Sharemarket in free fall…

This time it’s serious. Below 4000 points.

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49 Responses

  1. And Rudd’s said, “Australian bank deposits will be protected during the global financial crisis, Prime Minister Kevin Rudd says.”

    I’m worried. Very much so.

  2. My ASX 200 share holdings have now dropped 52% on average since I purchased them between Jan 2007 and now.

  3. My super has lost $3000 overnight!

    Just switched all my future contributions into Cash and a Consrvative fund.

    This is really scary.

    Unemployment is going to increase dramatically in Australia.

    My boss says, what’s happening today on the sharemarket will be felt in the economy in about 6 months, and it’s going to be “really bad”

  4. From America, spiritual home of free market capitalist fundamentalism, came this torrential malaise which will subsume the whole world, guilty and innocent alike.

    A pox on their shitful unworkable iedalist ideology, and the political parties (Republican and Liberal) that adhere unstintingly to it.

  5. Welcome to The Economy Wars…I believe this is now worse than 1929…so much for having the cycle of Boom & Bust under control…lies, lies and more lies…watch for the new political parties to emerge from the smoke…

  6. TB

    I think you are so correct new political parties will emerge. What worries me is when things crash too far it breeds extreme political parties of both persuasions and this is not a good thing

  7. Shane it breeds extreme political parties of both persuasions and this is not a good thing

    Agree, what we need is a hybrid democratic/capitalist/socialist mix.

    My old slogans come into play around about now though:

    I prefer to live in a society rather than survive in an economy…

    …and…

    Prosperity With Integrity!

    ………………………………………….

    reb

    I was saying the same thing to my son last night. Right now we are living in a Phony Economy War – everything is travelling as normal – in about six months (maybe three) things will start to unravel for many people…and it will take a number of years to recover …

    …………………………………………..
    Sans B

    The innocent have been suffering this greed and excess for many years now. I don’t know how you stop it … other than stiff jail penaties … I do believe in Karma …my only consolation.

    ……………………………………………
    The Minister tells me that the UK is now sueing Iceland over “frozen” (you’ve gotta be kidding) bank accounts…let the battles begin…(will look for a link)

    Welcome to Sodom & Gomorrah 2008!

  8. TB

    I agree a society not an economy. I am all for private enterpise as I have my own business. However I believe a democratice government needs to be the following.

    I vehemently disagree with this philosophy you pay peanuts you get monkeys. When many public offices were originally created the people elected were public officials volunteering their time for the good of their nation, when did it turn to a capitalist organisation that needs to be profitable and pay ridiculous salaries and benefits that continue for the life of the employee.

    1) Totally and utterly independent of all business and unions. NO DONATIONS to political parties of any pursuasion from either business or unions.
    2) Has a social outlook for the benefit of all its citizens.
    3) Members of parliament are paid a salary and a generous superannuation package together with many benefits not provided to its citizens. As a result if you are elected to parliament you may not have any direct exposure to any outside business or organisation. If you do lose after 1 term in parliament then that was the risk you took and are now free to go back to what you were doing previously. if you last for 8 years or more then you are more than adequately compensated compared to the citizens you claim to identify with and represent.

  9. Caney, Caney, Caney. I agree with your thoughts on unfettered capitalism. However, despite popular (particularly in America apparently) opinion, it was the Democrats who deregulated Fannie Mae and created this sub prime crisis in 1999 and it was the Democrats who blocked Republican attempts to fix it in around 2003 (I think).

    It was Labor in Australia who deregulated the banks and sold off the CBA and it was the Coalition who brought back in the regulation (despite opposition from Labor) that has saved the Australian financial system from the same crisis. I can’t believe these basic facts just get overlooked.

  10. James of North Melbourne

    See you’re back in your fantasy world again.

    The bit about the Dems blocking the Republicans was a piece of McCain fiction (amongst a long line of fiction he is spewing out). Plus the whole guff about this being the fault of Democratic deregulation is just that guff. I suggest you go look at the real history of it and not the utter bull being put out by the Republicans and their rabid followers.

    Also please tell us exactly what was the exact regulation the Coalition bought in to re-regulate the banks, that certainly is a new one on me?

