Your rights at work

Justin campbell

Justin Campbell puts his slant on the thorny issues of workplace relationships, the debate that just won't go away.

“Your rights at work” words that in 2007 brought down the
Howard government. The idea that an individual statutory contract could remove
pay and condition guaranteed under industrial awards and enterprise bargaining
agreements was enough to get voters to take a chance on Labor. The idea that
access to service or minimum conditions are “rights” has become so ingrained in
our society that almost no one has challenged the notion that such conditions
are rights or seriously raised the question do such rights violate peoples’
more fundamental rights.

This issue can be understood by comparing positive rights
with negative rights. From the 20th century on, the definition of
what could be considered a right has changed from negative rights, which
protect individual freedom, such as free speech, the right to a fair trial or
the right to enter a contract to positive rights, such as the right to an
education or healthcare. The problem with positive rights is that unlike
negative rights they aren’t a person’s by birth. Positive rights usually
require some restriction on another person’s freedom. For example: for me to
have the right to education; that by definition forces someone else to pay for
it. By comparison the right free speech is mine and all that right does is
protect me from someone taking that right away from me.

If one accepts individual freedom as basis for all rights,
then workers’ rights cannot be considered rights in the traditional sense. In
fact, minimum wages and awards significantly restrict individual freedom. If I
wanted to start a career working for a consulting firm but my current skill-set
doesn’t justify the minimum pay required by industrial regulation then my
freedom and the freedom of the employer would have been significantly
restricted. Most likely the outcome would be that I would remain unemployed.

A more relevant example to many disadvantaged jobseekers is
the Food, Beverage, and Tobacco Manufacturing Award 2010, which cover most jobs
in the hospitality sector. Under this award it is illegal to pay someone less
than $17.88 an hour for an adult employed in a casual capacity. While this may
seem to be a small amount to many of us, for some people entering the labour
market with insufficient education or life skills this can be a major barrier
to employment. For example: someone who has never worked before may need
constant supervision, in reality the time spent supervising this person
initially may exceed the value of their labour. Preventing such a jobseeker
from working at a price an employer is willing to employ them for is violation
of their basic right to sell their labour and to enter into contracts.

Much of the industrial relations debate has been framed in
the context of international competitiveness and profitability. These arguments
have fundamentally missed the point. Employers have no more right to cheap
labour then employees have rights to high wages. Ultimately, both parties
should be free to pursue their self-interest. The argument against restrictive industrial
relations regulations should be argued on the basis of individual freedom.

 Justin Campbell is currently studying a Master
of Economics at the University of New England and is a member of the Australian
Libertarian Society. He currently works as an employment consultant and has
over five years experience in the employment/recruitment industry. In 2008
Justin ran as an Independent in the Brisbane City Council election
and maintains an educational blog/website www.econstudent.org.

We’ve Changed From a Managerial to an Entrepreneurial Society

Ken_phillips Ken Phillips argues that if political parties are going to be serious about economic growth, then surely their thinking has to start from the individual, self-employed, small business perspective:

Simon Bridge is Visiting Professor of Entrepreneurship at the University of Ulster. He’swritten for us before about the change from an agricultural to a Fordist to an entrepreneurial society.
 
Simon has now given us more food for thought. This time he considers the change froma managerial to an entrepreneurial society. The change, he says, is quite profound—particularly for government policies that aim to create economic and jobs growth. The task is not to target favoured entrepreneurs but to target an entrepreneurial economy. This marks a significant shift in thinking.
 
To my mind the challenge is also to politics. In 1956, Galbraith suggested that economic management is about ‘big business’ balanced by ‘big labour’ and ‘big government’. That thinking still dominates how political parties approach their task. But the challenge is to reverse that thinking.

Take these simple Australian statistics:

  • 2.1 million Australians are self-employed.
  • 1.1 million don’t employ anyone
  • the other 1 million employ about 6 million people

Of a work force of about 11.5 million more than 8 million are in small business.

