How To Wreck The Recovery

The ACTU has published an eight-point plan to steer Australia out of the COVID-19 crisis. It would cause a deep recession and kill jobs. By Nick Cater.

To be fair to Australian Council of Trade Unions, it is at least asking sensible questions in its eight-point COVID-19 recovery plan.

The solutions it advocates, however, would condemn Australia to a deep and lengthy recession, making a nonsense of the union movement’s claim to be protecting jobs.

The unions’ log of claims when it comes to the post-COVID-19 reform agenda reeks of self-interest and hypocrisy.

Here is what the ACTU gets wrong.

ACTU proposal 1: Improve the quality and security of jobs by halving the number of insecure jobs and increasing by 2 million the number of permanent jobs.

In a week when 600,000 Australian workers’ names were added to the jobless list, finding them secure jobs is vitally important.

MORE: How the left is trying to commandeer the recovery with environmental policies that don’t even work during good times

Re-regulating the labour market and reversing decades of largely bipartisan reforms, however, is nuts at a time when agility and flexibly by business is required.

In any case, the movement’s assertion that 40 per cent of the workforce has fallen into “insecure work” is a contrivance based on a blatant misrepresentation of a single report published by the OECD. The OECD’s definition of “non-standard” work arrangements applies to people who are not in a conventional nine-to-five job. 

The so-called gig economy is part of the solution, not the problem.

2. Lift wages and living standards.

Well, yes, that would be nice. But not at the expense of other people’s jobs or the death of business. Wages and living standards are the rewards that come from increased productivity, not by robbing Peter to pay Paul.

3. Strengthen and invest in public and community services that are our first line of defence against ‘shocks’ like COVID-19, bushfires and drought.

Strengthening national, community and personal resilience to external shocks like these is a challenge that the MRC will address in a forthcoming report on national disaster management.

Improving welfare and community services are part of the solution. Much more important, however, is providing incentives for individuals, businesses and communities to better protect themselves.

4. Support nation-building projects that create decent jobs and set Australia up for a brighter future.

Investing in infrastructure that will produce long-term economic benefits while providing short-term employment benefits is a no-brainer. But coming from the mouths of trade union leaders, it is scary. The movement has a virtual stranglehold on the construction sector, an inefficient, uncompetitive, lawless and rigid workplace where inflated wages and conditions increase costs by at least 30 per cent. That means that for every 10 km of new road we fund, less than 8 km are delivered.

5. Deal with the crisis of climate change.

Measures that mitigate climate change are established, bipartisan policies, which already come at a heavy cost. As the Fisher Report established last year, however, raising emission targets means fewer jobs and lower wages. However strongly you might feel about climate change, is that is what unions should be arguing for at this critical time?

6. Education and training.

A skilled an educated workforce is essential. But Labor’s record on skills training, backed by unions, is lamentable. Our heavily unionised schools are serving kids poorly. And when it comes to universities, we need more emphasis on excellence and less on equity. We suspect the unions are talking up their own shop.

7. Improve social, health and economic outcomes for people and communities that experience disadvantage.

Under this velvet glove is the hard fist of public sector unions. Assistance for those in need is a given. But the biggest beneficiaries of government programs are almost always the people who administer them. In any case, the best form of welfare is a job.

8. Embrace industry policy and ‘Australian made’.

Increasing resilience after this crisis will require bringing some manufacturing back onshore. The best way to do this is fix the things that drove them offshore in the first place, like high wages and our rigid workplace regulations. You won’t be hearing much from the unions about that.