This was originally going to be my column for New Matilda this week, but it was overtaken by events, and after a bit of editorial discussion, it was agreed that I’ll be writing on the IPA advice instead.
Benjamin Disraeli, who would have known, once wrote about the plight of the opposition leader:
There are few positions less inspiriting than that of the leader of a discomfited party… he who watches over the fortunes of routed troops must be prepared to sit often alone. Few care to share the labour which is doomed to be fruitless, and none are eager to diminish the responsibility of him whose course, however adroit, must necessarily be ineffectual… A disheartened Opposition will be querulous and captious. A discouraged multitude have no future; too depressed to indulge in a large and often hopeful horizon of contemplation, they busy themselves in peevish detail, and by a natural train of sentiment associate their own conviction of ill-luck, incapacity, and failure, with the most responsible member of their confederation.
Disraeli penned that purple passage of prose in 1852, but he could have been writing of the plight of Brendan Nelson in 2008.
It didn’t take long after election night last year for the few Liberals who weren’t totally shellshocked to admit that WorkChoices had played, at the very least, a substantial part in digging their political grave. It was significant that Joe Hockey, himself charged with the hapless task of selling laws which had become so unpopular they were no longer to be named, pronounced WorkChoices dead. But it also didn’t take long for hardline voices within the Liberal Party to try to salvage some of the hard edges of workplace relations policy from the wreckage.
All the while, big business groups were cosying up to the new Labor government, and their most partisan critic of the ALP and the unions, Peter Hendy, jumped ship from the ACCI to take up a role with the new opposition leader before he could be pushed.
After the dust had settled, a compromise line was hastily patched together. Nelson joined the chorus proclaiming WorkChoices dead, but his deputy and IR spokesperson, WA’s Julie Bishop, drew a confusing line in the sand for evaluation by the Senate of the first tranche of the government’s workplace legislation.
Nelson had muddied the waters by declaiming the death of WorkChoices with one breath, and muttering about the sacred right of small business to sack employees in the next. Now Bishop claimed that Labor had a mandate to repeal WorkChoices, but not the Workplace Relations Act put in place by the Coalition government in 1996 and all the amendments to it up til 2006. This is, of course, nonsense. Labor has no intention of returning to the Coalition status quo ante, and as Nelson recognised when he claimed that the role of the opposition would be to hold the government to its promises, has its own plan for workplace regulation.
Bishop’s argument is not within the range of the legislatively practicable, and it really only means one thing, as she smilingly confirmed with her best head prefect grin in a tv grab this week – AWAs are good things, she argues, and must be retained. Never mind that the crux of Labor’s whole campaign was the unpopularity of AWAs.
Her bizarre defence of the AWA fetish has deep roots in the mire and confusion of post-election Coalition politics.
Although IR will be first cab off the legislative rank when Parliament resumes in a fortnight, discussion of Gillard’s (yet unseen) legislation has played second fiddle in the news cycle to the intention to make an apology to Indigenous Australians as the new Parliament’s first act. Here again, the opposition are at sixes and sevens. Nelson gathered support for his leadership run by reciting the tired Howard line against saying sorry. Never mind that most of the leaders who’d first apologised in state and territory parliaments in the 1990s after the Stolen Generation became a live political issue were Liberals or Nationals. No, the hard right of the Liberals needed placating, because Nick Minchin and Julie Bishop delivered their votes in the contest against Malcolm Turnbull.
So too with IR. There are sufficient provisions envisaged in Labor’s Forward With Fairness policy for genuine flexibility – either flexibility clauses embedded within enterprise agreements or common law contracts for the well paid. The abolition of AWAs protects those who don’t have bargaining power and skills valued by the market, and in particular protects against the tradeoff of basic conditions. The substantive argument made by Bishop is an empty one, and the Coalition’s confused political stance can only lead to Labor painting the Coalition as defending forever Howard’s worst excesses of hubris and ideology.
WorkChoices is still political poison for the Libs, but it’s a cup of hemlock Julie Bishop appears eager to quaff.
There’s been much discussion of the future direction the Libs need to take – reviews are proliferating, amalgamation is being lauded or dissed, liberals are brawling with conservatives. But one very basic mistake has been made. Events won’t wait on Liberal navel gazing. A thousand argumentative flowers might be blooming, but the legislative timetable – and the political cycle – marches on. Malcolm Turnbull had the right idea – lead from the front, and set a new policy stance immediately. This was also his undoing, as panicked right wingers scrambled to preserve whichever Howard stance was closest to their heart. Nelson finds himself trying to juggle too many balls in the air, searching for a compromise where no compromise exists – because if, as with AWAs, the Libs can be painted into a corner defending the most unpopular and electorally toxic aspects of the Howard agenda, they will be starting this term as political carcasses swinging in the wind.
Cross-posted at PollieGraph.
