WAYNE Swan has given Labor’s strongest indication that it is prepared to amend its industrial relations laws in response to business claims they are inhibiting growth in productivity.
But the Treasurer has made it clear the government has no plans to revert to the Coalition’s previous Work Choices laws, which sidelined unions by emphasising the use of individual contracts.
He has also offered a passionate defence of Labor’s productivity agenda, accusing Tony Abbott of misrepresenting Labor’s economic performance to scare the community and expressing optimism about the future of the troubled manufacturing industry.
Mr Swan’s comments came yesterday as the World Economic Forum’s annual Global Competitiveness Index of 142 countries found Australia had dropped from 16th place to 20th, partly because it lagged behind top performers in labour market efficiency and innovation. Since dumping Work Choices in favour of Julia Gillard’s Fair Work Act, Labor has faced criticism from business organisations and the opposition that the law is too inflexible.
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Pressure has intensified in recent weeks with the government’s own economics adviser – the Productivity Commission – releasing a report last month criticising inflexibility in working arrangements in the retail sector. On Monday, Australian Industry Group chief executive Heather Ridout, who has had a close relationship with Labor, called for the creation of “flexibility provisions” within the existing laws.
Mr Swan and the Prime Minister have frequently played down the concerns and Ms Gillard told a business lunch in May she would keep the system in place.
Yesterday, while forcefully rejecting a return to Work Choices, Mr Swan softened the rhetoric.
“I’ve had conversations with people I respect in the business community and they express concerns from time to time about aspects of industrial relations and some of the frameworks,” he said.
“There’s very few of them that . . . say that they want to rip away the Fair Work Act.”
Asked if there was room for reform, Mr Swan said: “We’ll sit down and talk with the business community and with workers and with unions about these questions. We’re up for a productivity agenda. We understand its importance.”
But Mr Swan said he had no interest in “the ambitions of some” who wanted reform to strip wages and conditions from Australian families.
Asked if he was leaving the door open to productivity-enhancing changes to the Fair Work Act, he said: “I’m happy to have that discussion with people.”
Last night, Ms Ridout said Mr Swan’s comments were important and she renewed her call for flexibility provisions in the act. “AI Group hasn’t been seeking wholesale reform . . . just sensible changes,” she said.
She pointed out that the World Economic Forum’s competitiveness survey had ranked the nation’s financial system sixth in the world, while the banking sector was fourth and the health and education systems came 11th. Australia rated 24th on innovation and 13th on labour market efficiency.
“We have made little progress on improving our infrastructure rating, which is down from 22nd to the 24th position,” Ms Ridout said. “This is another wake-up call for Australia. We cannot be complacent about our performance in key areas such as innovation and cannot ignore the need to continue to improve our labour market efficiency.”
Also yesterday, ACTU national secretary Ged Kearney criticised business lobby groups pressing for productivity gains and questioned Labor’s direction.
“I think it is fair to say that, judging by the polls, there’s some disillusion with the Labor Party even from its core base and there’s a lot of work that needs to be done to restore that,” Ms Kearney said
Mr Swan cast his comments about industrial relations within the context of the government’s agenda to lift productivity, which he said included investments in skills, education and infrastructure, building the National Broadband Network and streamlining regulation.
“The very big bang productivity reforms of the 1980s and 90s are no longer available to government,” the Treasurer said.
“What governments have to do is craft out a really broad, big agenda across a wide range of areas. That is what we have been doing quite methodically.”
In Perth, Reserve Bank governor Glenn Stevens said the idea of lifting productivity in the workplace did not mean people had to work harder.
“Productivity per hour, which is what counts, is not improved by adding more hours, but by finding ways of making the hours that are already being contributed more effective,” he said.
Additional reporting: Joe Kelly
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