In a clear triumph of right-wing ideology and business self-interest over economic growth and the advice of the Reserve Bank, the government intends to directly undermine wages growth by locking in what will amount to a “worse off overall” test for the next two years for workers.
That’s the proper name for Christian “Public Bar” Porter’s proposal to allow businesses to cut wages in enterprise agreements based on a vague “public interest test” — with workers knowing they can be pushed back to award minimums if they fail to agree to them.
While references to Workchoices and its return have been a dime a dozen for the past twelve years, this proposal is straight from that ill-starred Howard government reform program that saw wages cut and labour productivity slump.
Making it even easier for employers to reduce wages will further accelerate two trends in the labour market in recent years. Employers have been able to keep the benefits of greater productivity, meaning a long-term decline in the wage share of national income, which fell to 49%, its lowest level ever recorded on a seasonally adjusted basis in the September quarter, while the profit share rose to 31%, its highest ever level.
And, of course, the wage stagnation that has characterised the economy since the Coalition was elected, and has now turned into outright real wage falls as a result of the recession.
Private sector wages rose just 0.1% in the September quarter and 1.2% for the year. The Reserve Bank forecasts that wages growth will only “recover” to 1.75% by the end of 2022. The government’s new “worse off overall” test will further suppress wages growth — along with the government’s new policy to stop public sector pay rises from rising above private sector levels.
Where exactly the government and business think additional household spending will come from once the initial burst of recovery expenditure in the wake of the economy reopening is going to come from is anyone’s guess.
Consumer confidence can be sky-high but if workers’ wages are going backwards, or they’re worried they’re going to have their pay cut, why would they do anything other than what they’ve been doing in the years of wage stagnation, and keep their spending down?
Combined with its punitive attitude toward public service pay, the government appears hell-bent on suppressing household spending as much as it can, convinced that’s what’s best for its business donors.
What level of wages growth is low enough for the government? It’s nearly down to 1% now. Does it want zero wages growth? Does it want negative wages growth?
The implications for the recovery are significant — and have been completely missed by the press gallery in the coverage of Porter’s latest assault on workers. The Reserve Bank is desperate to get inflation back up again.
“Australia is likely to experience a run of years with unemployment too high and wage increases and inflation too low, leaving us short of our goals,” RBA governor Philip Lowe told parliament last week.
In the December board meeting statement earlier last week, Lowe was clearer still, saying “the board will not increase the cash rate until actual inflation is sustainably within the 2% to 3% target range. For this to occur, wages growth will have to be materially higher than it is currently.”
Last year, Lowe was blunter still about what wage stagnation did to the economy and household spending. In August 2019 he told politicians “it has become increasingly clear that the extended period of unusually slow growth in household incomes has been weighing on household spending,” adding “caps on wages growth in public sectors right across the country are another factor contributing to the subdued wage outcomes.
At the aggregate level, my view is that a further pick-up in wages growth is both affordable and desirable.”
Porter’s attack on workers will do something else as well. It is workers and households that have been the heroes of the recovery. While business has hidden in its bunker, Australians have endured lockdown, complied with often draconian restrictions on their freedom, then emerged to get back to work and start spending in exactly the way the government has urged them to.
Their reward for that? Workchoices 2.0, designed to undermine their wages and further tilt the industrial relations playing field in favour of employers.
It’s vicious, ideological and idiotically self-defeating.
Listening to Radio National this morning was dispiriting, as Fran Kelly stuck to the government line, calling this flexibility. It’s a move to cut wages, the whole point is lower wages, but that has to obfuscated with polite euphemisms: we don’t want to frighten the horses.
Not that it’s a new one, and of course there are many more. Efficiency dividend is equally pernicious cant. It all adds insult to injury.
Recall there was some specific book written which showed how words were important for political messages/policies and how they were used to sway the gullible public. Was an American publication. The ABC is nervous of getting a “extreme left” bias so toes the line, sad to say.
True enough, there are examples everywhere, some worse than others. The USA’s carpet bombing of Vietnam, Laos and Cambodia was officially known as pacification, because who could possibly object to bringing peace? Maybe the greatest example of all is life insurance. Of course the event being insured is death, but how would anybody sell death insurance?
Not to mention collateral damage, and ethnic cleansing.
The flexibility comes from juggling 2 or 3 jobs just to keep a roof over one’s head.
