There are strong arguments that the housing market is well out of sync with historical yeilds and ratios to income (noting that income itself is likely to come under pressure in the next year or two blowing out that relation further). On the income scale the IPA’s mid-year recalc of the Demographia figures (mentioned here http://www.news.com.au/business/money/story/0,25479,24136331-5013951,00.html) estimated that in the English speaking world Sydney is now the most stretched on this income to house price ratio. The yield ratio has also been very bad for Australian houses (for an out of date comparison see here,paywall sorry, http://www.economist.com/finance/displaystory.cfm?story_id=5283797).

Club Troppo also has those pointing to potential downside (http://clubtroppo.com.au/2008/11/09/lessons-from-californias-housing-bubble/) based on the recent Californian experience (to which we could add the experience of Spain, Ireland, and the UK).

So there are good reasons to conclude that there are risks of serious downside to residential property and that now may not be the time to be pushing people into investing in property, even as owner occupiers.

The result of allowing new home builders, which tend to be young families to draw down on their largest and best protected investment (as in protected from themselves) at this time, while no doubt be good for the economy could very easily (due to the leverage) end in negative equity and no retirement savings in the event of a sizeable property downturn. These are not the people we should risk leaving on the hook for a struggling economy. There are a million other ways to encourage the building boom that we need, and many people better off to help fund it to my mind. In any case that super gap will probably be funded in the long run by the taxpayer in the form of increased pensions.

In addition, the magic deposit appearing from super would only add to the affordability problem, with everybody forced to compete with those bidding up the price of houses by spending every cent of their super. There is a further risk that people could over commit themselves based such an easy deposit and no experience of the saving that would normally be required to accumulate it.

I think the building boom can be acheived by shifting the tax burden around rather than net increasing it. For example, every CityRail ticket in NSW ais 70-75% subsidised (see IPART). This is a very heavy subsidy, particularly as it is not asset or means tested. In comparison new home builders can be slugged $90-$100K in fees and levies before they are allowed to build a house. That tax apart from being directed largely at young families is a direct impediment to economic activity at a time when there is not much of it about!

I live in the legal system and trust me, it doesn’t help with the small stuff. If Tribunals tend to become legalistic it’s because they are so crappy otherwise. We might think the legal system appalling, but it evolved to it’s current form for good reasons (not just to enrich lawyers).

The cost of applying legal remedies to small disputes is very rarely justified. Tribunals included. It’s not just lawyers bills, party time and stress also needs to be taken into account.

You make it sound like it’s an unstoppable trend. In reality I’d think what tends to happen is that “the system” tends to trend one way until it’s having patently obvious negative effects, it gets overhauled and pushed back the other way, then gradually drifts back again over time. Indeed, much economic regulation tends to follow that pattern. Maybe it is the best we can hope for.
If there really was a “best” answer, we probably would have found it by now.

Workers’ comp systems often blow out with tribunals allowing more and more in the way of claims. I think if I was on a tribunal I’d probably do what they do. Confronted with an injured worker, I’d want to give them the benefit of the doubt. But over the long haul it leads to dysfunction as the system gets gamed.

We are fallen creatures . . . If there is a God he probably does pity us. But that’s a rather big ‘if’!

What I will say is that it seems those in support of unfair dismissal laws seem more likely to accept the need for reform than those opposed to them, who simply remain committed to their scrapping no matter what the evidence says.

I hadn’t noticed this flimsy dodge. Inherently, if you are in favour of unfair dismissal, you can either support their reform or look ridiculous trying to insist that they work as they should. OTOH if you don’t support them abolition is a reasonable position despite somewhat unclear evidence – particularly since you can adopt the position that abolition would be better than whatever amount of mucking around is involved in trying to improve them given the likelihood of success.

All you are saying, then, is that it seems that those in support of unfair dismissal aren’t complete clods. Good for them.

It’s the legal system stupid. (Not that I’m calling you stupid, I’m just – stupidly – invoking a saying).

The legal system is too full of dysfunction to deliver cost effectively on this. And to tell the truth it’s a pretty hard thing for it to do in any event.

What I’d like to see is some way for employees to rate employers – including departing employees. Getting lawyers involved directly is likely to lead to more costs than benefits IMO.

On the other hand, you probably have to have something – to address the point about employers sacking employees for insisting on better safety.

So I’ll go for something minimal and informal as possible. With some attention given to helping improve the process by which firms’ reputation for being good or bad employers is formed. There are a lot of ‘market failures’ in that area.