  11. Also please tell us exactly what was the exact regulation the Coalition bought in to re-regulate the banks, that certainly is a new one on me? Adrian

    Yes, me too, Adrian. I’ve been sitting here wracking my brain after that statement…glad I’m not alone…waitin’ James

  12. Admittedly following the HIH debacle, ASIC and APRA were established/strengthened which put greater controls over financial institutions. I won’t repeat here the entire legislation and explanatory notes but that is the difference in this country.

    Now who created the subprime mortgage problem in the US?

    http://www.norcalblogs.com/post_scripts/2008/09/how_the_democrats_created.html

    This was the first I could find which describes it, but there is much more evidence.

    Now, how about you correcting so quickly Caney’s errors. Or are errors on his side ok?

  13. James of North Melbourne

    I worked for The CBA during the Labor and Liberal governments and I can tell you truthfully that liberal lending by our Banks with low docs and relaxed policy commenced during and increased during John Howards government. It exploded from around 2002 onwards.Can you please tell me the Exact re regulation you are talking about becuase it certainly was not in the servicing and credit assessment areas of the Banks. The Labor govermnet commenced the sell off of 49% of the Commonwealth Bank, the Liberal Party sold the lot. Funny to see that as soon as the CBA was sold to shareholders our banking system went into a profit making frenzy of fees and charges and liberal lending policies. Go back and check the sharprices and dividends of our big 4 over the last 15 years and you will see what I am talking about.

    We are not in a mess for one reason alone. We were behind the world in these type of lending products, but believe me if this had happened in 2 years time we would be in the same mess without a doubt.

  14. You don’t have to quote the regulation verbatim just link to it. As far as I’m aware there was little done in regulation after the HIH debacle. Yes there was a lot of talk and chest thumping but I’m certain there was almost no follow up. And I’m absolutely certain the regulators were not given any extra powers over banks and other money lending institutions.

    —————————————–
    Also you quote a single blog, not even a proper source, and all that blogger does is tell a story with not one link or real fact. Just a precis on his take of events. Please James give us some credit of a tiny bit of intelligence.

    I’m tied up doing several things at the moment and working back, too much time on Blogocrats 🙂 but I’m sure I can chase up the true history of it all and I know for certain that the Democrats role is being overplayed and exaggerated with a lot of downright malfeasances being spruiked by the right in the US about this. They just refuse to admit they stuffed up big, probably the biggest a government has ever stuffed up on just about every front you care to name, and as is so typical of the right they blame shift, even if that means making stuff up so the blame can be shifted off them.

  15. Sorry to double post:

    You should read the reply to that blogger you link, very telling:

    “There’s a Republican talking point going around that lays the blame on Fannie Mae and Freddie Mac, and hence the Democrats. There were big problems in the way Fannie and Freddie were run, but they were very small players in the subprime market. And Fannie and Freddy had standards. They checked on borrowers’ credit and they weren’t giving out subprime, low-doc, or no-doc inflated appraisal loans. The overwhelming responsibility for the crisis is the failure to regulate financial markets, and that is a failure of the Bush Administration. They sent very clear signals that they were in favor of deregulating the industry. All of three weeks ago, Mitt Romney said at the Republican convention that we should take a weed whacker to regulation. Two weeks ago, Governor Palin told Charles Gibson of ABC that her philosophy of economic policy was to “get government out of our hair.” A few months ago, ancient history by now, McCain said, “I’m a deregulator.” That’s been a consistent Republican theme.

    Then the replies saying that the mess of the whole of the last eight years are all the fault of the Democrat’s greed, selfishness and bad ethics “and the facts are there for all to see” but they don’t post one fact.

    Then there is the fact that the McCain campaign is being led by deregulators and people from the very institutions that are now collapsing, with the head of the NY campaign office saying the problem isn’t deregulation but too much regulations, which McCain agrees with and is on record saying so.

  16. Thanks Shane I’m a fan of Alan Kohler (from the same source)

    http://www.businessspectator.com.au/bs.nsf/Article/Hedge-funds-on-the-endangered-list-K9STW?OpenDocument&src=mp

    As they say in Egypt – nothing is new!

