Industrial Relations and Productivity in Australia

In this report to the Chifley Research Centre, we seek to identify and to discuss major issues that arise in establishing the relation between Australia’s industrial relations practices and policies, on the one hand, and its productivity performance, on the other. This is a matter of controversy. Much of the report is an exploration of what can and cannot be said about the linkage. It is necessary, for this purpose, to describe the major facts about productivity growth and to take note of other possible causes of them. We draw heavily on the existing literature. Productivity is, of course, just one aspect of economic performance. It has an important bearing on community well-being, but there are other factors to be taken into account, including the terms of trade with the rest of the world, employment and unemployment, conditions of work, the distribution of income and the depletion of natural resources. These are outside the scope of this report, except where they have an arguable bearing on productivity. We do not attempt to deal with labour market policy at large. For example, we do not discuss government measures to encourage training and labour mobility.