Last night’s Australian Industry Group annual dinner saw the Prime Minister and the Ai Group butt heads.
Ai Group national president, Lucio Di Bartolomeo, disagreed sharply on what could be done to make the workforce more productive, opposing Gillard's comments.
Di Bartolomeo introductory speech stated that conditions in non-resource industries were near-recessionary due to labour costs and the high dollar.
He also suggested that the Federal Government needed to go past what was recommended in the recent review of the Fair Work laws and accept the use of contractors and non-union-brokered labour.
"Curtailing the scope of bargaining claims was not recommended by the review panel but we urge very strongly that legislative action is taken," Di Bartolomeo said.
"Many of our members are looking for ways to innovate and change their business models to better deal with the structural changes in our economy. But, as they attempt to adjust, they face a workplace relations system where bargaining disputes increasingly revolve around union attempts to impose restrictions on how businesses operate, such as the use of contract labour and clauses which oblige employers to encourage union membership.”
The prime minister followed by saying “stale old battles” involving cutting wages and conditions to boost productivity should end, and that there were other factors that were holding things back.
“You don't achieve productivity by cutting wages and conditions,” Gillard said.
“That just makes for poorer workers and arguably more unhappy, less trusting and less motivated workers as well.”
She said that productivity did not receive a significant boost when the Coalition’s WorkChoices attempted to make workplaces more flexible, and that enterprise bargaining was the best way forward.
Gillard blamed the lag between investment and output in mining, as well as low output in utilities and agriculture, for dragging down productivity figures.
She added that results were better than some were claiming.
“In the year to March 2012 labour productivity grew at its fastest annual rate in a decade.”