THE DISTILLERY: Fair Work whack
One jotter relays a stinging IR warning from the top of Fair Work Australia, while another rationalises the Qantas job cuts.
But first, The Australian Financial Review’s Matthew Stevens continues his attack on the Fair Work Act on the back of Watson’s opinion.
"In a remarkable contribution to the national dialogue on the fetid state of our industrial relations, Watson argues that the system is trapped in an almost self-reinforcing focus on conflict and the result is ‘productivity and enterprise underperformance’. Watson has effectively belled the cat on Fair Work Australia’s union club antecedence and announced the fragilities of the framework it underpins in a delicately layered speech that floats like a butterfly and stings like a bee. Watson, who heads a collection of FWA industry panels that include airlines, ports, maritime, health, welfare services and matters retail, recommends we need now to ignore the self-interest of "those who personally benefit’’ from the conflict embedded in the system and revisit efforts to devolve the engagement between employer and worker to the enterprise level.”
The Age’s Malcolm Maiden says Qantas simply had to axe those jobs in order to have a chance of being a serious, lower-cost operator in a tortured global airline market.
"Asked whether Qantas was covertly offshoring its aircraft maintenance, Joyce hit the nail on the head today when he commented: ‘This is not jobs going offshore, this is work that no longer exists.’ The airline has been spending between $1.5 billion and $2 billion a year on new aircraft. It has 12 new Airbus 380s, but that is not enough to support a new heavy maintenance operation in itself – and they will not require heavy maintenance anyway until about 2025. The group had to downsize its heavy maintenance operation, to reflect its newer fleet, and to get its costs into line with its competitors.”
The Sydney Morning Herald’s Michael Pascoe says, interestingly, that India’s democracy is a disadvantage for Australia because large, growing economies tend to do better when there’s an authoritarian rule – an unpleasant argument, but accurate.
"The Goldilocks scenario was based on the assumption that India would follow much the same path of industrialisation and urbanisation as China is and the likes of Japan, Taiwan and Korea did. They, in turn, travelled much the same road as the US and Europe had a century or two ago, experiencing massive restructuring, productivity growth and wealth creation as their societies were transformed by the growth of cities and moving up the value chain from being primarily agrarian. There's one big difference though – India is a democracy. It is arguable that no country has undergone such a revolution as a genuine democracy. The leap involved in a populous nation industrialising tends to involve plenty of hard and nasty stuff as the status quo is overturned – land being cleared of peasants, established rent seekers replaced by a new order, societies uprooted and overturned.”
Sticking with economics for the moment, The Sydney Morning Herald’s Ian Verrender says the surplus is already a fantasy thanks to the downturn in Europe. The Age’s Peter Martin points out the ridiculous way in which free trade agreements are drawn up – with both countries signing them before the conditions have been made public to the people they’ll actually impact.
In company news, The Age’s Adele Ferguson has been a firm critic of the Leighton Holdings board and today she juxtaposes their recent failings with the potential for asset sales at the majority shareholder (Spain’s ACS) of Leighton’s majority shareholder (Hochtief). Fairfax’s Insider columnist Ian McIlwraith says minerals testing company Campbell Brothers probably copped it from the market yesterday because it didn’t provide guidance for the upcoming financial year.
Meanwhile, The Age’s Eric Johnston says the major banks are taking a hit on their customer satisfaction ratings after keeping some margin from the Reserve Bank’s interest rate cuts. And finally, the AFR’s Chanticleer columnist Tony Boyd says it’s a bad time to be an Australian stock picker.