Employers warn Labor’s slavery bill harms productivity

In Short:
– Employers oppose criminal liability for modern slavery due to productivity concerns.
– The BCA warns against criminal penalties impacting inflation and business operations.

Employers are opposing the Albanese government’s proposal to hold companies criminally liable for modern slavery in supply chains, citing potential impacts on productivity.The Business Council of Australia (BCA) has raised concerns about additional risks to productivity and inflation stemming from government plans to restrict non-compete clauses and ban no-poach agreements between businesses.

Productivity risks

Rising bond yields could increase interest payments for state and federal governments by $18bn annually.

Treasurer Jim Chalmers indicated that rising interest payments will limit the capacity for cost-of-living relief.

Chalmers stated a savings package would accompany the mid-year budget update, reflecting ongoing fiscal pressures.

He acknowledged that the government is $103bn worse off due to policy decisions since 2022.

While economists express skepticism, some demand deeper cuts to spending than previously implemented.

Concerns from the Minerals Council of Australia highlight that holding companies criminally responsible for modern slavery is counterproductive.

CEO Tania Constable suggested focusing on prevention and practical solutions instead of imposing penalties on business leaders.

Mining accounts for a substantial expenditure in its supply chain, with over 60,000 suppliers already burdened by various pressures.

The BCA also cautions against proposed criminal penalties related to modern slavery in supply chains.

CEO Bran Black criticized the government’s approach to impose criminal liabilities while allowing unions to coordinate wages.

He noted that the proposed legislation could hinder the Reserve Bank’s efforts to control inflation.

Independent economist Chris Richardson foresees higher interest repayments on pandemic-era debt as a future challenge for governments.

Spending cuts

Warren Hogan advocated for real spending cuts of 10 to 15 per cent over the next decade.

He called for a royal commission into care-economy spending to address taxpayer costs.

AMP chief economist Shane Oliver suggested broad spending cuts similar to those enacted in the 1980s.

Dr Chalmers noted a contraction in public demand as private demand rises, although shifts may be driven by government-subsidised electric vehicle purchases.

KPMG’s Brendan Rynne urged a reevaluation of government expenditure, advocating for a reduction in public service size.

Calls for means testing for cost-of-living relief measures reflect growing concerns regarding high government spending levels.