10 January 2013

The empty mantle

The Liberal Party hasn't started 2013 at all well.

When your mainstream media coverage is stuck on an issue that makes people squirm (Peta Credlin's fertility) within a wider theme that is death for your side of politics (women: Tony Abbott just doesn't get them, but his side of politics wants him to be Prime Minister anyway), you need to change the subject fast. The Liberals chose the wrong guy (Josh Frydenberg) and the wrong subject (workplace relations).

Here's the article by Josh with a warm-up routine by David Crowe. You can read both for free by copying the headlines into Google.

First to Crowe. When Michael Stutchbury left The Australian he took a few acolytes with him, which didn't quite create a vacuum but did result in the backwash that swept Crowe into that organ (whether Fairfax or News benefitted least from that particular exchange is a debate fit only for pubs in Surry Hills or Pyrmont; even blogs have higher standards than that). Paul Kelly used to hold the title that Crowe now occupies, and the very idea of him writing a cloying intro for an Opposition backbencher would have seen him crack the mother of all tantrums.
TONY Abbott is being urged by his allies to commit to major workplace reform and encourage the use of individual agreements, as the Coalition's internal debate on the key election issue escalates despite fears of a political backlash.
It is not escalating. Liberal MPs are in their electorates, spending time with the families for whom they will later leave politics to spend more time. They are being asked can they really win with that man, and have run out of Chrissy comestibles onto which the conversation can be deflected.
Howard government adviser and rising Liberal MP Josh Frydenberg has reignited the industrial relations debate by calling for a crackdown on union power as well as changes to make it easier for employers and their staff to use individual contracts instead of union awards.
He's reignited nothing. As we'll see, Josh is proposing nothing that hasn't been chewed over for much of the past seven or so years. Crowe is wrong to make out that Frydenberg is shifting the debate, or adding anything nearly so substantial to constitute "ignition".
The Opposition Leader has raised hopes for a more assertive Coalition stance on industrial relations by vowing to release detailed policies early in the year, as business leaders seek a clear commitment from the Coalition to dismantle elements of Labor's regime.
Less than a fortnight into the year is pretty early, and to be fair to Abbott he is serving the community to a far greater extent as a volunteer firefighter than he has or even can by applying his talents and experience as a politician. Frydenberg isn't jumping the gun, as Crowe is trying to make out. He is part of the strategy of taking up media space without saying anything.
... Mr Frydenberg is stepping up the case for major reform by citing a "productivity slump" and a spike in workplace disputes as proof that the Fair Work regime has failed to deliver on Labor's promises.
He's not stepping up anything, he's reiterating what has been said before. Crowe is being cute with language here. It's the policy of his paper that Australia's overall productivity has flatlined since WorkChoices was abolished, even though economists find it hard to prove. Can't wait to read the article where Josh clearly establishes that the increase in disputes is directly attributable to the legislation.
Mr Frydenberg marks out three reform targets including scaling back unfair dismissal laws, which currently apply to employers with 15 or more staff. While [he] does not nominate an alternative threshold, some within the Coalition favour an increase to 20 or 25 staff so that more small businesses would gain exemptions from the unfair dismissal laws.
Why does he not nominate an alternative threshold? Why have others done so without putting their names to it? Surely this is part of the broader policy debate? Why can't the Liberals have a debate any more?
Australian Industry Group chief executive Innes Willox assailed the Fair Work regime last year in a speech that singled out IFAs for criticism on the grounds they had "promised so much but delivered so little".

Mr Willox said employers and employees could not rely on IFAs because the current rules meant either side of an agreement could unilaterally terminate the IFA with only 28 days' notice.

The government's review of the Fair Work laws last year suggested the period be extended to 90 days but Mr Willox said companies and their staff needed a more secure arrangement with terms of up to four years.
This is poor criticism: do you want flexibility, or comfort and security? Many commercial contracts have terms of less than 28 days. News Ltd could sack David Crowe and have him off their premises in far less time than that. If you want comfort and security offer permanent employment, or enter into a commercial arrangement beyond the Fair Work Act. Why criticise a piece of legislation for being too flexible, then complaining it isn't flexible enough? Rather than just transcribed Willox's words Crowe should have questioned him on it, like a journalist would.
Mr Ciobo urged Mr Abbott last year to back the restoration of individual employment contracts like the Australian Workplace Agreements used in the Howard government's Work Choices.

Other MPs are wary of doing so as Labor seizes on talk of individual agreements to claim an Abbott government would bring back Work Choices and AWAs, which were widely criticised in the 2007 election campaign for cutting working conditions.

