IR Legislation

This week Federal parliament is due to debate the new IR legislation laws. This is the legislation that Turnbull has previously said that the opposition will support the legislation.

But all is not as it seems.

Last week the minister for sniping from the backbench, Peter Costello, said that the government should “reconsider” the legislation. Remember, this is the person who set up the HR Nichols Society, which believes that Workchoices did not go far enough.

There are also other rumblings from the coalition over the IR changes where other members think the proposed legislation is wrong. Will they vote against Turnbull’s wishes? I think it’s going to be an interesting week in parliament.

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94 Responses

  1. Thanks joni

    At least this should get TomM away from ‘gyrating naked woman’ and back onto the ‘dead hand of the unions’

    Also, I bet Turnbull will oppose it, but on some technicality, not the main thrust of the document, as he knows it will go through anyway.

    A bet both ways for him

  2. Tom R

    I am not sure it will get through the senate. The government needs the Greens and the two independents, and they seem to be wavering too.

  3. I’d like to see a double dissolution on IR. I doubt it will happen though; Turnbull’s not that silly.

  4. Julia Gillard’s making tremendous political mileage about the disunity within the Liberal party over this issue in the press.

    Who was it that said “disunity is death?”

    Oh, t’was THE RODENT.

  5. IR changes ‘will cost restaurant jobs’ http://news.smh.com.au/breaking-news-national/ir-changes-will-cost-restaurant-jobs-20090309-8ss3.html

    Something for Turnbull to sink his teeth into?

  6. RN

    I ask Peter Doyle (from your link) – why do restaraunts charge a weekend surcharge if they are not using it for paying their staff? Surely they would not be pocketing the money as extra profit.

  7. Shouldn’t be too much of a worry RN as most employers in the hospitality industry from Byron Bay and all points north and south employ only backpackers. All of course ‘under the counter’.

  8. Joni..so difficult to believe isn’t it.

  9. Agree Joni. Min, I too know of many “under-the-counter” deals in hospitality as well as other industries for tax evasion purposes. Time will tell – will job losses equal that predicted and what proportion would have disappeared anyway due to the GFC? I would have thought that that a decline in the need for hospitality services would be a primary consequence of belt-tightening for both personal and business endeavours.

  10. Doing backflips is Turdballs strong suit. I reckon he had no idea the leadership of the grand old party would be so difficult. It’s about time they cleaned out the Howard Huggers in the party and moved on.

  11. RN. And you are of course spot on.

    A nice simple explanation from Ross Gittins is via the SMH via the title: Chomping through Debt Mountain

    http://business.smh.com.au/business/chomping-through-debt-mountain-20090308-8seh.html?page=2

    Quote: That was particularly true in the recession of the early 1990s. The key problem then was the excessive borrowing of business (and the excessive lending of the banks) and it took a couple of years for business and the banks to get their balance sheets back in order.

    This time, the key (domestically generated) problem is the excessive borrowing of households. And we’ll have to wait while households, suddenly anxious to reduce their exposure, slowly chomp their way through that mountain of debt.

    Which get us back to John McPh’s most excellent threads about why this Recession is different to the last one.

    And this then gets us back to RN’s post re ‘belt-tightening’..

  12. Here are some quotes from Liberals on Workchoices from after the election:

    Hockey: The people have spoken, the Labor Party has a mandate to tear up WorkChoices and they’ll be able to use that mandate

    Coonan: …balance our approach on economic management with the message we’ve received from voters… We’ve got two jobs in opposition: one is to keep Labor accountable and the second is to take heed of what voters have told us.

  13. Thanks for the link to Ross Gittins Min,

    I meant to read that article this morning but somehow overlooked it – So thanks again. It all builds on the bigger picture.

    I owe, I owe so off to work I go! (Really).

  14. And Turnbull from Sept 2008:

    Yesterday Mr Turnbull agreed Labor had a clear mandate on Work Choices. “As far as the Coalition is concerned, Work Choices is dead,” Mr Turnbull said.

    However, he said he could not give Ms Gillard a “blank cheque” promise to back Labor’s legislation, without seeing the fine detail.

    Noting the Government was under pressure from trade unions for more concessions, Mr Turnbull said Ms Gillard had made plenty of statements, but produced no detail. “The Government does have a mandate to make changes,” Mr Turnbull said in Sydney. “However, naturally we will again, in the national interest, review the detail of whatever legislation the Government presents.”

    And so I do accept that Turnbull qualified the coalitions support for the IR changes.

