Academic journal article The Economic and Labour Relations Review : ELRR

Enterprise Bargaining: Making Australia Competitive

Academic journal article The Economic and Labour Relations Review : ELRR

Enterprise Bargaining: Making Australia Competitive

Article excerpt

1. Introduction

When the Hawke Government floated the $A in December 1983 and removed the exchange controls that still then applied to capital movements in and out of Australia it let loose a variety of forces which were destined to have a profound effect on the workings of the Australian economy. One obvious and early effect of those decisions was the revolution that took place in Australia's financial sector including the entry of foreign banks. This in turn saw significant financial innovation, a deepening of Australia's capital markets and, despite some imprudence, the much more efficient provision of finance to business and consumers.

The most profound change wrought by the floating of the $A was the extent to which it opened the Australian economy to international influence. This occurred in two main ways. First, the hfting of the exchange controls removed all restrictions on Australian investment abroad. In the seven years since, Australian corporate investment abroad has totalled almost $50 billion. The bulk of this has been invested directly in business enterprises abroad, exposing Australian management to different and often best practice across the full spectrum of managerial issues. Indirectly, therefore, the floating of the $A has had, and will continue to have, a profound effect on Australian management, on its horizons, and on its international orientation. One important by-product is closer attention to the way we manage the people resources in our businesses. Not surprisingly, our national approach to industrial relations has come under increasing scrutiny by businesses and growing pressure to change.

Increased competitive pressures have been the other important effect of the December 1983 decision. With the value of the $A henceforth subject to daily market pressures, our entire economic performance was brought under much closer scrutiny by world financial markets and world investors. This brought new disciplines on government and the private sector alike. Pressures impact on government because the exchange rate can react more rapidly and decisively to shocks (such as large swings in the terms of trade) and because foreign perceptions of domestic economic management can now feed quickly into capital flows, exchange and interest rates. The penalties for not having appropriate policies for changed circumstances became larger and more rapidly felt. This development has speeded the pace of change in policy settings in some areas--the major adjustment to fiscal policy by the Commonwealth Government from the mid 1980s to a significant extent reflected this new discipline.

The increased disciplines on the private sector--or perhaps the enterprise sector of the economy, including public trading enterprises--arise in a variety of ways, some quicker than others. The tradeables sector of the economy is directly and quickly subject to movements in the exchange rate. Public enterprises and the non-tradeable sector are also being put under more pressure to perform as the economy becomes more outward in orientation. Management horizons and commitment have come under pressure across the board, while employees and unions now stand in more immediate competition with their peers in competitor countries.

These pressures, in turn, are beginning to flow back onto many of our institutions. Our universities, for example, are being put under increased pressure to perform. Increased scrutiny, and in some States major changes, are also afoot in our technical education system and school system.

Within firms, especially those more directly trade exposed, all aspects of business are coming under scrutiny. Matching competitors' technology has increased in importance. The place of research and development in competitive strategies is being re-evaluated, as is international market development and management development.

The realisation is growing and spreading too, that it is not enough to have the best technology or the best marketing brains to compete successfully. …

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