  • About 1.7 million work for government
  • About 1.7 million are in medium and big business

If political parties are going to be serious about economic growth, then surely their thinking has to start from the individual, self-employed, small business perspective. The days of elitist ‘big’ handing down economic prescriptions to the ‘little people’ must eventually disappear.

Ken Phillips is the Executive Director of the Independent Contractors Association.

Labor MP’s doublethink on Fair Work Act

Major Karnage examines the effect of the "Fair Work Australia" Act: 

The term “Orwellian” seems to be attached to anything vaguely misleading these days, but I genuinely believe that it can be applied to Labor MP Matt Thistlethwaite’s defence of the Fair Work Act (FWA) – Labor’s industrial relations legislation that was introduced to replace the Howard government’s Work Choices policy and came into full effect in mid-2010.

When extolling the virtues of the FWA, Thistlethwaite uses what I can only call “doublethink“, Orwell’s idea of telling “deliberate lies while genuinely believing in them”. Just look at the “facts” that he was using:

A simple measure of unsuccessful bargaining in workplaces is the number of days lost due to industrial disputes. Since 1991 the number of days lost to industrial disputes has been falling. In 1991 the average days lost during the year was 239.4 days per 1000 employees.

To compare, last year the figure was 15.9 days lost per 1000 employees. This is a significant drop. There has been an average reduction in days lost to industrial disputes almost every year for the past two decades.

For a few reasons I am no fan of the FWA, but I am also able to change my mind in the face of solid evidence. I was curious about what he was saying and decided to investigate a little further. I did not need to go very far; Thistlethwaite’s own figures came from the ABS Industrial Disputes, Australia report on industrial disputes up to September 2011. Looking at the report, there was a dramatic spike in disputes that began in the quarter ending September 2010 – exactly when the FWA came into full effect.

Also note: the major industries where most working days were lost were construction, mining and education/healthcare and NOT in transport – nothing to do with Qantas.

Another point I noticed: remember how he was lauding the fact that the number of days lost per 1000 employees had dropped from 239.4 to 15.9 since 1991? Well a couple of paragraphs later:

… The Howard Government had more than 105 days lost to industrial action per 1000 employees in 1999-2000. This figure represents the first four years of the Howard Government’s initial industrial regime, a policy that turned the screws on working people.

There seems to be more to it than he is telling, but the ABS did not have a graph showing the trend in the data going back decades. Luckily, I could do this myself:

The red line is a moving average over the previous four quarters.

Strange, to me that looks like the 1999-2000 period happens to have been an anomalous spike in what was otherwise a consistent decline in industrial disputes during Howard’s term. Meanwhile, he conveniently did not mention the 1985-1991 period under the Hawke Labor government where industrial disputes were actuallyincreasing (albeit not significantly).

After Keating took over, there was a drop, but then disputes started rising again until Howard started “turning the screws on working people” in 1996, when they began to drop again and did so more or less consistently, aside from the spikes in 1999-2000 and 2003-2004. Note in particular that the number of hours lost dropped under Work Choices (2005-07) and then have been slowly rising since Labor took over in 2007 andhave risen sharply since the FWA came into full effect.

I was a little disturbed by this, but I did give Thistlethwaite the benefit of the doubt at first. After all, no one looking at this data with any remote mathematical competence would arrive at the conclusions that he did without very carefully and deliberately choosing only the parts that prove their argument and ignoring everything else.

Well, lo and behold, recently there was another Thistlethwaite piece in The Punch on the FWA:

The recently negotiated Holden Enterprise Agreement shows that the Fair Work Act equips employers and employees with the tools to produce high quality, mutually satisfactory agreements.

The link that he points to says this:

Today’s stories about Holden signing a new EBA are premature.

The EBAs covering engineering and manufacturing employees have not been signed and the coverage today is misleading and takes a very one-sided view of negotiations.

Now I kind of feel like he’s doing this on purpose. This must be an Easter Egg. There is no possible way that someone would actually try to argue that their industrial relations scheme is working because of a protracted negotiation over salaries by a company that’s about to get a $300mln bailout and then back that up by linking to a press statement from that company saying that no agreement has actually been reached. I mean, that just seems silly.

