‘Enterprise bargaining drives productivity’: PM tells business

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‘Enterprise bargaining drives productivity’: PM tells business

Prime Minister Julia Gillard has taken on the business establishment over their claims that a lack of flexibility in the Fair Work Act is hampering productivity.

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Prime Minister Julia Gillard has taken on the business establishment over their claims that a lack of flexibility in the Fair Work Act is hampering productivity.

Addressing the Australian Industry Group (Ai Group) annual dinner gathering, Gillard said there was too much myth and ideology in the productivity debate.

She said Australia was in the top 12 in labour productivity and in the year to March productivity grew at its fastest rate in a decade.

Gillard admitted that productivity had fallen over the past decade, but the major reasons for this were not ‘lazy or militant workers, nor restrictive industrial legislation, but a sharp multifactor productivity decline in mining and utilities, with some impact from agriculture as well’.

‘Takes years’
 
‘In mining, because new investment takes years before it leads to output and because miners are accessing lower quality or less accessible deposits,’ she said.

‘In utilities, because there has been increasing capital expenditure, often well beyond levels suggested by demand.’
 
‘In agriculture, because our worst drought in a century led to falling agricultural output.’

Gillard said it was also a myth that individual contracts and the associated legislative regime boosted productivity.

‘They didn’t, ABS data show that multifactor productivity experienced virtually no growth when WorkChoices was law.’

‘The workplace model that best drives productivity improvements is enterprise bargaining.’

Keen to consult
 
Gillard said the Fair Work Act can be refined to better meet its objectives, and the government is keen to consult with industry and unions on the Fair Work Act review.

‘But labour regulation is not the whole story,’ she said.
 
‘We need to take a much broader view of productivity rather than putting more focus than is warranted on our workplace arrangements.’

‘That means accepting once and for all that you don’t achieve productivity by cutting wages and conditions.’

‘That just makes for poorer workers, and arguably more unhappy, less trusting and less motivated workers as well.’

‘Nor must it mean losing jobs — our record productivity growth cycle in the mid-90s showed you can grow productivity and grow employment together.’

In introducing Gillard, Ai Group president Lucio Di Bartolemeo said that how the government introduced changes to the Fair Work Act will be very important to the nation’s future.

‘Out of place’
 
He said Australian businesses faced a workplace relations system where bargaining disputes increasingly revolve around union attempts to impose restrictions on how businesses operate such as the use of contract labour and clauses that oblige employers to encourage union membership.

‘Placing such conditions on management is out of place in the modern workplace,’ he said.

He said there are a number of areas in the Act that need urgent amendment.

‘For example, curtailing the scope of bargaining claims was not recommended by the Review Panel but we urge very strongly that legislative action is taken,’ he said.
 
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