Paul Kelly: Onus is on Rudd | The Australian

CONTRARY to the deepest orthodoxy of Labor politicians, trade union officials and political analysts, the Work Choices laws represent the decisive test of Kevin Rudd's credentials to govern Australia. It is Rudd, not John Howard, who faces the bigger decisions on Work Choices. It is Rudd, not Howard, who has to formulate and explain his Work Choices policy. It is Rudd, not Howard, who has yet to address the big questions on Work Choices.

Remember that Rudd, unlike Howard, is an open book on industrial relations. He has yet to declare his real beliefs. This declaration in the form of his industrial relations policy will brand Rudd's values, reformism and economic credentials for election 2007. Rudd is a serious pro-market politician dedicated to competition policy and productivity gains. He prizes his intellectual integrity. That integrity, along with his political authority, will be compromised if he bows to the detailed re-regulation of the labour market, resurrection of the award system, comprehensive collective bargaining rights and rights of workplace entry being pursued by the trade union movement.

How will he manage the party and the unions? In coming weeks Rudd faces a test of his political judgment and forensic skill.

Rudd must decide how far he rolls back Work Choices. He is trapped between two irresistible imperatives. He must take a tough line against Work Choices to stay true to the huge political and financial commitments made by the trade unions and the Labor Party, yet he cannot abandon economic credibility, which is his main claim to office.

The way Rudd resolves this dilemma will be pivotal to his election hopes. It seems he has yet to find the answer. This is an image as well as a policy dilemma. Rudd projects as the leader of the future with his education revolution and broadband plan, yet his campaign in lockstep with the trade unions to enshrine a "collective approach" to industrial relations threatens a return to the past.

Rudd knows that somehow he must find the right balance.

How does he win small business and contractors to the Labor Party yet satisfy the unions? How does he persuade corporate Australia that he is safe in economic terms when he pledges to repeal Work Choices? How does he present as an economic reformer while threatening to unwind one of the key reforms of the past twodecades?

On industrial relations, Howard is a conviction politician. His views have been known for 25 years and they are entrenched. Howard is vulnerable on Work Choices and he will re-examine his position. This may go beyond finetuning to a strengthening of the social safety net.

But Howard this year will champion the ideas and principle of Work Choices as basic to Australia's prosperity, its below 5 per cent unemployment, job creation and fairness (a job being the key to fairness).

Work Choices is not the gift for the Labor Party that the unions insist and the media hails. It is best seen as a gift and a risk.

It shows the clout, money and skill of the Labor-ACTU alliance that has tapped into and provoked a community alarm, yet it brings Labor and the unions into their tightest embrace for decades in the cause of resurrecting collective power and denying individuals and employers the right to enter into individual contracts.

Critical points in this debate have been overlooked. First, Work Choices is an economic issue that will see a clean break between Howard and Rudd, contrary to Rudd's strategy of aligning Labor as closely as possible with Howard's economic policy.

Labor and the unions see Work Choices as the pivotal election issue, yet there is every sign that Howard welcomes this contest.

The risk for Labor is that it wins the Work Choices battle but gives Howard the opening to win the bigger war over economic policy.

In recent days NSW Industrial Relations Minister John Della Bosca said the Howard Government would be annihilated unless it changes Work Choices. Federal Opposition Deputy Leader Julia Gillard predicted that Work Choices "will be the single biggest issue on people's minds when they vote in the federal election".

As an opponent, Howard won't be NSW's Peter Debnam. Howard will plan his own scare campaign: by election time 20 per cent of workers in Western Australia and more than 750,000 nationwide will be on Australian Workplace Agreements that Labor will abolish. The more Labor backs rollback, the more convulsions its policy will unleash.

Howard will position industrial relations at the sharp end of the economic debate. He will welcome the chance to have Rudd locked into defending the award system, union rights and the centralised tribunal. This campaign would be the logical culmination of Howard's career (which is not to assume he will win).

Second, Rudd's industrial policy will be a compromise document that reflects his competing goals. He must retain significant elements of Work Choices to be credible. This was obvious from the style and content of Rudd's speech last week at Penrith with NSW Premier Morris Iemma. Giving a platform speech, Rudd looks and sounds like a technocrat. He shuns class-based polemics that have been the staple of Labor platform speeches for a century.

His rhetoric on Work Choices is a pledge for "fairness and flexibility": read fairness for the labour movement and flexibility for business. Blind Freddy can see that Rudd is searching for a middle path.

This was also apparent in Gillard's March 14 speech on industrial relations. Rudd and Gillard know their IR policy needs to be reformist and that it must reflect Labor's commitment to productivity and innovation. How they produce this from a mixture of common law contracts, stronger awards and legislated minimum conditions will test their creativity.

Third, contrary to claims by the trade union movement, Work Choices is not seriously disadvantaging large numbers of Australians. This finding is hardly a surprise. The ACNielson poll this month shows that of the 80 per cent of people who have heard of Work Choices, 72 per cent report it has made no difference to them. Only 21 per cent of this 80per cent think they are worse off and this figure is less than the 31 per cent who, two years earlier, expected to be made worse off.

Work Choices is an issue of perception, values and philosophy. This is confirmed by ACNielson pollster John Stirton, who said that rejection of Work Choices was "almost a philosophical opposition to what people understand Work Choices stands for". Stirton favoured the view that Work Choices did not really affect people so much as affect their perceptions. It is part of that vortex of contemporary insecurities: the worry that parents feel for their working kids, the fear of women that the workplace is becoming less friendly and suspicion that Howard, in Rudd's words, has gone "a bridge too far" in backing employers. This is not a battle of the hip pocket. It is a contest about ideas and power.