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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.

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Tuesday, December 10, 2013

Small business people lose out under Abbott government. Incompetent big business wins

Last week the Abbott government did two things that signal it as a big business, big union, big government operation. This is probably surprising to most people who thought the Coalition was a union hater. But not so!

Furthermore, the Abbott government’s approach to small business people could well be shaping up as tokenism. Abbott’s big business, big union partners will block or neuter proposed ground-breaking small business reform.

The first signal comes from Prime Minister Abbott’s appointment of his Business Advisory Council. Small and medium business make up some 95 per cent of all Australian business, with around 70 per cent plus of the workforce. You’d think there’d be strong small business representation. But no, the members are all big business types: the chairs of BHP, Telstra, Linfox and so on. It’s Australia’s big business establishment in the box seat!

Second, Industry Minister Macfarlane gave a job to ex-union boss and Gillard Minister, Greg Combet. Combet is being paid by the government to help Coca-Cola save its dying food manufacturing business SPC Ardmona.

SPC suffers the same problems as Ford and Holden, which are major examples of where corporate Australia’s management on workplace issues is appalling.

Big businesses such as Holden have consistently done business-killing industrial relations deals with unions for a long time. Nothing under the Fair Work Act forced them into these deals. They did this to themselves.

Now the car industry is dying. Food manufacturing has near terminal management cancer. The mining boom is being strangled because of construction cost blow-outs which primarily result from bad workplace arrangements.

The appointment of Combet is one example amongst many others where big business wants union heavies to save it from its own incompetence. This is the grubby, unspoken reality of Australia’s industrial relations arrangements.

For the Abbott government this is brilliant politics. The government doesn’t hate unions. It hates some unions, in particular the hard Left construction unions who controlled the Gillard government. By appointing Combet, the Coalition begins a process of dividing Labor thereby causing internal fights. Good for the Coalition!

Then there’s small business! The Coalition always claims it’s the party of small business. But history shows that if small business interests confront big business, small business people always lose.

There’s a big test in front of the Abbott government. It’s promised, for example, to bring in unfair contract protections for small business people, the same that apply for consumers. This threatens big business interests. Far too many big businesses, and government departments, structure their contracts to enable them to dominate and control small business people. The enforcement of fair contracts threatens these big business models.

The exclusion of small business people from the PM’s Business Advisory Council puts the big business establishment in the prime position to control this reform agenda. The predictable outcome will be legislation described as ‘fair contracts for small business’, but in its detail there’ll be so many ways for big business to ignore it, that it’ll be useless.

The government will claim that it’s small-business friendly, but still keep its big business mates satisfied. Small business people don’t have the organizational capacity or lobbying grunt to be able to stop this. For the government it’s a perfect political double play!
Comments
SME owner commented on 10-Dec-2013 11:56 AM
OMG, I thought Tony and Bruce (Billson) were at least willing to listen to SME owners in good faith, even if sometimes they (the government) may be unable to act on what is required. But no, I was wrong. Not even one advisory position for SME's. How could I have been so naive? Instead, they stack their committees etc with big Business and hand out cushy jobs to Unionists. Not a lot different to Labor, really. Now, watch the government rush in to save the big end of town, eg Qantas and Holden. I am disgusted. This is how governments destroy true innovation, enterprise and entrepreneurialism - reward and listen to failures and punish/ignore the achievers.
Dick Davies commented on 10-Dec-2013 11:31 PM
Ken,

You are right. The stitch up continues.

Robert Gottliebsen in the Business Spectator pointed out that Big business doesn't know how to deal with small business.

In terms of Australia's economic success, this is fundamental.

Instead of playing control games, a different thing needs to happen -- talking to one another.

Australia's productivity would take off if people stopped fencing and put the effort into trusting each other (albeit selectively) and then working together creatively. Big business would see possibilities of savings and improvements, and small businesses of scaling up to engagement hitherto undrempt of.

This is not fighting over the cake, it's growing the cake and there's no end of challenge and great satisfaction that comes from it. It's a game everyone can play if they choose to.

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