NEW LOW-COST ERA HEAD­ING OUR WAY

If Amazon lives up to the hype, the prices we pay for prod­ucts should get cheaper

The Weekend Australian - - COMMENTARY - GRACE COL­LIER

As you may be aware, we are in the grip of a wide­spread wages cor­rec­tion. Peo­ple are be­ing asked to do more, or work bet­ter, for less. Work­ers in the pri­vate sec­tor are ac­cept­ing pay cuts, freezes or very low wage in­creases.

Un­der­stand­ably, peo­ple in this type of sce­nario are not overly thrilled. Aus­tralia is a ter­ri­bly ex­pen­sive place to live and the cost of liv­ing con­tin­ues to rise, while peo­ple tighten their belts and try to man­age as best they can.

Our pe­riod of wages stag­na­tion is un­avoid­able and I ex­pect it to con­tinue. How­ever, the im­pact can be some­what off­set if we can make the tran­si­tion to a low-cost econ­omy.

In a low-cost econ­omy, we will all have easy access to cheaper goods and ser­vices. This will as­sist us all but par­tic­u­larly those on low in­comes. For too long we have all paid far too much for things in this coun­try. We have ac­cepted high prices and also woe­ful lev­els of ser­vice. It is time that changed, and so thank good­ness for the likes of Amazon.

You may be aware that the global on­line shop­ping gi­ant has set up a dis­tri­bu­tion cen­tre in Mel­bourne. It is yet to start trad­ing here but over­seas it is es­ti­mated that Amazon has dropped the cost of goods by 30 per cent.

The ar­rival of com­pa­nies such as Amazon gives us our best chance of achiev­ing change for the bet­ter. Amazon can help re­duce the cost of liv­ing and as­sist the tran­si­tion to a low-cost econ­omy. There­fore we must do ev­ery­thing we can to wel­come it and en­sure its suc­cess.

For this rea­son, Rus­sell Zim­mer­man’s re­cent com­ments are of in­ter­est and wor­thy of com­ment.

Zim­mer­man is the ex­ec­u­tive di­rec­tor of the Aus­tralian Re­tail­ers As­so­ci­a­tion, and he was re­cently quoted in a Fair­fax news­pa­per as pon­der­ing whether Amazon re­ally un­der­stood ware­hous­ing and how it would go, “get­ting an in from the Trans­port Work­ers Union”.

This is ba­si­cally say­ing that the TWU can de­cide whether to al­low Amazon to par­tic­i­pate in our mar­ket. Fur­ther, it in­di­cates that if Amazon wants to be in our mar­ket, it will need to strike a deal with the TWU for per­mis­sion to con­duct a busi­ness.

When we have the head of an em­ployer group pub­licly por­tray­ing our econ­omy as this cor­rupt and at­tribut­ing to a union the power to al­low access to a mar­ket, in a blithe and ac­cept­ing man­ner, it is a very poor re­flec­tion on our coun­try.

Zim­mer­man’s com­ments are con­cern­ing too be­cause some­one from Amazon could be­lieve them and run off to do a deal with the TWU, be­liev­ing the com­pany has no choice.

For the record, for the ben­e­fit of Amazon and the Aus­tralian com­mu­nity, the TWU does not have the power to con­trol who par­tic­i­pates in our mar­ket. It has no power to give Amazon an “in” and no power to ex­clude Amazon from the mar­ket.

By law, Amazon does not need and can­not be com­pelled to speak with any per­son from any union, ever, even if all its staff are in a union.

A union of­fi­cial has the le­gal right to speak to those Amazon staff el­i­gi­ble to join that union, in their lunch­room, in their non­work­ing time. A union of­fi­cial does not have the le­gal right to speak to any­one in Amazon man­age­ment. The Amazon man­agers can com­pletely ig­nore union phone calls, emails and other forms of con­tact.

Amazon does not need to en­gage in en­ter­prise bar­gain­ing — in­deed, it should avoid it like the plague. Aus­tralia has a sys­tem of mod­ern awards and these are by far the cheap­est and

For too long we have all paid far too much for things in this coun­try. It is time that changed

most flex­i­ble way of em­ploy­ing peo­ple. Amazon can use the rel­e­vant awards as its base­line em­ploy­ment doc­u­ment, although it is free to pay in­di­vid­u­als at its dis­cre­tion above the base award rate if it wishes.

There is no need for Amazon to make any union deals or have “union re­la­tion­ships” with any­one. Amazon can avoid en­ter­ing into com­mer­cial con­tracts with union-con­trolled com­pa­nies — this will only place its sup­ply chain at risk of in­ef­fi­ciency, de­lay and po­ten­tial in­ter­rup­tion.

Amazon can iden­tify union­con­trolled com­pa­nies quite eas­ily: a Google search will re­veal an in­dus­trial re­la­tions his­tory. In real life, man­agers of union-con­trolled com­pa­nies spend a lot of time com­plain­ing about the unions and shak­ing their heads about how pow­er­ful they are, be­fore go­ing off to have meet­ings or lunches with peo­ple from the unions.

When con­tacted this week, Zim­mer­man said he did not want to see any union con­trol over in­dus­try lead­ing to a di­lu­tion of the fan­tas­tic im­pact that Amazon could have on our econ­omy. “Amazon is a dis­rupter,” he said. “They are com­ing and there is a great op­por­tu­nity for re­tail­ers to en­gage with them and grow their busi­ness.”

Zim­mer­man is up­beat about Amazon. If it does what is ex­pected, he says, we should be able to buy things more cheaply, have them de­liv­ered more quickly and for less. Let’s hope its doors are open by Christ­mas.

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