In a sign of the internal differences, opposition Treasury spokesman Joe Hockey declared last November that workplace reform was not a Coalition priority.

Howard offered Joe Hockey the Faustian bargain whereby he could get into Cabinet only if he put together a piece of workplace relations legislation that was flexible only for employers, but which didn't appear that way and enabled the then-government to fudge electorally unappealling aspects of it. Hockey seized the opportunity and produced a piece of legislation every bit as long and convoluted as the Corporations Act, and which also brought on the biggest labour-movement scare campaign in recent history.

It isn't quite fair to blame Hockey for single-handedly losing the 2007 election for his side of politics. He should, however, have stood up to Howard and demanded some flexibility, and he had a duty to steer the party away from those rocks in debates since that time. The idea that the Coalition would have nothing to say on workplace reform is garbage - particularly as the leader said that there would be a whole new policy early this year, meaning that it is in fact a priority at the very time Hockey claimed it wasn't.
Mr Frydenberg has spoken consistently on the need for workplace reform but insisted last night that he was not proposing a return to the Howard government's IR regime.

Mr Frydenberg said his call for changes to the IFAs did not amount to reinstating a key element of Work Choices.

"It's about tweaking existing provisions in the Fair Work Act to ensure that they work more effectively for both employer and employee, so they're a more attractive option than is currently the case because they're under-utilised," he said.
Ah, so Josh doesn't want to "ignite", he just wants to "tweak". Why didn't you say so, David? LIBERAL MP BASICALLY HAPPY WITH LABOR WORKPLACE LAWS, CALLS FOR TWEAKING would be more accurate than exciting, but accuracy is an under-appreciated and greatly missed feature of newspapers today.
Extending the timeframe of the IFAs, along the lines proposed by Mr Willox from AI Group, was a serious issue that needed to be looked at, Mr Frydenberg said.
What non-committal tosh. Crowe should have called Frydenberg on that.
Mr Frydenberg, who worked as director of global banking at Deutsche Bank and as a lawyer at Mallesons Stephen Jaques before entering parliament, cites the business criticism of the Fair Work Act as a reason for an urgent response from the Coalition.
Again, Crowe is being cute here, puffing up Frydenberg's title at Deutsche and omitting the most substantial part of his pre-parliamentary resume. Frydenberg spent relatively little time in the private sector; there are senior officials in the Chinese Communist Party with more actual private-sector experience than he, including in the important practical areas of dealing with employees and unions. Crowe should have told his readers that Josh is yet another MP who has spent much of his pre-parliamentary career as a party hack (Frydenberg was a staffer to Downer and Howard). Regular readers of The Australian loathe career staffers and wrongly assume hacks are a feature only of the hated Labor government, and would discount Frydenberg's words accordingly if only they knew.

It's understandable that Frydenberg should want to get his name in the paper, but Crowe is meant to be the one with a bit of sense and experience on what news is. Crowe should have looked at Frydenberg's article and declared it as non-meaty as a tofuburger, then gently broken it to Josh that he won't get a run until he can actually contribute to a debate rather than just calling for one. Crowe has tried subtly undercutting Frydenberg but it hasn't worked.

Enough of Crowe and on to Frydenberg directly:
Labor believes there is a trade-off in the workplace between flexibility and fairness, and a contest between a greedy employer and a helpless employee.

This is simply not true.

Employers and employees need each other. Without an effective, workable partnership, there is no enterprise, no profit and no job.
Straw-man knockdown followed by vacuous motherhood statement! If there is such a thing as a stamp of authenticity from Josh Frydenberg, that has to be it.
This workable partnership is under threat from an overregulated workplace, where unions are emboldened, militancy is on the rise and productivity in decline.

These are problems of the government's own making. In return for union financial support at the 2007 election, the Rudd government's Fair Work Act increased union power in more than 120 areas. Greater right of entry, more authority over greenfield sites and an enhanced ability to restrict the use of independent contractors are just some examples ...

This is Australia's new industrial landscape - a throwback to the past, unwinding not only John Howard's reforms (which were responsible for more than two million new jobs and a 20 per cent rise in real wages), but also those of Paul Keating, whose 1993 reforms encouraged enterprise bargaining at the workplace level.

