices legislation, released an analysis of Labor's policy in April. "Labor's policy will certainly pare back many of the freedoms introduced by Work Choices," it said. "However, significant aspects of the infrastructure remain, positive aspects for business have been retained ... and many of the changes do not go further back than the Howard Government's 1996 reforms."

If policy documents, politicians' statements and outside analysis are not convincing, then plain logic should be: why would Labor go back to a centralised system whose abolition it hails as one of its significant reforms?

However, it seems that facts, objective analysis and common sense don't wash with the business politicians. They are campaigning against Labor on the basis of a report that does not even purport to represent Labor policy. It is also a report that changed substantially between its draft and final versions, including by taking out references that reflected well on Labor's performance in government. For example, the final report mentioned that Labor productivity stagnated in the late 1980s before growing rapidly during the '90s but omitted the sentence: "However, in recent years, labour productivity growth has slowed." The final report also excluded one of the original three scenarios: modelling the impact if Work Choices alone, rather than all the changes from 1993 onwards, were reversed. That at least would have been closer to Labor policy, though, as Freehills points out, elements of Work Choices would be retained by a Labor government.

The draft reached the preliminary conclusion that Work Choices might be responsible for about one-third of the changes under its modelling. That would confirm that most of the economic benefits of labour market deregulation came from the introduction of enterprise bargaining - the system a Rudd government would retain and emphasise - rather than from Australian Workplace Agreements, which Labor would abolish.

ACCI chief executive and former Howard Government staffer Peter Hendy was evasive yesterday on whether he had asked Econtech for the changes to be made: "They provided the report; it is their report." Econtech referred all questions back to ACCI. It seems he who pays the piper calls the tune.

But there are signs that the consultants were concerned about their credibility and how the report might be used. The final version includes the disclaimer: "While all care, skill and consideration have been used in the preparation of this report, the findings refer to its terms of reference, which are to analyse what would be the economic impact should all the major industrial relations reforms in Australia from 1993 onwards be reversed." The draft report was leaked in June, apparently in an attempt to pre-emptively discredit its findings.

The Econtech report is a red herring in the industrial relations debate - a large, dead and smelly red herring. John Howard and Peter Costello are delighted that ACCI commissioned it and have been happily misrepresenting its results as indicative of the horrors a Labor government would inflict on us. It fits perfectly with the Government's attempt to turn the political negative of its industrial relations policy into the positive of its economic management.

Some business groups, such as the Australian Industry Group and the Housing Industry Association, refused to join the advertising campaign on the grounds that it politicised their activities. Of course, the ACTU has run its own extensive advertising campaign, complete with misleading claims. But it has never hidden its preference for a Labor government. Business groups would do better to drop the pretence that they are just objective observers.