  15. joni, on March 9th, 2009 at 12:16 pm

    My local tavern put on a 10% surcharge last LABOR Day and when I questioned three of the staff and they said they were not getting any extra I told my family…they lost 12 meals plus drinks that lunchtime!

    I later spoke to the bottle shop manager who told me that we were not the only one’e angry but we were the only customers who voted with our feet!

    The tavern is in the heart of Labor too, local, state and Federal!

    We’ll see what happens this Labor Day.

    The owner who I’ve talked to on many occasions is very pleasant and easy going – and obviously greedy!

  16. It’s about time they cleaned out the Howard Huggers in the party and moved on

    lol, that’s the silly buggers’ problem. It’s a party of Howard Huggers. There would hardly be a Liberal alive who doesn’t love the old coot.

    They take loyalty to past victors waaay too seriously.

    Getting rid of Howard Huggers means getting rid of the Howard Party, er, the Liberal Party.

  17. Joni

    I thought the greens and independants were behind it, simply because the ‘mandate’ of the people argument.

    If they are wavering, yes, I think that will prove to be a worry for Turnbull.

  18. Tom R

    Not sure – that’s why I think this week in parliament will be interesting.

  19. Very good point joni..while the Libs were f*rt*ars*ng about Rudd’s public persona and his wife plus then throw in mega Costello for good measure, hey guess what is happening in the rest of the world..it’s Julia Gillard and WorkChoices. (whoops wrong thread).

    I would be interested in what other Blogos (wave, wave to Tom of Melbourne) think about union access following industrial accidents.

  20. Caney:

    “They take loyalty to past victors waaay too seriously.”

    And losers too. Evidently.

    Which would clearly suggest that those that continue to maintain steadfast loyalty to the biggest loser and constantly reiterate his old mantra that “we’ve never been better off” (Hockey for example) really need psychiatric attention.

  21. It will be interesting to see if this legislation clears the hurdles. Bob Brown has said that the Greens went to the last election declaring that Work Choices should be torn up. It’s hard to say what the Lib-NP mob will do because, like a sailor banging away at a prostitute’s thighs, the Libs are banging away with a clear message of disunity. Does anyone know what Nick the Greek and the other bloke will do?

  22. “Julia Gillard’s making tremendous political mileage about the disunity within the Liberal party over this issue in the press.”

    reb, I got little from that link…I prefer the ABC transcripts:

    http://www.abc.net.au/worldtoday/content/2008/s2511025.htm

    just sayin’

    N’

  23. Just a reminder of how keen the Libs & Nats were to SELL this Workchoices bill to the public on THE EVE of an “economic tsunami” that Peter Costello seemed to be blissfully unaware of until the EVE of the election:

    “In March 2008 Federal Industrial Relations Minister Julia Gillard revealed that the previous government had spent $121 million on what she described as WorkChoices propaganda including promotional material such as 98,000 mousepads, 77,000 pens and 100,000 plastic folders.”
    (Wiki pedia)

    Personally, I reckon the top Libs & Nats knew what was coming the whole time…knew what their mates in the USA were brewing up…& were eagerly awaiting the downturn w/ their media/propaganda ENABLER Rupert Murdoch (who just happened to buy the Dow Jones & Wall St. Journal on the same EVE of DOWNTURN)…so the truly Left-Wing allied companies could be plundered…the workers turned into serfs…taxes reduced for the surviving business & rich class w/ the excuse that only BUSINESS booms will pull us out of recession…green energy plans scuttled unless they benefitted…& the younguns out of work were to be sent to do their “defend Israel at all costs’, “grab resources for the supremacists” DIRTY WORK in the military.

    and just in case Rudd & Obama won…they’d be handed a SHIT STORM. Or perhaps we should say

    MANURE PIE.

    and then turn around & dump all the blame on Labor & the Dems.

    NO LONGER EYES WIDE SHUT
    N’

  24. Fascinitating topic. Great to see so many interesting points of view.

    Keep up the good work!

  25. Oh dear.

    I think someone has tampo :).

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

  26. The next few months will no doubt be brutal on employment. Work Choices would have no doubt accelerated this process.

    Businesses expect profit slide, will cut more staff say Dun & Bradstreet
    Article from: AAP
    http://www.news.com.au/dailytelegraph/story/0,22049,25161127-5014099,00.html
    March 09, 2009 05:31pm

    * 65 per cent of firms expect profit fall
    * Many will cut more staff

    BUSINESSES say the worst of the crisis is yet to hit as most predict further falls in sales and profits, and a growing need to cut staff, a survey says.