    …and I am a firm believer that the truth wil always catch up with you – what I really want to see now is some JUSTICE!

  17. Thanks, Shane, I’m a fan of Alan Kohler (from the same source)

    http://www.businessspectator.com.au/bs.nsf/Article/Hedge-funds-on-the-endangered-list-K9STW?OpenDocument&src=mp

    As they say in Egypt – nothing is new!

    …and I’m a firm believer that the truth always catches up with you. What I want to see now is some JUSTICE!

    …and bugger it! The bar is open! “Clink”!

  18. Adrian, you are unreal. For someone who posts “inside knowledge” from everything from economics to Russia’s role in Georgia without linked evidence, you require from me cast iron proof, actual regulations etc. APRA was formed by the Coalition Govt in response to HIH in 2001 (I think). Look the regs up for yourself. I know it meant a whole lot more compliance for financial advisers. ASIC was given extended powers. That is fact and whilst those two organisations are far from perfect, their role has shielded the Australian financial system at least to some degree from what has occurred overseas. The ALP deregulated the Australian Banking system, which had advantages, sure, but brought risks as well. The blog I linked to was the first I could find in a hurry. I am a financial adviser and am pretty busy as you can imagine. I did point that out when I linked. Fannie and Freddie were not small players. What absolute crap. They were the biggest single players of the lot.

    But please remember, I was responding to Caney, who had put the blame squarely on the Republicans and the Libs (I assume the Aussie ones). I was simply pointing out that is was Labor in Australia and Democrats in the US that did the deregulating. Why have you jumped on my comments (for lack of absolute proof) but happily let Caney’s through, Adrian?

  19. James a simple Google tells you that APRA was formed in 1998

    http://www.apra.gov.au/Speeches/98_13.cfm

    All we are asking is that if you “believe” something its not good enough just to say it, you need to prove it with links to acceptable sources.

    Another Google tells you that Howard & The Private School Bullies came to power in 1996.

    http://en.wikipedia.org/wiki/John_Howard

    As a Financial Advisor I do hope you reasearch your advice to clients a little better – unfortunately I doubt it based on my personal experience with your “profession”.

    Can’t provide a link at this stage but I suspect your “profession” is going to come under a great deal of scrutiny over the next couple of years.

    …and finally – some of us pull Adrian up too…and anyone else who makes incorrect statements – that’s how we all learn!

    PS Adrian doesn’t “let comments through” he’s not the webmaster…

  20. Cripes the world is in deep shit and al I read is someone blaming the other. Isn’t now the time to cut the adverarial crap and find some consensus. Political point scoring aint gonna fix things. Careful and deliberate thinking might.

  21. And BTW I don’t give a rat’s arse about myself (I operate a little business that seems to keep me going) but I do care about my kids.What is the future for them? Sure things might pick up, but if it doesn’t where does that leave them? You can argue all you like about blame and whatever but lets get some real thinking going on.

  22. Okay, so I tried to post this as a thread for discussion but I’ll be damned if I can get it up. Sure Joni, if Reb can do it anyone can LOL.

    Don’t panic, Kevin’s got it under control – our banks are as safe as houses he reckons (pardon the pun). There’s no escaping the fact that this week has been a week from hell and will probably go down in the history books as exactly that.

    Australian shares had their worst day since the crash of 1987, losing more than 8%, as mounting recession fears sent equity markets tumbling around the world.

    The benchmark S&P/ASX-200 stock index recorded its biggest one-day loss in its 16-year history, dragging the value of the main share index below $1 trillion. The broader All Ordinaries recorded its worst day since the October 1987 crash.

    – ASX-200 loses 8.3%
    – Stocks plummet 16% for the week, worst since 1987
    – Value of ASX-200 falls below $1 trillion
    – European markets plunge on opening

    It gets me back to people like John K. Galbraith, who, as far back as 1998 issued a stern warning that was all but ignored:

    “This is the warning of the present time. We had a slight indication of that in August and September [ Long Term Capital Management crisis in 1998] . It’s a warning that everybody should have in the back of her or his head. The effect of the speculative collapse is something which economists have not yet, even to this day, fully appreciated, because it is not the collapse that causes the trouble, but the further effect on investment, and also the further effect on consumer spending.”

