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From the Desk of the Executive Director

Ken Phillips is co-founder and Executive Director of Independent Contractors of Australia. He is a published authority on independent contractor issues and directs research on related commercial and trade practices issues. Through his numerous articles in newspapers and think-tank and academic journals, Ken is known for approaching issues from outside normal perspectives and is frequently sought out for media comment.

457 visas about union control

Tuesday, April 02, 2013

Even though Julia Gillard's comments against 457 visa workers have horrible undertones of historical Labor racism, they aren't racist. Instead Labor, in my opinion, is involved in an old-fashioned protection racket of entrenched power and money.

It's federal Labor demonstrating it's a sibling of the "rotten throughout" NSW Labor.

It was Labor prime minister Edmund Barton who introduced the shameful White Australia policy in 1901. Then as now, foreign worker restrictions were introduced at the behest of unions seeking to protect jobs.

Then as now unemployment was low. But in 1901 union density was soaring towards 50 per cent of the workforce. Today less than 13 per cent of the private-sector workforce is unionised.

Labor's job protection racket no longer relates to protecting the jobs of workers but protecting the jobs, influence and power of the union powerbrokers.

The power of today's unions rests in the leverage and control they exercise over businesses, and the economy, through the Fair Work Act. Foreign workers undermine this control.

Legislative requirements ensure that 457 workers cannot be underpaid. Minimum rates are largely tied to award rates and related conditions. But this doesn't serve union purposes.

The trick with union power today is that the Fair Work Act effectively allows unions to bludgeon strategically incompetent business managers into entering bad enterprise agreements. This happens on a grand scale particularly with big businesses. Clauses in agreements neuter managers by requiring them to seek union approval for major and minor decisions.

With control of managers, unions turn to the workforce with very convincing reasons as to why they should join. Basically, if you want a job, you'll join! Through this process unions control worker recruitment and jobs. This has been the key process enabling unions to re-enter the mining sector, for example.

Even the unions' decade-long enemy, Rio Tinto, has wilted and become "union friendly".

But foreign workers undermine this. Access to 457 workers maintains an alternative route to worker recruitment that is more "market" based. Ex-immigration minister Chris Bowen enraged unions by giving 457 approvals to Gina Rinehart's Roy Hill development in Western Australia. Bowen's demotion has removed this problem for unions.

New Immigration Minister Brendan O'Connor is "fixing" the issue for unions. First he's demonised foreign workers with the Prime Minister's loud support. Next will be the restriction of foreign worker entry in selected areas of union interest.

This will artificially induce a shortage of key labour skills and entrench business managers' reliance on unions for recruitment. Unions will push up pay rates in critical areas, solidifying the inducement for membership.

It's brilliant stuff by Labor. In government it openly and shamelessly uses the law to create institutional power for its elite backers. It's a technique in open display across many policy areas under Gillard.

Ultimately, it can be highly corrupting. Laws are tweaked to favour the rent-seekers. One sort of favour can lead to other sorts of favours and then to the sorts of scandals being exposed in ICAC and Labor furiously trying to protect its brand.
John Y commented on 02-Apr-2013 02:44 PM

1) The ICT industry is one of the largest sectors employing 457 visa holders.

2) Most of the Prime Minister's comments relating to 457 visa rorts have been aimed at the ICT industry.

3) There is no union movement that represents ICT workers.

4) There are many qualified ICT workers currently looking for work.

5) Do you like Julia Gillard?

John Y

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