The result has seen productivity slump and costs rise, penalising the very workers Labor purports to represent.
This has all the red-meat indicators of a desire to scrap the Fair Work Act altogether and start again: none of that "tweaking" nonsense that Crowe was quoting. Which is it? Is the current legislative environment completely inadequate or in need of shoring up?
Working days lost through industrial disputes were up 83 per cent in the year to June 2012, levels not seen since 2004, and high-profile stoppages such as the Qantas strike and the blockade at Grocon's Myer Emporium site dominated front pages.
The two examples quoted were employer-initiated lockouts rather than employee- or union-initiated actions: not helpful in making Josh's point. It's telling that 2004 is the nadir Frydenberg uses: while Howard was in office but before WorkChoices, the point where the mining boom started to take off and so did wage demands. He fails to mention low unemployment as a factor in increased disputation.

I'll leave to a qualified economist to deal with productivity and industrial disputations. There's plenty of quant goodness to be had here too, and I'm disappointed it's to be expected that Frydenberg hasn't even engaged with the data.
Greater industrial disputation not only creates higher costs for companies that are inevitably passed on to consumers but can also lead to companies cancelling projects in the pipeline.

In the past 12 months Shell, BHP and Woodside have shelved more than $100 billion of investment as the viability of resource projects is called into question.
And when asked why they shelved those projects, those companies explicitly state that high labour costs aren't a factor. Only cranks like Gina Rinehart, who wants the government to build all her infrastructure and to pay her employees no more than $2/day, bellyache about high labour costs as a factor in investing in this country. The companies Frydenberg cites are all mining companies: mining produces about as many jobs as the arts sector.
In May, BHP chairman Jac Nasser said "restrictive labour regulations have quickly become one of the most problematic factors for doing business in Australia". Using BHP's Queensland coal business as an example, he said in the past year alone that business faced "3200 incidents of industrial action" and "received over 1000 notices of intention to take industrial action and then approximately 500 notices withdrawing that action given on less than 24 hours' notice".

BHP's experience is not a one-off. David Peever, managing director of Rio Tinto Australia, has also spoken out on the issue and Santos chief executive David Knox has said Australian labour costs were double those in competing jurisdictions.
When Nasser was called on his labour regulations remarks, he admitted that they weren't that significant. Commodity prices and the Australian dollar are far more significant in determining the viability of projects in Australia.
This hasn't gone unnoticed by our competitors and global equity investors. Last year Australia fell from 11th to 15th on the World Bank's ease of doing business index ...
And how much of that was down to the Fair Work Act and other workplace legislation? None? Thought so.
and in the World Economic Forum's measure of global competitiveness, Australia fell four places to 20th overall and 123rd out of 144 countries for flexibility in wage determination and 120th in hiring and firing practices.
The latter two indicators are tricky to sell politically. If you are going to make it easier to sack people you run straight back into the Your Rights At Work campaign. Innes Willox was complaining about a mere 28 days notice: imagine the flexibility of giving immediate notice.

If you're going to criticise the current legislation, it is important to be clear about what your criticism is. You might think you're a tactical genius for attacking from both sides at once, but it makes you look flaky.
... Workplace Relations Minister Bill Shorten remains, in Kathy Jackson's words, "Dracula in charge of the blood bank".
Not a smart move to be quoting Kathy Jackson. Abbott is stuck with her but you may as well go boozing with Peter Slipper for all the good it will do to your cause.
A former secretary of the AWU, Shorten has become "the minister for unions".
Yep, that's what happens to Labor workplace relations ministers. Something similar happens in Coalition governments to Nationals who become Minister for Primary Industry. I learnt that in first-year politics. It's amazing that Josh has only just discovered it; and not necessarily an indictment of teaching at whatever uni Josh went to as one can only do so much.
[Shorten] conducted a Clayton's review of the Fair Work Act ... ignored the Department of Finance's suggestion that the implications for productivity be included ... stacked the Fair Work Commission with former union officials ... government's intervention in a legal case in support of the union movement... crudely "partisan".
So with stock-standard Liberal criticism of a Labor minister, and referring to criticism from employer groups, it is hard to see how Frydenberg is getting out in front of Liberal policy or even contributing much to it. Crowe has sold readers a dog here; everything Frydenberg has said is a rehash of what others have said, with no inkling or enlightenment as to what we might expect from Coalition workplace relations policy (even though, according to a former Liberal Workplace Relations Minister, it isn't a priority at all).
Not to mention his long silence over the Craig Thomson matter, which has raised serious questions about the conduct of senior union officials and the willingness of Fair Work Australia to conduct a proper and timely inquiry.
Michael Lawler has a lot to answer for, eh Josh?
Since union votes continue to dominate Labor conferences and ex-union officials continue to dominate the Labor caucus - even though overall union membership is in freefall - it is clear only the Coalition can make the practical changes necessary to our industrial relations system.
By that logic, only Labor governments can regulate corporate interests.
Tony Abbott has the track record to do this. As a reforming minister he instigated the Cole Royal Commission, which led to the creation of the Australian Building and Construction Commission. In his book Battlelines he identifies the "destructive" elements of Labor's Fair Work legislation while pointing to industrial relations reform as a road to a more productive and fairer society.
Here we are in the fourth-last paragraph of Josh's article. While Frydenberg has name-checked everyone who has ever criticised Shorten and the legislation he administers, he hasn't used it to propel his argument as to what's wrong and what needs to be fixed. All he's done here is name-check the leader, who basically set in place the conditions that led to the breakout of 2004.
Now is the opportunity for the Coalition to go on the front foot and put forward proposals that make unfair dismissal laws less of a burden on small business, lead to individual flexibility arrangements in the Fair Work Act becoming more attractive to employers and employees, and put the brakes on coercive union power beyond reinstating the ABCC and making unions more accountable through reforms to their governance arrangements.
That's it? That's the policy substance we've all been looking for?

