Summit stitch-up

The outcome of the jobs summit has already been preordained. By Nick Cater.

When Tony Burke promises a consultation period he doesn’t mean he’s open to persuasion. There’ll be no friendly tete-a-tetes, confabs or heart-to-heart chats before the Fair Work Commission is unleashed on the gig economy.

“I want to make this clear,” Burke told a union gathering on Friday. “We’re not consulting on whether or not we act. That decision has been made.”

Burke’s uncompromising rhetoric ends speculation this week’s job summit will be a repeat of the 2020 summit, a conclave of the clueless convened by a rookie prime minister in search of a first-term agenda.

It will be something far worse: a Labor government seeking cover to re-regulate the labour market, empower trade unions and strip away the elasticity in the economy. The presence of business representatives at the summit is merely a gloss. Unless business leaders want to be seen as complicit in Anthony Albanese’s regressive agenda, they must be ready to walk away from the pre-prepared closing declarations.

Hope that Albanese would emulate Bob Hawke in anything other than beer-skolling died when he named Burke Employment Minister. Where Hawke encouraged individual businesses to strike local workplace deals, Burke wants to restore the one-size-fits-all approach where wages and conditions are decided across sectors. Where Hawke increased competition, Burke will reduce it by making it harder for small and medium businesses to survive.

Where Hawke worked with union and business leaders to link wages to productivity, Burke has no concern for such economic niceties. Burke thinks wages should be raised by regulation enforced by the FWC. He wants to change the industrial relations system to give unions greater bargaining power and crack down on a heinous crime he calls “wage theft”.

On Friday, Burke intensified his campaign by describing Uber-style work arrangements as a cancer spreading through the economy. It signalled a resumption of the war against the gig economy the labour movement has been fighting since the Shearers Strike of 1891.

That fight, too, was against agreements struck directly between employees and bosses. It opposed working arrangements that encouraged productivity and discouraged sloth. Back then, the labour movement was fighting a Luddite battle opposing the introduction of mechanical shears, an innovation that gave the Australian wool industry a competitive edge while making shearing less arduous. Today’s war of resistance is against mobile apps that connect customers and suppliers without expensive intermediaries.

Australia’s success in the 19th century was guaranteed not by riding on the sheep’s back but by a flourishing gig economy that created work not only for shearers but for roustabouts, bullock drivers and wharfies. Success in the 21st century will be driven by digital innovation

There are smarter people than Burke in Labor’s parliamentary caucus who know their history and understand economics. Andrew Charlton, the member for Parramatta, would be one. He is an economist, business owner and former economic adviser to our 26th prime minister, whose name Charlton coyly omits from his official biography.

Charlton co-authored an academic paper published earlier this year examining the effects of the gig economy on the wages and job satisfaction of Uber drivers. Drivers were generally satisfied, particularly with their hours, flexibility, job security and the nature of the work itself. Levels of satisfaction were on a par with the general workforce and in most categories slightly higher than that of machine operators and drivers in the population at large.

Drivers clearly didn’t join Uber to make their fortune, but average wages were comfortably higher than the minimum wage even after the costs of running a car were deducted. Most put flexibility ahead of the security of a more formal contract that would make them eligible for minimum wage safety net and holiday pay. Only 30 per cent said they would rather work fixed hours.

None of Charlton’s findings would support Burke’s claim that gig workers are underpaid and exploited. Nor that they are prone to the “feelings of isolation, fear for their personal safety and their wellbeing” as Burke claimed last week. On the contrary. Smart phone apps, credit card payment and the motivation of a five-star rating system make Uber safer and more agreeable than old-style taxis.

On wages, Burke talks a very different game from colleague Andrew Leigh, the Assistant Competition Minister. Leigh blames stagnant wages not on kleptomaniac bosses but reduced productivity. In a speech last week, Leigh said “slower productivity growth means lower real wages and less buying power for households”. He made some prescient observations about business start-ups, which increase competition and introduce innovation. As Leigh points out, the rate of growth in new businesses is slowing even before Burke introduces his entrepreneurial-sapping reforms.

It is bad enough that Albanese is about to discharge his debt to the union movement by making retrogressive changes to the industrial relations system. What’s worse is that the rest of us will be paying for it.

History and common sense tell us empowering the unions and taking away the power of individuals to negotiate wage settlements that suit their particular circumstances will send businesses broke, cut jobs and increase inflation. The fatter pay packets of the fortunate few in the construction, transport and public sectors will be funded by those in small and family enterprises that account for 95 per cent of the businesses in the country.

Small and family businesses serve as the brain box of the nation. They are innovative and efficient because their survival depends upon it. They are the enterprising people on whom the nation’s future depends, the great, sober and dynamic middle class of whom Robert Menzies spoke in his appeal to the forgotten people.

First in the firing line are the small and medium-sized contractors in construction already being driven out of business by Labor’s crass decision to abolish the Australian Building and Construction Commission. All of us, however, will cop it in the end in falling living standards and inflation.

If there is sarcoma in the system, it’s not in the workplace economy. It is in the body politic where Labor is delivering reforms to order for the union leaders who bankrolled Albanese’s election campaign. We don’t need a federal integrity commission to tell us Labor’s relationship with the unions is the cosiest and most cancerous deal in town.