* By default all new employment contracts, regardless of company size and/or employee income, include a provision that after a period 6 months, workers have a right to protest a dismissal that they feel does have not “just cause”. In return, employers have a right to demand at least 2 weeks’s notice in the case of employees choosing to resign.

* However, after that 6 months they also have a right to negotiate to trade away that right in exchange for some other improvement in their pay or working conditions (e.g. I could trade away my right to protest a dismissal with an extra week of paid annual leave, if my employer agreed to it).

I’m not sure what’s currently defined as “just cause”, but one thing that should be explicit in all new employment contracts is that an employer may not fire an employee simply because they refuse to renegotiate a contract to trade away unfair dismissal provisions.

Regarding the unfair accusation thing – what’s your proposal? What methods should be available to me to prove my innocence? And once I’ve managed to prove my innocence, why shouldn’t I want to stay working there, just because, for example, my boss was momentarily convinced by another employee that I was engaged in something in breach of my contract?

And in many contracts (including most of mine) you were expressly forbidden for going to work for another company that did sufficiently similar work, which somewhat restricts your options for resigning for trivial reasons.

I feel very uncomfortable about such restrictions and avoid them. Obviously not everyone feels the same way, I don’t want to force anyone to do it my way, so long as they accept the truce, and don’t try to force me to do it their way.

There are employees who work at a place because they like it and who would have no desire to hang around if the boss wanted to sack them. A lot of those kind of workers would also be confident that they could find another job.

Exactly, there are plenty of examples of this, including myself. I’m very happy to trade unfair dismissal laws in return for higher pay, I didn’t value the unfair dismissal laws in the first place and I do value the higher pay. Easy decision. I’ll also add that getting anything proven through a court of law is an agonising process that I would be happy to avoid.

In relation to NPOV’s example of unfair accusation, I can understand someone wanting to protect their reputation, but I think that is completely separate from whether they continue working that particular job or not.

But Ive also read enough of what goes on in other workplaces to accept that my own situation is very fortunate and not representative of a large number of workers who dont have the luxury of picking decent employers.

First you asked for “an example”, now you want a representative example based on people who are less fortunate than ourselves. In other words you want to offer charity to other human beings and you feel that restricting my freedom is an effective method of offering charity. I would argue that other methods are far more beneficial to all concerned.

What I will say is that it seems those in support of unfair dismissal laws seem more likely to accept the need for reform than those opposed to them, who simply remain committed to their scrapping no matter what the evidence says.

It’s probably also necessary in the sense that if you have OHS laws and similar protections – which I think you should have – then unfair dismissal is probably required – so you can outlaw sacking someone for speaking up on OHS.

All that having been said – and even the concession that we probably have to have some protection – I think most support for unfair dismissal laws is incoherent (in favouring the existing employee they disfavour the employee who would move into the position if it were not protected), sentimentalised (in which the employers are always the bad guys – note there are virtually no safeguards for employees unreasonably buggering off and leaving their employers in the lurch, which happens in hundreds of workplaces daily) or naive (about how triumphantly dysfunctional our legal system is in translating the intention into the practical legal reality).

I tried to sum up some of these thoughts here, though you’ll note I wasn’t able to get in the qualification I’ve conceded above.

[I]n 2001 the Full Court of the Federal Court investigated the relationship between unfair dismissal laws and employment growth, including taking expert evidence from a number of leading scholars in the field, and concluded that the suggestion of a relationship between unfair dismissal laws and employment inhibition is unproven (Hamzy v Tricon International Restaurants t/as KFC (2001) 111 IR 198 at [70]).

…followed by…

It has been argued that the adoption of fair dismissal procedures reduces the likelihood of dismissing an employee in circumstances where consideration by a cooler head would reveal that dismissal was not warranted, and so potentially saving the firm the substantial costs of hiring a replacement employee (Johnstone, Mitchell and Riekert 1991: 117). Other benefits for business in being bound by unfair dismissal law are also apparent. De Ruyter and Waring discuss research that indicates that unfair dismissal law encourages employers to invest in the education and training of their workforces, thereby enhancing labour productivity in the longer term (at 28). They use organizational justice theory to conclude that perceived injustice around dismissal issues can result in reduced performance by employees, and reduced commitment by employees to the organization, including preparedness to undertake discretionary roles and tasks (at 28-29).

Which makes a lot of sense to me.

