AWAs unlock West's mining wealth

Kim Beazley's recent commitment to eliminate all Australian workplace agreements is tantamount to killing the goose that lays the nation's golden egg.

Eliminating the AWA would undermine the profitability and productivity of the nation's main wealth creating sector -- the mining sector of Western Australia.

The WA mining sector moved en masse to individual agreements in the mid 1990s under reforms introduced by the Court Government.

At the time, the mining sector was encumbered by a huge number of inefficiencies built up over decades of capitulating to bloody-minded union demands.  The sector also had on offer riches from the rise of China if the largest country in the world got its act together, became efficient and built the needed capacity and related infrastructure.

While labour was not a major cost, it was the major impediment to improving productivity and reaping the riches on offer.

The challenge was to get the workforce committed to gaining the prize and individual agreements achieved this largely by providing wage increases in the order of 30 to 50 per cent in exchange for organisational change.

In 2001, the industry faced a major hurdle when the Gallop Government, like Beazley now threatens to do, capitulated to its union paymasters and eliminated state-based individual agreements.  Luckily, there was an alternative in the form of the Federal AWA and the sector shifted en masse.

The shift was not easy.  AWAs are costly to administer and negotiate and the mining sector had to once more convince its workers individually to agree to make the move.  Because the gains to workers and the firms were so large and clear-cut, the move was achieved in full and in a remarkably short period of time.

There is now no alternative to the AWAs.  Moreover, a shift back to collective agreements, as envisaged by Beazley, would necessarily result in reduced operating flexibility, lost productivity and lower wages and profitability.  The impact would spread to us all.

All Australians share in the profits earned by the WA mining sector, directly through taxation and indirectly through economic growth.  Indeed, the large tax cuts now benefiting most households are in the main being funded from profits from the WA mining sector.  If the profits go, the tax cuts will follow suit.

Beazley rationalises his commitment as an effort to defend the little guy from exploitative bosses.  However, in the mining sector there is no little guy or exploitation.  The mining sector workforce is highly skilled, highly paid and in a strong bargaining position.  Moreover, the mining sector workforce has twice agreed unanimously to adopt individual agreements.

If Beazley's concern lay in protecting workers, he would not ban AWAs but place restrictions on their terms and conditions.  He certain would not ban them in the mining sector.

One can only conclude that his aim is not to protect workers but to force them back to the union fold irrespective of the consequences for them and the nation as a whole.

This is how low the formerly reformist ALP has sunk.

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