One significant reason the Bracks Government is performing so well in the opinion polls is that it is substantially a business-friendly government. The reasons are clear.
It has controlled the state budget, keeping it in surplus, paid down debt and kept the workers' compensation scheme in the black. It is positioned to cover the state's looming public sector superannuation liabilities. State finances are generally stable. This has contributed to a fairly positive economic environment.
The Government has made a range of important changes to occupational health and safety laws, small-business policies and has pushed along infrastructure development.
Naturally, not all is perfect. Stupid things have happened, such as the ban on genetically modified food. This damages Victoria as a centre for biotech excellence. The 2030 planning scheme has made some land speculators rich at the expense of young home buyers. New housing costs are consequently higher than they should be, thus restricting home building activity.
The scorecard overall, however, is positive and reflected in the continued Victorian economic growth. This compares with NSW, which is in significant economic difficulty.
Much of the reason for the Bracks Government's success in the business area relates to the unusual relationship with Victorian unions. Last time the ALP was in government under Cain and Kirner, it was captured and ultimately destroyed by anti-business unions. But the Bracks Government has kept this key constituency at arm's-length from vital economic decision making.
In fact, the relationship between the Government and Victoria's unions is strained and often icy. Radical Victorian unions wage war behind the scenes with the Bracks team but it's mostly contained inside ALP factional power plays.
The key indicator of how Victorian unions have been kept at bay is the refusal of Bracks/ Brumby to reintroduce a state industrial relations system. This has caused tension with Victoria's unions. But it has meant that Victorian business has a significant advantage over other states.
For example, NSW business is gridlocked by an industrial relations system that micro-manages business activity. One NSW transport company recently had to supply 50,000 pages of financial records to a union as part of an industrial relations compliance requirement. This sort of detailed industrial relations interference in business operations is surprisingly frequent in NSW.
Even more startling is that commercial and even criminal cases can be heard in the NSW Industrial Relations Commission, where appeals against decisions are prohibited. NSW cuts business to death in thousands of ways.
So far Bracks and Brumby have kept this NSW-type anti-business disease largely out of Victoria. This is important. Victoria's construction sector underperforms because of entrenched union control. This makes Victorian infrastructure construction much more expensive than Queensland, for example. The Federal Government's new construction industry policemen are starting to clean this up and Victoria should be a major beneficiary. The Government is letting this play out, which may fix a construction union problem the it can't fix. But within these positives there are some signals of creeping special privilege being delivered to unions.
This year, the Government introduced owner-driver legislation. It does a number of good things by tightening up contract obligations in the transport sector. But it also does something else that is surprising. It introduces a process of union-influenced price fixing over commercial contracts in the transport sector. Proof that the intent is to do this, is that the act removes itself from the Trade Practices Act. This means the TPA will not be able to block price manipulation when it starts to take effect.
To stay in the Government's good books, some industry bodies have agreed to this.
This mirrors the interference in business that developed in NSW. In that state, business interference laws built up over a decade in many small ways. Industry bodies were gradually seduced into agreement. NSW unions achieved new anti-business powers over time. Business and the voters didn't realise what was unfolding.
The Victorian owner-driver laws indicate that this process is under way in Victoria. It is masked by political spin.
The Bracks Government so far has a sound pro-business track record. But signs are emerging of seemingly small political trade-offs to unions.
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