Between the lines - Business and Govt must bury their hatchets

By Rod Oram

Some 250 employers at an Auckland conference this week took the opportunity to complain long and loud about the Government's decision to give back to unions the central role in wage bargaining.

No employer leapt to his or her feet in protest, but plenty of testy words were directed at Finance Minister Michael Cullen up on the podium.

If the Government needed to wear a flak jacket for ramming through the re-nationalisation of workplace insurance, it will need an armoured personnel carrier for pushing through its Employment Relations Bill.

Employers have reacted very negatively to the bill, tabled this week. The list of things they see wrong is long, running from the central concept of "good-faith bargaining" to the conviction that unions will now come between them and their employees to the detriment of workplace relations.

The philosophy, tone and detail of the bill are aimed at weakening employers and empowering employees. The Government believes the shift will make for more harmonious relations and productive workplaces. Many employers believe the opposite.

As if that was not important enough, the bill has far greater significance. No piece of legislation will be as big a test of relations between business and the centre-left Government. How both sides handle it will set the style of engagement - for better or for worse - for the life of this Coalition.

Futile confrontation is the worst-case scenario. Employers will rail against the bill while the Government stubbornly pushes it through. The Government will then find it hard to work well with business on other issues.

Constructive cooperation is the best-case scenario. Employers and Government will have a forceful, well-argued debate. The result will be an Employment Relations Act that serves employees and employers well.

That sounds idealistic but it could happen. However, the way the Government and business performed on the ACC bill is far from encouraging.

The Insurance Council staged a Custer's last stand in defence of the market principle, resorting to dodgy statistics when its ammunition ran low. It should have accepted from the outset that the Government believed it had won an electoral mandate for the change and worked to get as many constructive changes as possible.

The Government behaved only marginally better. It made some concessions but it has still burdened the economy with some unnecessary costs, such as the cumbersome scheme for forecasting each employer's safety record and premium.

The Government says it is pro-business but its quips, tactics and some of its policies say otherwise. Business says it will work with the Government but large chunks of it will not.

The country is the loser in this stand-off. After long years of divisive economic policies, New Zealand is ready for a more balanced and hopefully fruitful set of policies.

Unless the Government and business show more respect for each other and willingness to work together, they will blow the opportunity.