The union inquiry is splitting the Coalition in two

Big companies are just as much to blame as unions for lowering productivity but some conservatives' black-and-white view of IR could get in the way of justice.

The Australian business community and Coalition government forces are now engaged in a tense debate over how to handle Boral's confirmation that it was a victim of businesses' deep involvement in commercial building cartels -- and now also Toll's revelation that it pays the union to conduct raids in on its competitors.

The dispute also underlines the split in corporate ranks caused by the former chief executive of Coles, Ian McLeod, who put pressure on Coles suppliers who had done bad deals with unions by refusing to allow the price rises that the bad deals assumed.

In the past, industrial relations -- in the Coalition's eyes -- seemed simple: the evil in the system was extreme unionism and the employers were the 'goodies'. Those in the conservative ranks who still hold this view say that extreme unionism forced the companies to join cartels with unions.

While there is no doubt this was initially true, those in the conservative debate with a different viewpoint now say that the way building suppliers stepped in to take advantage of the union bans on Boral and the extension of Toll's agreement with the Transport Workers Union for the union to target five Toll competitors a year instead of one shows that the difference between the behaviour of unions and big corporations has become marginal (Appeasing unions is taking its Toll, July 16). The view of this side of conservative politics is that the employers have become as much a part of the problem as the unions.

Tony Abbott had no idea when he called a royal commission into unions that he would uncover deep employer involvement in what was going on. Had he talked with opposition leader Bill Shorten he would have discovered that Shorten knew all about the building agreements -- the employers in the commercial building industry had decided to get into bed with the militant CFMEU rather than Shorten's milder AWU, which was left out in the cold. Shorten was bruised.

Australia has laws governing cartel-style agreements but the administrator, the ACCC, looks to be asleep. Given the split in Coalition ranks in this area there will be no political pressure on the ACCC to test the law, although the government's code of conduct in government commercial building tendering could bust open the commercial building deals (The domino effect that will crush the building cartels, July 10).

Meanwhile, transport is a major cost to almost all companies, with supermarket suppliers among the largest users. We can now understand why the Coles action, followed by Woolworths, to stop price rises caused so much consternation in the supply industry -- their union agreements assumed regular price rises. The good news is that the union royal commission is at least exposing what is going on and so there is now a real debate among Coalition forces rather than simple anti-unionism.

And somewhere along the line -- either in cabinet, the ACCC or the Productivity Commission -- someone will look at the disaster graph (see below) in Treasury’s budget papers. Without productivity growth our income per head goes down the gurgler, with widespread implications for community prosperity and share prices. Among the people whom we will blame for that fall will be those who saw the anti-productivity agreements and had the power to act but did nothing.

Graph for The union inquiry is splitting the Coalition in two