The Howard Government's new Fairness Test legislation has just officially ended Australia's flirtation with serious labour market reform for small business.
The legislation is seriously flawed. It will be too hard and expensive to use Australian Workplace Agreements in order to operate profitably and compete.
What is surprising, given Prime Minister John Howard's acute political antennae, is that the way it is being done will be damaging politically.
Apart from the fact the Government has done the ACTU's dirty work to effectively end AWAs, most businesses - having gone the hard yards to make the necessary changes to implement AWAs - will find it almost impossible to continue employing new people under the same conditions as existing employees.
Even worse, by the time they eventually realise the scope of the changes, there will be a significant retrospective penalty.
A Government trump card has been the public opposition to a return to the union system proposed by Labor leader Kevin Rudd. A key plank of Labor's policy is that AWAs will be replaced by Collective Workplace Agreements (CWAs).
If the AWA system is clogged to paralysis, the door is open for Rudd to have an epiphany and agree to retain them under a revised (“even fairer”) Fairness Test. Howard could hardly attack Labor's plans to destroy workplace reform. They did it themselves.
The real political damage of this proposed Fairness Test legislation can be likened to what Mark Latham tried to do to the Tasmanian forestry workers.
His plan was to destroy a few hundred jobs to curry favour with Greens voters in Melbourne and Sydney.
Everyone realised Latham was selling out his core constituency and, if you're prepared to do that, how can you be trusted with anything?
Howard's agreement to legislation which will severely damage a loyal part of his small business constituency, to assuage a group who won't vote for him anyway, is most uncharacteristic.
The Federal Government has spent $40 million of taxpayers' money trying to coax businesses to implement changes in their workplaces and introduce workplace agreements.
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