Of geese and golden eggs and voting against them

This story in The Australian about the latest NATSEM study on income inequality trends provides a reminder about why Labor necessarily faces an uphill battle to persuade Australians to abandon the Howard government in the midst of an unparalleled era of general prosperity. The NATSEM study covers the first 5 years of the Howard government era (1996-2001), but prosperity has continued unabated since then:

Overall, the five years to 2001 were good years for the typical Aussie. Average household income, after accounting for changes in household size, increased by 26.1%. There was a modest increase in income inequality between the richer and poorer postcodes in Australia, with the average incomes of the top half of postcodes increasing by about 27%, compared with 25% for the bottom half of postcodes. However, the 23.2% income increase recorded by Bottom 10% postcodes was only marginally lower than the 24.2% increase achieved by Top 10% postcodes.

On balance, these five years of economic growth and falling unemployment benefited both richer and poorer regions of Australia.

John Howard won’t be so stupid as to say “you’ve never had it so good“, but it’s a true statement just the same.

I’m only voting Labor because of Howard’s unacceptably extreme and persistent dishonesty and divisiveness. I’m sufficiently convinced (though still nervous), by Latham’s writings and announced policies and the record of the Hawke and Keating governments, that Labor will be a responsible economic manager. Despite that, I would certainly be voting for the Coalition if Costello was the leader, which makes me a very atypical swinging voter indeed.

My nervousness about Labor stems mostly from its IR policies. Although I’ve occasionally mused on this blog about a modest degree of re-regulation of the labour market to protect the most basic conditions of employment from aggressive outsourcing, I accept the general proposition that “flexible” labour markets are a significant component of Australia’s current era of prosperity. Labor’s policy of abolishing Australian Workplace Agreements, combined with taking the the secondary boycott provisions of the Trade Practices Act away from the jurisdiction of the ordinary courts and putting them under the sole control of the AIRC, will restore trade unions to the central position in industrial relations, even though only 22% of Australian workers are union members. Flexible negotiation of individualised employment arrangements will be a thing of the past, with coercive collective bargaining back to centre stage. It would be a seriously retrograde step.

If it weren’t for the depth of my conviction that Howard must go, I wouldn’t even be considering voting for a party with these policies in a time of such economic prosperity.

About Ken Parish

Ken Parish is a legal academic, with research areas in public law (constitutional and administrative law), civil procedure and teaching & learning theory and practice. He has been a legal academic for almost 20 years. Before that he ran a legal practice in Darwin for 15 years and was a Member of the NT Legislative Assembly for almost 4 years in the early 1990s.
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cs
cs
2022 years ago

faces an uphill battle to persuade Australians to abandon the Howard government

There’s a cliche for every situation. Here, one says that the economy only matters to voters when it’s stuffed. When it’s travelling well,it’s going as it should, and people vote on other matters.

There is a grain of truth, perhaps. The left are congenitally given to thinking that when the economy stuffs up, people will turn left in seeing the failures in the system – and they always turn inwards and go right. The reverse assumption might be a congenital weakness of the right.

Dave Ricardo
Dave Ricardo
2022 years ago

It’s not out of the question that John Howard has made the electorate so relaxed and comfortable that they might feel a bit adventurous and give Mark Latham a go.

The economy was doing just fine when Billy McMahon got flicked in favour of St. Gough.

Ken Parish
Ken Parish
2022 years ago

cs and Dave

You may be right. Certainly I hope so. And certainly Howard has created an opening not only with his dishonesty and divisiveness, but with imposition of half-baked, ill-considered market-based solutions in education and health that haven’t worked well and have impaired equality of opportunity and fairness (which are at least equally as important in these critical policy areas as “freedom of choice” and economic efficiency).

Whether Latham is able to fashion and then successfully sell policies in those areas, and so give voters a positive reason to vote against the successful economic managers, is the sixty four million dollar question of this election.