Since 1991, wages have increased from $929 to $1287 per week in real terms. That means even once cost of living increases over the past two decades are taken into account, Australians are now $358 better off per week. Over this 20-year period, combined real wage growth was 33 per cent, an average increase real in wages of 1.7 per cent per year.

Since the introduction of the Fair Work Act, real wages have increased by 2.8 per cent, an average of 1.4 per cent per year. This is consistent with real wage growth trends seen over the last 20 years and shows that real claims about wages breakouts are grossly exaggerated.

Hold on a second, did he just  argue that the FWA has maintained real wage growth using figures showing that, under the FWA, growth has been 18% lower than average? I had to make sure, because it definitely looks like he did that.

It does make sense that the FWA would lower wage growth and cause more industrial disputes, seeing as it effectively takes Australian IR policy back to the pre-Keating era, when this was the norm:

The labour market regression started with the FWA’s repudiation of Keating’s concept of enterprise bargaining. But it went a lot further; it abolished individual contracts and non-union collective agreements, made bargaining more difficult, bolstered the centralised system, returned to and reinforced the concept of arbitration, put agreement-making back into the tribunal thereby undercutting the involvement of employers and employees, brought the unions back into virtually every agreement, expanded the right to strike and reinvigorated the awards system. It widened union access to business through right of entry provisions; it broadened unfair dismissal provisions, changed anti-discrimination rights and gave the tribunal more jurisdiction.

… Under the FWA, all agreements are, in practice, union agreements because if, in any business, regardless of its size, there is even only one union member then the union with coverage becomes the default bargaining representative. The employer is not allowed to know the identity of that member. And the union member is not consulted.

That last point is particularly sore for me. Less than 20% of Australian workers are members of Unions. Note that I capitalise the “U” – this is because the Union movement in Australia today is not the trade union movement of the past. These are no longer grassroots organisations formed by uniting workers to demand better conditions; they are now large, opaque and corrupt institutions, which, as their membership numbers show, are becoming increasingly irrelevant with every passing year.

It is an absolute disgrace that there would be legislation forcing Unions into negotiations between employers and employees who are not Union members. Who is the Government to tell Australian workers who should be representing them? Especially when they have made a clear choice that they do not want to be a part of the Union!

But then I guess this is apparently a Government who can only defend the policy with proof that it isn’t working. That, right there, is straight out of Orwell.

UPDATE: Since time of writing, December Quarter figures have been released, further confirming the thesis of this article. 

Major Karnage is a Sydney-based young professional. This was originally posted on his personal blog

Gillard government: hates volunteers, loves unions Gillard government: hates volunteers, loves unions

Ken_phillips Ken Phillips describes the continued attack on volunteer & community groups by the GIllard Government: 

This headline – “Gillard government hates volunteers, loves unions”, is based on evidence. Last week the Gillard government killed off the Australian Building and Construction Commission. (The Abbott opposition have said that it will restore the ABCC if elected.)
 
One of the reasons the government cited for removing the ABCC was because it had strong powers to require unions and others in the construction sector to answer questions about corruption, bullying and intimidation. (We say the ABCC protected self-employed construction workers from extreme harassment and intimidation.)  The government has now saved unions from tough questioning that might expose bullying and corruption.
 
But the Gillard government has a proposal to introduce a new regulatory system for the not-for-profit and volunteer sector. The Bill sets up a commission that will have near-identical powers to question volunteers that it’s just removed from unions. The double standard is glaring.
 
The government is also introducing new tax laws for the not-for-profit sector—but exempting unions from those laws.
 
This follows the Gillard government’s introducing OHS laws that enable volunteers to be prosecuted. Here’s the evidence from the Scout Association.
 
What is it with this government? Doesn’t it understand what it takes to make a just and fair society? It favours protecting bully unions in construction and proposes the same in transport. They have a very contorted view of justice!