  27. It’s pretty obvious why Joe Hockey has been given “made about IR reform” Costello’s former job:

    The Australian Government stopped using the name “WorkChoices” to describe its industrial relations changes on 17 May 2007.

    Workplace Relations Minister Joe Hockey said the brand had to be dropped due to the union and community campaign against the Workchoices laws. “It has resonated because it’s been the most sophisticated and political campaign in the history of this country”.
    (Wiki pedia)

    Brand eh?

    “An organization can only ‘walk the talk’ when its managers deliberately shape its internal reality to align with its brand promise…(the brand’s) values must be internalized by the organization, shaping its instinctive attitudes, behaviours, priorities, etc.”

    Alan Mitchell, “Out of the Shadows” Journal of Marketing Management 15, No. 1-3, January-April 1999: 25-42
    ———-

    Methinks this BRAND was “internalized” by the political organisation that sits on the opposition front bench.

    Workchoices oozes from Joe Hockey’s pores day in & day out. He’s one perspiring fella.

    N’

  28. The recent global economic implosion reminds us that unregulated ‘competition’ and beggar thy neighbour economics are the wrong philosophies for a crowded planet with limited natural resources.

    Can the OECD countries manage a more sustainable and equitable path going forward? Yes we can! A fair and balanced IR system is just the beginning. Democracy is, after all, supposed to benefit the majority of Australians, not an overpaid elite …

  29. N’, makes me want to buy a hot iron and “brand” the buggers where it hurts most.

  30. Min writes : “I would be interested in what other Blogos (wave, wave to Tom of Melbourne) think about union access following industrial accidents….”

    I dunno what TOM thinks, but I’ll tell you what I think.

    I’m all for it.

    Here in NSW Industrial Accidents are investigated by the Workcocver Authority of NSW, whose Inspectors have prosecutorial power in matters where an Employer has been found to have breached any OHS Legislation.

    The problem is that they now use that power once in a blue moon., and that’s not because breaches are as rare as hen’s teeth.

    Currently Workcover Inspectors launch about 60-80 prosecutions a year. Now, it wasn’t always so. A decade or so ago (when I worked for Workcover as a prosecutions lawyer) they were launching 600-700 per-year.

    They’ve backed-off that, though.

    It’s not that the rate of Industrial accidents has plummeted. It hasn’t . The reason for the change is that they’ve now decided to adopt a more “conciliatory and advisory” approach in administering the Industrial safety Legislation. Whatever that means.

    Essentially Workcover seems to now see its OHS role as a sort of OHS Guidance Counsellor, rather than an Industrial Cop. So, they’ve put-away the Big Stick and brought out the tea and sympathy instead.

    I think it sucks.

    Only a nitwit would think for an instant that this sort of approach works.

    And before the Wingnuts on the Blog jump all over me for being hard on Employers I’d like to say two words: New York.

    Does anyone recall what the crime rate there was like before Rudy introduced his Zero Tolerance regime?

    This sort of policing works. New York proved that. And prosecutions as a safety tool in OHS work.

    Nothing bangs-home the message like a nice hefty whack in the wallet.

    So, if Workcover has run-up the white flag, I reckon it’s high time the Unions stepped into the breach and did their job for them.

  31. Evan, you seem to be yet another here that could usefully brush up on some facts before posting.

    You seem to exist in blissful ignorance of the fact that in NSW specifically, unions have the legislated right to launch prosecutions against employers for breaching their OHS obligations.

    Exactly what additional power are you suggesting that they get?

    And as a result of unions having this power, can you point to any change in safety performance?

  32. Tom of Melbourne, on March 9th, 2009 at 7:42 pm Said:
    Fascinitating topic.

    Agreed Tom..We are all fas-cin-ating.

    Evan..was just thinking of a site or several where there were industrial accidents. One young apprentice lost a leg.

    The union tried to access the site and this was denied. The union said that the reason that this young bloke suffered this injury was because of the lack of a safety barrier – however management’s argument was that this apprentice was negligent/slack in the way that he performed his duties.

    Tom..if the union cannot access the site, then there is the opportunity to clean up the oil slicks, to erect the safety barriers before anyone has the opportunity for OH&S to even have the opportunity to obtain a permit to enter the site.

  33. I see, so given that unions in NSW can initiate independent prosecution proceedings, claim costs and get a share of any fine, what additional legislative rights are you after exactly?

    And please do try to pick up a little more than spelling mistakes this time.

  34. I see, so given that unions in NSW can initiate independent prosecution proceedings, claim accost, and get a share of any fine, what additional legislative rights are you after exactly?

