Dnarever wrote on Jan 2^nd, 2016 at 6:08am:

I believe penalty rates to be counter productive to margin growth and part of an outdated concept of labour supply.
In today's global market economy, penalty rates are outdated.

Australian employees no longer compete just with other Australian employees but with Asian, European and South American employees too.

In fact the admirable success of the Cameron Government employment stats have been centred around relaxing of the employment rules and penalty rate removals.

It's not a race to the bottom but it's about competing in a vastly different market economy now to the 1970s - where a lot of these concepts were born.

I spent a lot of time understanding and analysing our WACC Weighted Average Cost of Capital on labour intensive projects.
Think of people as EPUs - Economic Production Units - then look at the variable cost into a specific project. This is what we do in the Global FP&A teams I run at corporate, compare EPUs and our workforce productivity metrics by country.

Australia for many companies like mine is just a land mass and a production line of people. I have zero loyalty to place or incentivise a project to continue in Australia or be switched to Canada, UK, Puerto Rico etc.
Australia needs to have laws and industrial relations which make it attractive.
One of its assets is educated workforce, ancillary services and transportation, security of country etc. so no it does not have to be a race to the bottom as you say.

But when it competes with like for like western countries such as the UK which does not have a very high superannuation cost in force, a much lower wage restriction, much more employer friendly rules on penalty rates - then Australia shoots itself in the foot.

The example is already there for you.
Ford pulled out of Australia citing high cost of labour - in the same month INCREASED production and took on more staff in Dagenham, Essex.

General Motors pulled out of Australia. They have recently increased the capacity of the plant in Bedfordshire.

Is this a coincidence or the fact that Australian labour (I'm sad to say it's true) is just too damn expensive?

Kat wrote on Jan 2^nd, 2016 at 6:39am:


I'm sorry Kat I don't agree.
I've never been in a union, never needed to hide behind someone else to fight my own battles, sign my own work contracts.
I've never worked for a company that turns over less than $3bn per year, it's hardly an equal discussion.
But we have statute employment laws that aren't going anywhere and a market rate of employment pay.

Unions really aren't needed. They are dinosaurs out of place in today's world.

Andrei.Hicks wrote on Jan 2^nd, 2016 at 6:44am:


Your generous work contracts are based on and backed by the union negotiated results of normal workers. That position is the rock that you negotiations start from, undermining that position is undermining your own outcomes.

Yes penalty rates overtime and RDO's etc are all factored into the package you are offered.

Andrei.Hicks wrote on Jan 2^nd, 2016 at 6:58am:


And you are not capable of understanding that rolling back things like penalty rates, overtime, hours worked etc all undermine the rock that your position is based on.

Unions are probably more relevant today than any time in the last 40 years because the attacks on employees are more real and more effective.

It's not ATTACKS on employees it's about being competitive in a changing global market!!!
I work strongly within this field I understand it better than any.
In fact in the last few years I've earned more than ever before in incentives and bonuses based on these exact reallocation resource projects I refer!

It's not attacking employees but realigning their attraction to ensure employment remains within their grasp.
Countries not prepared to change will fail.

The Conservatives in the UK clearly understand this better.

Andrei.Hicks wrote on Jan 2^nd, 2016 at 7:07am:



trying to make Australia employees compete with Chinese and Indian wages IS an attack on employees. If your company wants to sell its products here, it uses Australian labor and pays Australian wages .. when they sell their product here for the same price they sell it in China, then you can start to ask for comparative wages.