Ken Phillips is the Executive Director of the Independent Contractors Association.

Scouts and Other Volunteers Hit by OHS Laws

Ken_phillips Ken Phillips discusses the damaging affect of new national OHS laws on volunteers:

In a dramatic demonstration of the bad design of the new national OHS laws, the NSW Scout Association has issued a memo to all its volunteer leaders and committee members. The memo is here.
 
In part, it says:
 
Section Leaders are required to perform the following duties

Promptly rectify or notify safety issues around the Scout Hall
Conduct risk assessments on proposed games and activities and ensure that the can be done with a reasonable expectation of safe participation.
Provide clear and concise instructions to Youth Members on safety issues.
Enforce safety requirements and the use of personal protection equipment where required.
Follow the policies and procedures of the Association
If you do not follow directives, policies and procedures, you may be fined.
 In effect, volunteers are now expected to have the same OHS expertise and resources as a senior manager in BHP. This has never been required before. Volunteers now face huge risks.
 
What the Scout memo doesn’t say is that prosecutions are conducted under criminal law, that volunteers would be denied the right to silence and could be held responsible even if they didn’t have control of the situation.
 
Here’s our most recent update on what’s happening with the laws.

The Gillard government is insisting that these laws go fully national.

UPDATE: Link fixed.

Ken Phillips is the Executive Director of the Independent Contractors Association.

The Facts Behind The Victorian Nurses Strike

IMG_3115Dr. Grant Ross discusses the damaging impact of the illegal Victorian Nursing Strike:

There is nothing respectable about the nursing strike. 

The Australian Nursing Federation (ANF) voted to strike after failing to reach an agreement with the Victorian Hospitals Industry Association (VHIA), subsequent to the previous Enterprise Bargaining Agreement expiring on November 1. The ANF demanded an 18.5% pay increase whilst the VHIA on behalf of the government offered 2.5% annually with bankable productivity gains. Industrial action began November 12 and was ordered to stop on November 16 by Fair Work Australia after an application by VHIA.

The ANF defied this order and continued striking until a third order to suspend industrial action was issued November 25th. During this period hundreds of beds had been closed across 86 health providers in the state with major effects on hospitals.

According to news reports, during the nursing strike a two-year-old girl with a broken arm had to wait more than a day for treatment after staff vacated the Casey Hospital emergency department.

Nurses refused to admit a 96 year old woman to a ward, until senior management was called in. A man at Northern Hospital waited 40 hours on a trolley.

In my hospital, 5/6 of theatres were closed, grinding theatre to a halt and forcing patients, some of whom have waited years in crippling pain, to forego operations that would have restored their ability to walk. Over 800 such elective operations were cancelled by nurses during the 13 day strike. 

Contained in a series of instructions published on the ANF website the ANF somehow gave themselves the power and expertise to decide who would and would not get an operation:

Contained in only 2 brief lines, the document ‘How to Cancel Beds’ tells nurses:

“CANCEL 1 in 3 booked operations or the equivalent in operating theatre including endoscopy and day surgery…be mindful of the clinically optimum time for surgery”

Out of keeping with normal practice, union delegates were deciding who did and did not get their treatment as nurses were deciding which patients got beds in relation to the strike. For the ANF to argue that they always found a bed for the patient when it was required deviates from the purpose of why the patient is there is the first place; aka for treatment from trained professionals.

In this regard every patient should be deserving of a bed, not having nurses decide who was and wasn’t safe without treatment is more or less an unacceptable departure from the principles of usual practice. Furthermore, it raises some ethical questions about the rise of unionism in nursing.  

Everybody supports that nurses, just like any other worker, have a democratic right to undertake industrial action and put their case forward for what they view as better working conditions. But that right does not extend to abrogating the industrial relations process as set out by our democratic parliament. 

The ANF had a means of negotiating on pay that involved minimal striking and arbitration with the FWA and minimal disruption to the hospital system. Displeased with the prospects of a fair arbitration towards them, they chose to strike beyond the order of the FWA.