Well said, Mark.
And bonus marks for giving us Disraeli in full flight: his diagnosis still holds good. That’s the thing about the classics, eh?
Heh!
The quote is from The Life of Lord George Bentnick btw.
The Howard wing of the Liberal party clearly do not recognise the sort of poison they created with WorkChoices. The WC AWA’s and effectively at-will dismissals, were bad enough, but implementing it by fiat without pre-election discussion tattooed a target on their backs, while putting a cup of hemlock in their hands.
Re: “WA’s Julie Bishop, drew a confusing line in the sand…”
It was less of a line, and more of a “piss ring”.
Mark,
People who don’t have skills that are valued by the market are, to put it bluntly, screwed, regardless of the IR statutes.
AWAs basically gave employers the ability to pay people less (in salary and/or conditions) and demand greater flexibility. Getting rid of them is effectively forcing employers to pay people more and accept less flexible arrangements. Some employers will decide that it is not worth the hassle. That the 53 year-old migrant with limited English and a dodgy back is not worth holding on to if you have to pay them extra to work on public holidays.
AWAs shifted the line in the employers’ direction. Getting rid of them will shift the line back toward the employees. Some marginal employees were just on the right side of the line because AWAs meant that employers could pay what their labour was worth (i.e. not much). Getting rid of AWAs will mean that some people are now on the wrong side of the line, their labour is simply not worth what the law says they should get. So they will lose their jobs. Funny way to ‘protect’ people without valuable skills.
Anyway, I’m sure you’ve heard all that before. At least now once the ALP’s IR laws have gone through we’ll have a natural experiment to test how effective AWAs were in reducing unemployment among less skilled people. Any economic downturn in the next couple of years will give us a very interesting data set.
Good stuff, Mark. I rather enjoy watching the various factions of the Liberal Party measuring up the axes and knives they are sharpening to use on each other. Long may it last. At last they will be revealed to the electorate in all their conservative glory, and I hope the electorate will at last be suitably apalled. Apart from being natural born racists we will at last see them for the bosses’ shills they truly are. Looks like the nightly TV news will soon provide us with even more schadenfreude. I love it!.
Not necessarily at all, Required, for the same reason that WorkChoices didn’t constitute a natural experiment as to whether AWAs were creating jobs - because it’s impossible to hold other factors constant.
In any case, your hypothetical employer may still find there’s a labour shortage and might just have to lump paying employees fairly. Tough, in my view.
Paul - an excerpt from David MacCormack in Crikey today:
What I find the greatest hypocrisy of Bishop’s/the Libs position is the “it needs time to be reviewed by a Senate committee”. The Libs wouldn’t be in opposition if they had followed that advice when they initially implemented the IR laws that we do not speak their name.
Are Bishop and Minchin honchos of the Right of the party? I didn’t know Bishop was of that persuasion.
Mark,
How do you define “paying employees fairly”? How do you determine “fair”?
Mark,
On your point that it’s impossible to hold other factors constant when estimating the effects of AWAs, you are of course correct. And this is the line that we will see if anybody comes out with a study that shows that AWAs reduced unemployment among the low-skilled. But labour market econometricians are a clever bunch, and are pretty good at isolating out effects, even when there are a bunch of things going on.
However, even if the number-crunchers can’t get a good estimate of the effects of AWAs, there is one indisputable fact: if you take a low skilled worker, and force their employer to pay them more, the employer has an incentive to get rid of them. So I reiterate my original point: getting rid of AWAs is no way to ‘protect’ people without valuable skills.
And I would echo Andrew’s question: how do you decide what is fair? Is a retired judge at the AIRC better placed to know what your labour is worth than your employer?
Fozzy, every Opposition loves a good Senate inquiry.
Meanwhile the WA Libs can’t even attack the Health Minister over the Head of the Health Dept and his links with Brian Burke without stuffing it up
http://www.news.com.au/perthnow/story/0,21598,23142587-2761,00.html
Required:
Yes, there will be some on the border line that will be a little bit worse off (AWA’s that are that bad wouldn’t pay much more than welfare). But for every 1 of those there will be 100 who now can go home on time to relax and manage the rest of their life, or be fairly rewarded for missing the weekend. 100 people who will be paid based on a reasonable assessment of their productivity rather than a grossly uneven negotiation system that’s empowered by the fact that there will almost always be more unskilled workers than unskilled jobs. Businesses were all for Work Choices because it enabled them to get a lot more for a lot less, and they weren’t looking at the insignificant number of fringe cases.
There are two broad answers to that question AR.
1. A “just wage” as epitomised by the Higgins Harvester Judgment. This argument has a moral basis.
2. Whatever can be screwed out of the employer within the framework of laws, including criminal law. What’s “fair” is whatever does not cause the employer to shut down his firm because he cannot make a living wage for himself, or he feels that the energy that he expends to run his firm is not justified by the rewards he derives from his expenditure of energy.
