Ergas on Qantas

How the Fair Work Act encourages blackmail and falling productivity

Henry Ergas gives us a clear outline of the role of Julia Gillard’s Fair Work Act, along with her and her cabinet’s lack of action, to the fiasco over Qantas.

Most of Australia understands, despite the beat-up by pro-union commentators and the protests of the Labor government, that Alan Joyce is a hero. What the Fair Work Act does is to encourage industrial sabotage and blackmail and increase inefficiency.

First, as Gillard told the ABC’s 7.30, companies such as Qantas are important to her “because they provide jobs to working Australians”. Not because they create wealth by successfully competing on world markets; not because they meet the needs of consumers; but because “they are major employers”, presumably of unionised workers.

Rarely has an Australian prime minister so thoroughly confused means and ends.

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