You can blame the mining tax for the Fair Work review flop: Kohler

The main problem with the Fair Work Act is the mining tax. Discuss.

Through that tax, and an air of general hostility towards wealthy miners and employers, this government has encouraged a culture of wealth redistribution to replace the culture of productivity that was set up by the previous Labor government.

It has become respectable to believe that ‘the community must share in Australia’s minerals wealth’, as if it doesn’t already. This has had a pervasive secondary effect on all workplace bargaining, where productivity offsets are now routinely resisted by union negotiators, seeking, instead, to simply redistribute supposed ill-gotten wealth to their members.

The idea that industrial relations was all about wealth redistribution rather than wealth creation had become entrenched under successive weak governments during the mining boom of the 60s and 70s and reached an apogee under Malcolm Fraser in the early 80s with an uncontrolled wages blowout that contributed to the recession of 1982.

In 1983 the election of the Hawke government began Australia’s greatest period of workplace reform through a partnership between government and unions, expressed in a series of Accords.

In March 1987 the third Prices and Incomes Accord required efficiency offsets for wage increases for the first time – huge breakthrough.

Accord Mark VII in 1991 introduced enterprise bargaining, ending more than a century of centralised wage fixing and and cementing the linkage of efficiency and wages at an enterprise level. This was further enhanced by the Howard government through the Workplace Relations Act 1996, which restricted awards to 20 “allowable matters”, expanded enterprise bargaining and restricted unions – and then by the great waterfront dispute of 1998.

Unfortunately John Howard then went a step too far with the 2005 Amendment Act, known as WorkChoices, by removing the ‘no disadvantage test’ for individual agreements. That contributed to the Coalition’s defeat in 2007 and allowed the pendulum to swing back the other way with a vengeance.

So a new partnership was set up between a Labor government and the unions aimed at “restoring fairness” rather than efficiency, and this has been further tilted into wealth redistribution by the government’s rhetoric, led by Treasurer Wayne Swan.