3. Ratty and his cohorts wanted it both ways. On the one hand they denied the existence of a “just” wage, but on the other they criticised wage earners on a moral basis for demanding “too much” by the measurement of “stealing other Australians’ jobs”.
So one may ask in return: when ought a wage earner be an individualist and when ought a wage earner be a corporatist?
I was listening to the ABC talk back bloke in Perth get all uppy over the great scandal with McGinty and Brian Burke, uncle Tom Cobbly and all.
We had the Buzzcock jumping up and down egged on by 6pr radio jocks,one who was hinting darkly about more revelations to come later that day tsk tsk.
Then McGiny released the lot in the afternoon,Buzzcock discovered he was argueing about something that was 5 months old and had already been debated in the Parliament.
On talk back this morning, from the self righteous jocks silence on the matter
[On talk back this morning, from the self righteous jocks silence on the matter]
And the West have gone silent as well, only running a story about “Fong’s Secret Golden Hanshake”, which is really $41,000 accrued wages and leave entitlements.
Good move on McGinty’s part to release all the docs - it dried up Troy’s dripfeed to the media and has turned the tables on him for not checking
I love how people who defend workchoices are never the ones earning seven bucks an hour working 11pm on a sunday night.
Man these chestnuts are getting stale: If we paid low-skilled people a dollar an hour, Required, they’d all have jobs, but woop de shit: if you can’t afford to live properly, eat properly, and get medical attention properly, all the jobs in the world don’t add up to a whole lot.*
*For reference see America, United States of, and Labour, Mexican.
Well where are the studies showing that AWAs created jobs? Do tell. Please don’t cite bullshit from some “consultancy” commissioned by employer groups.
As to what is “fair”, what Katz said. I’d add further that any idiot boss who can’t work out how to compete except on paying their workers less than the award (which is what your example implies) doesn’t have some sacred right to stay in business.
And of course with unfair dismissal laws, the “incentive” the employer has to “get rid” of some poor bastard who wants to be paid a fair minimum disappears.
Before you go into conniptions, I’d also have a look at how many AWAs were actually made in small business, and how many were in effect pattern bargaining by employers - templates produced by consultants or the retail traders’ association etc. AWAs are anything but free bargains.
Desipis,
That’s a nice made-up statistic you have there. Any proof that for every one low skilled person currently on an AWA that loses their job when AWAs are abolished there will be 100 who are better off? Or is that just how you would like things to turn out?
And note that my original quarrel with Mark’s article was that he said that getting rid of AWAs would protect people without skills. Even if your made up statistic is correct, it’s the 1 person without skills who will lose their job. The 100 who benefit will be the more skilled people. Mark’s point is still wrong.
You mention ‘100 people who will be paid based on a reasonable assessment of their productivity’. Who makes this ‘reasonable assessment’? A pattern-bargaining union? A judge? A federal bureaucrat? Or the boss who sees them every day and sees how much money the firm is making from their labour?
Katz:
You say that the Harvester judgement ‘has a moral basis’. So does the idea that low skilled people shouldn’t be pushed out of a job just so more highly skilled people can get award contracts with leave loading and union picnic days.
My morals say that any job is beter than no job (but that there should be a government safety net so people don’t have to accept slave wages).
The morals that underlie the Harvester judgement are pretty much ‘first in, best dressed’. If you’ve got a job, we’ll make sure that you get your overtime and penalty rates. If you don’t have a job, and don’t have skills, we’re going to price you out of the market.
The morals of the Harvester judgement are the morals of the scrapheap.
Katz,
Personally, I never hire a corporation, it is always a person. The people who hire me do likewise. If I do not believe they are paying enough I walk. If they think they are paying me too much they fire me (has not happened yet).
The old, coddled, corporatist system my parents grew up in allowed male / female pay to be widely divergent on the basis that only men had serious jobs and they were there to support the family. It also expected women to give up work when they got pregnant. Personally, the so-called “moral” system stank.
I would phrase your point 2 differently, though -
2. Whatever can be agreed between the employer and employee, with each being free to use whatever negotiators they choose.
The rest is redundant.
The rest is redundant.
Please choose the last line that is correctly spelt.
“if you can’t afford to live properly, eat properly, and get medical attention properly, all the jobs in the world don’t add up to a whole lot.”
Dude, you’re not getting it - more work getting done more cheaply adds up to a whole lot for those doing the employing. Then it all, y’know, trickles down. Or overseas. Or into another few thousand low-paid jobs. What’s the problem?
“Moral� doesn’t necessarily mean what any individual thinks is good.
“Moralâ€? means any arrangement that is not determined by the market. Some moral economies now seem to us to be very immoral, for example rates of pay based on sex or race. But, strange to say, such arrangement are known as “moral economies”.