Instead of striking, nurses should have sought arbitration and accepted the necessity for wages to be based on enterprise bargaining and productivity assessments. This is what FWA and EBA are for; despite how inadequate the current industrial relations legislation is exposed as being.

The recent strike raises serious questions about the effect of the unions on nurses. Nurses have chosen to make their claims through destabilizing the health system and perpetuating a public campaign on false grounds of ‘gender discrimination’, ‘nurses work harder than doctors’ and spurious claims of ‘disrespect’.

Claims such as these are simply decerebrate.

In the context of such constantly toxic claims, one seriously must wonder whether these arguments are genuinely about pay disputes of nurses or rather an attempt by some officials to revive unionism within the hospital systems. The challenges in running a first class health system are difficult enough without having to battle self-interested elements of the industrial dispute business that are intent on turning professional against professional to grow their power.

Nurses must continue to advocate for the very important role they play. However, a professional does not blackmail their employer to get what they want. It may get results, but it is not dignified when other options are available.

Grant Ross is a graduate of Medicine and Surgery from The University of Melbourne, where he was also President of the Rural Health Society. 

 

Three Cheers For Alan Joyce

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Tim Andrews congratulates Alan Joyce for doing the right thing, and notes that the real villian here is the Fair Work Act:

As someone who has three QANTAS flights booked in the next week, and may still not be able to get on at least one of them, I would like to offer my heartfelt congratulations to CEO Alan Joyce for standing up to Union blackmail and doing the right thing.

There is no doubt whatsoever that if the current, outdated, inflexible model imposed upon QANTAS was to continue, the Airline would eventually cease to exist. It can not, after all,  succeed  against other airlines in a highly competitive international marketplace if shackled by such things, hence why QANTAS International is losing money, and it is highly disappointing that, in persisting with their unreasonable claims, union bosses were happy to see QANTAS go bankrupt just to preserve a few of their perks.

Still, it is rare to see a CEO have the courage to do what Alan Joyce did and ground the whole airline, knowing the personal abuse it would cost him. CEO’s in Australia these days are generally successfully threatened into making deals with union bosses so that our left wing media can say nice things about them, they’re safe from attacks, and it is the consumers and taxpayers who foot the bill when the company goes bust 10 years later and their successors will ask for a taxpayer bailout.

However, the union bosses are not the real villains here. Rather, it is the fact that they were allowed to blackmail a company into a position where it is brought to its knees, and the lock-out was the only choice left, that is the real issue. And the fact remains that none of this would have occurred if not for the euphemistically named Fair Work Australia Act, which allows Unions to take protected strike action on pretty much anything, and limits employers responses whereby their only choice it the lockout – which is what occurred here. And so, with the Fair Work Act designed to give Unions almost limitless power, it is only inevitable that something like this has occurred.

This is the real crime here – that Labor has imposed upon the workplace an incredibly outdated piece of legislation as a payoff to its Union donors for the millions of dollars of members money they donated to the Labor Party. The Fair Work Act is responsible for this. It is bad law, and it must be repealed, hence why it is so disappointing that Tony Abbott has refused to point this out, out of fear of a Labor Party WorkChoice scare campaign.

Unless the Fair Work Act is repealed, get used to seeing disputes like this again, and again, and again.  

Tim Andrews is the Managing Editor of Menzies House. 

 

Opposition squibs workplace relations in manufacturing inquiry

The Federal Opposition should be taking a critical look at workplace relations to improve productivity, writes Ian Hanke.

The HR Nicholls Society is disappointed that the federal opposition has not made workplace relations central to its review of the manufacturing industry.

In its 11 point terms of reference there is not one mention of workplace relations which is central to improved productivity in the sector.

While it is heartening that the shadow Minister for Innovation, Industry and Science, Sophie Mirabella, acknowledged at the National Press Club that she is “open to industry raising issues with us” including workplace relations the issue should be central to the inquiry, not peripheral to it.

