Peter Strong: What was missing from the Jobs Summit, and why the government must be wary of unions

The Jobs Summit is now done and dusted, and attention is firmly focused on the Albanese government’s response to the shortage of workers and rising cost-of-living pressures. The federal budget, to be handed down in October, will be the first real test of the government as business and the broader community seek real leadership and practical solutions on key issues.

And it is indeed a daunting challenge. The government will be required to act responsibly to address the record debt amassed by the previous government as it worked to protect the Australian economy and jobs during the pandemic, while simultaneously advancing actions that address future labour force availability and cost-of-living increases. 

Various decisions were made at the summit, and this suggests that it was not just a talk fest. During the summit there was good quality time spent on migration, gender pay parity and participation, the cost of living and support for particular sectors such as aged care and childcare. 

There was a significant focus on workplace relations, but much of that discussion was hijacked by the announcement of the memorandum of understanding (MOU) between COSBOA and the ACTU. The initial lack of information about what was actually agreed to in the MOU led to a great deal of confusion and opened COSBOA to criticism that it was being led into a scenario that ultimately would unionise small businesses.

The ongoing, often angry, discussion during and after the summit on this matter is perhaps best described as a train wreck, as it has merely served to further entrench deep and historical divisions about the way industrial relations operates in this country. It also gave the old IR club a chance to vent its hypocritical spleen — which it likes to do. 

Tread carefully on union power

The government must be careful of overreach on IR. It was elected to govern for all Australians, not for the union movement — and currently it is just 10% of workers that are union members, while over 50% of the workforce gets its income from small businesses.

Yet the outward approach of the government seemed to be about cementing union power by aggressively seeking to change workplace relations processes to enable more industrial strikes.

What happened to the productivity discussion during the summit? How does increasing the capacity to strike, which risks substantially increasing the number of productive days lost, increase productivity?

As the summit progressed, the Minister for Workplace Relations Tony Burke appeared to be more and more in lockstep with the ACTU. Mr Burke should be setting policies for business and workers, not just for the unions.

It certainly appeared during the summit that the Albanese government sought to position small business as very important — with consultations and words — while strongly positioning unions with actions. In reality the summit was about big business, big unions and big government.

Perhaps there is no surprise at this situation, it is a Labor government. A Coalition government would traditionally be doing all it could to disenfranchise unions while empowering a few big businesses. Although in truth, the Coalition supported small business through COVID-19 while pushing against the laissez faire economists in their own ranks who believe in the survival of the fittest principle. The Albanese government must simply push back against the hard left in its own ranks and govern for all by advancing IR policies that are in the interests of the majority, not the minority.

No amount of consultation with small business advocates will hide overt post summit legislation that gives unions disproportionate power over workplace relations. We must address the central failure — the bargaining mechanism — rather than expose business, particularly small business, to coercive power of unions that exerts extra unnecessary pressure on the national economy.

The proposals relating to Vocational Education and Training (VET), in many ways very good, had a sting in its tail. The announcement of substantial financial support for TAFE, which is heavily unionised, prioritises public VET providers over private providers. That is despite the fact that 87% of students in VET get their skills from private training providers. We do not want to see the private training providers, the majority of which are very good at what they do, being held back — this would stifle innovation and efficiencies in the VET sector. 

What was missing?

The summit of course could not focus on everything as there is never enough time. So, what was missed when it comes to lifting productivity and growing wages?

Competition policy needs some attention. Robust competition is important for innovation, for consumer price control, for choice, for safety and for our capacity to compete globally. When there is a Labor government, traditionally, the retail union (the SDA) will write the competition policy for whoever the minister is at the time. This is because most of the SDA’s members are to be found in big businesses such as Coles and Woolworths. Big businesses want competition policy that favours them and keeps competitors out of the market and inhibits small businesses from starting up and growing, and so does the SDA.

Given that the summit showed that Prime Minister Albanese and Tony Burke are intent on empowering unions, we can assume that the SDA will get its way. If the assumption is correct than that will be sad for consumers and small business and innovation and community. 

There is also a need to focus on the development of manufacturing and the value adding to our resources. There is so much opportunity for new industry development that would be beneficial for the economy, for our sovereignty and indeed for unions. The government is convening many more meetings and developing white papers to address these issues.

The other important area which needs to be discussed is the tax system and tax rates. I will cover the budget, where this should be addressed, in a separate article.