Back to the Future: Workplace Reform Takes Centre Stage Again.

The industrial relations scare campaign has begun, as we count down to the next federal election. The recent leaking of the Coalition’s workplace relations policies to a national newspaper suggests plans to scrap Labor’s better off overall test (having previously promised no changes in 2022), boost productivity, support tradies, expand work bonus arrangements (for pensioners and veterans), and reduce red tape are on the table to get the country ‘back on track’.

While the leaking of correspondence between Senator Michaelia Cash and the NSW Liberal Party office may have caught some people by surprise, it will be music to the ears of Australia’s 3.5 million small business owners.

The Coalition’s proposals represent not just an acknowledgment of the critical needs of small businesses and the broader economy, but a re-engagement with workplace relations policy after a lengthy absence. The party, long a champion of small business and family enterprise, appears to have ‘come out from under the doona’, offering renewed hope for those feeling the pinch under Labor.

The Coalition might consider also adopting the NZ Nationals’ 90-day trials for businesses with more than 20 staff — enabling recruitment with greater confidence — and continuing the work of award simplification to reduce confusion and complexity in our workplace relations system.

In stark contrast, Labor’s Tony Burke has declared war.

Labelling the return to a more flexible industrial relations system as ‘radical’ and accusing the Liberals of making it ‘easier to sack workers’ with Work Choices-style individual contracts, Burke argues: “low wages have always been a deliberate design feature of Liberal Party policies, and these changes would deliver exactly that”.

A line in the sand has been drawn.

A crucial element of this reform will be the Coalition’s ability to communicate its necessity. The experience of the founding father of Work Choices, John Howard, offers both guidance and a cautionary tale.

In the lead-up to the 1996 federal election, Howard consulted thousands of small business owners across Australia, heeding their clarion calls for mainstream reforms.

Promising an industrial relations ‘shake-up’ to lift economic productivity, boost employment, and raise real wages, the Howard government delivered sweeping changes. It introduced individual contracts (with over a million Australian Workplace Agreements signed), implemented unfair dismissal laws, tackled union thuggery, and supported independent contractors. These reforms ensured workplace relations contributed to stability, low inflation, higher productivity (especially on the waterfront), and real wage growth. In this regard, the Howard government did well. However, after eight years in office and gaining a Senate majority in the 2004 election, hubris took its toll. The Party Room had become more akin to Icarus than Lazarus.

The Labor Party and union movement successfully campaigned by convincing workers and their families that the government had gone too far, stoking fear people would be worse off and have to work harder.

The political backlash in the 2007 election was profound, culminating in the public burial of Work Choices by successive leaders Brendan Nelson and Tony Abbott. This internment has cast a long shadow over the Coalition’s approach to workplace relations reform. Until now.

The recent leak shows a willingness to break free from the past. After all, it has been 17 years, five leaders and five elections since the so-called Rudd-slide.

Howard remains convinced of the need for his party to pursue further labour-market reform. When it comes to economic reform, for him there is no ‘finish line’.

The contrast with the Albanese government’s approach is stark. Albanese’s IR policies revert to a one-size-fits-all industrial relations system reminiscent of the pre-Hawke Accord era (a time of stagflation and industrial disputation), favouring union bosses over small business entrepreneurs.

The Starmer-led UK Labour Party is considering a similar approach ahead of the July 4 election. According to the UK think tank Policy Xchange, the OECD found that when this policy was enacted in New Zealand under the Ardern Labour Government, it reduced economic growth — hardly a strategy for economic prosperity, but will Labor listen?

Instructively, Howard’s political success did not come from playing it safe or merely scraping by into office; it came from confronting policy challenges head-on, such as the introduction of the GST. By being proactive and developing a workplace relations policy for the coming election, Peter Dutton seems to be embracing a similarly bold approach.

Only time will tell if this strategy pays off.

Andrew Blyth is the John Howard Fellow at the Centre for Independent Studies and was chief of staff to the Hon. Kevin Andrews in the Howard Government.

Photo by Anamul Rezwan