MRC Report: The Great Regression
how unions and the government have changed the rules from accord to central control
Published: September 2025
Lead author: Hon Pru Goward AO
Australia’s industrial relations system has undergone a historic reversal.
The workplace reforms of the Hawke and Keating era modernised Australia's economy and shifted the focus of industrial relations from centralised wage fixing to enterprise-level bargaining. Unions were encouraged to negotiate directly with employers, with workplace improvements tied to productivity and collaboration — not industry-wide arbitration or imposed national standards.
These reforms brought higher wages, productivity, and growth. They reflected a Labor leadership prepared to challenge entrenched interests in pursuit of broader national goals.
That consensus no longer holds. The Albanese Government has introduced a series of sweeping industrial relations (IR) laws that in large part mark a deliberate and systematic shift away from the enterprise model. Many of these changes prioritise centralised control, increase union intervention, and reduce productivity for businesses and workers alike.
This report details how the Albanese Government’s IR laws are reshaping Australia’s industrial landscape and radically regressing from the Hawke–Keating model.
The reform process that began in the 1980s and once led towards decentralisation and productivity has been reversed back towards regulation and control. What began as a cooperative agreement between the government, unions, and businesses has shifted into a two-way political compact between Labor and the unions. This new accord is mutually beneficial: the unions provide financial support, in exchange, the Labor Party delivers the union's legislative agenda.
The scale of the changes already made, and the ambitions yet to be revealed, deserve close and urgent scrutiny. What is at stake is not just the structure of workplace law, but the foundational principles that underpin our economy: reward for effort, accountability, and productivity. The policy changes documented in this report extend beyond isolated amendments and represent a turning point in Australian industrial relations. The result is a power shift away from enterprises and workers and back towards centralised control.