AR, if you hire a person on an award rate of pay you are hiring that individual as a representative of a larger, corporate identity. To assert otherwise is to suffer from false consciousness.
Every advanced society has a mandated minimum wage. One’s corporate identity as a resident of that country is recognised by the enforcement of that minimum wage.
Once that minimum standard is accepted as reflecting a corporate reality, then it is simply a matter of negotiation and political action for workers and employers to decide which corporate identity best represents their interests. Of course, workers sometimes organise themselves to maximise their bargaining power for achieving the most favorable wages and conditions. This sometimes involves very restrictive practices.
In industrial relations in advanced countries, therefore, the question isn’t market versus moral economy. Ihe question is which kind of moral economy.
Required, you’ve got a very strange world view, and an incorrect understanding of Harvester.
This, clearly, is untrue. Harvester was, paraphrasing, about paying a worker enough so that he can support, in frugal comfort, his wife and three children (remember the times…). Low skilled people should be given the opportunity to gain skills at public expense, so that, all going well, they become higher skilled people, and more likely to find a job. But, clearly, any job should pay a living wage. A job that doesn’t pay enough to live on is, as has been noted above, not worth much.
Excellent post Mark.
Apparently Bill Heffernan is behind the apology to the Stolen Generations. News to me — I guess one offensively sexist comment doesn’t determine everything else about a person.
Switzerland, Hong Kong, Singapore.
Yes and yes again, judging by the matters up before both the current Workplace Relations ombudsman and ASIC, who admit that they had literally thousands of cases involving dodgy companies not paying entitlements.
At the moment unpaid wages are pursued through the Office of Workplace Relations, superannuation entitlements under the ATO (which also has liquidation powers) and dodgy companies under ASIC. The GEERS scheme supposedly covers companies which are in liquidation or bankruptcy.
A lot of miles to travel there for workers ripped off by crooked employers, all hiding behind the former government’s laissez-faire attitude to corporate cowboys.
So the one stop shop proposed by Labor may be a good idea.
Just don’t trust the boss…ever.
Thanks, mick.
I’m not myself all that interested in debating some arid calculus which claims (always a priori and never with any evidence) that shithouse wages are to be encouraged because it’s better to be working poor than on the dole or whatever. Patrickg put the only argument that counts eloquently at 19.
The post refers to politics not econometrics - now I’m aware that there are these “whatever an employer determines is fair is better than being unemployed” claims around the shop, but, hey, as Lindsay Tanner said today, the Liberals ought to wise up very soon indeed as to why exactly they lost the election.
The Australian people drew a line in the sand and put paid to an IR system loaded massively in favour of employers, and instead asked for a just system that rewards labour fairly. If some people don’t get that, and want to carry on with some sort of neo-classical political correctness, that’s fine, but they might like to ask themselves whether they’re putting economic theory (so-called - might be more accurate to say class privilege) before democracy.
Deal, folks. WorkChoices is dead.
Alister, read more carefully. Required is not giving us the point of the Harvester judgment. It is not ‘clear’ that any job should pay a living wage (by which I take it you mean a wage that guarantees that great Australian dream of frugal comfort, or as some would have it, the state of being relaxed and comfortable), since (1) it is not true that every person of working age has skills that create that much value, and (2) it is arguable that the most desirable state of affairs is that every person of working age is employed, if they would have employment. There is little logic in messing with labour markets by insisting on things like minimum wages and causing, to some extent at least, unemployment (which you ought to know by now is Required’s actual point). If you have so-called ’social justice’ goals, there are better ways.
BBB
WorkChoices couldn’t have been more of a mess, and a huge messing with labour markets.
What you are saying here, BBB, is theology. Sweden used to have the lowest unemployment rate in the Western world, with very high wages. Japan used to have almost no unemployment with older workers who did nothing much kept on. I’m not arguing for either (necessarily - both actually have social points in their favour) but matters to do with employment are a function of social choice. It’s not some automatic function of “economic laws”. Just isn’t. Katz is quite right - every country has a moral economy. Under the spurious grounds of concern for the unemployed, the neoliberals in this one have been arguing that capital should be able to in effect unilaterally set wages for labour - it’s nothing like a free market. Well, sorry, times have changed. Your mob lost, and they lost because they pushed these lines.
The Howard government didn’t convince anyone by saying “the best employment protection is having a job” because people realised that their employers were taking them to the cleaners, and they had no real option other than to cop it on the chin, because the whole point of WorkChoices was to enable employers to drive down labour costs, so the famous market would just enable them to go and get another job with similarly crummy wages and conditions. This is the reason why Labor won. End of story.
