Where will the new jobs come from?

The economic stories hogging the headlines lately are of financial losses, plant closures and job-shedding – think Holden and Toyota, the closure of Alcoa's Point Henry aluminium smelter, and yesterday's announcement that Qantas will shed 5,000 jobs.
 
It's as if Australian businesses forgot the creative part of capitalism's creative destruction. Australia's economy needs new jobs, and there are impediments in our industrial relations system that are increasing costs and preventing new jobs from being created.
 
One of the unfortunate consequences of Work Choices was the degree to which the union movement was to use popular opposition within the community to drive their own agenda. Through Labor's Fair Work Act the union movement was able to gain monopoly status on new businesses/projects.
 
Under the Fair Work Act, Greenfields agreements – which set out wages and conditions for new business/projects and are organised before employees are hired – can only be negotiated with a union. Work Choices allowed for both union and non-union Greenfields agreements.
 
Unions have used their monopoly position to delay the commencement of new projects. Unions know the longer negotiations drag on, project costs increase and start dates are threatened. Eventually employers cave in and agree to exorbitant, and often unsustainable, conditions.
 
The Australian Mines and Metals Association found in 2012 that one third of resource industry employers had tried to negotiate a Greenfields agreement in the previous three years and of those, 19% had experienced unions refusing to make an agreement with them.
 
This problem was also raised in Labor's in-house review of the Fair Work Act in 2012, yet the government made no changes. Providing new businesses with a choice would mean that unions cannot stall projects and run up costs.
 
Still haunted by the ghosts of Work Choices, the Coalition are weary of bringing back anything remotely resembling elements of Howard's reforms. Instead they've suggested that these long-running disputes on new projects be determined by the industrial umpire. Such a solution simply entrenches adversarial relationships.
 
In an economy where only 18% of all workers are union members (13% in the private
sector) having a non-union option should be a no-brainer.
 
The Coalition should be bold. There was never broad community opposition to non-union Greenfields agreements. Community opposition was based on the lower safety net and unfair dismissal exemptions for small- and medium-sized businesses.
 
The Coalition should make it easier for businesses to get started and create jobs by bringing back non-union Greenfields agreements.

Alexander Philipatos is a Policy Analyst at The Centre for Independent Studies.