Proposed reforms to Australia’s industrial relations laws will help rebuild collective bargaining coverage in the national labour market, and provide a major boost to long-stagnant wages growth, according to this report.

In particular, proposals in the legislation to extend opportunities for collective bargaining across multiple employers hold potential to significantly boost collective bargaining coverage, based on the experience of other industrial countries. International comparisons show that the existence of multi-employer bargaining is strongly associated with higher coverage.

Higher collective bargaining coverage, in turn, is vital to stronger wages growth. The decline in coverage in Australia (which has fallen by close to half since 2013) explains over half of the change in wages growth over this period.