I think the schools funding policy is a good start (as are most elements of the tax and family policy), but we haven’t yet seen either comprehensive health policies or a coherent tertiary education policy. Nor do we know whether Latham will be able to “cut through” the national security static with any of these policies (once they hit the deck). The election is certainly there to be won and lost; the polls are saying that. But we shouldn’t lose sight of the fact that it’s very much an uphill battle.

Alex White
2022 years ago

Labor’s policy of abolishing Australian Workplace Agreements, combined with taking the the secondary boycott provisions of the Trade Practices Act away from the jurisdiction of the ordinary courts and putting them under the sole control of the AIRC, will restore trade unions to the central position in industrial relations, even though only 22% of Australian workers are union members.

The point as I understand it is to restore independence to Australia’s industrial relations scene. Since Unions lobby and campaign for changes that benefit the majority of workers, not just their members, and all workers in the various areas see an advantage of, for example, increased minimum wage, better conditions, increased rights and protections, having unions that aren’t effectively legislated against can only be a good thing.

Which is not to say that unions are the best thing ever– a lot of them are bad for their industry and bad for their members, since they sell out, cave in, or are complicit with the demands of big business. Furthermore, their historically low membership can only be partly blamed on Howard’s regressive industrial relations policies; a lot of them have resorted to poaching members, squabbling and politicking, and concentrating on “services” rather than “advocacy” (all unions which have done the reverse have seen an increase in their memebership in the last five years).

I’d also add that although only 22% (or thereabouts) of Australians are union members, there are some industries which have almost 100% union membership (such as maratime workers or forestry), and some (likie hospitality) which have almost no union membership. The union movement is pretty diverse.

tony
2022 years ago

I wonder if there is much substance to our prosperity at the moment?

Seems to me that our feelings of prosperity were founded on a 55c Australian dollar, which quickly made our exports internationally competitive. Add this to a real estate boom kicked off by changes in capital gains tax and large handouts to first home buyers.

Anyone who owns a house is feeling pretty good these days. It’s easy to redraw some of that increased equity. Problem is that this is financing consumption based on increasing debt.

Now the dollar is back around 70 cents, and we are experiencing record current account deficts.

Doesn’t matter who wins …. interest rates are going up, probably as early as October.

There’s lot of risks at the moment. High fuel prices, shaky US economy, and the chance of a hard landing for the real estate market.

Whoever loses the coming election may, in time, be glad they did.

Jacques Chester
Jacques Chester
2022 years ago

“Market-based solutions”? In education and health? The Howard government? Hardly.

Try comparing just about any CIS monograph on any old thing with current policy. The word “market”, in this context, belongs near “not a free-“.

Flute
2022 years ago

Hi Ken,

I found another more damning report of economic distribution and whacked it in my blog:
Economic Myth

Ken Parish
Ken Parish
2022 years ago

Flute

You’re right that the NATSEM income figures are innominal not inflation-adjusted dollars. But we’re still seeing very respectable gains in real income right across all groups from poorest to richest.

And you’re also right that the increase in house values (esepcially in Sydney-Melbourne-Brisbane) has given many people a false idea of their real position, and induced then to go out and borrow and spend up big on sonsumption items, leading to a dangerous blowout in private debt, and therefore a very real feeling of insecurity. And that has also priced many others out of the housing market. And all those consequences are in part a result of Howard government policies e.g. CGT.

But even with all of that, these are still very prosperous times, and however you want to spin it, that means Labor faces a tough task in convincing people to change horses. I’m not syaing it can’t be done, and hope it is. But it remains tough, and the national security focus (and now footie finals) makes it tougher still. As I’ve said before, if we reach the last week of the campaign and we still have 20% or so undecided, I would expect a majority of them to break towards Howard on a “better the devil you know in dangerous but prosperous times” basis.

James Hamilton
James Hamilton
2022 years ago

“Which is not to say that unions are the best thing ever– a lot of them are bad for their industry and bad for their members, since they sell out, cave in, or are complicit with the demands of big business.”

