Hockey’s shtick
Posted by Christopher Sheil on Thursday, February 15, 2007
In one of the portfolio contests that could be decisive as the election rushes on, the new labour minister, Joe Hockey, appeared out of his depth debating his shadow, Julia Gillard, on the 7.30 Report last night. I appreciate that conservative partisans will not agree. For die-hards on the political right, it is sufficient for Hockey to wave the trade union bogey to licence them to declare the issue a lay-down misere, in the name of god, queen, country and the individual.
I also appreciate that industrial relations is primarily an issue for the respective party political bases. The structural political disadvantage that flows for the government here is that there are more workers than CEOs. The government’s best political strategy, therefore, has always been to confine this issue to the bases, or at least to avoid the mainstream, and to seek to overwhelm the anti-WorkChoices priority among Labor’s base with other issues. In this light, Howard recently appointed the avuncular Hockey in place of Kevin Andrews, who did all the heavy ministerial lifting to launch Australia’s new labour laws.
Hockey’s difficulties were evident last night. Given hidebound rival ideological positions, the fundamental empirical question is whether individual Australian Workplace Agreements (AWAs) are good or bad things. Unfortunately for the government and Hockey, it seems that the advent of AWAs a decade ago has coincided with a downturn in Australia’s productivity. To appreciate the significance of this, you also need to appreciate that, for most economists, not only today but in all history, enhancing productivity is the main game. For conservative streams of economics, it is the whole game. If human rights are in question, only enhanced productivity offers a potential trump.
There is one escape hatch from this politically unfortunate (for the government) coincidence, and that is to be able to argue that the fall in productivity would have been greater without AWAs. Alas, and this is the wall Hockey walked into last night, the government has refused to allow an independent analysis of the AWAs to date, or even a partial departmental analysis. With the only escape route closed, Hockey found himself stranded.
Hockey’s new ministerial stature was last seen suggesting that the captain of the national cricket team, Ricky Ponting, Himself, had less individual bargaining power than journalists, dissolving Kerry O’Brien, Gillard and no doubt the watching public into laughter. Under real-time pressure, embarrassingly obvious sweat turned avuncular into Nixonian. Holed below the water line, the minister went under gurgling about having heard about someone in Cairns who knew about someone who mowed lawns who is allegedly happy with his AWA.
This was the new minister’s public baptism. He will improve; either that or he might as well save himself the trouble of ordering new stationery. Nor is this to say that Labor is home free on industrial relations, for it still has much to make clear, both in how the new industrial relations arrangements will work, and what the new government will do about appeals from unfair dismissals in small businesses. Yet Gillard handled the debate with deadly aplomb. The lucidity of the fact that most workers bargain as price-takers and her articulation of the transitional arrangements for existing AWAs were impressive and comforting.
I was left with the thought that perhaps the finest touch of genius in the new ALP leadership was the decision to give the industrial relations portfolio to someone who is not only brilliant, but a woman, for this tends to kill the government’s 19th century affection for union bully boys. All the addition of an avuncular ingredient can achieve in these circumstances, without facts to bless beyond convenient Cairns hearsay, is to bring the issue forward, which is the opposite of the government’s strategic political interests.
Will sacking the telegenically challenged Kevin Andrews prove to be not only an ironically unfair cabinet dismissal for a dutiful conservative colleague, but another Howard political mistake? Whichever way you look at it, the 2007 election is already compelling.
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On the productivity issue, let me first observe that there’s evidence that co-operative workplace relations are a boon for productivity. That doesn’t necessarily mean collective agreements, but certainly the individualising effects of AWAs are likely to have a bias against productivity under certain circumstances.
But the debate really is wrongly framed.
The reading I’ve done in labour economics (and if it wasn’t so late, I’d dig out an article which suggested that it was very difficult to quantify the effect of institutional workplace arrangements on productivity – the comparison in this instance being between the Australian regime and the highly deregulatory ECA regime introduced by the Nationals in NZ in 91 – because the effects of legal and bargaining frameworks are difficult to isolate and therefore to measure) suggests that drivers of labour productivity growth are more likely to relate to “human capital” factors and workplace organisation more generally.
