Shorten Still in Serious Trouble

Although yesterday’s Cassidy interview with Shorten on ABC’s Insiders was recognised in The Australian as missing some key points (see “Shorten admits AWU dues might be paid”), the week-end media critique of Shorten’s deals at AWU with businesses does seem to have moderated somewhat today. In particular, there was no follow-up to The Age’s editorial on Saturday calling for Shorten to “come clean – right now”. No doubt Labor staff made calls to The Age and Shorten himself attempted to “make” news by following-up on his letter on Friday to Abbott proposing a Senate inquiry into credit card interest rates. This morning ABC radio made this a lead item but no mention of Shorten (the ABC is of course absent on workplace reform).

On the other hand, Bolt’s piece in the Herald Sun spelt out the deficiencies in policies enunciated by Shorten’s and argued that the left is now taking control of Labor (Shorten is supposedly right wing). Bolt outlines a possible scenario for an election in November with Shorten still leader but with Plibersek a possible.

But even if Newspoll puts the Coalition well in front, does Abbott have the capacity to run with an agenda on reform of industrial relations? There is now what might be described as a golden opportunity but Abbott has so far failed to tell voters why workplace relations needs major reform. As pointed out in today’s Financial Review by Minerals Council CEO, Steve Knott, employers have rarely directly campaigned for Coalition-sponsored workplace reforms (see “CEOs should push for IR reform”). Yet he draws attention to the problems which have emerged from a Fair Work Commission “often stacked to the gills with ex-union officials … challenges include employee protections with uncapped compensation and that treat employers as ‘guilty until proven innocent’, union monopolies on new project agreements, excessive union access to work sites and constant strike threats.”

Unfortunately, the Royal Commission, which could provide the basis for reform, is not due to make its final report until later in the year. But there are plenty of “experts” available to prepare a document setting out the case for reform and what it should be.

Note also that, apart from Shorten’s record at the AWU, the opportunity for reform has been increased by the announcement by the Federal Court of the deregistration and fining of $3.55mn of the CFMEU.  Today’s Herald Sun gives this a front page lead and also refers to the outstanding claim on the CFMEU of $28mn by Boral. Relevant is that when Shorten was workplace relations minister, he reduced penalties for unlawful action in the building industry by two-thirds.

As noted, an important question now is whether the Coalition (and supportive media) can get across to leaders in the community the extent of the adverse effects of the deals involving other unions as well as the AWU. These extend way beyond the question of payments by businesses of union dues highlighted in The Australian’s editorial. My letter published in the AFR (see below) mentions some of the implications.

But the key issue is whether Labor under Shorten supports regulatory arrangements which allow deals that may include lower wages for employees than would otherwise be the case or “guarantees” of no disruption to business activities in return for various favours to unions.

Some argue that deals concluded in such cases are acceptable because both parties agree. But  businesses not involved may be unable to compete and the wider community will experience higher costs than should be the case. The deals so far revealed certainly suggest considerable amounts are paid by businesses to unions that should instead be reflected in lower costs to consumers and exporters in particular.

Substantive reform will require the government to prevent this situation continuing by implementing major changes to the role of the regulatory body, which currently appears to a large extent to simply accept the wages and conditions negotiated between businesses and relevant unions. This sympathetic regulatory authority gives unions the power to threaten costly disruptions to businesses’ activities unless claims are concluded to their satisfaction. This is not the kind of workplace relations that should operate in Australia