I told myself I wouldn’t write about the Fair Work Act for a while. I told myself this partly because it’s a topic I’ve done to death in recent weeks and months, and partly because no amount of factual analysis will dissuade the ideological warriors of the right from blaming the Act for all the nation’s economic ills, both real and imagined.
I told myself I’d lay off, but I can’t resist responding to Michael Stutchbury’s piece in today’s edition of The Australian.
Yesterday afternoon I listened to the Q&A session that followed the RBA Governor’s interesting speech about consumer caution. Stutchbury asked the first question, part of which concerned the slowdown in productivity growth and the implications for public policy. Fair enough, it’s an important question. Glenn Stevens gave a considered, though oblique answer in that central bankerly style of his.
This morning, though, Stutchbury’s column (is it opinion, or reportage? I find it hard to tell) stretched the Governor’s words too far.
Here’s the relevant section of his piece:
“It is now just about impossible to avoid the conclusion that productivity growth performance has been quite poor since at least the mid-2000s,” Stevens says.
The problem is that Australia took its eye off the productivity ball when the China boom started showering us with money.
It’s not an easy thing to fix, the RBA governor agrees, but he nominates “sensible labour market regulation” as one place to start.
The problem is that the Governor did not, in fact, nominate ‘sensible labour market regulation’ as “one place to start.”
What he actually said was:
In terms of productivity, I think it’s probably not wise for me to list a whole bunch of detailed things, but we know that the overall thrust of the things which produced productivity in the past were sensible labour market regulation, competitive product market regulation…
See that? He’s talking about past changes to regulation. To imply, as Stutchbury does, that the Governor nominated further changes to labour market regulation as a place to start in an effort to lift productivity growth now is to misrepresent Stevens’ answer to the question.
Besides which, what “sensible changes” is the Governor referring to? As Stutchbury himself reports, Stevens said in yesterday’s speech that “productivity growth performance has been quite poor since at least the mid-2000s”. Work Choices took effect from March 2006; it would be difficult indeed to conclude that Stevens was referring to this legislation when he mentioned productivity-enhancing labour market regulation. Instead, in my view he was probably referring to the shift towards bargaining at the enterprise level, a shift that occurred under the Keating Government and a policy stance that is at the heart of the Fair Work Act.
If I had read Stutchbury’s piece without having listened to the Q&A session that it quoted, I would have been left with what I believe to be a misleading impression about the Governor’s statement. If ideological warriors like Stutchbury want to campaign for changes to the industrial relations system then they’re obviously free to do so, but they shouldn’t distort the facts in the process.