    And please do try to pick up a little more than spelling mistakes this time.

    Just testing why my comment would be awaiting moderation, unless we are introducing a degree of regulation on comments here…

  35. Not sure Tom, I’ve tried to approve but have no authority, Joni or Reb have probably been absent. So, I’ve just quickly cut and pasted.

    tom

    Submitted on 2009/03/10 at 7:58pm

    I see, so given that unions in NSW can initiate independent prosecution proceedings, claim accost, and get a share of any fine, what additional legislative rights are you after exactly?

    And please do try to pick up a little more than spelling mistakes this time.

    Just testing why my comment would be awaiting moderation, unless we are introducing a degree of regulation on comments here…

    Tom of Melborne

    Submitted on 2009/03/10 at 7:49pm

    I see, so given that unions in NSW can initiate independent prosecution proceedings, claim costs and get a share of any fine, what additional legislative rights are you after exactly?

    And please do try to pick up a little more than spelling mistakes this time.

  36. Thanks John. Please also cut and paste the following –

    I’ve posted from my palm pilot, my home computer, my data card and my work lap top.

    All are being moderated. I’d be interested in why this is the case.

  37. TOM reckons:

    “You seem to exist in blissful ignorance of the fact that in NSW specifically, unions have the legislated right to launch prosecutions against employers for breaching their OHS obligations.

    Exactly what additional power are you suggesting that they get?”

    Well, actually I’m not suggesting they get any additional powrers at all, old chap.

    I was simply pointing-out that since Workcover dropped the ball on OHS in NSW, perhaps they’d like to step-up to the plate and launch a few prosecutions themselves.

    As for blissful ignorance, well, I was a Workcover Prosecutor for a decade so I had somewhat of a passing acquaintance with the ins and outs of NSW OHS Legislation, uncluding an awareness of the fact that Unions could launch prosecutions off their own bat, as it were.

    They rarely did so in my day, of course, due to a number of factors, cost being the foremost.

    Also, the sad fact is that they lacked certain investigatory powers that were conferred by the Legislation specifically on Workcover Inspectors.

    Facts checked to your satisfaction now, eh TOM?

    Perhaps before you go shooting that cannon mouth-off at me again you might care to enlighten us as to just what you’ve done for the noble cause of Industrial Safety lately.

    Either that or lay-off the booze.

  38. Min raises the prospect of employee negligence as an complete defence in an OHS prosecution of an Employer.

    Care to explain to her why employee negligence is irrelevant to such a prosecuiton TOM, or shall I?

  39. So Evan, in answering this question – “I would be interested in what other Blogos (wave, wave to Tom of Melbourne) think about union access following industrial accidents….”

    You say – “I dunno what TOM thinks, but I’ll tell you what I think.”

    And then finish with – “I reckon it’s high time the Unions stepped into the breach and did their job for them.”

    I then query the additional power you think unions ought to have. You seem to take offence. Do try to get over it.

    Alos – “They rarely did so in my day, of course, due to a number of factors, cost being the foremost.”

    So unions regard cost as an inhibitor to OHS, then I’d only ask again, what do you mean by – “I reckon it’s high time the Unions stepped into the breach and did their job for them.”

    Kindest regards

    Tom of Melbourne

    Ps- please excuse the spelling mistakes, I was full at the time.

  40. “makes me want to buy a hot iron and “brand” the buggers where it hurts most.”

    lol…

    “Can the OECD countries manage a more sustainable and equitable path going forward? Yes we can! A fair and balanced IR system is just the beginning. Democracy is, after all, supposed to benefit the majority of Australians, not an overpaid elite …

    Well said Ray

    “if the union cannot access the site, then there is the opportunity to clean up the oil slicks, to erect the safety barriers before anyone has the opportunity for OH&S to even have the opportunity to obtain a permit to enter the site.”

    Good pint Min.

    “As for blissful ignorance, well, I was a Workcover Prosecutor for a decade so I had somewhat of a passing acquaintance with the ins and outs of NSW OHS Legislation, uncluding an awareness of the fact that Unions could launch prosecutions off their own bat, as it were.
    They rarely did so in my day, of course, due to a number of factors, cost being the foremost.”

    You go Evan…informative stuff.

    I reckon much of the Opposition’s arguments are red herrings & fear-mongering hyperbole.

    Wouldn’t Howard love to be around as Lord & Master to watch his beloved Serfchoices carve up the Unions & see worker’s PROTECTIONS fall under the bulldozer of his reforms handed to big business on the eve of Costello’s “tsunami”?
    N’

  41. Well Nasking, Evan is the expert on the role of unions in OHS apparently.

    So when Evan suggests “perhaps they’d like to step-up to the plate and launch a few prosecutions themselves.”

