Brendan Nelson’s been at one of the regular talkfests organised by The Australian and the Melbourne Institute – the “New Agenda for Prosperity Conference” – having his say on industrial relations.
The day after Julia Gillard buried AWAs (or did she?), Dr Nelson’s taken time out from his compassionate crusade to resurrect the Coalition’s support for statutory individual workplace agreements:
The proposition is for an AWA with a different name and a better safety net. “The Coalition has heard the message from the electorate about AWAs and we no longer support them,” he said.
“Having said that, it is important for Australians to understand that we continue to support individual statutory agreements with a fair no-disadvantage test.”
Nelson, meet Labor trap.
Given that even mining companies were being quoted in the Fin Review yesterday as being “relaxed” about the absence of individual statutory agreements after 2009, this can only be about pure ideology. Which is, of course, what got Howard into so much trouble. The Coalition’s inability to paper over the cracks of the Howardian legacy just ensured Labor gets to run the scare campaign it wants to run at the next election.
This folly was perhaps predictable. What’s more interesting is one of the other themes from Nelson’s speech The Australian decided to highlight in advance of its delivery.
At today’s conference address, Dr Nelson will say the research of the Melbourne Institute that shows a solid improvement of the incomes of the lowest-paid over the past decade put to the lie claims the Howard government had presided over a “brutopia” and the recreation of Dickensian sweatshops.
Yep, the lowest income decile of the population are jumping for joy at their munificent median income of $29000 a year.
Significantly, the research from the very same Melbourne Institute sponsoring today’s conference was spun by its other sponsor, News Limited, as a refutation of Kevin Rudd’s “Brutopia” line from 2006. The story which reported the research across the News Ltd papers didn’t source anyone for this characterisation, which is surely a value judgement, and a highly political one at that rather than straight news:
The findings of the first study to track changes to income and wealth in the same group of people cast a new light on one of Kevin Rudd’s central themes in opposition – that in John Howard’s “brutopia” the rich were getting richer and the poor were getting poorer.
It’s not, for instance, attributed to Professor Mark Wooden, who was the lead researcher on the study. In The Australian itself, it was accompanied by a comment from Dennis Shanahan, reinforcing this message. And a google search shows the selfsame Dennis Shanahan as having been pushing this line for quite some time, in various contexts, all hostile to the Rudd government.
There’s another piece to this puzzle in Nelson’s address today:
He will say the Rudd Government is lying about the economy, noting that the headline rate of inflation, 3 per cent, was not at a 16-year high, even if the underlying rate was at that historic level.
In a nutshell, what we have here is a defence of the Howard government’s claims that everything is (or was?) just peachy as far as the economy and how “working families” are travelling are concerned. Wrapped up in a tissue of lines fabricated at the Shanahan political message workshop (presumably a bastion of individual contract-ism). That claim, and Shanahan’s spin, worked so well last year for the Coalition, didn’t it?
It says something important about Brendan Nelson that his themes are confected for him by The Australian’s columnists. It also says something important about him that he’s apparently blind to the toxicity of the Howard legacy on industrial relations, believing that a bit of pr can magic it into a pleasing package (again, those who don’t understand history are doomed to repeat it). Has he noticed that the mob he’s apparently outsourced political messaging and strategy to are the same crew who spent most of last year expecting a resounding victory for Howard?
Cross-posted at PollieGraph.
I think you meant “Idiot Wind.”
I lol’d Amanda.
(again, those who don’t understand history are doomed to repeat it).
And they do, every couple of generations or so when it comes to ‘freedom of contract’. It (FoC) and they, (the paid delegates of the employers) will be back, and back and back again. Some things do stay the same actually.
“It’s not, for instance, attributed to Professor Mark Wooden, who was the lead researcher on the study. …”
Wooden’s presentation features a chart entitled, “Median % Change in Real Equivalised Household Income by Decile: 2001/02 to 2005/06″.
http://www.melbourneinstitute.com/conf2008/Presentations/Session%203/Wooden,%20Mark.pdf
If I am reading it correctly, it shows that the real income of the lowest decile (the very poorest people) rose by almost 30% over that period. By contrast, the income of the top decile fell by about 3%.
Prof Wooden concludes, “Economic growth has favoured those on low incomes.”
Therefore, the Nelson/Shanahan interpretation of this seems reasonable. Under the Howard ‘brutopia’, the rich lost income and the poor actually gained income.
I know this seems unthinkable to all those who are convinced that the Howard years were a period of unmitigated misery and social brutality, but the Melbourne Institute are a very highly regarded research outfit, so I would be inclined to believe them …
As one of the poor brutalised by Howard’s Brutopia, I can tell you I am definitely worse off thasn I was 11 years ago. I now spend at least $40 more per fortnight on groceries for the same amount of groceries that I used to. My rent has risen by $40 a week. My medfecines now cost $5 -$5.60 each per fortnight, from memory an increase of $3. If I hadn’t been protected by the grandfather clause for long term disabled pensioners, my fixed income would have dropped considerably.Electricity prices have risen by about $50 per quarter. The preice of everything except food has gone up by 10%, and I was very inadequately and only temporarily compensated for this. Bus fares have risen by almost 50%Don’t bull-shit me about being better off under Howard, Paulus!.Its just not true.
Paul Burns wrote:
No, it’s not true Paulus.
It’s a total crock based on the very selective assertion that over the four years, greater income == greater outcome. There isn’t a single person in the country who ever wandered into Coles who doesn’t question the garbage inflation figures. There isn’t a single person who bought petrol over that time who doesn’t question them. Anybody with a mortgage (and anybody renting) copped that 12 times and an awful lot of investors passed it straight on to their rent incomes as soon as they could.