Yes Mark, it was messing with labour markets, but then WorkChoices wasn’t neoliberal in philosophical approach, was it? The examples you have given, like Sweden, are damning. You seem to think that neoliberals believe it impossible to have very high wages and very low unemployment. Can you provide a quote, a link, anything from any serious person along those lines? Unilaterally set wages? Where does this rubbish come from? You don’t understand neoliberalism at all if you use phrases like that.
Now I’m happy to acknowledge that WorkChoices, as a set of policies, is dead politically, but why should I change my own views about labour market de-regulation (note: de-regulation, not the re-regulation of a WorkChoices)? You appear to be labouring under the misapprehension that when one side of an argument wins an election, it is incumbent upon the other side to abandon its view. Happily, your understanding of democracy is deeply flawed. By the way, it is not true that ‘the Australian people’ rejected WorkChoices, although it is true that a majority of electors did.
Cheers
BBB
What else were AWAs about?
No, happily, BBB, people are now going to be paid fairly and not whatever their employer thinks is the lowest possible rate they can get away with - which was the whole point of Required’s example.
You can believe in “free markets for labour” all you like. That’s fine. Just don’t expect me to accept the terms of your argument. I don’t ask you to join me in my Catholic faith, though I suspect I’m on safer ground than you are with your economic theology. And, of course, these matters aren’t settled forever by an election result. But if the Libs want to go down your path, they’ll be settled for a very long time indeed, because we’ll have Labor government after Labor government after Labor government.
It’s very clear to anyone with any political sense at all that Howard was quite correct when he said that if he lost this election, his views on IR would be buried for a very long time. I’m more than happy to give him credit for sagacity on that point.
“You can believe in “free markets for labourâ€? all you like. That’s fine. Just don’t expect me to accept the terms of your argument.”
but also:
“The Australian people drew a line in the sand and put paid to an IR system loaded massively in favour of employers, and instead asked for a just system that rewards labour fairly. If some people don’t get that, and want to carry on with some sort of neo-classical political correctness, that’s fine, but they might like to ask themselves whether they’re putting economic theory (so-called - might be more accurate to say class privilege) before democracy.”
Are you sure there aren’t two Marks?
BBB
There’s no inconsistency.
The Libs will never be able to run some sort of race to the bottom wages system again. Or they’ll consign themselves to permanent opposition.
You lose whenever you get less than half the seats in the HoR. I’m sure you’re aware of that particular calculus. Why did Howard lose so badly this time (and go back and check the swing in its historical context) - because WorkChoices offended very long established principles of the Australian moral economy.
We don’t disagree about that Mark. Couldn’t agree more in fact. We disagree about all this ‘if you don’t fall into line on labour market policy, you’re anti-democratic’ nonsense. Again: “they might like to ask themselves whether they’re putting economic theory (so-called - might be more accurate to say class privilege) before democracy.â€?
BBB
My point is threefold, BBB, and I’ll try to make it clear so I can go to bed:
(a) There isn’t hard evidence that lowering wages means more employment;
(b) Even if there were, it would not be a good thing morally;
(c) It’s highly doubtful that such an argument will ever fly again in the forseeable future in Australian politics, and I’m very happy that’s the case.
Night!
Sorry to blog-whore, but there is empirical evidence that unions can be a good thing, economically and otherwise, and that the Workchoices approach to ‘reform can be a bad thing:
http://lacomplaintedupartisan.blogspot.com/2007/10/in-defence-of-unions.html
It’s hilarious that in the post-Cold War era, Keynes is the new Marx, and economic neo-liberals are fundamentalist fanatics. Such an hysterical uproar because an ALP Govt wants to limit the ability of businesses to do as they please with workers. This stuff belongs in 19th Century caricature, not 21st Century Australian politics.
I think the ‘Howard-wing’ of the Liberal Party just about sums it up.
What they don’t seem to realise is that Johnny’s politically a ghost, and is now as relevant to most people as an Atari computer.
The hand-wringing about Teh Sorry and AWA’s is playing to a constituency of about six people, consisting entirely of my cranky Uncle Ned and his mates, many of who may be dead (and being eaten in their homes by alsatians etc etc etc).
Make that seven if you include Pauline Hanson.
Whether or not these two propositions are true is beside the point. The central point is that in Australia they are deemed to be true by a working majority of the voting population. And in a democracy that is all you need.
This proposition is a statement of faith, as are all statements about the future. Perhaps in future neoliberals may be able to convince Australians to change their views on these matters. They have been trying for well over 100 years, and have achieved some measure of success.
But Mark is probably correct. The neoliberal moment has passed for the time-being. Whatever persuasiveness the neoliberal case may have had has been thoroughly undermined by the public’s association of it with the mean and tricky, late, unlamented Howard ascendency.
Spot on comment.
