Some claim that the March 24 election in NSW will be a major test of the federal government's Work Choices legislation. At least that's the line being put by the NSW government. The truth is that the NSW election won't test Work Choices, but it will test the entrenched processes of political and business deal-making under which NSW is run. And at the core those processes depend on a tightly controlled network of industrial relations players.
NSW is unlike any other Australian state for the supreme power it has delivered to its industrial relations processes. The NSW Industrial Relations Commission and Court is more powerful than the NSW Supreme Court and the Australian High Court.
People in NSW cannot appeal against decisions imposed upon them by the Full Court of the NSW IRC. The IRC even prosecutes criminal cases under work safety laws. And normal criminal justice is absent, with denial of trial by jury and denial of presumption of innocence.
It applies in commercial matters also. Through the NSW IRC's unfair contracts provisions, normal commercial contracts are subject to control under rules quite alien to standard commercial law. This has included leases and franchise agreements. The commission's reach is unrestrained.
The IRC's intrusion into the detail of work relations considerably exceeds that of other states. Even the NSW government is powerless against the might of the NSW industrial relations system. For three years running the government's wages budget has blown out by 8.9 per cent a year because of IRC decisions on government employee pay scales and job classifications.
The system is designed this way. It's supposed to deliver an orderly and secure deal-making environment through which NSW can be run. At its heart is a belief that effective organisation of NSW only happens when unions, government and business cut deals to which they all stick. But this requires discipline.
The NSW industrial relations system delivers that discipline. The supreme legal authority given to the NSW IRC positions it as the institutional centre of NSW society. Around it circulate legal, union, political, financial and business operatives who co-operate to cut deals.
Anyone not part of the system remains a comparative minor player in NSW. Big players know the rules and don't break them. Anyone who steps away from the system finds it can turn against them and impose financial pain.
Most aspects of how NSW functions are affected by the system. This includes planning, transport infrastructure, health and education delivery, workers' compensation, superannuation, major financial deals and construction in particular.
When NSW was an economic powerhouse the system seemed effective. Over the past decade the system's influence has been enhanced. But with NSW now an economic deadweight this is under stress. The players can't seem to mastermind the deals that will drive NSW forward.
Few people comprehend the domineering scale of the system because its processes are complex, sophisticated and involve sleight of hand. Few voters understand that on March 24 they will be passing judgement not just on a long-serving government but on a process of deal-making to which the government is beholden.
Whatever the NSW election result, the implications federally are significant. The Australian union movement looks to NSW as its desired federal industrial model.
A win for the ALP in NSW will increase union pressure on the federal ALP to maintain and enhance policies designed to implement the NSW system federally. This is the real reason for the opposition to Work Choices. Work Choices blocks union-business-government deal-making -- putting industrial relations in a more subservient position to normal rule of law.
An election loss for the NSW ALP would send shock waves through the unions and the ALP. Even though no one believes this will occur, such an outcome could strain the relationship between unions and the federal ALP. Why would the federal ALP want to replicate a NSW style deal-making system that created economic decline and delivered political loss?
Attention could turn to the Victorian ALP model, which has rejected state-based industrial relations system supremacy and still delivered ALP political dominance.
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