Indeed, that’s always been my own position. And personally I’ve never valued unfair dismissal protection all that highly as far as my own employment goes. But it doesn’t mean I think there would be much benefit from being given the option to trade it in. For instance, it’s not outside the realm of possibity that my boss might suddenly decide to fire me just because another employee fabricated allegations against me. I’d like to think I had some sort of option outside of the expensive process of going through the courts to prove the allegations false (though as it happens I probably don’t, because I’m employed as a contractor directly by a US-based company).
But I’ve also read enough of what goes on in other workplaces to accept that my own situation is very fortunate and not representative of a large number of workers who don’t have the luxury of picking decent employers.

If it’s really “cloud cuckoo” stuff to believe that the vast majority of workers are capable of improving their employability by skilling up, then there doesn’t seem much hope for ever acheiving just and equitable workplace conditions for all.
As it is, exceptions are already made for the cases where skilling up is not an option – e.g. lower minimum wages for disabled workers etc. If there’s a case for making exceptions on particular workers re unfair dismissal, then fine, but I I really can’t see a lot wrong with the assumption that your average worker should be confidently able to enter an employment contract knowing that it can’t be terminated for any arbitrary reason with no period of notice. If current unfair dismissal laws are discouraging employers from taking on employees, then fine, they need changing – but getting rid of them entirely seems just as likely to push more employees towards unionised workplaces where unfair dismissal provisions are part of collective bargaining agreements, which doesn’t seem likely to benefit small businesses very much.

Tel, can you give an example of why an employee might truly wish to sacrifice all unfair dismissal provisions as part of their contract, and happily consent to such an arrangement.

I’m afraid comments like that make me think we may be on different planets. Hello?

There are employees who work at a place because they like it and who would have no desire to hang around if the boss wanted to sack them. A lot of those kind of workers would also be confident that they could find another job.

Now why isn’t it obvious that some people – I expect quite a few actually – would value protection against unfair dismissal at a pretty low value.

(And of course any rational person would value it at something. So I presume ‘sacrificing unfair dismissal provisions’ is exchanged for some monetary compensation.)

“Id much rather see employees accepting they will have to improve their skill levels and productivity in order to gain employment than thinking they can do so simply by willing to work under sub-standard conditions.”

You only have to be an employer – not some right wing ideologue to know that the problems of some employees can be dealt with with skilling up, and some can’t. This is cloud cuckoo stuff.

Perhaps we should do the same for marriage. When a marriage goes wrong, surely enough counselling will fix it up? A bit of skilling up perhaps?

Tel, can you give an example of why an employee might truly wish to sacrifice all unfair dismissal provisions as part of their contract, and happily consent to such an arrangement? FWIW, I suspect the risks in allowing employees to do that are often overstated by unions etc., but where are the benefits to the employee that couldn’t be acheived through better means? I’d much rather see employees accepting they will have to improve their skill levels and productivity in order to gain employment than thinking they can do so simply by willing to work under sub-standard conditions.

NPOV and Tel, My point about maternity leave is that the societal goal for maternity leave gets particularly put on employers and other employees. The widespread existence of maternity leave provisions and programs does not in any way deny the point. If there is a societal goal then the cost should be society wide and not particularly foisted on some people. How do you feel about conscription for example? Defence under attack is great for society, but should the price be especally high for 18-30 year olds or whatever?

“Everyone does it” is not a valid argment for anything. Everyone once did slavery. Was the wide acceptance of slavery a valid argument against the decisions different countries made to drop it?

c) youre a hard-line anarchist that thinks you should be able to run your company any god-damn way you like

Any way that involves consent of the parties involved. And why not? You think there is some value in placing arbitrary restrictions on behaviour to prove how lawful we all are? May I be the first to recommend that all Australians spend 15 minutes a day kneeling in silence before a portrait of the Prime Minister — anyone who refuses is sure to be an Anarchist.

So who pays the cost of maternity leave?

A society that cannot produce children is doomed. I’m all for women in the workplace, providing there is still an incentive for them to also take time for children. Exactly how that incentive is structured is a matter of debate, but ultimately no matter how you shuffle it around, there will be a cost involved and someone (not the mother) is gonna have to pay that.

But what I’ve read suggests that getting rid of unfair dismissal laws and the tribunal process through which cases are currently taken will drive up the costs of employees suing for breach of contract, because they then have to go through the regular courts.

Maternity leave is one of those issues that sounds horribly difficult until you recognise that every single developed nation in the world aside from Australia and the U.S. have some how managed to cope with it, presumably with varying degrees of success.