So, on one hand, one can’t really make a claim that the decline in productivity coincident with the introduction of the WRA in 1996 is due to AWAs, and particularly because until WorkChoices, the number of AWAs made outside the federal public sector, telecoms and non-metalliferous mining was very small.
In any case, it depends on whether you’re talking about labour productivity or multi-factor productivity. There’s a good case to be made (and it was made in a number of reports in the early to mid 90s) that deficiencies in management as well as poor utilisation of capital are significant impediments to productivity growth in Australia.
But, on the other hand, the claim that AWAs will magically lead to productivity growth is also a government furphy. It only betrays the ideological agenda behind WorkChoices and the government’s total inability to focus sensibly on other aspects of microeconomic policy or investment in innovation and human capital as part of an “economic reform” agenda.
WorkChoices was never about productivity, but always about shifting bargaining power such that real wages growth could be held down despite a tight labour market. It’s achieving that objective, which indirectly puts downward pressure on interest rates through dampening wage push inflation.
I think it’s important not to accept the terms in which the government wants to frame these debates.
People interested in the economic effects of WorkChoices would do well to look at David Peetz’ work. Of course Hockey has taken a leaf out of Costello’s book and moronically dismissed Peetz’ standing as an academic (he’s an internationally respected labour economist and IR scholar) because he likes to sing trade union songs, doesn’t like George W. Bush and once worked for Gough Whitlam! Peetz has pulled together a range of data sources and also looked at a range of statistical indicators to examine the impact of WorkChoices.
It’s simply ludicrous to suggest that the OEA is too busy or something to release a full analysis of AWAs. I have no doubt, and it could easily be confirmed, that the OEA would have software that enables both record keeping and analysis of each AWA in order to see that it meets the legal requirements in place. As Gillard suggested, pulling together the data wouldn’t be too hard, and the reason it isn’t done is that it enables the government to continue to make misleading claims about AWAs, based on aggregates which are inflated by AWAs in mining. In fact, there’s much evidence that large numbers of AWAs in retail and in small manufacturing (to instance two sectors where data has been collected by unions) provide for no pay rise whatsoever over the 3 year term of the agreement. This is confirmed in part through the sample that has been released by the OEA.
Similarly, Hockey is being specious in relying on surveys by private sector organisations rather than by the ABS to make a claim about wages growth.
Having said all that, Hockey clearly doesn’t understand the legislation and performed poorly, while Gillard did very well (I enjoyed the reference to GST paperwork particularly).
I’d disagree that WorkChoices is an issue which only plays to each party’s base. I think this is Andrew Norton’s argument. It certainly motivates Labor supporters, and the $28.5 million fighting fund the ACTU has raised and the move to put 16 full time organisers into federal electorates (including some that are not marginal – for instance Nationals held seats in regional Queensland which have some of the lowest wage numbers in the nation) is a wild card in the election.
But I also think that WorkChoices plays to concerns about security which are around in an age of constant workforce transformation and to concerns about fairness. Rudd and Gillard have been picking up on these, as they should.
The test will be how WorkChoices plays among the so-called “Howard battlers” (many of whom aren’t the proverbial aspirational independent contractors – whose numbers are overstated anyway – Productivity Commission figures from 2004 put them at less than 10% of the workforce whereas the figures journos and the government use collapse sole professionals in non partnership arrangements and some small business owners in with contractors. In addition, many contractors don’t meet the adapted common law test which the ATO applies – that is, they have only one “customer” for 80% of their income. Most of these folks are people like cleaners and call centre workers who are being paid less than award wages. One of the most significant changes in WorkChoices was to remove the power of State Commissions to declare that such contractors are really employees being deprived of employment rights).
Posted on 15-Feb-07 at 1:19 am | PermalinkPs – noticed Hockey’s Nixonian sweat.
