Higher productivity requires community support: BHP

BHP Billiton director Malcolm Broomhead says labour productivity issues in Australia need to be fixed, and says the issue requires community understanding and support.

Broomhead said that labour productivity has “dropped enormously” and said the Abbott government, while fully aware of the problems, has “locked itself out of major reform in that area”.

Last week the government introduced changes to Fair Work laws that toughen right-of-entry rules for unions, allow employees to trade penalty rates for flexible hours and remove ''strike first, talk later'' loopholes.

However it was hoped more wide-sweeping reforms would have been undertaken by the Coalition government with union involvement, high labour costs, and falling productivity long being bug-bears of the mining industry.

Broomhead told The Australian it is electoral backlash as seen when Work Choices was introduced that stopped the government from acting.

“It is trying to do what it can within the constraints of the commitments it made. But as a country we need to get back on that bandwagon. And it really needs community support. It is the kind of thing you need community understanding around,’’ he said.

“Productivity doesn’t necessarily mean wages. It is about doing things more efficiently.”

Broomhead’s comments come just days after Labor stalwart Martin Ferguson said the ALP should support industrial relations reforms.

The former Resources Minister, who now chairs the Australian Petroleum Production and Exploration Association, said Australia risked losing out on investment dollars if changes were not made.

'High labour costs and low productivity are an unsustainable mix,'' Ferguson said.

''And therefore elements of the Fair Work Act must be looked at.''

Ferguson called the Maritime Union of Australia (MUA) a "job-killing" and "rogue" union and said unless excessive demands were reduced, more Australian jobs would go offshore.

He said Prime Minister Tony Abbott should go further than the announced changes to IR laws, labelling them as modest.

Abbott said he would not seek to change any industrial laws outside of his pre-election commitments.

For mining, this may mean battling against an inflexible and out-dated system for the time being.

Last year, BHP boss Andrew Mackenzie said most employees wanted to “sign up to a team that wants to win”.

“They want to be globally competitive. They too speak of their desire to make Australia more competitive,” Mackenzie said.

“BHP Billiton, and the industry more broadly, acknowledge that the bulk of the productivity challenge sits at our feet. We are focused on working smarter to produce more from our ore bodies, plant and machinery and to create an environment where our hard-working, talented people excel and want to be more competitive.”

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