It is true that lowering wages at the bottom end of the labour market will reduce unemployment when done in conjunction with cutting back on access to social security payments. People have to eat after all. In a booming economy such as Australia’s is at the moment, however, the overall effect is marginal and social judgements (Katz calls them moral) will be made. The Australian people have made their judgement that the marginal economic benefit does not justify the social cost. As is their right in a democracy. So Howard out and Rudd in.
“That the 53 year-old migrant with limited English and a dodgy back is not worth holding on to if you have to pay them extra to work on public holidays.”
Required (at 21),
They have to hold onto the 53 year old migrant if they cannot get another younger one from a low wage country.The poorly policed availability of cheap overseas labour under the former government is what made WorkChoices enforceable.
Effectively the social security system was made to subsidise the cheap wages of the new migrant worker under Ratty’s regime.
“It is true that lowering wages at the bottom end of the labour market will reduce unemployment when done in conjunction with cutting back on access to social security payments. People have to eat after all.”
GregM you should consider such cutting back on social security would merely transfer a problem from the state to the charity sector. The big stick approach that the Liberals were pushing was increasing the burden on Vinnys etc and increasing homelessness. The booming economy mantra that justified this tactic is so tired. Everybody knows how patchy the good times are around the country.
Mark is correct.. “(a) There isn’t hard evidence that lowering wages means more employment.” All it does is create unnecessary pain for the most vulnerable, make the company balance sheet look more flash and transfer cash to those sitting around watching their shares go up.
It does seem the truth is dawning on some Coalition members re AWAs, refusal to say Sorry, persecuting people on welfare etc. I was astonished and delighted to hear Barnaby Joyce admit on the 7.30 Report last night that the Coalition could be in Opposition for 20 years. I hope so, I fervently hope so. It was unclear from the context if Joyce was specifically referring to Qld. proposals for amalgamation of L/NP there, or talking Federally. (As a NSW person I was also astonished at the bitterness between the Libs and Nats there - Liberals preferring to preference the Greens rather than the Nats - which obviously goes back to the Bjelke Petersen years). From a NSW perspective some thoughts - any forming of one big Conmservative Party here would see a combination of Nats, and probably the Liberal Uglies, with Christian Democrat under that theocrat Fred Nile giving them first preferences. Since NSW people were prepared to vote back in a dysfunctional (at the very least - I cdould get a lot nastier) Iemma Labor Government, I can only suspect the doctrines of the Mad Right are as unacceptable in NSW as they appear to be in Queensland currently.
Joe2, it did that too. That’s part of the social cost that the Australian people weighed up and in which they found the Howard government wanting. But it’s not an either/or situation.
When Mark says “(a) There isn’t hard evidence that lowering wages means more employment.� what he means is that no hard evidence that he will ever accept because he does not want to believe it. That is the expected and accepted position of a liberal arts academic. He does not have to live in reality. We pay him not to.
The proof that lowering wages means more employment can be found in the reforms of the Hawke/Keating government where in a compact with the ACTU, the Accord, real wages were reduced in return for increased economic growth, and hence greater employment, combined with significant social welfare reform. That was real radical economic reform across the entire workforce as compared to Howard’s trivial and mean-spirited tinkering at the margins which focused only on the lowest paid.
The best part about this debate is that it is moot.
AWAs will soon be consigned to the good ol’ dustbin o’ history as a failed experiment - a bad idea - a dead parrot.
So BBB, Required, keep flogging that horse ’cause its amusing to watch you pissing in the wind, chasing your tail, wanking etc etc…
I don’t want to believe it, but I would believe it if there were sufficient evidence for it. But, as stated above, I still don’t believe a tiny marginal growth in employment justifies unfair wages. As discussed, that’s a social choice.
The argument with regard to wage restraint under the Accord is quite a different one, GregM. No one argues that lowering wages for the low paid causes economic growth and therefore promotes employment. The argument is correctly stated above as a microeconomic factor which would influence employers’ decisions at the margins.
When you look at the real world, a shop owner who only needs say 10 casual employees doesn’t hire another one because their wages are lower because 11 employees doesn’t necessarily promote sales growth. He/she pockets the extra from lower wages for the 10 existing employees.
Ha!
Among my qualifications are a first class honours degree in Commerce and a graduate diploma in management with distinction… and I’ve taught in Business schools as much as in the Arts Faculty. Nor am I a full time academic, so actually such of my income as comes from universities is paid out of research accounts - ie money from the ARC and private industry. The rest of my income I get from my own endeavours out in the marketplace!
This is true. However I think you meant employment. There are those who do argue that, provided of course that there is no social security net for the unemployed to fall back on. Beggars can’t be choosers. We agree of course on the properly rendered social judgement of the Australian people on that.
I have to disagree, Mark. Wage restraint under the Accord meant reductions in real wages across the entire workforce- those on award rates of pay anyway. It was necessary to break inflation and bring economic stability in order for economic growth to occur. It achieved that and specifically it achieved what you dispute when you say that “There isn’t hard evidence that lowering wages means more employment”.