The comment about Ponting is ironic given that two Queensland netballers have been suspended from the team for not signing AWAs!
http://www.abc.net.au/worldtoday/content/2007/s1847970.htm
Posted on 15-Feb-07 at 1:32 am | PermalinkSorry, Chris, this isn’t quite right. The OEA released a sample of 250 AWAs to a Senate Committee late last year.
In the past, they’ve called tenders for analyses of AWAs in particular sectors. I wrote a bid from QUT which got onto the preferred provider list. But most of the work went to centres like Judith Sloan’s NILS and Mark Wooden’s mob (I’ve forgotten the acronym).
Nevertheless, only small samples have been analysed. But the sample given to the Senate was pretty scary.
Still, the general point is spot on.
The fact that AWAs are secret (as opposed to enterprise agreements and awards, all of which are public documents anyone can look up on a number of websites) is an evil in two senses. First, because an accurate picture of their impact can’t be guaged, which if nothing else, is a severe failure of accountability and policy evaluation. Secondly, because employees don’t know if their fellow workers have been made a different offer. (The previous legislation required the starting point for bargaining to be equal for those on the same award or CA level, but that’s now gone). One particular concern is the effect on gender equity. There’s evidence that many employees in one particular telco are offered 10k a year more for the same duties just for being blokes.
Peetz is good on the negative gender equity impacts of AWAs. There’s some other good research around on this, and the unions are well aware of it. That’s another good reason to have Gilly as shadow. It would be very interesting to see polling on WorkChoices disaggregated by gender. I strongly suspect women would be more concerned with it than men.
Anyway, sorry to clog up your thread! I’ll stop now.
Posted on 15-Feb-07 at 1:53 am | PermalinkStrong stuff, Chris; and persuasive and eloquent as always. You’ve been missed.
However, and looking for the blitz, it didn’t read as much for me. A few thoughts:
* Hockey is congenial, and that is effective – so different it would have been had Andrews been there. Blunt policy instruments otherwise seemed to be rendered numb I would suggest on account of Hockey’s performance (on that performance basis only).
* Gillard seemed reserved. What a chance to ignore the other line and go for the kill; not taken. Instead, she gave in to her opponent’s ground too often and too much. Nothing like how she performs in Parliament.
* Gillard did not present with alternative policy.
* Hockey failed in addressing the looming crunch about power for employers, but won it back when speaking of small business needs: unfair dismissal: a reclamation in the ‘debate’ of his own initiative last night.
* Gillard called the employer “sign it or go” AWA problem well, but I believe failed to land the knockout on that, which was available.
Overall, one wonders what has been agreed upon for these debates. They are way too tame for the issues involved.
Perhaps it’s a case of dipping the toe in; perhaps it’s a case of “no mistake is better than risking the killer” (it’s early), perhaps it’s about an agreement in mishmash ABC ways as attempt to lead into following debates – but it’s bloody tame stuff.
Overall, the issue wasn’t aired well, Gillard underperformed [one wonders if she is timing the killer requirements for later, or is hamstrung by something else], and Hockey proved himself a far better proponent than Andrews. That also seemed to indicate: Gillard can improve considerably, and Hockey may have shown about as good as he gets, more or less, in comparison with where else to go.
However, if it’s more of the same in the next rounds, Labor is at a loss in that particular environment. Wny? Because the issue itself which propends elsewhere to be so crucial is rendered lame. If Howard has in fact softened the ABC, and laid out a pissant runway for landing into this year’s election, with Hockey there, he’s done well.
Early days; Hockey under pressure should that happen and debating on actual alternative policy may appear as lame as the debate did last night.
Gillard has the ball, then, in her court.
Posted on 15-Feb-07 at 2:05 am | PermalinkNo, you are not being partisan, Mr Sheil, Hockey’s performance was truly abysmal. Gillard ran rings around him. He didn’t have a single decent answer, it was little more than simplistic, inconsistent ideological cliche, very poorly delivered. It was actually quite scary, and I have no doubt it did not go unnoticed by the Liberal party powerbrokers. I have always been skeptical of Hockey’s real ability, and I don’t think this woeful performance is just settling in nerves for a new minister, it is much, much worse than that. If Howard loses the looming election on a single issue, it will be IR.
