Are the Labor Party’s proposed IR laws the first big policy misstep of Kevin Rudd’s leadership? Michelle Grattan today raises the point that Kevin Rudd did not consult the head of his Council of Business Advisers, Sir Rod Eddington, in creating the policies.

Grattan wrote: “Eddington is believed to have now told friends the IR policy was flawed and he is surprised and confused at being kept out of the loop. But maybe Rudd did not want to hear what Eddington undoubtedly would have told him — that business would find the policy retro and restrictive.”

Kevin Rudd sounded quite confident in his promise on the 7.30 Report that “no worker will be worse off after the AWAs are ripped up”, but it only took one night for his star recruit, Greg Combet, to highlight that many workers gained significantly by moving onto AWAs. Asked if any workers were better off working under an AWA, Combet answered sensibly: “Of course they are, and of course we acknowledge that … That’s because (of) the market, because of the profitability of the resources sector. With a boom in China, the demand for commodities has driven wages up very high.”

Despite this, Labor refuses to back down on its claim that it will “tear up” AWAs, but it has left some room to move. The so-called “transitional arrangements” are yet to be defined, but they will need to be good to gain the support of a business community increasingly dependent on AWAs.

Which brings up a good question — one that Henry asked in his Your Say column –what exactly is the case against AWAs?

Mike Sketetee’s answer is as follows:

For Labor, the debate over miners’ AWAs is a distraction from their use in other areas, particularly retail and hospitality, where they are being used to cut pay and conditions. Here, workers typically are low paid and in no position to bargain equally with employers.

However, as Henry has argued, the major economic benefits of WorkChoices are clear — strong employment growth with surprisingly benign inflation, allowing us to fully capitalise on the China boom. Labor’s desire to reintroduce union power into our workplaces will add downward pressure to employment growth.

As Henry wrote last week, old Labor values union rorts well ahead of overall economic efficiency, which includes employed workers. Unemployment is a major cause of poverty in Australia — we must continue to focus on reducing unemployment, which it must be said, is much higher than officially reported.

Read more at Henry Thornton.