    A very large part of our present consumer spending is based on debt creation, credit cards, or the impression given by stock market gains or real estate gains.

    If and when the end comes, the economic effect will be the drying up, the slump, in consumer expenditure and, of course, the economic effects of that.”

    I guess now we are likely to learn what he meant by ‘if and when’

    Malcolm Maiden expressed his astonishment today by writing:

    “The continuing sharemarket crisis is like nothing I have reported on, and I have witnessed some doozies: the long, painful market slump in the seventies that followed the 1973 OPEC oil price shock, the October 1987 market crash, the Long Term Capital Management crisis in 1998, the 2001 dot.com meltdown and the World-com-Enron crisis that followed, and 9-11, to name some of the highlights, or lowlights.

    This is one is different because it is more than a year old, and there is still no clear picture about how it is going to be fixed.
    The slump induced by the OPEC oil shock was also a slow burn, but Fed boss Paul Volcker eventually sterilised inflation by controlling money supply. The market slumps in 1987 and 1998 were much shorter in duration, and were solved essentially by liquidity injections.

    The dot.com crisis was self-inflicted, and allowed to run its course, and the World-Com-Enron crises were also allowed to work their way through the markets ahead of accounting reform.

    Already in this crisis we have seen liquidity injection of unprecedented magnitude, a raft of bank rescues, unprecedented co-ordinated central bank rate cuts this week, and the nationalisation of failed operators in the US, Britain and Europe, including Fannie Mae and Freddie Mac, the groups which between them finance half of America’s $US12 trillion mortgage market. None of it has so far unblocked what are, in essence, crucial global financing arteries ”

    I’ve got to admit, as someone whose been expecting the worst for some time now, even I’m a little stunned at the sheer ferocity and magnitude this crisis.

    It makes me wonder how politicians and business leaders can claim that they never saw this coming. I guess Galbraith’s observations of the 1929 Crash , in part, answers that question”… “Long-run salvation by men of business has never been highly regarded if it means disturbance of orderly life and convenience in the present. So inaction will be advocated in the present even though it means deep trouble in the future. Here, at least equally with communism, lies the threat to capitalism. It is what causes men who know that things are going quite wrong to say that things are fundamentally sound.”

  23. john… so close – u just needed to publish it! I have done it now.

  24. Joni ..I looked everywhere for a publish button and could not find one. There was ‘unpublished’ and ‘pending review’ under status. As well as a ‘save’ and ‘submit for review’ but no ‘publish’ available and I looked high and low for it.

  25. Joni..Don’t tell me all I had to do was click on Path:p at the bottom left-hand side of the dialogue box when ready to publish?

  26. James of North Melbourne,

    Banks failing – this is a failure of capitalism.

    Stockmarkets crashing – this is a failure of capitalism.

    Capitalism is likely to bring unprecedented misery to every country in the world. They are talking about the prospect of a deep, long depression. Even China is “slowing down”. If China stumbles, Australia falls.

    Greed from some: everybody gets hurt. An economic model (crapitalism) that specifically caters to greed – hurts the whole world.

    I look at which party serves the exponents of capitalism. Which foster the “greed is good” mentality and which have given us rhetoric defending capitalism. I see the Lieberal Party in Australia and the Repugnants in the US.

    You (who work in a capitalist industry) bristle with defensiveness for the Liberal Party. Nothing personal, James, but your doing so gives the game away IMO. It confirms my view by pointing at whom to look at.

    So .. I’ll repeat: A pox on the greed-driven capitalism that looks set to inflict suffering on every corner of the world. A pox on its political masters & servants in Republican – Liberal Parties.

  27. John McPhilbin:

    ” if Reb can do it anyone can LOL.”

    Hey! I resemble that remark..!

  28. Reb

    I’ve been itching to throw one back at ya.

