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

a never ending race « Previous | |Next »
October 10, 2005

In selling his IR legislation, in which Canberra will take over responsibility for industrial relations under a single national system, John Howard, the Prime Minister, said that the country's long boom and record low unemployment were not evidence of the success of the current system, but of the need for constant reform and change. The PM said:

It's like participating in a race towards an ever-receding finishing line.You have to keep going, not because you think you will ever reach that finishing line - frustratingly you won't - but if you don't keep going the other people in the race … will run past you.

The race is called international competitveness. What is required for Australia to keep being left behind in this kind of race? A suggestion:


Keeping up in terms of being internationally competitive means freeing up the labour market, reducing or abolishing minimum pay and constraining the power of unions.

Under the proposed legislation employers will find it much easier to take damages action against militant unions in court, the Government will severely limit the right of all unions to enter worksites, and the Minister for Workplace Relations, Kevin Andrews, will be handed an "essential services" power, enabling him to declare strikes illegal if considered a threat to public welfare or to the economy.

The freeing up the labour market involves breaking down the century-old system of collective bargaining, and a reduction in the working conditions of employees. The latter will be achieved through an emphasis on individual agreements, outside workplace awards, in which individual workers will have to bargain with bosses for conditions.

There has been backtrack and compromise. The 38-hour ordinary week, annual leave, sick leave, personal leave and carers' leave will be protected by law, conditions such as public holidays, rest and meal breaks, incentive and bonus payments, annual leave loadings and penalty rates will be up for negotiation in the contracts. However, employers could still wipe out these safety-net award conditions by including "specific provisions" in individual contracts under non-award agreements.

The rhetoric is that the IR reforms will increase the growth of the Australian economy by perhaps one half of one percent and allow at least a further 1% fall in the rate of unemployment. How the reforms will increase productivity is unclear.

The strategic aim of the reforms is to lower the cost of wages:

Bill Leak

Many are saying the reforms do not go far enough. Des Moore, for instance, says that:

'...the changes are basically shuffling job protectionist measures. The retention of a large regulatory and judicial framework will be a feast for industrial lawyers and the many pro-unionist figures on tribunal and judicial benches....The saddest part of the new system is the retention of a minimum wage to be determined as "fair pay'"...The 550,000 unemployed, the 550,000 under-employed and the 800,000 unofficially unemployed, most of whom are unskilled, face a bleak future unless the new body is brave enough to reduce the employment-deterring level of the minimum wage.'

That means--and the power relationships in the economy determine this--that you take lower conditions and wages to get a leg into the job market.

Legislation to implement the changes to Australia's industrial system will most likely be passed by the Coalition Senate majority by the end of the year. What does that passage mean for the ALP? It's back is to the wall, is it not?

| Posted by Gary Sauer-Thompson at 12:36 PM | | Comments (2)


Last week, John Howard was on ABC 7.30 report making known that people out of work could leave it if the job didn't offer enough. But, did anyone realise that the unemployed person likely then will loose any unemployment benefits for refusing to accept a job, no matter the paltry and draconic work conditions?

Mr G.
yes you are right. The government policy of flexibility for the unemployed is lower wages and worse working conditions.

The Government wants to increase further the gap in earnings between those on high and low incomes. Flexibility in a booming economy is good news for those employees with skills in demand. They have more scope to bid up the price of their labour.

It is bad news for those with fewer or no skills who are competing against others for scarce jobs, because it will become easier for employers to cut labour costs.

The justification for this harshness?

Any job is better than know. A growing economy will provide better jobs for those who are willing to work hard, do what they are told, and reskill themselves.

That is the reality of the market. A freer market in labour caan adapt more readily to changing economic conditions. Flexibility means that prices can go up as well as down.

What happens to those with lows skills when the markets goes bust? Unemployment. So you have to take even lower wages to get a job.