Penalty rates a challenge for business

The government’s response to the Fair Work Commission’s decision on penalty rates has been weak. The government has appeared indecisive, yet will wear opprobrium for supporting the decision anyway.

That the unions and Labor would try and mount a campaign against these changes was one of the most predictable things in the world: unions in particular long for another relevance boost like the one they received after Workchoices. The government should have had their response prepared.

And to be clear, the penalty rate cut is not merely a whim of the Fair Work Commission: a lot of work has been done over a number of years to build the economic case for the cut — not the least by the Productivity Commission. As the CIS has noted before in a number of reports, this change is a good one for the economy.

Yet the political case, the public case, must be made for the changes — not just the economic one. Government has failed to take the lead here, but they are not alone in failing to act. Business has been even weaker in prosecuting the case for change.

The Liberal party has long despaired that business does not actively campaign the way unions do. By and large, business is correct to stay out of politics — too many businesses to count have suffered financially from taking political positions.

Yet this reticence by business has now gone far beyond staying on the political sidelines. Business is not defending itself against increasingly aggressive attacks by the left. Business was barely heard in supporting positive changes to company taxation and business leaders are again missing in the fight to cut penalty rates.

The business community is supposedly white hot with anger over the failure of Turnbull to prosecute the case for penalty rate cuts. I say supposedly because you would never actually know that from the debate on the issue.

Businesses have tried making themselves invisible in politics and they have tried appeasing the left by embracing ‘corporate social responsibility’. Neither approach has placated the politics of envy. Maybe it’s time they start fighting for what they believe in.