Politics of economic reform

Now that my days of writing and blogging are over, I am spending my time reading books. I have almost finished reading John Howard’s book on Lazarus Rising, which is easy to read and generally quite enjoyable (although at times self-righteous). One thing about the book struck me.

Howard admits that he was “forced” to introduce new legislation on Work Choices, even though many of its provisions were never fully planned or announced prior to the 1996 election. It provided for:
• an end to the “no disadvantage” test, which had previously guaranteed a part of the person’s pay packages, including penalty rates and leave loading;
• covered firms employing fewer than 100 persons when applying the unfair dismissals; and
• Howard’s industrial relations legislation covered all persons in an enterprise-based agreement, even where there was an overwhelming majority of the work force who stated a clear preference to retain collective agreement.

Why did Howard do this? The reason is that he unexpectedly now had full control of the Senate. The Government would be deemed as “policy cowards” if they did nothing to take advantage of this blessing. Howard admits this decision turned out to be a “political mistake”.

Now isn’t that the very same problem Gillard now faces with the Carbon Tax reform? It faced a change (this time adverse) in the Senate composition, with the Green in control. Gillard decided to accept the “changed circumstances” and proceed with its reform. Whether that too proves a “policial mistake” we will not know for the next two years or so. But there is a clear precedent in what Howard did.

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One Response to Politics of economic reform

  1. KB Keynes says:

    In actual fact all he had to do was to introduce the WR policy Reith wanted to do prior to the 1996 election.

    this was almost a carbon copy of the NZ legislation which was less that 100 pages.
    That would have deregulated the labour market.

    What he actually did was substantially reregulate the market.

    Workchoices was all about destroying trade Unions.
    He didn’t have to do that. They are dong a job of that by themselves.

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