Is it controversial to claim that WA's economic boom would not have been so huge if cutting edge labour reforms had not happened over the last twenty years? If it is, it may be even more controversial to say that the current Federal labour reforms are essential to maintaining and even expanding the boom.
WA is doing really well but not well enough to bring the 4 per cent plus unemployment rate down to historical lows of 2 per cent seen in the 1960s.
More economic growth is needed. Getting labour issues right is essential to this objective. The WA mining industry shows why. If any economy is to fire at full capacity every operational aspects of business must be in total harmony.
This was the situation in WA mining in the 1980s. Ore bodies were secured, finance was in place, markets were expanding, mines were built but labour relations were a disaster. Mines were underperforming because collective labour agreements stopped mines operating at full design capacity.
The big change started in the Pilbara when the Robe River mine shifted to individual agreements. Robe management simply wanted to run the mine properly. They said the collective agreements stopped them having good working relationships with Robe staff. This change in management attitude was revolutionary at the time, but it resulted in massive productivity, wage and profitability increases at Robe.
The new management approach was rapidly adopted through the mining sector, particularly in WA.
Quality individual staff agreements assist labour and management to pull together with planners, engineers, financiers, marketers and others to achieve high success. Miners say they would not have captured the full benefit of the Chinese and Indian economic explosions without this.
The outcome is that the current WA mining boom and hence the general economic boom, would not have been on the scale it is if individual labour agreements had not spread through WA in the 1990s.
Take this simple example. Many mines now have women driving their monster ore trucks. It turns out women have proven safer and more skillful than men. The greater female care has resulted in less equipment damage, breakdown and wear and tear.
But women have high child care needs. In some mines women have formed child-care groups. They alter their work rosters and share child care amongst themselves.
This could never have occurred under the old industrial relations processes. To change things companies had to apply to government tribunals, employ lawyers and wait months, sometimes years for a decision. If more change was needed the process was repeated. The old system was just to slow to meet the evolving needs of the people on the ground.
Individual agreements enable the constant and small changes needed to focus everyone on properly servicing clients.
This is why the mining industry fled to the Federal industrial relations system a few years ago when WA laws destroyed individual worker contracts.
It's why the mining industry has been a loud supporter of the Federal Work Choices legislation. They even say it doesn't go far enough to make individual contracts easier.
It's why WA needs to recognise the risk of not pushing for constant labour reform.
The terminal collapse now occurring of the traditional east coast manufacturing sector is a lesson for WA. Over the last decade Australian manufacturers stuck to 1950s-style collective labour agreements. They failed to do what miners did and focus the total business, including labour, on success. Competitive international threats are now overwhelming Australian manufactures and opportunities are going unrealised. It is management failure on a grand scale.
The same can happen in WA. The WA commercial construction sector is the best example.
WA construction is plagued by violence, scandalous cost and schedule overruns. It affects every aspect of life and business in WA.
These failures are held together by the WA industrial relations system which locks up labour and stops competition. It's holding back the additional economic potential of WA.
If not fixed, it will continue to cause the boom to be under-realised. Further, it can lead to economic rot in some sectors and job losses down the line as is happening in east coast manufacturing.
This is the importance of the new Federal regulator, the Australian Building and Construction Commission which is charged with weeding out corruption and returning competition to the construction sector. It's a big task with a large focus in WA.
It's all part of the Federal Governments integrated approach to creating labour reform. Along with Work Choices and the ABCC, we will soon see new legislation to look after independent contractors rights.
Is this revolutionary? For some people, yes! The total reform approach challenges some entrenched ways of doing business, and organising labour. From these groups there will continue to be a lot of huff and noise.
For others, individual contracts merely secure what is already happening. For them it's no big deal and they'll just continue with the job.
But for WA there's a lot at stake. The development boom has a long way to go to secure the full benefits. Labour reform is part of the package of activities that needs to occur to lock down this historic WA economic opportunity.
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