
Issue No 2		26 February 1999

Guest Report

Sid Marris on Transitory Promises

By The Australian's Sid Marris

It all came down to one word. One extra word in a sentence and the Prime Minister had sanctioned a major shift in employment and industrial relations policy.

The shift marks a move to the highly contentious policy of allowing lower wages so as to create jobs for the unemployed. It makes a further change to the nature of awards - hinted at but not specifically articulated during the election campaign - replacing them with one single benchmark against which to measure agreements. It involves another whittling away of the powers and the primacy of the Industrial Relations Commission.

That word was "existing". By adding it to the 1996 election promise that no worker would be worse off compared with the relevant award when negotiating an agreement, the promise was significantly qualified. New workers, first time workers - the young and the unemployed - were no longer covered.

The changes are outlined in a letter to the Prime Minister from the Employment Workplace Relations and Small Business Minister, Peter Reith, and the key sentence is in John Howard's reply. The Government was forced to release them last week after Opposition Employment spokesman Martin Ferguson obtained an earlier draft of Mr Reith's plans and ambushed him in question time.

Mr Reith describes his ideas as a "midpoint" between the Coalition's 1998 election promises and a "fully deregulated labour market". The proposals include the potential for compulsory work for the dole programs for all unemployed adults after six months; discounted wages for the long-term unemployed; exemptions from award conditions for all small businesses or companies employing the unemployed replacing it with a single set of conditions; and taming the IRC by insisting it no longer hear claims for across the board award pay rises themselves but rather form a panel with the Reserve Bank, Productivity Commission and the Treasury.

Not so much a "second wave" as a second front.

The letter is riddled with contradictory messages.

Mr Reith insists his approach is a bold plan to beat unemployment, but in the same breath suggests ways of fiddling the figures to make unemployment rates look lower. He praises the need for tougher rules against unions but acknowledges that higher productivity is undermining the job creation that might have been expected in the present good economic environment. This last point alone reinforces how in a global economy suggestions of a trade-off between wage rates and jobs is simplistic.

Beyond all of this more fundamental questions remain: If wages are dropped will jobs be created? What sort of jobs would they be? Will they serve as a stepping stone back into the workforce and towards a better higher paid job later, or only reinforce the low self-esteem that comes with long periods of unemployment.

Mr Reith's proposals, by his own admission are designed to be provocative, in part so extreme that the Senate will inevitably reject them. This will in turn, says Reith, provide political capital for changes to the Senate. One Liberal Senator has already floated the idea that a Senate cannot be elected if they did not get a certain percentage of primary votes before preferences are distributed - thus making it harder for the minor parties and independents to be elected and possibly hold the balance of power.

There is no doubt too, that Peter Reith wants to be seen to be active to re-invigorate his stocks after the self-induced trauma of the waterfront dispute.

Labor is also looking at harder policies than before. During the election campaign Kim Beazley committed the party to a 5 per cent unemployment target. There was little detail explaining how this would be done. Now Shadow Treasurer, Simon Crean, has said he is discussing options with a group known as the "five economists" who hit the headlines after the election suggesting a system of tax credits - Labor's policy to help the transition for the unemployed into lower paid jobs by essentially giving them a discount on their tax - and more controversially a wages freeze. Mr Crean insists Labor is not advocating cuts in wages and that the link between lower wages and job creation is inconclusive. But he is talking about a variation to hold down employment costs that will ensure rising disposable income for the low paid.

So with the tax debate still unresolved, the employment issue is warming up.

The debate should be furious. But if both parties start singing a similar tune, it might not.

Sid Marris is a former industrial reporter who now covers federal politics for The Australian

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Issue 2 contents

Interview: Checking the Spellar
We talk to a former union official who is now a minister in the Blair Government about the difficult relationship between New Labour and the labour movement.

Unions: Working It Out
NSW trade unions have embraced a movement-wide campaign to deal with the vexed issue of ensuring workers have a life.

History: Remembering The Eveleigh Railway Workshops
The Eveleigh railway yards have a rich history which your average commuter would never imagine.

Review: Opening Tanner's Australia
Lindsay Tanner's new book offers a frank and forthright view of the future for Australia.

Campaign Diary: Carr And The Unions
No-one would accuse the Premier and the labour movement of being bossum buddies, but their fortunes are inextricably linked.

» Revealed: Reith Defies Own Pollster To Bash Unions

» What's Going Down at Gordonstone?

» VSU To Stop The Music

» Employment Advocate Dines Out, But Not A Sausage For Workers

» Union Interpreter Translates The Word �Exploit�

» How Much Can A Koala Bear?

» Botsman Shifts North To Tame The Rednecks