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We can be adult everywhere but the workplace

By Mark Christensen - posted Monday, 13 July 2009


Good policy is always practical.

Much of Kevin Rudd's pre-election agenda was anything but practical. He became Prime Minister because numerous working families, tired at having to exercise consumer sovereignty to drive their own economic fortunes, were happy to yield their market responsibilities to government for a promised return to the good old days of perceived economic certainty.

The Government recently dumped Grocery Watch because the political fall-out of walking away from this particular feel-good commitment was tolerable.

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The responsible Minister, Craig Emerson, has admitted it was bad policy, suggesting the public doesn't benefit when third parties believe they have a silver bullet for consumers. It's classic Austrian School economics. The market is too dynamic and complex for well-intentioned governments and their agents. By the time the price is pinned down, things have moved on.

While governments can legitimately concern themselves with appropriate transparency there is a natural limit to the value of facts and figures. Try-hard information is counter-productive because a consumer, at some point, has to exercise personal judgment by deciding if it's efficient to buy a can of tomatoes for $1.59, shop elsewhere or head to Bunnings for some gear to start a vege patch.

Contrast this cool, pragmatic outlook with the hot-headed hypocrisy over ending WorkChoices.

If consumers and suppliers can be trusted to work through the complexities of groceries, why is it different for the labour market?

Politics, of course. Industrial relations policy can be developed outside the bounds of reason because of its highly emotive elements. Having enlisted the unions to assist in drumming up fear, the Government must now maintain the bravado, lest its mixed messages be called into question.

The Government acknowledges it's imperative workers and employers personally work through the subtleties of reasonable working terms and conditions at the individual enterprise level. Yet on the other hand, it's also realistic to over-ride this intimate process with regulators apparently capable of forming a better view.

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Dwarfing the task of Grocery Watch, the Orwellianly-named Fair Work Australia is expected to understand and then arbitrate on the mind-blowing trade-offs between the welfare of individual workers, expected business profitability and the forward-looking performance of the Australian and global economies.

The only certainty here is open-ended conflict. Like grocery shoppers offered an easy-yet-impracticable alternative to doing the hard yards themselves, workers will unwittingly encourage an impersonal system to produce collective outcomes that have blunt regard for their individual circumstances. Meanwhile, employers become risk averse, offsetting reduced flexibility with lower levels of investment and employment. Worsening labour market conditions will then be blamed on corporate greed, warranting a further backward step towards centralised wage determination.

No amount of good will on the part of the heroic FWA membership can arrest this process. The good faith claims espoused by Julia Gillard are empty words, more Rudd-like rhetoric designed to convince hapless voters that big government and a growing band of regulators can shoulder their unwanted cares and worries.

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About the Author

Mark is a social and political commentator, with a background in economics. He also has an abiding interest in philosophy and theology, and is trying to write a book on the nature of reality. He blogs here.

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Creative Commons LicenseThis work is licensed under a Creative Commons License.

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