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IR debate is heading down a dangerous path

"The public policy debate around workplace relations in Australia at a state level is at risk of heading down a particularly dangerous path that is contrary to the best interests of the community," Australian Industry Group Chief Executive Innes Willox said today.

"This was seen in recent developments in Queensland and some of the more extreme resolutions from the NSW Labor Conference over the weekend in support of policies which could seriously harm jobs and investment.

"Substantial civil penalties are already in place to deal with businesses that deliberately underpay workers, and the Federal Government has a Bill before the Parliament to increase these penalties by up to 20 times. Not to be outdone, the NSW Labor Party has endorsed lengthy jail terms - reportedly up to 14 years - for employers who deliberately underpay workers, and the Queensland Labor Government has introduced a Bill that would expose the owners and managers of any business that uses the services of any unlicensed labour provider to up to three years jail. Political parties are tripping over each other in the rush to see who can be tougher on employers. Fairness and balance do not appear to be high on the agenda.

"The reality is that thousands of small business owners do not need to employ other people. If unfair laws are imposed on them, there is the risk that many small business owners will take the view that they would rather invest in property or shares or retire early, rather than continue to build their businesses and employ other Australians. If this occurs, Australia's economy will suffer, unemployment will rise markedly, and living standards will fall.

"Another reality is that multinational companies do not need to invest in Australia. Many hundreds of factory closures in Australia over the past 20 years attest to this. If the business environment in Australia becomes one which no longer promotes investment and growth, why would multinational companies choose to maintain their investments in Australia or make new ones? The overseas head offices and overseas shareholders of multinationals have a myriad of other investment options.

"It is time to re-set the workplace relations debate in Australia. As recommended by the Productivity Commission Inquiry into the Workplace Relations Framework, Australia needs some sensible changes to the Fair Work Act to boost productivity. These include changes to the transfer of business laws and to the Better Off Overall Test for agreement-making (i.e. to stop one employee frustrating the approval of an enterprise agreement supported by thousands of employees).

"The last thing that is needed is for the retrograde, anti-business proposals of the union movement to be adopted by mainstream political parties. Legislative changes need to be in the national interest, not just in the union movement's narrow interests," Mr Willox said.

Media enquiries: Tony Melville – 0419 190 347