With the Federal Government pushing for a single, national industrial relations system, it's worth considering the different industrial relations cultures in each state. Understanding these cultures explains a lot about how business is done in Australia. There's quite a difference between the states.
The most critical point is that there's still a lot of "big picture" deal-making involving unions, state governments and businesses. This deal-making contradicts the public's perception that unions and employers are mostly natural enemies.
But deal-making is often dysfunctional. It fractures and fails.
The Federal Government's industrial relations changes are altering deal-making processes. This is beginning to impact on how business is done.
Industrial relations deal-making at state level can be strong because it links with planning approval processes. If someone wants approval for a project, they'll find swifter government sanctioning if working relationships have been created with designated unions.
It works like this. A company will seek to expand or develop a factory or perhaps bid for government road construction jobs. The approval process is multi-layered. It usually involves establishing union worksite agreements, during and after construction. Executives sit on industry consultative committees with union officials. Personal connections are made that smooth approvals.
Industry associations play a central role. They guide companies through the personal connection process. In return, the associations secure membership and government funding for training and other activities.
The states and federal industrial relations commissions largely have a rubber-stamping role. They give the appearance of legal authority to deals pre-hatched between company executives and senior union officials. The commissions also discipline wayward companies.
It's not as simple as this but the general picture is true.
NSW is the strongest deal-making state. For a long time politicians, union officials and top business people have worked together in tight harmony. People who are "inside" the deal tents have done well. Deals are negotiated hard. But when deals are struck, they last. The NSW IRC gives legal force to the deals. Over the past few years it has become incredibly powerful by extending its reach to override normal commercial laws. The IRC has become a super-authority, sanctioning deals involving every aspect of how NSW operates, particularly in Sydney.
But lately this NSW deal-making has corroded. The web of deals has become so complex that it's strangling the NSW economy. Everything from transport, schools and hospitals to housing and even work safety is affected. The Government has largely lost control of its budget because public service wages are controlled by the NSW IRC.
Infrastructure reform has failed because of countervailing deals. These have stopped electricity privatisation, for example, and created dysfunctional management of railways.
Victoria is totally different. The deals culture has always been haphazard due to passionate ideologies dominating the union movement. Grand social ideas matter more to unions than practical business. The relationship between Victorian governments and unions has always been strained. The biggest bully usually wins. Business executives often look on, like blinking teddy bears, hoping to get their projects through but not sure how.
The demise of the Victorian IRC nearly a decade ago broke down deal processes even further. But oddly, Victoria has benefited. The web of integrated deals now stifling NSW is not present in Victoria. Projects can and do get approved and move ahead. However, huge cost overruns and delays are endemic, particularly in construction, because every day seems to involve renegotiation of demands. It's a great challenge for any Victorian government. It badly affected Commonwealth Games projects, costing hundreds of millions of dollars.
Queensland is in a league of its own. The difference is that a down-to-earth "frontier" spirit is alive. People tend to ignore ideology and seek to look after themselves. The Australian Workers Union dominates Queensland. But because Queensland workers have a real "get-up-and-go" attitude, the AWU has always had to be more practical than in other states. Deals tend not to be interlinked because players and projects are spread across a vast geographical area. The Queensland IRC has some importance but nowhere near that of NSW.
South Australia's long history of tight and stable family connections means that deals are not as dependent on industrial relations. SA has a small number of large, dominant projects, particularly mining, which everyone is desperate to support. There's a keenness to assist these projects. The SA IRC plays a role, sometimes heavily, but family and personal connections cut through. Outsiders looking to do business in SA need to take time and to partner with locals.
Tasmania has turned around spectacularly in the past few years. It was rapidly becoming a retirement village for romantic green dreamers. However, smart elements in the local construction union became fed up and decided that the state needed business. They moved into government with a strong pro-business attitude. They are working closely with local businesses in a Tasmanian rejuvenating exercise. The local IRC plays a role, but it is limited when compared with NSW, for example. Outsiders with ideas are encouraged, but have difficulty locating new investment opportunities.
The mining boom in Western Australia is so massive that industrial relations deal-making is minimal. Mining companies have developed top-quality, direct relationships with workers without unions, and pay big money to workers. They have to because the largest issue is the labour shortage.
The WA Government is being dragged along by the boom, responding to developments rather than creating them. The biggest problem is a dysfunctional Perth-based construction sector dominated by a crazed construction union. Rationality does not exist. The WA Government is inert on the issue. Robust entrepreneurs have responded by building integrated non-union supply chains to manage their projects.
The federal push for a unified industrial relations system will change these state-based deal environments. The impact will vary from state to state. NSW is set to witness large and fundamental change quickly. It is why the NSW Government is the chief advocate of constitutional challenge to the federal legislation. Change in the other states will be more medium to long-term.
ADVERTISEMENT
No comments:
Post a Comment