With IR shaping as a major battlefield in the federal election, both sides of politics should be doing more to seize the high ground on workplace productivity. For Tony Abbott, in particular, the mistakes of the recent past should be enough to focus his mind.

Tony Abbott assumed the Workplace Relations portfolio in January 2001. Seven months later he appointed Terence Cole, QC, to head a Royal Commission into the building and construction industry. An election was imminent and the Howard government was anticipating a judicial inquiry into the industry would prove politically damaging to the key industry union, the Construction Forestry Mining & Energy Union (CFMEU), and, by extension, the Labor Party.

Abbott got his wish; Cole uncovered some unsavoury practices in the industry – by employers as well as unions. But it didn’t prove to be political gold. The CFMEU could and did claim – repeatedly – that it was a political witch-hunt.

The union was right, of course. Abbott was seeking political advantage – not the restructuring of an industry that 'boasts' productivity destroying work-practices that are largely alien to the rest of private industry.

At the time, Abbott was counselled to have an inquiry that examined the industry’s productivity; the Productivity Commission would be been the ideal vehicle. The industry’s productivity could have been measured against comparable overseas economies and the spotlight thrown on inefficient work practices – as well as the union’s role in maintaining them.

An economic approach to the industry would have made it far harder for the CFMEU to defend the status quo. Although any inquiry by a conservative government into a unionised workplace is always going to have political overtones, the Howard government would have had a far more solid argument for industry reform if the inquiry could be portrayed as being above party politics.

But Abbott opted for the political route, and the consequences are with the industry today. Certainly the Australian Building Construction Commissioner (ABCC), a by-product of the Royal Commission, has brought a degree of industrial peace to the industry, but only by using the heavy hand of the law. What’s actually required is workplace change that creates a more productive industry.

The best example of what can be achieved is the waterfront. The popular perception of that titanic struggle between the Maritime Union of Australia (MUA) and the then stevedoring company Patrick Corporation (fully supported by the Howard government) was a victory for the MUA; it survived a political and industrial onslaught.

But the reality is Patrick won. It achieved the redundancies and changed work practices (and saw a massive increase in its share price) that virtually doubled productivity on the wharves overnight. In the end the MUA could not dispute the fact that productivity on Australian wharves was seriously lagging. The cost was being borne by all industry and, by extension, other Australian workers.

The then ACTU assistant secretary Greg Combet, who had carriage of the dispute with the then MUA national secretary John Coombs, understood this economic reality. Although they fought to keep the workforce unionised, they privately knew such an outcome could only be achieved if it went hand in glove with workplace change.

The tragedy in the building industry, particularly in Western Australia and Victoria, is that the CFMEU leadership has no interest in workplace change; they simply ignore the macro argument of how unproductive work-practices in their industry is a cost to the broader economy.

Only an inquiry into the industry modelled on an economic argument can create the political and industrial climate for change. For Abbott, who is looking to make industrial relations an issue at the next election, this might prove a handy political weapon.

Who knows, it might even prompt the Rudd government, which boasts enough union officials in its cabinet to know the CFMEU modus operandi, to have its own Productivity Commission inquiry. But don’t hold your breath.

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There's a simple reason that Abbott didn't go for a PC inquiry – it would have got the wrong result. (See It's the productivity, stupid, March 8.) Any international comparison of construction industry productivity would quickly show – as it has in the past – that the Australian one is close to the most efficient in the developed world. And Abbott's department would have advised him of this. This is a critical difference from the wharfies' case, and ruled a fair dinkum approach out.