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April 2005   
F E A T U R E S

Interview: [email protected]
Labor's Penny Wong has the job of getting more people into the workplace and keeping companies honest. In her spare time ....

Unions: State of the Union
Unions NSW secretary John Robertson unveils the annual survey of attitudes of workers to their jobs, thier lives and the union.

Industrial: Fashion Accessories
Jim Marr unpacks the unlikely claim of a suburban house to be considered the New Mecca of the New Right …

Legal: Leg Before Picket
Chris White looks at how the federal industrial changes will impact on the basic right to strike.

Politics: Business Welfare Brats
Neale Towart asks why the only form of legitmate welfare seems to be going to the top end of town.

Health: Cannabis Controversy
Zoe Reynolds looks at how drug and alcohol testing is leading to some addled outcomes.

Economics: Debt, Deficit, Downturn
As the indicators head south, Frank Stilwell wonders whether it is the way we do economics that is to blame.

History: Politics In The Pubs
Phil Doyle reports on the increasingly-popular Struggles, Scabs and Schooners day out.

Review: Three Bob's Worth
Doing their best Margaret and David, Tara de Boehmler and Tim Brunero have different takes on the new Australian flick Three Dollars.

Poetry: Do The Slowly Chokie
Workers Online bard David Peetz teaches how workers to dance to Howard's industrial laws.

C O L U M N S

The Soapbox
Notes From a Laneway
Mental Health Workers Alliance member Toby Raeburn shares a week on the frontline.

The Locker Room
War, Plus The Shooting
The Socceroos aren’t their own worst enemy after all, or so says Phil Doyle

Culture
Life Imitates Art
The jokes have been around for some time about the economic rationalist's approach to the orchestra, writes Evan Jones.

Parliament
The Westie Wing
Ian West takes the secret passage out of Macquarie Street to deliver his take on NSW Parliamentary Committees and other goings on.

E D I T O R I A L

Icarus Rising
Right now John Howard is flying. Watch him soar in his Vodafone track-suit, further than the Hawke into unchartered skies.

N E W S

 Health System to Subsidise Shonks

 Who Likes Bing Lee?

 Death Threats Shut Campsie

 Thumbs Down for Union Busters

 Advocate Pours Salt on Wound

 United Front Beats Drug Boss

 Kev Backs Double Standard

 Victorian Morality Shafts Teacher

 Doctors Prescribe More

 Multinational Banks Jobs

 Working Class Idol

 Greens Protect Entitlements

 Activist’s What’s On

L E T T E R S
 Students Bear Brunt
 Security Lacking
 Bus Lanes On Vic Rd
 Dirt Cheap Right On Money
WHAT YOU CAN DO
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Politics

Business Welfare Brats


Neale Towart asks why the only form of legitmate welfare seems to be going to the top end of town.

Is it just me or do all of us wage plugs feel fairly aggrieved when business figures who attend conferences and do lunch on the expense account, on top of six and seven figure salaries, start to argue that the AIRC should consider how wonderfully well the welfare system does for those on the safety net??

Here are people whose every move is a tax deductible expense, arguing for the taxpayer funded welfare system as an alternative to a living wage.

The latest came at a conference where the attendance fee was over $2000 for the day. Australian Industry Group IR Director Stephen Smith saying the AIRC needs to consider family and child care payments in its decisions.

The extraordinary thing is that the claims are coming when the neo-liberal think tanks and the government generally are happily bashing the welfare system. Peter Saunders (right wing version no the Social Policy Research Centre person) has just published on kicking the welfare habit, saying we need, as usual, to go the US path.

Never mind that most welfare recipients are usually short term, in transition as they move through phases of life, except probably the high income earners who are I receipt of family benefits not means tested. But I digress.

Or maybe I don't. The interaction between wages and welfare is actually pretty strong in the US, so the model is one they are no doubt keen on. The Walmart model in particular.

Lisa Featherstone and others have been looking at the way the Walmart model works and of course impacts on other employers.