With over 100,000 jobs having disappeared in the manufacturing sector since mid 2007 the Society believes it is incumbent on the opposition that its review specifically looks at work practices that operate within the sector.

In light of the government allowing a trade exposed industry such as blue water shipping to be exempt from the operations of the Fair Work Act the opposition should be seeking submissions on why other industries cannot avail themselves of same flexibility.

With the government effectively having set an “opt out” clause for the shipping industry the question must be asked why other industries cannot do the same.

These sorts of issues ought to be central to any review of the manufacturing sector.

Ian Hanke is the Director of Communications and Strategy at the HR Nicholls Society.

Who is Obama’s New Economic Adviser?

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Nickolai Hubble investigates the new Chair of Obama's Council of Economic Adviers:

Obama has appointed a new Chair to his Council of Economic Advisers. Alan Krueger is a Princeton University economist who was an Assistant Secretary of the Treasury for Bill Clinton and Chief Economist at the Department of Labor for Obama. 

One of his most noteworthy achievements, on the positive side at least, was his criticism of Bush’s manipulation of data on terrorist attacks in 2004. Magazine The Atlantic explains that ‘Krueger in 2004 challenged one of the central premises of the Bush doctrine on the year-old war in Iraq: that going into that country would reduce global terrorist attacks.

And he was vindicated when Secretary of State Colin Powell admitted ‘I am not a happy camper over this. We were wrong.

But Krueger and his co-author gloated a little too much over their discovery, saying that ‘It is regrettable that one casualty in the war against terrorism has been the accurate reporting of statistics. This seems to be another fight we are losing.’

The Atlantic Journalist Nancy Scola falls for Krueger’s triumph, writing that his discovery ‘suggests that Alan Krueger a) really knows how to count and b) knows how to make that skill count in the political arena.

Only one of these is true.

If she had done a little research, Scola would have discovered that Krueger’s expertise with ‘accurate reporting of statistics’ comes from his own history of failing to do so. Most notably, in 1994, when he attempted to prove that minimum wages create jobs instead of reducing them. (In other words, he attempted to refute supply and demand.)

The National Bureau of Economic Research did a follow up study in 1995 to dig into Krueger’s absurd findings. The abstract of that study states that it came ‘to the opposite conclusion’ from that reached by Krueger and his co-author.

Why the opposing results? Well, the NBER used proper payroll data, while Krueger used … telephone surveys.

Ezra Klein of the Washington Post must have skipped looking into Krueger’s past as well when he wrote that Krueger is ’known for bringing a near-superhuman rigor’ to labour economics.

Better still, when the Employment Policy Institute looked into the study one year later, it concluded that the ‘data set used in the New Jersey study bears no relation to numbers drawn from payroll records of the restaurants the New Jersey study claims to cover.’

Super human rigor indeed. No wonder the EPI used the title ‘The Crippling Flaws in the New Jersey Fast Food Study’.

As Scola got right in The Atlantic, Krueger is good at making his ‘skill count in the political arena.’ The EPI study noted politicians had been widely citing Krueger’s conclusions, despite the fact that ‘the New Jersey fast food study has been proven wrong…’

But after a series of failures coming from Obama’s economics programs, perhaps Obama doesn’t want someone who uses reliable statistics. Perhaps he wants someone who uses statistics for political application. As Ezra Klein puts it, Krueger’s ‘academic work makes him a particularly good fit for this position at this particular moment.

Maybe Obama has selected Krueger for his success stories. Like being involved in ‘Cash for Clunkers’ and the ‘Small Business Lending Fund’.

Alas, those have turned out to be spectacular failures too.

Perhaps Krueger’s quote above could be rewritten as follows: It is regrettable that one casualty in the war against the free market has been the accurate reporting of statistics. This seems to be another fight we are losing.

Nickolai Hubble first read Milton Friedman’s book Free to Choose before turning 16. Ever since, he has gone on an enthusiastic rampage of learning and advocating free market principles.

