- From: The Australian
- September 05, 2011
Mr Argus, who chaired Labor's mining tax panel, today described the government's tax reform agenda as politically expedient, and accused it of a lack of consultation with industry in the lead-up to both the ill-fated resource super profits tax and the carbon tax.
Mr Argus referred to the labour and financial market reform undertaken by the Hawke-Keating government in the 1980s, and John Howard's support for the GST, as examples of policy changes that took political courage.
But he said the Gillard government was wasting the benefits of the resources boom and risking the living standards of future generations by failing to address genuine reform.
“Australia still has enormous opportunity before it. We are positioned in a very unique way to benefit from the shift in the globe's economic centre of gravity from the western world to Asia,” the former bank chief, who stepped down as chairman of BHP Billiton last year, told a mining conference in Perth today.
“I worry that future generations of Australians will have to contend with the results of `lazy reform'.” Mr Argus called on the government to address Australia's deteriorating productivity growth, which he said could lead to a decline in foreign investment and a return to the economic “dark days” of the 1970s. He said improved labour practices had been achieved in the mining industry under the use of individual agreements that allowed companies to directly engage with workers and to reward them for enhanced productivity.
But employers' recent concerns about Labor's Fair Work Act, which forces employers to negotiate collectively with unions, were proving well-founded, he said.
“Despite the objects of the Act stipulating that bargaining should deliver increases in productivity, my research suggests that unions are resisting management attempts to achieve efficiency-related tradeoffs or productivity improvements,” Mr Argus said.
“Instead of agreements being seen as key vehicles for reform and enhanced working arrangements, many employers now regard the bargaining process as successful if they manage to retain prior concessions that they gained, and for which they paid in previous negotiations.
“Some employers simply have not been able when faced with industrial campaigns to hold onto their earlier productivity gains and have reluctantly agreed to `go backwards' in terms of a loss of the flexibility permitted under their industrial instruments.
“Although the scheme of the legislation purports to mean that protected industrial action should only be used as a last resort where lengthy bargaining has reached a genuine stalemate, it appears that unions are using stoppages as a tactic to `soften up' employers either quite early in the bargaining process or, indeed, before bargaining even commences.”
In his first comments on the mining tax since handing a report to Wayne Swan on the contentious levy late last year, Mr Argus criticised the government for its failure to consult widely with the industry before its botched attempt at introducing the RSPT.
“The Henry review was touted as the most comprehensive review in 50 years or a `root and branch review' , but with little consultation,” he said.“There were similar problems with our first attempt at a resource rent tax, and the carbon tax also had a frighteningly scant amount of consultation with those outside political circles.”
Mr Argus said the government should simplify its tax system, noting that Australia had 10 main taxes that contribute around 90 per cent of the revenue and another 115 taxes that collect about $40 billion.
“This complexity costs businesses time and money - resources that could certainly be used more productively,” he said. Mr Argus also said he was deeply concerned about Australia moving before the rest of the world in introducing a carbon tax.
He said more attention should be given to the use of natural gas, which was more cost-effective than renewables and more likely to deliver a reduction in carbon emissions.
“This example highlights just how politically expedient this government's tax reform agenda has been,” he said.“The government has rushed ahead with proposals that are simply designed to navigate the political landscape of the day, and not in the best interests of our country.
“We need a more rigorous evaluation before large amounts of taxpayer money are spent on speculative investments in renewable energy that could actually be less effective than other options in reducing emissions.”
A spokesman for Treasurer Wayne Swan later rejected Mr Argus's claims that the government was failing to address productivity.“The fact is that we've seen a long-term structural decline in productivity growth over a long period of time after a decade of neglect from our predecessors in critical infrastructure and skills investment, as pointed our repeatedly by the Reserve Bank, including very recently,” he said.
“We can't flick a switch and turn that around, this neglect, and we know from history that it takes time to see the benefits of the long-term structural improvements we have been investing in from the day we came to office.
___________________________ | _________________________
Mr Argus referred to the labour and financial market reform undertaken by the Hawke-Keating government in the 1980s, and John Howard's support for the GST, as examples of policy changes that took political courage.
But he said the Gillard government was wasting the benefits of the resources boom and risking the living standards of future generations by failing to address genuine reform.
“Australia still has enormous opportunity before it. We are positioned in a very unique way to benefit from the shift in the globe's economic centre of gravity from the western world to Asia,” the former bank chief, who stepped down as chairman of BHP Billiton last year, told a mining conference in Perth today.
“I worry that future generations of Australians will have to contend with the results of `lazy reform'.” Mr Argus called on the government to address Australia's deteriorating productivity growth, which he said could lead to a decline in foreign investment and a return to the economic “dark days” of the 1970s. He said improved labour practices had been achieved in the mining industry under the use of individual agreements that allowed companies to directly engage with workers and to reward them for enhanced productivity.
But employers' recent concerns about Labor's Fair Work Act, which forces employers to negotiate collectively with unions, were proving well-founded, he said.
“Despite the objects of the Act stipulating that bargaining should deliver increases in productivity, my research suggests that unions are resisting management attempts to achieve efficiency-related tradeoffs or productivity improvements,” Mr Argus said.
“Instead of agreements being seen as key vehicles for reform and enhanced working arrangements, many employers now regard the bargaining process as successful if they manage to retain prior concessions that they gained, and for which they paid in previous negotiations.
“Some employers simply have not been able when faced with industrial campaigns to hold onto their earlier productivity gains and have reluctantly agreed to `go backwards' in terms of a loss of the flexibility permitted under their industrial instruments.
“Although the scheme of the legislation purports to mean that protected industrial action should only be used as a last resort where lengthy bargaining has reached a genuine stalemate, it appears that unions are using stoppages as a tactic to `soften up' employers either quite early in the bargaining process or, indeed, before bargaining even commences.”
In his first comments on the mining tax since handing a report to Wayne Swan on the contentious levy late last year, Mr Argus criticised the government for its failure to consult widely with the industry before its botched attempt at introducing the RSPT.
“The Henry review was touted as the most comprehensive review in 50 years or a `root and branch review' , but with little consultation,” he said.“There were similar problems with our first attempt at a resource rent tax, and the carbon tax also had a frighteningly scant amount of consultation with those outside political circles.”
Mr Argus said the government should simplify its tax system, noting that Australia had 10 main taxes that contribute around 90 per cent of the revenue and another 115 taxes that collect about $40 billion.
“This complexity costs businesses time and money - resources that could certainly be used more productively,” he said. Mr Argus also said he was deeply concerned about Australia moving before the rest of the world in introducing a carbon tax.
He said more attention should be given to the use of natural gas, which was more cost-effective than renewables and more likely to deliver a reduction in carbon emissions.
“This example highlights just how politically expedient this government's tax reform agenda has been,” he said.“The government has rushed ahead with proposals that are simply designed to navigate the political landscape of the day, and not in the best interests of our country.
“We need a more rigorous evaluation before large amounts of taxpayer money are spent on speculative investments in renewable energy that could actually be less effective than other options in reducing emissions.”
A spokesman for Treasurer Wayne Swan later rejected Mr Argus's claims that the government was failing to address productivity.“The fact is that we've seen a long-term structural decline in productivity growth over a long period of time after a decade of neglect from our predecessors in critical infrastructure and skills investment, as pointed our repeatedly by the Reserve Bank, including very recently,” he said.
“We can't flick a switch and turn that around, this neglect, and we know from history that it takes time to see the benefits of the long-term structural improvements we have been investing in from the day we came to office.
___________________________ | _________________________
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