This was done, however, with explanation, consultation and co-operation, as it should be, not through brute-force coercion.
The other achievement of Hawke and Keating, along with Bill Kelty, was the introduction of enterprise bargaining which broke the destructive lock-step of award wage negotiations so that employers could, where it was in their interests and they had the capacity to do so, negotiate higher wages with their employees, while leaving the award rates as a safety net.
Against those giants of economic reform Howard is a pygmy and it is on the shoulders of those giants that he stood when he claimed the economic successes of his administration. Then he introduced “WorkChoices” and came tumbling down.
Interesting question, this.
It is quite clear that some economies can have hyperinflation in a world context of low inflation. Present-day Zimbabwe is a case in point.
However, it is difficult for an economy which is open to the vicissitudes of world financial conditions to insulate itself from exogenous inflation. The entire western world experienced an era of high inflation from the early 1970s until the early 1990s. And Australia was, and is, a particularly open economy.
I would argue that no Australian Federal regime had the power to return inflation to acceptable (≤3%) during that era. Politically, it may have been necessary to go through the motions of promoting the Accord. But in reality, inflation wasn’t beaten out of the Australian financial system until it was defeated in the US in the early 1980s under Reagan and Paul Volcker.
As long as all the major economies experienced inflation there was no place where capital could take flight to avoid it. And inflation does have the virtue of forcing capital to work hard to maintain its current value.
Interestingly, we have the opposite situation developing in the US at the moment. With the fall in official interest rates and the rise in inflation the US is approaching a condition of negative interest rates. Simply buying assets and allowing for the increase in the monetary value of those assets may soon cover the costs of borrowing. Capital doesn’t have to work hard at all under those financial conditions.
No, Katz. Australia in the 1970s wasn’t a particularly open economy. It was anything but that. Full credit to another giant of the times, small in stature though he was, John Button, who steered us out of the fatal autarchic trap of protectionism which preserved the jobs of a few, often in miserable conditions, at the expense of the many.
The glory of the achievement of these Greats is in how Australia rode out the Asian economic crisis of 1997, when the Howard government was still wearing nappies. Though, of course, as the government of the day they took all the credit of the work of the work of others, as one does.
Depends on what you mean by “open” GregM.
It is unlikely that in the 1970s Australia was more open than today.
However, measured by the percentage of GDP imported and exported, Australia in the 1970s was more open than the US in 2008.
That achievement could be made only if Australian exporters were efficient enough to compete in an open market, and only if importers thought that Australians would pay for the stuff they imported.
And that is a very direct measure of an “open economy”.
The slightest bit of research would establish that and place it beyond being “unlikely” into being “it is uncontrovertibly true”. But who does research today?
That’s an irrelevant measure, Katz. I don’t argue that in 2008 the US is an open economy, and I won’t argue that until they get rid of their agricultural tariffs and subsidies. They also have economies of scale within their economy which makes your point trivial and misleading.
But the point it GregM, that the Australian economy of the 1970s was more open than by far the majority of developed economies of the 1970s.
So your weasel-word statement that Australia “wasn’t a particularly open economy” in the 1970s is both factually incorrect and intellectually vacuous.
You write that and then accuse me of being factually incorrect and intellectually vacuous.
Your ignorance of economics and economic history is on display to all.
Jesus wept.
The only PMs to lose their seats are Howard and Bruce. Such personal retribution by the Australian electorate is rare. It is clear that in both cases, those Governments’ anti worker legislation was a major catalyst in their demise.
Any future Liberal PM will know this empirical reality. I would expect enlightened self inerest preventing a threepeat. Or does no one ever learn anything?
Mark:
I think the econometric comments are inevitable due to the very econometric nature of almost all the Liberal domestic policies. All Howard’s major policies were about injecting a ‘profit motive’ into system where the issues lie in naive idea that it will magically make the problems disappear.
Ah yes, this from the person who lauded South Korea’s “market-driven” development while overlooking the small fact that South Korea had a virtually complete embargo on Japanese consumer durables until the 1990s!
Newsflash! Mr and Mrs Park couldn’t buy a Toyota, a Sony, or a Toshiba in Soeul, because it was illegal. Is it surprising that they bought a Hyundai, a Samsung or a product from any other of the government-backed chaebol.
But enough of old embarrassments.
GregM may recall that I referred to quite a narrow measurement of “openness” of an economy — the size of GDP relative to imports and exports.
If GregM can find me 15 developed countries in the 1970s that had a larger percentage than 1970s Australia of their GDP represented by imports and exports, I’ll admit I’m wrong.
If he can find ten, I’ll declare a draw.
See how generous I am?
