Rising costs for housing and food may not even be tempered by higher real wages as union power is further diminished with even the Fair Pay Commission in 2009 ruling out a small increase in minimum award wages for 1.3 million workers.
Forget the argument offered by the Institute of Public Affairs’s John Roskam who suggests that favours given by Labor to the unions runs the risk of returning Australia to the industrial relations dark ages (Australian Financial Review, September 4, 2009). Quite clearly, Australia’s labour market is far more flexible today than in 1996 when the Howard government was elected.
And workers are hardly likely to be better off without union representation, with one study noting that wages under union collective agreements increased by 4.3 per cent between June 2004 and June 2005 (compared to 3.5 per cent for non-union collective agreements and 2.5 per cent for AWAs). Why else was business so anxious for the Howard government to promote AWAs, and why else did leading building industry groups oppose the fairness test which the Coalition introduced in a bid to win back support prior to the 2007 federal election?
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Time will tell if trade unions can increase their membership, although ABS data in April 2009 indicated a 3 per cent rise in membership after many years of decline. It may well be that only a major recession will lead to a major rethink of policies throughout the Western world as our time of promoting freer trade facers more obstacles as our societies struggle to compete.
To conclude, while we may disagree with what level of government intervention is needed to maximise Australia’s wealth potential, we all need to offer greater voice from different perspectives to encourage extensive debate.
After all, with Australia’s champion of rhetoric (Rudd) bagging the past 30 years of policy, yet paying one person $2 million a year to build the government’s $43 billion National Broadband Network because that is the market rate, we will need extensive debate to make sure our elites adopt polices that ensure welfare assistance and wages are fair and appropriate.
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About the Author
Chris Lewis, who completed a First Class Honours degree and PhD (Commonwealth scholarship) at Monash University, has an interest in all economic, social and environmental issues, but believes that the struggle for the ‘right’ policy mix remains an elusive goal in such a complex and competitive world.