Australia has something New Zealand doesn’t have, right? A free trade agreement with the United States, yes. But also tougher labour practices.
They may be about to get tougher if the impending election bounces Mark Latham’s way.
From some comments from business lobbies here, you would think doing business in Australia is a doddle. Adopt Australia’s regulatory environment and, hey presto, we will be rich like Australia.
It’s not quite like that. Australian CEOs running subsidiaries or local companies here have begun to point out counterfactuals: that it is generally easier to do business here than there, despite the Clark government’s re-regulation and tax rises.
And if the swing goes Labour’s way in the impending federal election, the gap will widen. Latham has warned big business he would be less indulgent than John Howard’s Liberal government and Labour has just issued a workplace relations policy that would tighten the rules.
Will the swing go Labour’s way? The almost universal advice to me in Australia last week, including from most Labour people, was that Howard is ahead on points.
They base this on three main factors:
* The polls are depicting a similar pattern to that of the past two pre-election periods, when opinion turned back toward the ruling Liberals after a period when Labour led. Projecting the polling trends forward to an October election would amount to a Howard win if translated into votes.
There is a small difference in Labour’s favour this time from the likely distribution of minor party preferences under the preferential voting system — the Democrats have faded and the Greens gained and Green voters give more of their preferences to Labour than Democrats do. But not enough, analysts say, to outweigh the general poll trend.
Moreover, on-the-ground assessments of marginal seats which Labour must win for a House of Representatives (and so a government) majority present a daunting task.
* Second, the economy bubbles along. Sure, house sales and lending have eased off, so the retail boom looks at last to be on the point of losing its steam. But the consumer mood remains positive for the government.
* Third, Latham is largely unknown to most voters. His now well publicised volatile temperament raises questions about his judgment and his handling of pressure and crises: is he the man to run the country? There is also a whiff of anti-Americanism which Howard makes much of before an electorate that takes its pro-American stance seriously.
But Latham is an unknown quantity in a positive sense as well. He has a potentially lethal unpredictability. The Liberals had a taste of how election-changing that might be when last Tuesday he suddenly backfooted Howard over the United States free trade agreement.
Labour had struggled to a decision the previous day to support the FTA and everyone expected Howard successfully to paint Labour as divided and unreliable, Latham having initially in March said the deal was inadequate and Labour’s large left faction still intransigently against it.
But Latham finessed his left and Howard in a high-octane press conference announcement that Labour would block the deal in the Senate, where opposition parties have a majority, if the government refused two amendments to the legislation needed to implement the FTA, one on medicine patents and one on local radio and television content.
Nobody anticipated this high-wire manoeuvre and Howard was initially nonplussed in question time in Parliament which followed hard on Latham’s press conference.
So election-watchers keep open the possibility that Latham might king-hit Howard when they meet in debate in the election campaign.
Lesson: however strong the pointers for a fourth Howard term, don’t dismiss Latham.
Does it matter to business here? Yes.
First, the single market. For as long as Howard is Prime Minister, he will keep the trans-Tasman relationship positive. So would Treasurer Peter Costello, whom most expect to succeed Howard sometime in the next term. It was Costello who got the single market project moving again. He and Michael Cullen seem to have hit it off.
But there is a school of thought in Canberra which has Howard delaying his handover and manoeuvring into position for eventual takeover his protege Tony Abbott, a 46-year-old bovver-boy and moral and constitutional conservative now in the health portfolio. What line on New Zealand an Abbott prime ministership would take is unknown.
Abbott is in a curious way Latham’s foil, in age (Latham is 43), in ambition and in risk-taking temperament. Author Michael Duffy was so taken with the parallels he published a book detailing them in late July.
Latham has not spent much time on trans-Tasman matters. But he did say when he met Helen Clark and cabinet ministers in early April that he backed moves towards a single market. Since he is a free trader, there is no compelling reason to think he would not carry through as Prime Minister. Shadow foreign minister Kevin Rudd also backs the single market.
So, while there would be a hiatus in single market progress while the new ministers got up to speed, it would not likely be derailed.
In any case, progress under Howard and Costello is uneven. For example, on the simple matter of rules of origin — which under CER are much less generous to New Zealand than under either Australia’s or this country’s FTAs with Singapore — the Australians are insisting on tariff classifications as the criterion for duty-free entry instead of reducing the amount of local content New Zealand exports must have.
There may also be apprehension in Wellington on defence. Former leader Kim Beazley, a hawkish Defence Minister in the Hawke-Keating government, would be Defence Minister in a Latham government and would drive much of its foreign policy, in which Latham is inexperienced. However, Beazley insists he is well-disposed toward New Zealand and Rudd extols this country’s extensive involvement in peacekeeping hotspots.
But it is behind the border where it may really count.
Latham has lambasted the “big end of town”, Australian slang for big business, which once feted him for his innovative economic and social ideas, notably on asset-based welfare and the “ownership society”. He says he stands for “outsiders”, the small people.
And his shadow workplace relations minister Craig Emerson — a micro-economist who worked for Prime Minister Bob Hawke when he was Prime Minister — has drafted labour law changes business deplores.
Emerson told me his proposals simply bring federal law into line with state law in New South Wales and Queensland, where business is booming. He has a deal with the Labour governments which control all the states to harmonise federal and state workplace relations laws.
Among his proposals:
* restoration to the Industrial Relations Commission (similar to this country’s Industrial Relations Tribunal) the power to settle “long-running, intractable disputes”;
* a “good faith” requirement on bargaining parties;
* a right of all workers to bargain collectively, backed by the Industrial Relations Commission, which would be able to intervene if employers baulked;
* abolition of a scheme of statutory individual contracts;
* a right for long-term casual workers to request permanent employment (and so holiday and sick pay rights);
* 100 per cent protection of employee entitlements in insolvencies;
* requiring the Industrial Relations Commission to “consider effective provisions to assist employees to combine work and family responsibilities”;
* “measures to ensure the principle of equal pay is effectively applied to women”;
* ensuring employees can recover underpaid wages and other entitlements.
Some of this will be familiar to business here, wrestling with the potentially draconian measures in the Employment Relations Law Reform Bill Labour Minister Paul Swain says he is trying to tone down — for example, to reshape the clauses which, if strung together, could force multi-employer agreements akin to the pre-1989 awards.
Emerson insists enterprise bargaining would remain the focus under his policies and there would be no minimum code, as here. And he insists benefits must be fairly shared, so that non-union employees get the same terms as unionists.
Does that sound like the nirvana we hear so often of Australia? Add in mandatory subsidised superannuation and a stronger union movement and then do the calculation.
Ah, but Howard is ahead and he has labour law deregulation plans. Sure. But for years those plans have been stalled by a hostile Senate. And no one expects the election will fix that.