It’s Time to Unleash Business from Government diktat

Sean-Garman Tony Abbott needs to start fighting in the corner of investors, entrepreneurs and small businesses against Labor’s Big Government machine, writes Sean Garman.

Australia is being held back by politicians who are ignorant of the dynamics of the free market. Australian businesses and entrepreneurs cannot achieve their full potential because of restrictive regulations and a political class more afraid of their own shadow than going into bat for a freer and more prosperous economy.

The two most successful Australian sectors are mining and banking but both are coming under attack by politicians. The mining industry is fighting the super profits tax. Banks are fighting Wayne Swan’s “fifth pillar reforms”. Both are being targeted by politicians who have little or no experience in the world outside of the political beltway. The error of the ‘politico-media axis’ is in believing that these two sectors successes require the government to lasso them to allow other industries to grow. What country achieves and drives prosperity by dragging back their bolters? In any other field of endeavour it would be considered as the ‘tall toppy syndrome’. It would be like asking Cathy Freeman to wear weights when she was sprinting in the Olympics! Instead of throwing up barriers to our successful sectors, we should ask why other industries are not as successful.

People point out that Australians suffer from a high interest rate or foreign exchange regime. Others point out that people are too greedy or that innovation is somehow driven by government spending to prop up demand. This is wrong. Innovation is spurred by risk-taking and competitiveness is spurred by a flexible and light-tough regulatory regime that promotes productivity. This can be supported by government through a positive tax regime to promote private equity investment, a technically skilled and critically-thinking society, and a low regulatory regime. This then creates a culture of entrepreneurship and competitiveness.

This is where Tony Abbott needs to sit up and take notice. Hiring people is a massive investment for a small business or entrepreneur. It represents a massive financial and operational risk. Expanding production is a similarly large risk for a business owner. Creating and maintaining a regulatory regime that creates a rigid labour force only throws sand into the machine of private sector investment rather than spurring them to greater productivity and growth.

High regulation that permanently increases costs does not help drive innovation. Labour market rigidity means that business cannot quickly downsize (or cheaply) during a downturn. This blocks businesses ability to access capital. Furthermore, labour market rigidity makes it comparatively cheaper to move production offshore or for competitors to benefit from having a better regulatory climate than Australia. This then creates a slippery slope because while Australians might not want low-wage jobs, pretty soon it is cheaper to move higher value production off-shore and then finally designers, scientists and engineers who create the “idea”. This is what we are seeing in China today. The west started to move low-cost manufacturing and now we are seeing the top ranked scientists and designers move across to be closer to the manufacturing centers.

Australia’s tax regime bashes international private equity and investment capital and this throws up barriers that halt money and expertise flowing through to Australian-based businesses. International investors can bring with them the capital to grow Australian businesses and the skill set to allow them to export goods and services to the world. Our tax regime acts as a disincentive for investors and hence acts as a brake on innovation and growth. Yet arguing for a more efficient and investor-friendly tax regime is not an easy case to make in this media cycle, especially when Labor is beholden to Green “progressives” and agrarian socialists for their majority.

Yet the real test of a leader is doing what is right, not what is easy.

Tony Abbott must now need to listen to the concerns of businesses and investors. Australian business leaders are prepared to speak out if they know there is someone on the other end who is listening. Why would they do that if Tony Abbott meekly accepts Labor’s proposals on industrial relations? Abbott was prepared to king-hit Labor over the ETS but runs from a fight on industrial relations!

I am a positivist by nature. The 21st century offers Australia an opportunity to work towards a higher standard of living. If history has taught us anything, it is that humanity has the capacity for continued innovation and improvement. The growth of the Asian economies, the rising middle class, and the increased globalisation of business is an opportunity that Australia needs to embrace but they need the government and politicians to stop thinking that they know business better than those who do it for a living.

Sean Garman works in banking in the City of London. He was Vice Chairman of Macquarie University Student’s Council, President of Macquarie University Liberal Club and currently provides policy advice to Conservative Party MPs and MEPs on economic policy.