That's what The Australian (Financial Review) and the employer organisations has been expounding for years: some sort of alchemy whereby WorkChoices will just pop back onto the statute books without voters noticing. This is more substantial than Frydenberg's effort, and it reads like the blimpish eructations of an armchair general who doesn't bear responsibility for Liberals on the front line. If you asked someone like David Crowe what changes the Coalition would make to workplace relations - shit, if you asked me - off the top of one's head and without reference to Josh Frydenberg, anyone would probably rattle off a list like that. Buy the paper, indeed.

The only attempt Frydenberg has made at dealing with workplace relations policy was this. Scroll down to my name and you'll note my comments on how he and his mate Alan failed to take the issues (which affect broader workplace relations issues) seriously. With this earlier article, his sorry record generally, and now yesterday's effort (even with Crowe's build-up), it's clear that policy is not Josh's thing.

Ironically, the issue that Josh was tasked to change the conversation from - Peta Credlin's reproductive difficulties at work - offers a host of workplace relations issues that are worthy of examination from a policy perspective.

Policy wonkery is not the be-all-and-end-all of politics; there is a place for hard-headed political calculation too. Business got WorkChoices out of the Liberals but when WorkChoices was threatened in the 2007 election, they all but abandoned it and the Coalition. Greg Jericho might think outfits like this are somehow sinister, but from a Liberal perspective they are laughably insufficient. If Innes Willox wants WorkChoices back he can bloody well pay for it: if business won't back workplace relations reform to the extent necessary to beat the labour movement, the Liberals should not stick their necks out for them. If Frydenberg was ever going to bite a bullet in this debate, that was it: he shirked that too.

Never mind seizing the mantle, Frydenberg should just take his coat. There is nothing for his leader or his party in his typically sorry offering. Josh Frydenberg, as was said of Newt Gingrich, is a dumb person's idea of a deep thinker. He drifts into policy debates with nothing to say, no contribution to make, and drifts away having made no impact whatsoever. No Labor ministers need fear any challenge by Josh Frydenberg, and it's doubtful any do. Flattering him as Crowe and others do goes beyond merely gilding the lily: to call Josh Frydenberg an up-and-coming Liberal is to set him, and the Liberal Party, up for failure.

We need more and better consideration of the big issues facing Australia than Josh is capable of offering. We also need the press gallery to stop dragging him out of his depth and insisting that his hapless floundering is so much artful positioning.


  1. Love your work, Andrew - another fine piece.

  2. Michael Kroger thinks Josh is a star!!

    References from John Howard and Andrew Peacock in his preselection considering the historical divide of those men within the party is genius!!!


    Does he walk on water as well i wonder??

    Yep party hack i assume with limited life experience

  3. Absolute Gold Andrew, thankyou!

  4. Brilliant, I do not understand why these pollies think so little of 11 million or so workers compared to a few hundred thousand bosses that they want to punish and continuall torture the workers. Workers are the voters and they do have rights.

    1. True, I'd also add that workers are consumers. If you're going to screw over the majority of consumers in society, I'd hazard a guess it wouldn't do so well for the economy as a whole. I wonder if they ever think of that?

  5. This is a well argued and clear article in response to the Liberal schmooze. Thank you for this. Pity the MSM won't publish it..It is a very important piece.

  6. FWIW Andrew, you can copy the links to the Oz direct from Google, and with the attached padding they'll link straight through.