Labor reshaping Australia’s IR system to fit the union vision

Even though the labour hire firms' staff are generally unionists, unions hate these types of arrangements because it robs them of power, particularly the power to strike.

They also adhere to Karl Marx's concept of the Labour Theory of Value where labour is held to have some sort of intrinsic value.

Yet in the labour hire world, supply and demand are big determinants of what someone is paid, and you shouldn't worry if one person is being paid less or more than another-that is a result of a complex matrix of when they were hired and what the conditions were at the time.

In the union world, there is one price, and that's it, otherwise, it is an abuse of human rights.

Australia's economy has grown quickly in recent years because we've adopted much more of the labour-hire view of the world. By treating labour as a commodity, you ensure that resources flow more quickly to where they are needed.

Labour shortages will drive up wages and pull in new workers until the need is filled and reallocate resources from areas with less priority. The extra mobility in these arrangements also produces better outcomes.

Unions too often rely on seniority rather than ability, with the "last on, last off" rule leading to ossification in production and shifts the economic burden onto younger workers, irrespective of their real worth to the enterprise.

The gig economy is next, but why?

Another area where contracting has transformed industry is in the small business sector where many tradies, and others, today are self-employed when once they would have worked for a boss.

Former Prime Minister John Howard changed the laws to allow this to happen more easily, and the beneficiaries were eternally grateful and became part of what was termed "Howard's battlers."

They're the ones in the large, chromed SUVs driving to the job work during the week, and fishing on the weekends, while their wives have been transformed into their business managers.

It also includes many people in the "gig economy" like Uber drivers, and independent owners like truck drivers who might drive essentially just for one company.

Labor and the unions also have these in their sights.