Good Lord!

I must confess that’s an explanation that never occurred to me. I think it is my ability to be utterly gobsmacked that keeps me young at heart.

still working it out
still working it out
2022 years ago

I don’t understand why anyone could feel that Industrial Relations policy could be such an important issue. There has been significant labour market reform, but at the end of the day it is globalisation that’s keeping union power limited. Changes to IR policy might make a difference around the edges, but as has been seen time and time again, the power of unions is helpless when an employer has the alternative of moving work overseas or has to compete with lower priced overseas labour.

IR policy simply does not matter that much when globalisation has moved bargaining power significantly towards employers.

Peter G.
Peter G.
2022 years ago

Industrial relations is a very big issue if you are in business.

“..globalisation has moved bargaining power significantly towards employers”

What nonsense. Employment figures show that a high number of Australians are employed but it is true that certain jobs have been, and will continue to be relocated to more favourable labour markets. Unions are experiencing diminishing membership however all Australians still ‘enjoy’ a plethora of poor industrial law and well meaning but ineffective socialist workplace legislation. I would argue that employers have lost sovereignty over their businesses but overall both parties are disadvantaged. Business often has no choice but to shop around for labour when operating in a competitive market.

Unions are increasingly irrelevant to modern business and should be allowed to naturally wither and die rather than being put on life support as Latham plans. Every regulation, tax and compliance serves to increase the cost of production which in turn increases unemployment as processes are moved offshore. The division of labour which is responsible for our overall high standard of living now easily spans the globe. Trade has been with us forever – there is nothing really new in globalisation.

We employ 50 in our swimwear manufacturing business here in Australia. We are a relatively fast growing small business with 80% of sales made internationally. Plans to build a new modern manufacturing facility have been postponed in the light of Latham’s IR policy announcements. I have built this business from the ashes of ‘the recession we had to have’ and remain nervous about the prospect of another bout of social engineering in which small business owners (and ultimately workers) are expected to pay for the wet dreams of those with nothing to lose.

mark
2022 years ago

I thought that “you’ve never had it so good” link would be a reference to The Wizard of Id. I’m very, very disappointed, Ken.

JOSEPH  MATEUS
JOSEPH MATEUS
2022 years ago

Too much bullshit in here…people just don’t have the time to read all this stuff….shorten your comments as well as those of your readers and you might find somebody willing to read your commentaries….OTHERWISE THE “DELETE” BUTTON WILL BE WORKING OVERTIME.

HOPING THAT YOU WILL SMARTEN UP A BIT,

JOSEPH E. MATEUS

Ken Parish
Ken Parish
2022 years ago

Joseph,

Has anyone told you lately that you’re a wanker and a fuckwit who should piss off and go play with others who share a two second attention span? Is that short enough for you?

Ken Parish
Ken Parish
2022 years ago

Actually a slightly longer comment to similar effect would go like this. I’m well aware that lots of readers expect blog posts to be written in short, breathless “10 second soundbite” form. That’s how blogging started. But the longer, analytical essay blogging style also has its place. Bloggers like Don Arthur, Tim Dunlop and Christopher Sheil write in this way, as do some right wingers like Currency Lad and Al Bundy.

It’s true that the longer essay style may not suit lots of readers, but there are enough who seem to like it and can be bothered reading those longer posts to keep me doing it. And I’m not forcing anyone to read Troppo if they don’t feel like it.

It’s also true that essay blogging can sometimes be an excuse for turgid, undisciplined, excessively verbose prose. I’m certainly guilty of that on occasion, but again there are enough readers prepared to sift through the dross to find the gold. But it’s at least equally true that the short grab style of more traditional bloggers often leads to glib, gross oversimplifications of topics that deserve much more careful treatment if you want to actually understand the issues and not just have your unformed prejudices reinforced by another goose who’s just as intellectually lazy as you are.