Mr Howes warned the resources boom was now over and that Australia faced a jobs crisis, with 130,000 losses since the global financial crisis and "tens of thousands more lie just around the corner". Paul Howes, National Secretary of the Australian Workers' Union, has called for an end to political point-scoring over industrial relations. Credit:Alex Ellinghausen Mr Howes urged his comrades in the union movement to concede there had been a pattern of unsustainable wages growth in some sectors of the economy, adding "we could be pricing ourselves out of the market". He said "the leap-frog wage outcomes in the offshore sector, in particular, are not going to be sustainable for the long-term". But he urged business to concede that on an economy wide basis, industrial disputes had fallen and wages growth had slowed.

"Perhaps they [business] might agree - penalty rates and the minimum wage are fundamental planks of our social contract and should remain." The union national secretary said the industrial relations see-saw in Australia, which has seen a range of legislative changes in the last decade and a half and contributed to a "perpetual instability" in the IR system. "Some will tell you that our industrial relations system is dragging us down. "And I won't be popular amongst my friends in the labour movement for saying this - but I agree," he said. "This culture of perpetual instability means business and unions believe - quite reasonably - they don't need to co-operate today - because they'll be able to rewrite the rules tomorrow."

Seeking compromise In comments that will put him at odds with some of his fellow union officials, and some in the Labor Party, Mr Howes said both sides of politics had engaged "in wild, overblown claims about how disastrous the legislation of the day is". Mr Howes called for a "circuit breaker" to end industrial relations law changes to provide some of the stability that existed in the form of Accords agreed during the Hawke/Keating era. "A grand compact is not just possible, it's desperately needed. A grand compact in which business, unions and government all work out a deal that we all agree to live with for the long haul." "A bitter, all-out war between labour and capital will not end with productivity gains. The federal government needs to realise that its primary role is actually to take a few steps back - and to use that perspective to start fostering harmony and co-operation."

Mr Howes' comments come as the federal government prepares to launch a Productivity Commission inquiry into the Fair Work Act, and as it attempts to restore the building industry watchdog. They also come as the Abbott government urged the Fair Work Commission to take a softening economy and labour market into account as the industrial umpire reviews modern awards and flagged concerns about penalty rates. On the allegations of corruption in the construction union, first revealed by Fairfax Media last week, Mr Howes said union members had been betrayed, dishonoured and undermined. "We must not allow this treachery to define us. We must not allow the traitorous minority to usurp the meritorious majority," he said. "If we turn a blind eye - if we ignore any pocket of dishonesty - it will grow like a cancer. It is my job - and the job of every union leader - to cut that cancer out."

Greens outraged Greens deputy leader Adam Bandt was not impressed by Mr Howes' speech on Wednesday, calling for the AWU leader to resign his post. "Paul Howes should resign as union secretary and join the Liberal party if he is going to just parrot Tony Abbott’s attack on people's wages," said Mr Bandt in a statement. "On the same day the government is in the Fair Work Commission attacking people's wages, Paul Howes is out there spinning Tony Abbott’s argument. Why is one of the most prominent union leaders in the country giving ammunition to Tony Abbott's attack on Australian wages? It is a disgrace." Mr Bandt argued that Mr Howes seemed "more interested in pursuing his long-term goal of becoming prime minister than representing ordinary Australian workers".

The federal government has signalled it is moving towards broadening out a promised judicial inquiry in the Australia Workers Union slush fund scandal into a full blown Royal Commission. Earlier on Wednesday, Labor leader Bill Shorten slammed the idea that penalty rates would be cut, saying Mr Abbott had "no idea of how millions of people earn their pay". "Penalty rates aren't going to the big end of town," he told reporters in Melbourne. "These are people who require that extra money when they work the unusual shifts, the family pressuring shifts ... they deserve to be able to at least expect that their government doesn't have their hand in the pocket of ordinary workers, trying to take away their conditions." PM agrees

Prime Minister Tony Abbott brushed aside suggestions that his government was moving to reduce wages, conditions or penalty rates, arguing they were a matter for the Fair Work Commission. He welcomed Mr Howes’ comments at the National Press club to ‘‘let the past be the past’’. ‘‘I guess that’s not a bad message for everyone - not just for Labor frontbenchers - to let the past be the past,’’ he said. ‘‘I want to maximise Australian jobs, I want to maximise Australians’ pay and I want us to be amongst the best paid workers in the world. But to be the best paid workers in the world, we have got to be amongst the most productive workers in the world and that’s what I want our system to encourage.’’ Mr Abbott said that there was still scope for wage levels to grow, as long as productivity increased in lock-step.

Loading ‘‘Penalty rates are very important to people - very, very important to people. If you are a low-paid worker one of the things that you often love to do is work late-nights, weekends, because it does substantially increase your income.’’ Follow us on Twitter