Posted on 15-Feb-07 at 2:07 am | PermalinkTo the degree that Gillard came across as reserved, I don’t think that’s a bad thing at all, Robert. She is probably aware of the need for female pollies to soften their image somewhat to avoid predictable claims about being shrill. I thought she came across more as reasoned and deliberate, while Hockey blustered.
So my assessment of the contest is much closer to Chris’s take.
Hockey also very clearly isn’t across the detail of the legislation. Gillard will be able to hone in on this in time – it’s probably an advantage that she’s a lawyer (and her practice largely industrial law) both in the sense of getting across very complex legislation and also a forensic knack for the weak points in her opponent’s argument – which has always been one of her strong suits in Parliament.
Posted on 15-Feb-07 at 2:15 am | PermalinkMark, I am not in disagreement with you regarding Gilllard, and did not mean to imply it was a bad thing she appeared reserved.
I agree Hockey failed on detail, but would contend that his position there in comparison with the impersonable and near-zealotry Andrews goes a long way to softening the blunt instrument of the policy, which, overall, is a positive for the current government, and a hat-tip to Howard for reading that.
The interesting thing, which no doubt will happen – and hopefully will happen in the ABC environment of issue ‘debate’ – is that Gillard can slowly turn the screws on Hockey, but Hockey must move away from congeniality and into substantive facts and/or debase Labor policy when it arrives. This brings up the points you mention in comments, and that it’s harder to sell a complex suite of facts than it is to attack them. Hence, Gillard is in the box seat, but it really is up to her and Rudd to get this right.
Posted on 15-Feb-07 at 2:31 am | PermalinkI quite enjoyed the exchange between them. They actually appeared to quite like each other – “Joe” and “Julia” was a humanising touch and shifted the focus more directly onto a discussion of the issues rather than the usual hand to hand combat and hyperbolic claim and counter claim.
Julia Gillard is the sort of parliamentary performer – and forensic intellect – that Joe Hockey isn’t, but Howard’s assessment of him as “an avuncular sort of bloke” rings true in comparison to the prim, buttoned-up little Rotarian that Andrews evoked.
Posted on 15-Feb-07 at 7:12 am | PermalinkI’ll keep it short. I agree Gillard won the debate with the common points – “take it or go” and “young people” aka entering job market, etc.
However it was only a narrow victory. Hockey was clever with Awards using the same methodology – take it or go.
Thanks for clearing up the sweat but in the man’s defence. He’s a big man and would’ve been under studio lights. That said I couldn’t work out if it was sweat or his nose running at the time.
Posted on 15-Feb-07 at 8:56 am | PermalinkRichard Mitchell and Joel Fetter also got access to a slew of AWAs a few years back and released their analysis in the Journal of Industrial Relations and as a working paper:
http://celrl.law.unimelb.edu.au/assets/Working%20Papers/celrl-wp25.pdf
Further to Mark’s point about co-operative workplace relations, Fetter and Mitchell found that AWAs weren’t being used to promote a culture change towards co-operative or ‘high trust’ work systems, but were directed toward cost-cutting, annualisation of salaries, abolition of penalty rates, temporal flexibility and the overall enhancement of managerial prerogative.
Posted on 15-Feb-07 at 9:03 am | PermalinkTangentially related to Uncle Joe … I don’t know about the kitchen table thing (did not see it) but the rest of this about Rudd and media strikes me as spot on.
Posted on 15-Feb-07 at 9:16 am | Permalinkhttp://www.theaustralian.news.com.au/story/0,20867,21226668-5002840,00.html
When it’s a case of Hockey v Hockey (players), Hockey will ultimately lose.
Posted on 15-Feb-07 at 9:35 am | PermalinkI felt that in performance they were roughly equal, with Julia slightly better. She was much more precise, and sounded much more cool and calm, as though she knew much better what was going on than Joe.
