Tax-cut timing brings swift end to uneasy friendship between business and unions

ACTU secretary Sally McManus. Picture: AAP
ACTU secretary Sally McManus. Picture: AA
The Australian,

The detente between business and unions forged by the coronavirus crisis is at risk after the nation’s leading industry group condemned ACTU secretary Sally McManus for rejecting the need for tax cuts in the October budget.

Australian Industry Group chief executive Innes Willox said Ms McManus’s opposition to fast-tracking tax cuts was a “new peak of economic absurdity for the COVID-19 crisis”.

Mr Willox also lashed the union leader’s refusal to back ­extensions to short-term flexible workplace laws, implemented to accommodate for the pandemic, unless the $1500-a-fortnight JobKeeper scheme was continued in full past its September expiry.

Josh Frydenberg revealed this week he was considering bringing forward legislated income tax cuts in the budget, but Ms McManus called on the government to ­instead prioritise reforms aimed at improving job security and ensuring businesses and high-income individuals were “paying their fair share (of tax) in the first place”.

But Mr Willox said the union position showed no “willingness to drive economic demand or build consumer or business confid­ence to retain or grow Australian jobs”.

“We cannot forever rely on the taxpayer-funded JobKeeper program­ to keep the economy afloat and we need to now be looking­ to implement new measures to stimulate demand, growth and ­investment. Tax reform, simplification and reduction is going to be a key driver of success.”

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Scott Morrison in May ­described the industrial relations system as “not fit for purpose” and set up five working groups of business and union leaders to find a compromise on reform. The ­working groups were focused on casual workers, enterprise agreements, compliance and enforcement, greenfields deals for new projects and award simplification.

The Weekend Australian can reveal that Ms McManus also ­rejected calls from business to ­reduce the number of awards in the industrial relations system, warning that such a move would amount to “taking away rights”.

“We are never going to agree to anything that will leave workers worse off. We are not,” she said. “There are 122 awards, and 15 years ago there was 3500 awards. So I do not accept the ­argument that the amount of awards is an issue. The evidence says exactly the opposite.”

The Ai Group is pushing for the awards system to be simplified, while Council of Small Business Organisations Australia chief executive Peter Strong has called on the government to follow­ New Zealand’s lead and scrap awards completely.

Following Friday’s national cabinet meeting, the Prime Minister announced that Prod­uc­tivity Commission chairman Michael Brennan had made recom­mendations to ensure unnecessary regulation did not choke economic ­recovery.

Mr Brennan briefed state and territory leaders about red tape for new businesses, heavy vehicles­ and planning and development approvals, with Mr Morrison warning hat regulatory hurdles could hinder flexibility and “constrain job creation and the economic performance of the country”.

Mr Willox also took issue with Ms McManus’s warning that she would consider supporting the extension of short-term changes to workplace laws — only if the JobKeeper scheme was extended in full beyond September.

“We have referred a series of recommendations that he has made to the Treasurer’s grouping, the Council of Federal Finan­cial Relations,” he said.

“We have asked them to come back to us as quickly as possible on the … changes that have been made to regulation for a limited time in relation to COVID-19 across a whole range of economic activity. And the potential for those to be extended out further and potentially even extended indefinitely.”

“To hold hostage moderate and sensible workplace reform measures now under discussion and which are designed to allow employers to retain, retrain and grow their workforces in the name of keeping JobKeeper ­indefinitely makes no sense,” Mr Willox said.

Ms McManus angered the business community this week by arguing for tax loopholes to be closed ­before any decision was made on bringing forward legislated ­income and business tax cuts.

“If we are all in this together we need to make sure everyone is paying their fair share of tax so we support (and) create good, ­secure jobs,” the union leader told The Weekend Australian.

Ms McManus wants the governme­nt to commit to a six-month extension of the full $1500 fortnightly payment for workers.

Under legislated tax cuts due to be phased in by 2024, the 37 per cent bracket will be abolished and every dollar earned from $45,000 to $120,000 will be taxed at a rate of 30 per cent. The 19 per cent tax rate will be lifted from $37,000 to $45,000.