GG, You wonder if pollies ever learn anything.Just sticking to economics, sort of. I’m sure if my specualation here is wrong, others will jump on me. I see somewhat uncomfortable parrallels between now and the 1920s, though as always there are differences - Chinese thirst for our current mineral wealth, eg, had no counterpart back then. Now to thr bogeyman - what began in about October 1929. Just sayin’.
Another example a la Vietnam, if following the US into wars that are none of our business; again, just sayin’.
Mark,
Your argument seems predicated on the misconception that Workchoices was designed to lower wages. If so, it was a spectacular failure. I should add I always opposed Workchoices on two grounds:
1. It was bureaucratic and over-regulatory (and this became worse after I made that comment I linked to); and
2. It centralised too much.
I have not had cause to revise that opinion.
.
Growler (#57),
Nonsense. Bennelong had been trending Labor for a long time. The demographics, combined with redistributions, meant that it should have been Labor years ago. The fact the JWH held it as long as he did tells a completely different story. The fact he stayed there, when, for example, The Beazer moved under similar circumstances, says a lot about the man.
All it will teach future PMs to do is to swap seat when they get less than entirely safe.
Workchoices was designed to do a number of things, and lower wages was one of them. Howard himself said as much during the election debate, warning that WC’s was economically necessary - without it, wages will rise, and inflation increase. Disingenuous or not, this was the Coalition line.
Andrew,
If you seriously contend that Work Choices was not the “punter motivating” issue that did in Howard in Bennelong and the Libs overall, then it is you who are spouting nonsense.
Growler,
You were trying to draw a lesson from it. The only lesson in there for a future (or present) party leader is that when your seat gets unsafe, follow Beazley’s example and run away. Don’t stay and fight.
.
As I said, THR, if it was designed to hold down wages, it failed. Wages continued to go up - and spectacularly so for many.
No, that’s not true, Andrew. Generally, wages growth was slower than might have been expected. In particular, real wages in some industries where AWAs proliferated and where casual labour predominated (ie retail, hospitality) either stagnated or went slightly backwards. It might be helfpul in discussing WorkChoices to read some of the research on its operation.
The coalition and its apologists argued the following two things about WorkChoices, sometimes simultaneously:
1. It was good because it held wages down; remove it (as Labor promised to do) and wages would go up, creating unemployment, inflation, bubonic plague, etc
2. It was good because workers got higher wage increases than they would have without it.
“and spectacularly so for many.”
Company directors for example?
I’d say the lesson you’d draw from it would be not to push policies that the majority of the nation, and especially the majority of your electorate don’t want.
I find any claims of significant job creation resulting directly from workchoices to be dubious at best. With the labour market already as tight as a drum, a quater (or was it half) a million new workers suddenly appearing on the scene to fill said number of jobs seems rather improbable. Slashing labour costs merely makes such workers cheaper, more expendable and more exploitable. It does not create extra ones out of thin air.
I also take issue with the claim that employers will necessarily hire more workers if they are cheaper. I think it is a little more complicated than that. Recruitment and training costs are very expensive. If employers are not obliged to pay overtime, shift allowances, penalty rates etc then it may well be more economical to make existing employees work as many hours as possible on the single ordinary time rate.
During a recessionary period, the effects of workchoices would likely be more severe. Slashing the wages of millions in response to falling returns is hardly going to assist the consumer spending that business needs any more than having large numbers unemployed. It might even contribute to unemployment - there is no need to keep employing workers to produce and sell widgets if widespread falling wages means that widget sales fall along with discretionary spending power.
Boy,
We don’t make widgets, we import them.We make houses and we dig up minerals and we have service industries and we have dodgy universities graduating people in cooking degrees and migration points.
dany le roux,
Yes I’m aware we don’t manufacture widgets or much of anything, I was illustrating a point. Perhaps I should have used plasma screens instead. I have somewhere, buried in the dark recesses of my computers memory, a submission (supposedly at least) from the New Zealand small retailers assosciation to the government regarding the problems resulting from the employment contracts act - falling levels of discretionary income resulting from eroding wages were harming sales despite business having access to cheaper labour - a self defeating cycle.
“Slashing the wages of millions in response to falling returns is hardly going to assist the consumer spending that business needs any more than having large numbers unemployed”
Boy, we already have large (in fact huge) numbers who are unemployed.
http://www.roymorgan.com/resources/pdf/papers/20061203.pdf
Our social security bill is very large and the recipients of this largesse have to treat this income as discretionary. The bottom end of society’s spending is responsible for a lot of widget purchases which are very cheap because they are from China.I should also mention the “Plasma Bonus” to cover middle class welfare.
In essence I say that we dig holes and export minerals which gives us lots of money which trickles down to your ” small retailers association” via the social security network.
One of Mr Rudd’s election points was that something lasting should come from the boom in minerals prices whilst the going is good.It should not be used to sustain a jobs market for a relative few at a relatively