Politics is all about compromise and trade-offs. Sensible politicians target the median voter not the extremists on either side. On that test, Labors IR package seems to get it about right. Moreover the proposed changes are transparent for all to see and contain a lot more detail than Mr. Howard ever put to the people prior to the last election.
In my view, the revised IR package allows for considerable flexibility and its core is enterprise bargaining. It should ease the legitimate concerns of labour economists about potential job losses, inflation and interest rates. In fact, there is likely to be little economic impact from these reforms – even using the Econtech model much favoured by ACCI and the Government (see my earlier posting and addendum).
And the Rudd package reassures business that under Labor it will not be exposed to union bullies. In fact, trade unions will clearly be much less potent under Rudd than they were even under Keating.
Nonetheless, and not surprisingly, the announcement by Rudd and Gillard is being greeted with strong criticisms from both sides of the spectrum.
I glanced this morning at the Kevin07 web site and it is clear that the Rudd/Gillard IR package has been very badly received by left wing critics. They believe that Rudd has now swung the balance too far back to employers and betrayed workers. Many are threatening to vote for the Greens.
These critics forget that Rudd is offering a stronger worker protection safety net for low paid workers, more scope for collective bargaining, an independent arbiter and unfair dismissals laws. On the conventional Left wing views of fairness, it is surely a much fairer system than WorkChoices.
Critics on the Right who want to retain and even radicalize WorkChoices are adopting a different line of attack. They claim that Rudd has not gone far enough with his concessions and that trade unions will be sure to pressure a future Labor Government into giving them even more freedom. This may well happen but there is nothing in the recent history of Labor governments to suggest that a Rudd government will not be able to stand up to them on fundamentals.
Moreover the tables can be turned on these right-wing critics by pointing to comments by Peter Hendy (of the Australian Chamber of Commerce and Industry) on 29 May 2007 that “the new fairness test is unnecessary” and that the new system will have to be monitored” as “it definitely means more red tape for business (ACCI transcript). This suggests that the ACCI will be pressuring a re-elected Howard Government to retreat from the fairness test.
I doubt that business will succeed in getting its way under a Howard government but the risk is surely as great as the risk of a Rudd government succumbing to union pressure.