It’s really very simple: over that period, greater income was not greater outcome for anybody who had to eat or live in something that wasn’t a cardboard box. You only have to ask the local charity organisations whether the demands on their resources over that time were greater. Yep, they were. Pretty simple.
As for Greg Sheridan, the simple rule of thumb is if he says something is black, it’s white. If Sheridan says it’s up, look down. He’s a joke, and an irrelevent one.
Whoops, replace Sheridan with Shanahan. It’s the same f*ckwit anyway, just a different picture.
Really, Paul Burns? Well, let’s just take a look at the figures.
The historical rates of Invalid (Disability Support) Pension are here:
http://www.facs.gov.au/guides_acts/ssg/ssguide-5/ssguide-5.2/ssguide-5.2.2.html
They show that from when the Howard government was sworn into office (11/3/1996) the standard rate was $8,733.40 per annum. On the day Rudd was sworn in (3/12/2007) the rate was $13,980.20 pa. So it went up by $5,246.80 over the 11 years.
Now, you have stated that you pay $40 more per fortnight on groceries ($1040 pa), $40 more per week on rent ($2080 pa), $3/week extra for medicine ($78 pa) and $50/quarter extra for electricity ($200). That’s a total of $3398 more expenditure.
So even with the bus fares and whatever else you spend money on, you actually come out ahead compared to where you were in 1996.
Incidentally, I’m in the ‘lowest decile’ of income earners myself. I’m on Newstart at the moment, as I was in 1997 (although with intermittent periods of work in between). I personally don’t feel any worse off now than in 1997.
“There isn’t a single person in the country who ever wandered into Coles who doesn’t question the garbage inflation figures. …”
David Rubie, the ABS puts a huge effort into collecting the data that goes into the CPI estimates, and they’re a very professional organisation. You’ll forgive me if I prefer their hard data over your assertions.
Do keep in mind that a lot of things have come down in price — computers, clothing, cars are three I can think of. We always notice the things that rise in price, we never notice the ones that fall.
Paulus wrote:
Gee, I can eat or live in those. Thanks Paulus. Did you ever hear of the concept of discretionary spending? No? I’m not surprised.
Over 11 years, an increase of those amount actually seems quite low. I’d expect more from just inflation, let alone a housing crisis and drought.
I can see how the statistics would say that real income has gone up for the poor, but they would still be relatively speaking worse off. Products like electronics have dropped substantially over the past decade (eg hard disk prices have at least halved in the last year) or so which does reduce the measured inflation. But poorer people generally don’t buy these things very often (or they end up buying better technology so it doesn’t seem cheaper).
Paulus, no one questions the quality of the ABS figures. What people question is the discrepancy between what they measure and the prices of what most people buy on a daily basis. People might buy a car every 5 years and a computer every 3 years. You need to eat every day, and you need a roof over your head.
Paulus – you’re also accepting as gospel what Shanahan/Nelson claim Rudd’s term meant.
OK, then what did “Brutopia” mean?
A car or computer also costs a lot more than the daily meals so there are compensating factors. But I do think the pattern of what people actually buy varies quite significantly between rich and poor people. So the measure of inflation for the poor may be very much different from that of the rich.
He was referring to the negative aspects of privileging competition over all else, as I recall, Paulus. I may have the article lying around. Will have a look if I get a chance over the weekend.
Chris (a different one), there’s been a lot of work done on the difference in consumption patterns and the disparity between the CPI and a basket of goods which represents what people on low incomes consume. It wouldn’t surprise me at all if Good Peter Saunders turns up with a critique of Wooden’s methodology soonish.
Indeed, Chris, but there are a lot more poor people than there are James Packers.
The one-line definition of the CPI that I vaguely remember from first-year economics was that it revolves around the average weekly ’shopping basket’ of goods and services for the average Australian.
It’s online. As I suspected, it’s derived from a Tory critique of unrestrained capitalism.
http://www.themonthly.com.au/tm/node/312
He elsewhere refers in the article to “rampant individualism” and the tendency of capitalism to erode community and family values.
No, that’s a bit inexact. What’s “average”? Other things which aren’t in the weekly shopping basket are in it too. So weighting has a big influence. Hence the debate.
Ps – re “Brutopia”, don’t believe everything you read in Shanahan’s columns.
Anyway, it’s a great pity that the paper itself isn’t available. There are three things I’d like to know:
(a) the range and frequency of incomes in the deciles as opposed to the median, which can be quite misleading. The % increase figures appear to refer to the median.
(b) whether the top decile is just of “household income”. It seems to me that the statements about wealth and income are potentially inconsistent. You can (and a lot of households do) have low income and reasonably high wealth.
(c) the % of income that comes from welfare payments and other transfers.
Note also that the HILDA survey is (1) a sample and (2) based on self-reports. It’s copped a lot of methodological criticism based on this – ie from Bad Peter Saunders of the CIS when it appeared to show the opposite effect than what it’s showing now. Presumably he’s now happy with it, but that doesn’t detract from the force of the criticisms he made when he didn’t like it.
The source I just consulted which referred to the 2005 survey stated that the ABS itself discounted the bottom decile in their discussion of the results because they were unhappy with the reliability of the data.
“No, that’s a bit inexact. What’s “average”? Other things which aren’t in the weekly shopping basket are in it too. So weighting has a big influence. Hence the debate. …”
Mark, you cheatin’ scoundrel! You originally posted a rather more brusque reply, then you went in and changed what you had written. I caught ya red-handed!
If you can re-write comments, why can’t your loyal clientele do that too? I mean, fair’s fair …
I could go back to being brusque, I guess, but surely it’s a good thing to be less so on second thoughts?