"For a two-hundred-employee Wal-Mart store, the government is spending $108,000 a year for children's health care; $125,000 a year in tax credits and deductions for low-income families; and $42,000 a year in housing assistance. The report estimates that a two-hundred-employee Wal-Mart store costs federal taxpayers $420,000 a year, or about $2,103 per Wal-Mart employee. That translates into a total annual welfare bill of $2.5 billion for Wal-Mart's 1.2 million US employees. "

"Wal-Mart is also a burden on state governments. According to a study by the Institute for Labor and Employment at the University of California, Berkeley, in 2003 California taxpayers subsidized $20.5 million worth of medical care for Wal-Mart employees. In Georgia ten thousand children of Wal-Mart employees were enrolled in the state's program for needy children in 2003, with one in four Wal-Mart employees having a child in the program"

The ACCI also is explicit also in its claim that taxpayers should subsidise business when they employ people. "Low paid employees are better off being helped by the tax and welfare systems - large government welfare payments that have boosted family incomes in the past year don't even get factored in to the ACTU claim."(ACCI press release 11-3-05)

The ACCI is claiming that those who get the safety net will be better off getting increased welfare payments rather than wages, and then employers will be able to employ more people. Here we see plainly the notion of productivity improvement as the business "community" see it and have had it delivered to them over the past ten years. Productivity comes from people working longer hours and not getting compensated for it.

No mention that the welfare increases are the only thing keeping some above poverty levels, or of the fact that so much "welfare" goes to wealthy families. Maybe we could suggest to Mr Hendy and the ACCI that since they are also in receipt of massive welfare payments through subsidies, tax breaks, reduced tax for high income earners, and various other ways, they should salary sacrifice too and put the unnecessary part of their pay back into their employers pocket so that they could employ some of the "thousands" on welfare.

Another business lobby, the Business Council of Australia (BCA) has also launched itself into the arguments about welfare, equality and fairness. They argue that fairness is best ensured through the tax transfer system, not through the workplace. At the same time, they have published in the past 12 months a Scenario Project, Aspire Australia. Part of this project was a paper on Australian Cultural Norms and Values. Now I would say the BCA members certainly value high salaries, expense accounts and subservient employees, but the project set out a few other Australian values.

"We know that Australians, perhaps to a greater degree than citizens of other countries, tend to look to Government to solve community problems, to regulate away an issue or to manage a controversy." [How do they know this?? They give no indication]

"Values are neither given nor constant but are themselves a function of the policy-making process that they are supposed to guide - argument and persuasion play a key role in norm setting and problem definition"(ix)

What then are the so-called 'shared values' that appear to be so enduring in Australia? These might be said to include respect for democracy, a strong sense of justice, a sense of fairness, of tolerance, a caring for others, a powerful sense of egalitarianism, a less selfish society, loyalty and freedom of self-determination.

How does this equate with the agenda of undermining minimum wages and rights in the workplace?

The BCA clearly see the way forward differently:

"Me world"

In this scenario we see a dramatic rise in individualism. Australians become increasingly self-interested and see themselves as individuals in a globalised world rather than participants in an Australian community. They pursue individual goals, particularly economic goals, which results in a more competitive society. In this environment the gap between rich and poor continues to grow rapidly and this creates tension and sometimes violence within communities. Our emphasis on material wealth and visible manifestations of that wealth lead to the desire for bigger houses, faster cars and the latest technology. Social interaction is limited to immediate family and a close circle of friends of very similar socio-economic standing. Our suburban streets become increasingly deserted as parents keep their children inside to protect them from harm, and adults and children rely almost exclusively on television and the Internet for entertainment. The trend towards obesity continues, with all its attendant health risks. The media becomes even more powerful and is able to shape Australian opinion and values to an unprecedented degree. Environmental concerns become subjugated to these desires. Alternative energy sources are not progressed because they would cost more and therefore redirect money away from further material gain. As a result of this emphasis on the individual, many Australians could become increasingly disinterested in participation in civic life, particularly at a local level. A political leader who emphasises individualism over social policy, and lowers public spending in favour of tax cuts, will appeal to the great majority. Egalitarianism in the Me World becomes an increasingly irrelevant concept - inequality is more accepted and Australians are reluctant to support programmes to provide equal outcomes for all Australians. Given continued economic prosperity, we feel that this is the most likely scenario for Australia in 2025."

If the BCA has found the "shared values" to be respect for democracy, a strong sense of justice, a sense of fairness, of tolerance, a caring for others, a powerful sense of egalitarianism, a less selfish society, loyalty and freedom of self-determination and see that public policy is a key determinant of values, how can they seemingly endorse the scenario above that moves away from egalitarianism and respect for others and the environment..

I agree that argument and persuasion play a key role in policy making. They do not admit that the public policy responses are driven by the advocacy and links between themselves and government. Their current lobbying and influencing of government, which is doing its best to accommodate their proposals, is an example of the sort of values that influence public policy and their proposals argue against fairness in the workplace, fairness in public policy and rights of ordinary people to act collectively OR individually.

They are not concerned with the idea that "individualism" is actually the individualism of the CEOs who run the BCA who earn several million dollars each, or 2 or 3 times the yearly average wage per week.