Joe’s smiley-ness is probably his most useful quality, and the PM was clever to pick him, but smileyness only gets you people saying “ah, he seems like a nice guy, BUT…”
Seems to me that Julia has been coached on how to not appear too strident, as she can sometimes come across – I think she was better for it. And her comments re the QLD netballers something like “I don’t care if they negotiate with a union or not, but if they want to negotiate together they should have that CHOICE” was quite clever, and should be repeated as often as possible. Labor needs to make it clear that its not unions PER SE that they want to bring back, but options OTHER than just individual contracts. i.e., REAL choice.
Posted on 15-Feb-07 at 10:04 am | PermalinkThere’s not a person here, at a public school admittedly, that doesn’t think the Work Choice legislation will sink the government.
Posted on 15-Feb-07 at 12:00 pm | PermalinkI agree with Laurie’s very last point. But Labor will need to be very specific sooner or later on what parts of Workchoices they will repeal and what system will replace it. In other words, the choice that each employee will have regarding the determination of her own wage needs to be described very concretely, and contrasted with the current setup. Otherwise, Howard and Hockey will be able to obfuscate and portray their alternative system as suffocating, bureaucratic, a tool for self-serving union officials, and so on. Gillard should also keep hammering the point that the right to bargain is better protected in the UK and US than here under Workchoices.
Posted on 15-Feb-07 at 12:07 pm | PermalinkWhilst this is more about cheering for the good guys and booing the bad guys, Gillard came across as clear, calm and collected. Hockey was forced into several uncomfortable corners. Both made some good points.
The pattern that doesn’t seem to have been noticed is the number of times Gillard answered difficult questions with “what Labour will do is to come up with a fair and effective balance …”. Hockey’s most telling question was “What does that mean?”
The small target, “reassure but don’t give details strategy” adopted by Gillard is tried and true, but when it comes undone it really comes undone. It will be interesting to watch the debate unfold.
Posted on 15-Feb-07 at 12:53 pm | PermalinkNice post, CS, and interesting comments from Mark B. as well.
Posted on 15-Feb-07 at 12:57 pm | PermalinkI got the distinct impression Gillard has ample reserves available for when she needs them. Her background as an industrial lawyer would certainly provide the expertise and motivation in this role, which she alluded to.
Hockey on the other hand comes across as a dumb businessman who wants to be liked even while he rips people off. “Aw shucks, you know I wouldn’t do that to a friend.” He essentially tried to steer the conversation away from Workchoices, and instead to promote those economic indicators that are positive. In this respect, the Howard government has been incredibly lucky in having the resources booom to act as a cover for legislation that’s really an act of class warfare.
Gillard will need to be careful not to come across as too shrill or narrow in trying to force Hockey to engage with the issues, and it seems she is being careful.
As Gillard quietly pointed out, Workchoices denies choice to the netballers. She also mentioned the easy workplace transition to Labor in Victoria and some other states.
This will be an interesting battle, but I think Hockey’s “aw shucks” won’t cut it. Liberal polling in marginal electorates several months ago showed Workchoices to be harming them.
Posted on 15-Feb-07 at 1:48 pm | PermalinkYou could tell that Hockey’s heart wasn’t in it. He came across as someone who was given the short end of the stick portfolios. How on earth is anyone as decent a person as Joe Hockey going to masquerade before he gets shafted?
Posted on 15-Feb-07 at 1:57 pm | PermalinkHe is a man of principles & he is finding this tough going.
I agree with JustMe’s assessment of Hockey “He didn
Posted on 15-Feb-07 at 2:29 pm | PermalinkI was in a room with a lot of people having a loud conversation while this was on so I couldn’t hear much of what was being said. Even so, my strong impression (and impressions count for a lot) was that Julia won hands down – every time I looked at the tv she seemed to be talking calmly but persuasively – Hockey looked nervous and bumbling. I’m not a big fan of Gillard so I’m not overly biased in her favour, but I’d say she is doing really well in her new role. I especially liked that she pointed out that people often sign AWAs because it’s that or no job. Rings very true to me.