  29. Fair enough, John…

    Long over due …!!
    🙂

  30. Jaysus, TB, now you as well. We have small paragraphs to make our point, unless you are John McPhilbin. APRA was given extended powers after HIH. In any event, it was a Lib reform. Excuse my wording on the Adrian think, I should have said “let go uncorrected”. When I give advice, I have to write about 30 pages, so it is a lot more detailed and researched. This is because of Lib party reforms. Most of it’s shit but you can’t go and say, as Caney did, that this is all caused by Lib Party free market capitalism and their failure to regulate, when it’s in fact the other side of politics, both here and in the US, that were the deregulators and opposed regulation.

  31. Caney, I don’t bristle with defensiveness. I don’t care. I hate free market capitalism. I have never advised investment in an “absolute return” fund, or a hedge fund, or an “alpha” fund. Ever. Nor have I ever got involved in collaterilised debt. Against the wishes of various employers. I do advise clients to invest in companies that produce goods and or services for a profit. I have said repeatedly, my issue with Labor is that they are no longer Labor. They are more deregulatory than the Libs. You put your “pox” on the Libs, you might want to have a look at Labor.

  32. James

    “We have small paragraphs to make our point, unless you are John McPhilbin”

    Given I’ve been kindly invited to post a few threads James, I’d be more than happy to post a thread that would allow you to vent your opinion more fully, sincerely.

    Please feel free to contact me on email johnmcphilbin@live.com.au

  33. Just one point James how is APRA a Liberal Party reform? Just what did they have to do with it?

    If you go to the APRA website they state they are funded by the industry, not the government, and they are not directly regulated by the government (as in oversight) but do follow government regulations including ones going back to the Keating years.

    Basically the government’s input into APRA is a Statement of Expectations, which is nothing more than a letter from Peter Dutton to APRA. In response to that government letter APRA wrote a Statement of Intent.

    So how is APRA a government reform because as far as I can tell it is an industry response with some government input.

    You just want to blame shift which is the norm for the right. As soon as things go wrong on their watch it’s everyone else’s fault, even if they have to go back decades to lay that blame or just make it up on the run as McCain is doing. The Poll Bludger has a an article on how conservative governments and parties are being dumped on around the world, except for Italy, which is always out of kilter. Even opposition conservative parties like the Tories in the UK are taking hits on this.

    But I gather you think the hundreds of millions of people around the world have it wrong and should be dumping on liberal governments as they are the true culprits of the current crisis and the conservatives are just the scape goats.

  34. James, I suspect you are a disappointed “right” wing voter and I am a disapointed “left” wing voter…and I agree Labor is no longer Labor (you know I’ve posted that a number of times).

    I think Caney (I’m sure you’ll correct me C) is referring to the foundations of both parties – one socialist to assist people less well off and one capitalist to help each other – either ideaology, individually, is dangerous in the extreme. What we need is a balance that will help individuals to develop (as citizens), business to thrive (fairly) and the nation to survive (within the global network).

    My comments re linking to data stand…but that goes for all of us…

    As for free markets – I recall friends of mine “gloating”, when the USSR collapsed, that it “proved” that capitalism was the superior system. You’ve probably gathered by now that I’m a bit of a “free radical” and I argued that it only proved that one system was faulty… and that capitalism was equally (if not more) prone to greed and corruption…not much gloating in my vicinity these days…

    …with any luck we may get some changes in the world… but if we are all subject to decisions by multi-millionaires, in bed with big business, I somehow doubt it…

    What sort of nation allows its leader to say that many of its old and frail cannot survive on their income after serving their country for many years – and the media just piddle about on the fringes – where’s the compassion, where’s the respect, where’s the “christian” (or any other religion) beliefs…

    ….Life really is one big Farce…

  35. Howard was a recent recipient of the Irving Kristol award from the American Enterprise Institute for Public Policy Research (AEI).

    From Wikipedia:

    http://en.wikipedia.org/wiki/American_Enterprise_Institute_for_Public_Policy_Research

    According to the institute its mission is “to defend the principles and improve the institutions of American freedom and democratic capitalism — limited government, private enterprise, individual liberty and responsibility …

    Sounds an awful lot like capitalism to me, even couched in the term “democratic capitalism” or whatever.

