Federal Politics

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Tony Abbott rejects Paul Howes' proposal of an Accord with unions as 'very 1980s'

Prime Minister Tony Abbott has dismissed the proposal of a grand compact between business, unions and government to end the fractious debate over industrial relations in Australia.

But Mr Abbott seized on apparent divisions between Labor leader Bill Shorten and Australian Workers Union boss Paul Howes on how to tackle union corruption, a day after the union leader lashed “criminal” elements in the movement and called for the workplace debate to be reset.

Mr Howes called on Wednesday for unions enter a new partnership with the Coalition and business to rein in high wages and lift productivity in Australia, in a speech that undermined Labor's political attack on the government's plans for industrial relations reforms and shocked many of his fellow unionists.

But on Thursday the prime minister said he while he was on a unity ticket with Mr Howes and "against Bill Shorten" on the push to tackle union corruption, particularly following "credible allegations from former union officials about organised crime" published by Fairfax Media, he was not sure about a 1980s-style price and wages Accord, describing the idea as “very 1980s”.

“I certainly think workers and managers need to be partners in the enterprise. Whether we need to have some kind of grand compact between big government, big business and big unions, I'm not so sure about that," he told Fairfax radio station 4BC.


“I think wages should be as high as a business can afford, if the business is profitable innovative and competitive, then it can afford higher wages but if its not profitable, then its going to have trouble paying the wages it is paying.”

Mr Abbott said Mr Howes had “pulled the rug out from underneath Bill Shorten's scare campaign” that the Coalition government would cut wages and seek to reduce penalty rates.

“[It] was a very powerful assault on everything Bill Shorten has been doing for the last few months.”

In recent weeks, the federal government has criticised the “archaic” conditions in the workplace agreements of Toyota workers, rejected a request for $25 million in assistance from fruit processor SPC Ardmona – in part because of conditions in workers at the company's plant in Shepparton – and urged the Fair Work commission to take into account the softening economy and labour market as it reviews the modern awards system.

In a speech to the Lowy Institute on Thursday, Treasurer Joe Hockey repeated his comments from earlier this week that ''the age of entitlement'' was over.

He said the business sector ''must shoulder more of the burden... and rely on less government assistance''.

''Now is the time for a cashed up private sector to do some heavy lifting,'' Mr Hockey said.

''Too many tax payers' dollars have been spent on corporate and middle class welfare.

''I have said before that the age of entitlement is over,'' the Treasurer added. ''The age of personal and corporate responsibility has begun.''

Labor and the union movement have accused the government of preparing to back a push, led by retailers and restaurants, to reduce penalty rates that rose under Labor.

Mr Shorten declined to directly criticise Mr Howes but suggested it was a "fantasy" if the union leader believed an Accord-style agreement could be struck between unions and the Abbott government.

"I am not going to engage in some fantasy that Tony Abbott is going to change his spots," Mr Shorten told ABC Radio.

Mr Shorten said that he supported consensus on workplace relations.

"It's what I've done for 25 years," the former union leader said. "Do you seriously believe that Tony Abbott is interested in working with trade unions?"

He added that Mr Abbott was unlikely to strike a deal with a union movement that he was portraying as corrupt and in need of a royal commission.

The Australian Chamber of Commerce and Industry chief operating officer John Osborn welcomed Mr Howes' “frank admission that there are major problems in Australia's industrial relations landscape”.

“As Mr Howes knows, business has long argued that the Fair Work Act is unbalanced and out-of-touch with modern workplaces," he said.

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