A blueprint for real reform - it’s time

The Fair Pay Commission’s decision in July 2007 to limit the increase in the minimum full time wage to $10.96 a week is best understood as a vile attempt to rein in inflation and interest rates by undermining the basic living conditions of vulnerable and struggling Australian workers.

It is not only the most vulnerable of workers who have suffered under the Coalition government, however. Writing in The Age, Ross Gittins noted that the wage share of the economy had fallen from 70.6 per cent of GDP in 1999-2000 to only 66 per cent of GDP in 2007.

Such a gap is worth more than $2,000 a year.

Since Hawke and the Accord in the 1980s, crises in the rate of profit in Australia have been met with wage restraint. Restraint under Hawke was voluntary, while under Howard cuts in the wage share of the economy has been achieved through repressive labour laws.

In light of this, it is worth making the argument now for wage earner funds. Such compensatory measures could uphold the rate of profit and foster stability, while delivering economic democracy and justice to ordinary Australians.

Legislation could be adopted requiring businesses listed on the Australian Stock Exchange to issue shares every year to community-based funds valued at 7.5 per cent of the profit share of every listed enterprise. Rather than suppressing the profit share of the economy, such a move would seek to shift this share collectively into the hands of workers.

Such measures also need to combine with other measures aimed at maintaining incentive and improving labour market participation. Labor’s tax credits scheme could well go a long way towards achieving such an outcome, while more vulnerable workers need a general lift in the minimum award wages and conditions.

As always, education and health loom large in the public consciousness as the election approaches. Neither main party, however, has said very much about expanding education funding to meet the changing needs of the tertiary education sector.

The much-mentioned “Melbourne Model” (adopted by Melbourne University) demands the broadening of the scope of the Higher Education Contribution Scheme (HECS) to meet the minimum requirements of many students. Funding of graduate positions through HECS under such conditions is a fundamental equity consideration.

Full fee positions for domestic undergraduates, and those obtaining a first graduate qualification, should be in the process of being phased out. One option is the introduction of a bracketed HECS repayment scale, where repayment thresholds are raised and brackets are introduced governing the proportion of debt repaid in relation to total income.

Rudd’s devotion of $2 billion over four years towards rectifying the crisis of the broader health system may sound substantial: but again, in the context of an economy of more than $1 trillion annual GDP, it is plainly insufficient.

John Menadue, by comparison, writing for the Centre for Policy Development (CPD), envisages an expansion in public health programs, fuelled by the abolition of the Private Health Insurance rebate. Menadue views the current system as a misguided and costly example of corporate welfare whose abolition, in addition to the removal of other wasteful subsidies, could net as much as $18 billion over three years. Menadue views this potential windfall as being critical to the expansion of programs in such fields as mental health and Indigenous health, primary care, prevention and dental care.