8 August 2012

Political will a must for reforms

The Australian Financial Review: Dick Warburton, Executive Chairman, Manufacturing Australia

We’ve faced many of the challenges that are hurting Australian manufacturing before. Fluctuations in the Aussie dollar, high input costs, unbalanced competition with international importers, inflexible industrial relations laws and unproductive regulations are familiar. Cumulatively, however, these challenges are formidable.

As a community we rightly question the wisdom of taxpayer-funded bailouts for struggling manufacturers, but then wonder why there is not more vigorous and earnest debate about the policy reforms that might break this unsustainable cycle. The problems affecting Australia’s non-mining industry sectors are increasingly put in the “too hard” basket.

Australia’s progress on industrial relations reform is disappointing, and is being stymied by slogans and tokenism taking the place of earnest debate. Smart Australian companies know the value of a positive workforce – and they most certainly aren’t trying to rip off their employees. For employees and employers to enjoy a fruitful outcome, they need to work collaboratively and be driven by the best interests of the business and, by definition, its employees.

At present, direct relationships between employees and employers are undermined by third parties having the right to become bargaining representatives for employees, even when not appointed by employees.

Australian businesses need real industrial relations reforms to remain competitive. Despite persistent pleas from the business community, that debate is deemed too hard and is generally off limits.

A similar story is in the myriad regulatory burdens throwing a wet blanket over the industry.

The introduction of a carbon tax was designed in part to replace the myriad inefficient state and federal schemes that were in existence to reduce our carbon emissions, yet most of these inefficient schemes remain in place and look likely to be expanded.

A mature debate about Australia’s industrial future should be examining these issues, along with others plaguing domestic manufacturing.

Our political leaders should be asking the hard questions about what Australia’s industrial make-up will look like when the mining boom slows, as it inevitably will.

John Button asked those hard questions. The Manufacturing Council asked those questions in the 1980s and 1990s. But where is the political leadership with the courage to ask those questions today?

Industrial relations reform, deregulation, tax reform and adding value to our natural resources are all ways we can do that.

We need proper debates among our political leaders, driven by champions of industry and a well-balanced manufacturing council.