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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

confrontational reform « Previous | |Next »
June 1, 2005

If you think of Australia as a federal nation-state then a unitary nation wide system of industrial relations makes good sense. It rationalizes the differences between the state based systems. Such a system could work well and the states could support it from a productivity and efficiency point of view and retain their own system. That, from what I can make out, is the view of Victoria, with the Brack Government is quite happy working within the federal system.

Yet the Howard Government's proposed IR legislation is so confrontational that the ALP states and unions are resisting it; and they look like resisting all the way to the High Court. And, as Andrew Murray points out, in an op.ed in The Australian Financial Review:

The constitutional powers that will be used to take over the state systems will probably reach only 85 per cent of employees, leaving most small businesses uncovered because they are not constitutional corporations. Fifteen per cent of employees will remain under state systems.

Ross Gittens, writing in the Sydney Morning Herald, says that "Howard's introduction of a single national industrial relations system will be a big improvement."

The question needs to be posed again: 'why the decision to be so confrontational?'

Gittens gives something of an answer. He says:
"...the changes are intended to swing the balance of industrial power decisively in favour of employers.The changes constitute a grand experiment, testing the conviction of almost all economists that the way to make the economy a better place is to give employers everything they could dream of. Admittedly, the changes are too one-sided to be called fair in any conventional sense."
However the onesidedness makes economic sense:

"...just about every economist believes that the lower you make the minimum wage relative to other wages, the more unskilled workers will be hired.So the test of the experiment's success will be whether the unemployment rate falls much below 5 per cent.It's tough on people on the minimum wage who already have a job, of course, but the economists aren't worried about that."

That means the confrontational element in the proposed reforms will not be toned down.

| Posted by Gary Sauer-Thompson at 11:11 AM | | Comments (1)


For me, all these economist's should be forced to live on the minimum wage.

Actually, when you look at how productive they are, they should be on less than the minimum.