RESOURCES Minister Martin Ferguson has lashed out at unions winning wage deals for resource projects that endanger Australia’s competitiveness and will be “unsustainable over time”.
In a strong attack Mr Ferguson, a former ACTU president, said that “how much per hour we pay in Australia for project delivery as against how much per hour is paid in other countries” affected Australia’s competitiveness.
His comments are the latest sign that the government is looking at curbing union power to hold employers to ransom on greenfields resource projects. Workplace Relations Minister Bill Shorten, who has recently received the review of the Fair Work Act the government commissioned, is considering options after already meeting with unions and the Australian Mines and Metals Association. Mr Ferguson said Mr Shorten regarded this as a “key issue”.
Under the Fair Work Act, if an employer refuses to bargain, a union can take protected strike action.
Research released by the Australian Mines and Metals Association found one third of resource industry employers had tried to negotiate a greenfield agreement in the past three years and of those, 19 per cent had experienced unions refusing to make an agreement with them at all.
Mr Ferguson said that the difficulty was the employers either agreed to what a union or unions demanded “or you do not get an agreement”.
“That means in some projects we are getting improvements in wages and conditions which I think are unsustainable over time.”
The future challenge to these projects was not the mining or the carbon taxes, but the relative cost of delivering them compared to the capacity to deliver alternative projects in African countries, Brazil, the Gulf or any other oil and gas region.
Mr Ferguson said that as ACTU president “I found it as part of my responsibility to actually chase investment in Australia … We were actually looking to the long haul.
“I also learned very early on: you might get a short term gain in the immediate future but you can lose out on significant investment over time and that’s where we have got to be careful as a nation.”
The Minister for Regional Australia, Simon Crean, also a former ACTU president, appearing with Mr Ferguson at a news conference to release a report on commodity exports and infrastructure, pointed to the lessons of the 1970s, where big wage increases led to inflation and job losses. Later, in the years of the Accord between the Labor government and the unions, the emphasis had been on wealth creation and in return the union movement was entitled to influence the distribution of the wealth, including through obtaining the social reforms of Medicare and superannuation.
But the government is facing sharp opposition from the union movement to any cutback of union power. ACTU secretary, Dave Oliver, hit back saying Mr Ferguson and Mr Crean should refrain from lecturing this generation of union leaders, “who have operated in a highly flexible, enterprise level bargaining system for many years within an open economy — unlike the highly centralised system they were both familiar with.”
Both ministers appeared to be asking for a “special deal for mining companies to get one-sided agreements that will no doubt drive down wages and conditions in the mining industry”, Mr Oliver said.
“The ministers are demanding rights for mining companies that they have not supported for workers, which is getting access to the industrial umpire to arbitrate on disputes”.
Paul Howes, chief of the Australian Workers Union, with workers in the sector, said:”If you want to have a decentralised system you take the good with the bad”. He was “up for a discussion” of the situation but “what is the proposal?” It had to go beyond “fly by night comments”.
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