“Their reward for that? Workchoices 2.0, designed to undermine their wages and further tilt the industrial relations playing field in favour of employers.
It’s vicious, ideological and idiotically self-defeating.”
Well summed up gentlemen. What bewilders me is that about 50% of the population still votes for these scoundrels!
Frightened of union power. Unions will (supposedly) turn australia into North Korea – or something similar. These ignoramii don’t know industrial history.
So about 50% of voters are sociopaths?
No, just deluded, selfish, and short on critical thinking skills.
Pretty keen on idiotic commercial TV though….
Don’t know about you but every LNP voter I know is a sociopath.
Henry it comes down in large part to what some term a ‘dominant/hegemonic ideology. This is a situation where people are ‘convinced’ that following a particular ideology/belief is in their best interests. This in part explains Trumps MAGA (Make America Great Again) zombies. The thing is keep the message simple like ‘four more years’,’ lock her up’, ‘count the votes’ and maintain a steady stream of lies.
For example, it didn’t take long for Morrison to dredge up one of his favourite stereotypes in Question Time:- ‘the politics of envy’/’division’ when the government’s proposed IR laws encountered opposition from the ALP in Parliament. This is quite ironic given that Morrison is the master of fomenting division to advance his political agenda and self-promotion. The politics of envy is a term only ever used by the wealthy and powerful elite and is a crude way to shut down any discussion on growing inequality in Australia.
The same elites insult the intelligence of Australians by offering ‘The trickle- down effect’ as justification for the growing income & wealth divide in Australia especially between the top 1% and the rest of Australians. Australians are to uncritically accept as truisms that inequality results from the natural order of things that is, the wealthy deserve their wealth because of their inherent intellectual and moral superiority. In this way the wealthy and government may continue to exploit others through for example tax breaks to the wealthy and an IR regime favouring the lifters/wealthy of our economy. After all in Morrison’s twisted definition of ‘fairness’ the lifters bring far more to ‘the table’ – and must be rewarded accordingly, than the leaners who take at the expense of the lifters.- that is bring others (lifters) down to lift themselves up. If all of this does not bring tears to the eye think of how tough Mathias Cormann is doing as the government continues to cover his costs for example air fares as he chases a fat probably over-paid overseas position.
Copious research shows what a furphy ‘trickle- down’ along with its trite companion ‘a rising tide raises all boats” really is. More often than not the rising tide only raises the boats of the elite as it is designed to do and trickle down is better read as a flood up to the wealthy. And so inequality continues to grow.
Someone once asked why the late great philosopher John Rawls’s major work on ‘Social’ Justice as Fairness’ – where Rawls argues a case for making changes for a more egalitarian and fair society, has not been implemented in any nation. The answer would appear to be that Rawls simply asks to much of us. In other words we are all happy to talk about fairness and greater economic and social equality but find the price too high to pay. Talk is cheap when it comes to having to make some sort of self sacrifice to achieve a fairer society for all. Self -interest and greed are the payoff for the foregoing of a fairer society. For example another trite defence of inequality is raising the wages of the least advantaged would inhibit economic growth and lead to higher unemployment. True but no-one knows for certain at what point such a process would begin to take effect.
The funny thing is that all the small-minded people who voted for Morrison could be so deluded to think that the wealthy and powerful would enact serious change to benefit the less advantaged. Yet this is the very argument now being used as a justification for the new proposed IR laws. Just note how fast the average pay packet has increased in the last decade compared to the elite and also note the rapid growth – one of the fastest rates in the developed world off part-time casual positions. Remember how the presence of high levels of casual workers helped in the spread of COVID19 something that might have been avoided had we been a fairer society.
I said when the buffoons of this nation returned Morrison and his pack of moral bankrupts to power to don’t come to me with your crocodile tears in days to come you are victims of your own making.
He’s just doing to the economy what he likes to do to office staff.
Let’s hope the legislation passes & that Workchoices 2.0 does for Morrison what the original version did for Howard.
Because it doesn’t look like their other policies or their arrogance will sour voters before the next election.
Sadly that appears to be too true!
You will eat by and by
In that beautiful land beyond the sky
Work and pray
Live on hay
You’ll get pie in the sky when you die.
Famous lines from The Preacher and the Slaveby the much-lamented Joe Hill, killed by the USA in 1915.
Joan Baez sings a beautiful song about Joe Hill…Sally McManus should use it in her campaign against this legislation….I am sure Joan would approve its use for that purpose.