The European Union places values at the centre of its approach too: "Economic growth must go hand in hand with a high level of employment and sustainable development ... People must be able to have a job and enjoy a healthy environment and good quality of life all at the same time (European Commission 1999)."

The Brotherhood of St Laurence alert us to the EU approach. They see that values are shaped by society and public policy but that we need to assert values that are not determined by some concept of the "market" but that the market should be subordinate to society. (Values, unemployment and public policy: The need for a new direction Daniel Perkins and Philippa Angley (Discussion paper 2003)

"To move in this direction we must begin by addressing the lack of investment in areas of social and environmental value, and the under-utilisation of labour, currently occurring in Australia.

Governments must take a more active role in shaping society, ensuring that policy goals extend beyond their present focus on short-term economic outcomes and recognise the mutually reinforcing nature of a strong sustainable economy and a socially cohesive society."

So the language of values is in both these scenarios. The BCA approach says that values are just those we accept from the way we observe society acting. They state some shared values then discount them by saying the Generation X want different things.

Public opinion examinations of values crossing all generations would say the BCA group gets the wrong end of the stick on this:

"Public opinion supports this viewpoint with surveys revealing that 74 per cent of Australians agree with the statement that 'Too much emphasis is being put on improving the economy and too little on creating a better society', while only 8 per cent disagree (Saunders, Thompson & Evans 2001). Moreover, 70 per cent of people say they would prefer 'the gap between rich and poor to get smaller' rather than the 'wealth of Australia to grow as quickly as possible'."

Given that our best paid CEOs get the yearly minimum wage in one day (Morgan from Westpac: With various options he got for the year to September 2004 $8,946,154.00. which is $172,041.42 per week or $24,577.34 per day, based on a 7 day week, On a five day week it is $34,408.27 per day) I would say that the BCA doesn't take much notice of the key value that comes up in it own and the Brotherhood of St Laurence research.

Government and public policy has been pushed into acceptance of the so-called individualist agenda since the mid 1970s. This has not impacted on the core values that the Brotherhood and the BCA identify. It has impacted, according to the BCA report, on the trust people have in business.

"The BCA comprises 100 leading Chief Executives. Our Members are business leaders who believe in Australia's future and devote their time to place the Council's imprint indelibly on the national agenda - to make Australia the best place in the world to live, learn, work and do business."

If the BCA is so keen to make Australia the best place to work in, why do they insist on removing the minimum wage? Is it better to work for less money, to have more time t work and less time at home or at the footy or the kids netball? Must be if you agree with the workplace reform agenda the BCA has proposed. Why don't the BCA, AIG and ACCI members invest more in training? (There is a great deal of crossover in the membership of these employer bodies). They want skilled workers, but they want the government to organise an import program for them, and workers to pay increased fees for tertiary and technical education so that their skills are available for the BCA to use and abuse as they see fit.

The labour market policy advocated by the OECD, BCA, ACCI and AIG, with the government backing these alphabet group ideas will have drastic consequences. As the Brotherhod of St Laurence paper sums up the research:

"The broader labour market policy being pursued in Australia is also likely to result in significant social cost and reduce the long-term competitiveness of the Australian economy. Research both here and overseas indicates that employment policy based on labour market deregulation is likely to result in:

• increased inequality (Dowrick & Quiggin 2003)

• lower wages and reduced conditions for low skilled and disadvantaged workers (Preston 2001)

• growth in low-pay, low-productivity industries (Watson 2001)

• polarisation of income and employment outcomes, and greater numbers of working poor (Borland, Gregory & Sheehan 2001)

• increased incidence of poverty (Cantillon 2002)

In a survey of UK firms, Michie and Sheehan (2003) found that the employment practices encouraged by deregulation are likely to 'support a race to the bottom' by encouraging a low-skill, low-cost strategy of competition and being negatively associated with innovation. Chowdhury (1999, p.72) supports this finding and argues that 'the flexibility of wages at the bottom end of the labour market can generate only bad jobs and create an under-class of people with socially unacceptable living standards'

This policy direction has the potential to cause long-term damage to Australia's capacity to build a harmonious society, and it is completely at odds with the government's stated desire to compete in the 'knowledge economy', through the development of a highly skilled, innovative workforce (Commonwealth of Australia 2001)."

Daniel Perkins and Philippa Angley. Values, unemployment and public policy:

The need for a new direction Discussion paper 2003

http://www.bsl.org.au/pdfs/values_unemployment.pdf

Business Council of Australia. Aspire Australia 2025: The BCA's Scenario Project.

http://www.bca.com.au/content.asp?newsid=94443


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