Abbott must promise IR changes if he wants the support of SMEs: Gottliebsen

The issue that concerns Australian business more than most, industrial relations, has become Tony Abbott’s ‘no-go’ area, making it hard for him to sweep up business support.

He is not even prepared to stand up for small enterprises, his key constituency, and declare that he will make specific changes to make unfair dismissals less onerous, change the minimum working hours for casuals, and then rule out any other wholesale changes. Small enterprises feel betrayed.

Only a few weeks ago Australia brought into operation a new complex set of industrial relations rules, which in some areas takes workplace laws back 20 years and threatens to boost costs which, in turn, could have an impact on interest rates.

Abbott should be the person who stands ready to at least improve the situation by taking on the parts of the Gillard government legislation where there are clear weaknesses. But he can’t because he appears to believe he is trapped.

Even before the election had been called, the unions had prepared a massive advertising campaign that was virtually a rerun the campaign they waged against former Prime Minister John Howard in the last election. Not surprisingly, the Coalition believed it was an area where they could be a significant loser.

To some extent business organisations have only themselves to blame. They allowed Julia Gillard to change the Industrial Relations Act without a fight. Worse still, they allowed themselves to be brought into the government tent on the assurance that all would be well. By the time business organisations and major corporates discovered all was not well, it was too late. And as they had not supported the coalition, they have been left swinging in the wind, and small enterprises have been put on the same rope.

BHP Billiton, Rio Tinto and the other major miners learned from their mistake in industrial relations, and when the government moved their focus to mining taxation, they fought and won.

But there is no doubt that as we experience the massive industrial relations changes that came into operation this month, a whole series of anomalies and problems will arise. Abbott has boxed himself in to such an extent that it is going to be very hard for him to fix those problems if he gets to power.

The only person who can fix the mistakes is Gillard. And, if as I suspect, the industrial relations legislation hits productivity she is the only person who can jawbone the unions not to take advantage of what is now a very strong position.

Meanwhile, assuming the polls are right and Gillard is returned, companies are going to required to dust down a whole new set of old skills.

But as the government will discover as the result of its reform reversals, in the 1980s large corporates had to put up with the industrial relations mire.

In 2010 they have many more choices and large numbers of Australian businesses will find it easier to go offshore for their goods and services. It’s a key corporate power if the going gets rough.

This article first appeared on Business Spectator.