    We cannot let this topic pass without reference to WorkChoices, the embodiment of the Howard Liberal ideology, which was essentially unregulated (OK, “deregulated”) capitalism in practice in the workplace, transferring much of the risk from private enterprise entrepreneurs onto employees. An enlightening article can be found here:

    http://www.smh.com.au/news/business/work-choices-blue-is-class-warfare/2007/05/06/1178390141294.html?page=fullpage#contentSwap1

    It was only through resistance by Labor and “the unions”, and community demands that some decency be restored, that he was forced to backpedal from his extremist position. (Though, I’ve no doubt that, had he been re-elected, the so-called “Fairness Test” would have been quickly revoked and extensions to WorkNOchoices made, as per his long-noted zeal for ideological realisation.)

  36. Sorry for the multiple posting. To correct a formatting error in my last post (damn!)

    Some selectively quoted excerpts from the rodent’s address to the American Enterprise Institute:

    http://www.theaustralian.news.com.au/story/0,25197,23328945-5014047,00.html

    The Australian, 6 March 2008

    We pursued a blend of economic liberalism – in the classical sense of that term connoting as it does a faith in market forces – and social conservatism.

    […]

    Competitive capitalism within free markets remains the most effective economic paradigm

    […]

    The right responses will be grounded in free market orthodoxies.

    We should avoid resort to re-regulation. We should preserve the independence of central banks. We should maintain open and free labour markets.

    […]

    [In Britain] union leaders and government ministers met to decide how many more hundreds of millions of pounds of taxpayers’ money would be poured into the latest failing nationalised industry, had gone forever.

    I like the last bit. The days of failed nationalisation have “gone forever”.

    Disproven by events in the last week or two!

  37. Caney,

    If the former PM won the last election it would have caused a personal dilemma.

    I would of seriously considered putting on the bandanna, if you know what I mean.

  38. Caney…. I tidied up the double post

  39. Thanks Joni.

    Scaper, yes, a victory for the Liberals would have meant the gradual death of the Labor Party, leaving the increasingly-rightwards “Liberal” Party ultimately with decimated opposition. The pathway to fascism I think, and that’s without exaggeration or hyperbole. A dangerous tipping point as you put it so well recently.

  40. Hey, Caney, you’ll like this – our local Coles has a deli section and one of the many little signs (well not so little) reads as follows:

    “REMEMBER YOUR DUTY OF CARE”

    It may have had a little better impact if it had said OUR but no, there was an employer telling its employees that they had reponsibility for:

    A safe system of work
    Safe tools and equipment
    Safe access to and from the workplace
    Proper supervison and training

    Common Law Courts have long held the above to be an employer’s responsibility and they are now embodied in state and Federal legislation. (I used to train managers in H&S).

    Ignorance is bliss (or a Coles workplace!) …and don’t forget ABC Learning and their twisted concepts of Duty of Care and trying to change Victorian law!

  41. I think Howard’s reaction if he was in power would have been very similar to Bush’s but done with a lot more bravado, chest beating, self aggrandisement and putting down Labor. Bush is a lame duck whereas Howard would have been just starting another term.

    Howard would have thrown billions at the wealthy institutions saying it was necessary to prop them up. He never missed an opportunity to throw welfare at the rich and this would have been too good an opportunity to give up.

    He would have declared emergency legislation to increase the extent of WorkChoices saying it was essential, maybe even to the point of bringing in WC MkII. If people don’t know what WC MkII entailed you should read up on what Minchin, Hendy and the HR Nicholls society wanted to do. Even extreme anti-union conservatives overseas were calling WC MkII draconian. No other country has ever contemplated anything like it and for good reason, it’s little more than paid slavery pitting one worker against another for survival.

    The situation would have been worse here as well, for Howard would have bought in a budget implementing much of his extraordinary extravagant spending, that is unless he broke all his election promises. So credit would have gone up and as the RBA threatened so would have interest rates.

    All speculation of course but quite plausible given Howard’s record and the fact since coming out and making the running commentary he promised he wouldn’t, he has been making much about Rudd stifling the market and that he would stimulate the economy by stimulating personal spending, which means he was espousing a policy of increased personal credit loading.

  42. Totally agree with you there Adrian.

    In the context of the current market crisis, Howard would’ve used it to bring in Work Choices Mk2 (and probably Mk3), abolish the minimum wage and any other protections for workers.

