Brown Study

Brown study

18 January 2014

9:00 AM

18 January 2014

9:00 AM

It is good to read something worthwhile in the press and I had the opportunity to do exactly that the other day when up popped Ms Mary Thompson in the Australian. She is the MD of McLeod Rail, a construction company and she was explaining the disastrous cost problems now facing business. As she put it, the problem is not the ‘poor’ construction workers on $150,000 a year. No, the problem is ‘the 20 people in the project office doing compliance with red tape.’ It was sort of stating the obvious but a valuable view, literally from the coal-face, on how we are pricing ourselves out of existence by adding layer after layer of costly compliance requirements. Then I reflected that the heavy cost of complying with red tape was not just a sign of the pervasive government interference that we see in so many areas of life these days, but yet another example of how we have veered away from substance, from the real work we are supposed to be doing, into the vague and amorphous world of process and ritual.

It is largely the same with the law, which becomes more complex and expensive as procedural gobbledegook increases and lawyers stagger to court behind trolleys full of papers that are never used, judgments become longer and governments introduce so-called reforms and initiatives that slow down the decision-making process. Arbitration was supposed to be the great hope to save the law from this paralysis and to get it to abandon its ritualism and preoccupation with process, concentrate on making a decision and resolve the dispute quickly; but even arbitration now runs the risk of suffering from the burden of process or, as Ms Thompson put it, ‘compliance’, as it imposes more complicated procedures on the parties and the arbitrator. I am sure Josh Frydenberg, as he goes into battle to slay the regulation giant, does not need my advice, but I hope he asks the public servants about their regulations: ‘What does this regulation do and why is it necessary?’


So, Ms Thompson is right; the costs of compliance and other forms of red tape are massive. But so also is the cost of the ‘poor’ construction worker on $150,000 a year, especially where that salary has been fixed by the employer or his organisation having been persuaded to give too generous a pay increase without getting any benefits in return and, often, in the fond hope that governments will come along with some industry assistance or tariff that will cushion the blow. I can illustrate that problem with a case that comes from my time practising in the industrial relations field. I was appearing for a downtrodden and oppressed employers’ organisation to oppose a pay increase in their industry that had been demanded by the union. I burnt the midnight oil, mounted a vigorous defence against the claim and eventually won. The employers’ organisation was aghast at this result and, instead of breaking out the champagne, went into mourning. Apparently a deal had been done before the case had started and the wage increase had been given away without a fight and on such a flimsy basis that it could not stand scrutiny from either myself or the industrial tribunal. Fixes like that have to come to an end and it was pleasing to see Joe Hockey announce that there will be no more industry assistance for companies who make these extravagant bargains and then turn to the taxpayer to get them out of their bad financial deals. The other compliance cost on business is the cost of taxes that destroy jobs. Only today, I read of an Australia Post courier company that has collapsed. All the jobs are gone and the business is finished. Its offence: it cannot pay half a million dollars in payroll tax. What a triumph for government.

The other day I passed an acquaintance for whom I have done a fair amount of free legal work over the years, never, of course, with a word of thanks. He did not stop to chat, but as he swept on his way he called out over his shoulder: ‘We must catch up for dinner.’ I have always wondered what this expression actually meant; I have been pretty sure that it did not mean: ‘I would like to have dinner with you and I will now fix a time and date.’ But what did it really mean and why do people keep saying it when they know it is false? By a remarkable coincidence, I saw a few days later that some academics had done research on how we form friendships and keep them and in particular what we mean when we say things like the foregoing. It seems that we keep the same number of friends throughout our lives and recycle them; one is discarded when another potentially more appealing candidate comes along, it is like going through your sock drawer, discarding a pair with holes and replacing them with another. At the same time, we have invented a social language to keep up the ritual of friendship when the reality tells us that the substance has gone. Thus, the phrase in question really means: ‘We will certainly not catch up for dinner; you are boring and passé and I have moved on with my life and now mix with people who can talk about Luis Buñuel movies, goat’s cheese, Pilates classes and whether their personal trainer is gay.’

I am always a bit sceptical about blockbusters, but Gold and the Incas at the National Gallery in Canberra is a knockout. It is a brilliant reconstruction of a lost civilisation, the gold and silver pieces are elegant and the fabrics, weaving and needlework are breathtakingly beautiful. See it.

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