Posted on 15-Feb-07 at 2:30 pm | PermalinkJolly Joe will be boned – my bet – within a month, he’ll be promoted back to Tourism (family reasons…?). Thought this after seeing 7:30 Report last night but today in parliament, he confirmed his avuncular inadequacy. Gillard asked the question on an independent report for the AWAs and after shuffling some papers he got up strode to the dispatch and bellowed “NO!” and walked back. He couldn’t even answer with a slippery sidestep… just a bellow. Parliament is going to hell anyway but this was just ridiculous. After his parliamentary career is up he would be good as Sunrise’s political correspondant.
Posted on 15-Feb-07 at 5:25 pm | PermalinkLast year I was to change jobs. My new employer insisted I sign an AWA. I wanted to join up under the award. The new employer, after some disagreements over the phone, rang on my last day at my old employer and withdrew the offer. They did not want to negotiate at all. And they lied about the pay and grade I was offered. It was a harsh introduction to WorkChoices. Truth is the humble worker has no choice. In industries where workers can choose between awards and AWAs, they choose awards overwhelmingly (except in high-paid skills-short areas like mining). What the rich bastards and govt ideologues refuse to admit is that this legislation shifts the power to the employer totally. Also, the chief of staff at my new employer kept lying to me whenever I compared the EBA to the AWA. When I pointed this out he grew more cross and started fudging the way politicians do.
Posted on 15-Feb-07 at 5:46 pm | PermalinkBTW – my prospective new employer was to be News Ltd. No surprise really eh ? what hope for the honest worker ?
“..you also need to appreciate that, for most economists, not only today but in all history, enhancing productivity is the main game. For conservative streams of economics, it is the whole game.”
and ditto for leftists because they simply believe enhanced productivity is all about more publicly funded education, particularly university education.
“The lucidity of the fact that most workers bargain as price-takers…”
Posted on 15-Feb-07 at 10:57 pm | Permalinkand so do most employers who are only one step removed from their workers by being price takers for their outputs. That’s the dishonesty of the unions and the left here, which is of course patently obvious in an increasingly globalised world. If it were not the case the ACTU could simply engage in economy wide leveraged buyouts of industry and release all that surplus value for its members. Don’t hold your breath though. They’re like the RAA, NRMA and politicians who don’t produce a drop of petrol themselves but are always such experts on its ‘true’ price.
… and ditto for leftists because they simply believe enhanced productivity is all about more publicly funded education, particularly university education.
Untrue. Social democrats are as committed to enhancing productivity as much as anyone else, on condition the benefits are fairly shared.
… and so do most employers who are only one step removed from their workers by being price takers for their outputs.
This confuses output with input markets, or product markets with labour markets, and the relationship between the two. It is true that many, although by no means all (and perhaps only the minority of the major employers), are price-takers in product markets. On the other hand, under WorkChoices, most, although by no means all, employers can now become price-setters in the labour market. That’s the very point of the law – to tilt the balance of bargaining power in labour markets in favour of employers, who can now unilaterally lay working conditions down on a take it or leave it basis. The dramatic boost in the power of employers via WorkChoices is underpinned by a real unemployment level of 9-10 per cent. In technical terms, we are talking about the power to determine the distribution of the value of production, not production’s value per se, as you have incorrectly suggested.
It is Hockey’s job to somehow make this inequity palatable. Without being able to trade-off evidence of improving productivity (and the rise in the capacity of Australian production that this implies), like many, I don’t think palatable is possible, and the Andrews strategy of making WorkChoices as invisible as possible was the most feasible political tack for the government to take. I may be proved wrong, but Hockey’s appointment looks a mistake on this basis, for his high level of visibility only draws attention to the fact that he’s playing on a shocking wicket – effectively playing into Labor’s (and Gillard’s deadly) hands.
Posted on 15-Feb-07 at 11:25 pm | Permalink[...] it into an even contest. Chris Sheil, by contrast, thought that Julia Gillard was ably defending an unassailable position. I hope Chris intended some irony in putting it this way: Hockey
Posted on 16-Feb-07 at 6:01 pm | Permalink