    All the while trumpeting that it’s for “the good of the economy” and that we’ve never had it so good.

    Sickening just thinking about it.

    Thank god they’ve been relegated to the pages of history.

  43. Just stumbled onto this blog …

    “Independent blog designed to promote an online pro-Liberal Party infrastructure in Australia”

    Relevantly to this discussion, the blogger describes himself:

    “I am partial to free, market driven economies … I champion fiscal conservatism and economic liberalism”

    http://australasianliberal.blogspot.com/

  44. stuntreb you couldn’t go beyond WorkChoices MkII, it was the bottom and there was no further down unless you just bought in slavery outright.

    More complicated than this, but very basically WC MkII espoused that every worker in Australia become a contractor or sub-contractor. As a contractor you must supply your own super, pay expenses, conditions, do your own BAS etc. etc. You then had to contract/subcontract your work out to businesses who would chose the worker who offered the most production for the lowest price. So you would have factory workers on a production line trying to outdo each other whilst offering the lowest cost just to get the job.

    It meant the doing away of public holidays, weekends and many other things as workers would be forced to do lots of work probably in several jobs at the same time at very low remuneration just to survive. As contractors/subcontractors, workers would be expected to supply much of their own safety gear, work clothing and tools with companies doing the basics required of government regulation for supplying a safe workplace for contractors/subcontractors.

    When this was let out of the bag my Minchin the sheer horror of it immediately struck everyone and even had overseas commentators making disparaging noises about it. Minchin immediately hosed it down by saying it was just a work in progress and there would be strict guidelines for businesses contracting workers so they couldn’t be exploited. The backlash was so severe and sudden Howard had to step in, aver all ownership of the proposed legislation and promise it would never see the light of day. Yet it was still worked on and still exists to be rolled out at the first opportunity.

    This is why AWAs are so important to the Liberals who espouse WorkChoices or anything that replaces it. Without individual contracts established and in place they can never go back to anything like WorkChoices. Rudd and Gillard know this which is why they axed them, even though in some areas they were actually advantageous. There was no way of leaving them in place whilst restricting them from rising across the workforce in the future under another neocon conservative government.

    You just couldn’t get anything worse in a Western democracy than WC MkII, and it was described as being worse than IR for many in autocracies as well.

  45. Thanks Adrian. I think you’re right that Howard and Minchin only backed down once they realised that they had gone too far.

    Thank god they’re not in power today. I shudder to think what they’d be up to, but I suspect rushing through WorkChoices Mk2 would be part of it.

  46. Yes thanks Adrian for explaining so succinctly yet comprehensively the nightmare that was the Rodent’s, Custard Tip’s and Meanchin’s IR dream.

    Notice that they (Sliberals) have not come out and condemned it in the strongest possible terms. We had Joe Hokey with a half-hearted “We went too deep.”. Brenda saying “WorkChoices is dead” (but saying not a word about WC MK II or whatever name they will call it when unveiled.)

    They speak now about still having “a philosophical position on IR.” I take that to mean they would do the same again in a flash, and even worse, if they thought they could get away with it. That’s rotten, if you ask me, really really rotten.

  47. You raise a good point Caney on WorkChoices being dead for the Liberals. They have no hesitation in saying WorkChoices is dead but they won’t kill off AWAs. Not a single Coalition member will state outright that they will not bring in AWAs if they win government.

    This is important because without AWAs there cannot be anything like WorkChoices in the future and by keeping AWAs alive they are keeping WorkChoices, under whatever name they market it, alive.

    This is a real pity as AWAs do have their place and in some circumstances are actually advantageous to workers. Labor knows this but also knows that with any form of AWAs in place it is then just one step back into the realm of WorkChoices, so they made the decision to cut the ties to AWAs altogether whilst keeping much of the WorkChoices framework along with reinforcing and expanding worker conditions.

    I would not be surprised if at some time in the future the Labor government bought in IR amendments that expanded common law agreements to be something like an AWA or bought in a specialised common law contract. This would allow the advantages of AWAs to be realised for those workers who can benefit from them whilst the common law side would not allow them to be exploited like AWAs could be under WorkChoices.

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