The Real Worry About IR Reforms

Editorial - Canberra Times

The Federal Labor Party has an enormous investment in popular disapproval of the Government's workplace changes, just as it did six years ago in popular outrage against the goods and services tax. As with the GST, however, it might be wise for it to spread its risks. Polls suggest it is making headway in the short term with its campaign, but whether the unpopularity of the Government's measures, some (fairly slight but predictable) signs of some employers abusing the new powers, and signs of Government nervousness will be sounding as strongly in 18 months is far from certain. If the economy continues to grow strongly, demand may well keep wages and conditions at high levels and disarm some of the popular fears that hard-won conditions, and job security, will be eroded. If that occurs - as of course the Government insists it will - the issue will have lost its power to make a critical difference in the way people vote.

Indeed, the greatest threat to the changes at the moment comes from the constitutional challenge being mounted by the states against the federal takeover of industrial relations laws. The High Court is now dominated by judges appointed during the period of the Howard Government, some of whom are the capital C conservatives that some of the Government's ideologues demanded. What is not evident is that any of the judges approach their functions in a frankly party-partisan way. The legislation involves a radical approach to the power of the Commonwealth to take on functions, an approach which Labor governments have used with some success over the years, generally to criticism from the ranks of those more conservative in their politics or to political and administrative centrism. Strictly, the Commonwealth has always had only limited explicit powers in industrial relations; until recently the extension of those powers has come from expansive claims of what is implied alongside what is explicit, or by the use of legal fictions designed to pretend compliance with the old Commonwealth requirements.

John Howard and his Industrial Relations Minister Kevin Andrews have abandoned most of the old constitutional underpinnings, preferring instead to use the Commonwealth's constitutional power over corporations. Their strategy depends on an assumption, in effect, that any law saying "a corporation shall" or "a corporation shall not" is a valid exercise of Commonwealth power, even if it requires people, or corporations to do things that the Commonwealth is otherwise unable to make them do. Twenty years ago, a High Court regularly denounced by conservative politicians and conservative lawyers for being "centrist" "adventurous" and "expansive", seemed sympathetic to this broad interpretation. It is by no means certain that the present High Court, far more timid, far more inward-looking, and far, far more legalistic, will take the same view. Pessimism about the Government's chances goes right into Cabinet, as can be seen from the reaction to unguarded remarks made by Senator Nick Minchin at a HR Nichols Society meeting recently.

What is not clear is what will happen if the challenge by the states succeeds. It will certainly be embarrassing to Howard and to Andrews and, for a time at least, undermine many, though probably not all, of their "reforms". Most could probably be reinstated by more tortuous and complex legislation which skips around a takeover of state jurisdictions but, given the criticism of the complexity and difficulty of the new system (which runs to more than 2500 pages), even more prolix legislation would hardly be hailed by employers, particularly those who complain of excessive red tape, and a regulatory environment which is the absolute antithesis of a freer market.

Yesterday, Kevin Andrews conceded that a few employers - who had sacked workers, or sacked workers then promptly offered them, in effect, their old jobs with inferior pay and conditions - might be doing the wrong thing. That nicely suited a script being used by both industrial and political Labor, which has had daily press conferences blaming anything bad currently happening to workers on the new legislation. They may well be striking a chord with the public, even if there is little evidence, so far, of widespread abuses or systemic attempts to upset settled workplaces. One might assume that John Howard is being more calm, having expected some teething problems and immediate horror stories, confident that the changes will be bedded in well before the next election. It is unlikely that he can be as relaxed and comfortable about his court battle.