    And they already have the power of prosecution, they can obtain costs for prosecution, they can have a share of the proceeds of the penalty… I’m just wondering what other power or rights he thinks they should have in the OHS arena, particularly given that OHS regulation remains a state (ie not Workchoices) role.

    Evan???

  42. Yep, tip backs down again, but the Coalition just can’t let go of WorkChoices.

    Turnbull, Costello face off on IR

    Mr Turnbull said, “I’m pleased you agree with the shadow cabinet”, to which Mr Costello replied, “I’m glad they agree with me”.

    One senior source said Mr Turnbull had “called out” Mr Costello, inviting him to make a real contribution rather than to carp from the back bench or make grand speeches without having the responsibility of decision-making…

  43. “Tom of Melbourne, on March 10th, 2009 at 9:38 pm Said:

    Thanks John. Please also cut and paste the following –

    I’ve posted from my palm pilot, my home computer, my data card and my work lap top.

    All are being moderated. I’d be interested in why this is the case.”

    It happens occasionally, for what reason I’m not sure but I doubt it was deliberately done, my own comments as well as many other people’s comment have been held up for no apparent reaon. I worked out long ago that it wasn’t deliberate and was simply a glitch.

  44. “Min, on March 9th, 2009 at 12:47 pm Said:

    RN. And you are of course spot on.

    A nice simple explanation from Ross Gittins is via the SMH via the title: Chomping through Debt Mountain

    http://business.smh.com.au/business/chomping-through-debt-mountain-20090308-8seh.html?page=2

    Quote: That was particularly true in the recession of the early 1990s. The key problem then was the excessive borrowing of business (and the excessive lending of the banks) and it took a couple of years for business and the banks to get their balance sheets back in order.

    This time, the key (domestically generated) problem is the excessive borrowing of households. And we’ll have to wait while households, suddenly anxious to reduce their exposure, slowly chomp their way through that mountain of debt.

    And this then gets us back to RN’s post re ‘belt-tightening’..”
    ———————————-

    Exactly, Min and RN – the flow – on effects are very widespread.

  45. Min and RN, said another way, Mark Davis, author of The Land of Plenty writes:

    “Australia’s ‘age of prosperity’, as Peter Costello calls it in his memoirs, has been underwritten by the mining boom (even as manufactured exports stagnated during his tenure) and massive increases in household debt (now more than $1 trillion – about the same as the annual national output), even as the government has wound down its own debt. The national debt has in effect been privatised while, at the same time, risk has been shifted away from government and business onto the shoulders of ordinary people, in the shape of long working hours, casualisation, and the sort of uncertainty that is written in the fact that Australians take the least holidays of any western nation.”

    It just doesn’t get anymore succinct and to the point than that. And it was the Howard Government that have left us in this precarious position.

  46. Min and RN

    Another great article by Gittins

    It’s a hangover: take the medicine
    http://business.smh.com.au/business/its-a-hangover-take-the-medicine-20090310-8u58.html
    Ross Gittins
    March 11, 2009

    I won’t ask you any embarrassing questions, I’ll just say this: if lately you’ve been paying off debt rather than spending, don’t let anyone make you feel guilty about it. What you’re doing is instinctive, but also sensible in the circumstances. It was always a nice idea that Kevin Rudd would give us cash bonuses and we’d all rush out and spend them. And certainly, if that had happened the economy would be a little stronger than it is today.

    But it was always a vain hope that, by doing so, we could hold the global recession at bay. And it was always unrealistic to hope that, with recession looming, people would do anything other than pull in their horns and pay down their debts.

    (As for Malcolm Turnbull’s claim that, had we received a “permanent” tax cut rather than a one-off cash bonus we’d have been more likely to spend it, it’s laughable.)

  47. All,

    Just to clarify. Sometimes comments get caught in the SPAM queue. Normally for multiple links, sometimes for certain word combinations (and I do not know what they are) and sometimes when a number of comments are posted in quick sucession by the same IP address.

    Reb and myself then just need to approve the comments – which we try to do on a regular basis. But if both of us are unavailable then the delay will be longer.

    See – nothing nefarious at all.

  48. See – nothing nefarious at all.”

    That reminds me, just recently I stumbled (literally) on a ‘nefarious hairious cacti’ that’s one ‘wicked’ cactus.

  49. Regarding the topic – the IR legislation of the federal government, the hospitality, agricultural industries are legitimately concerned about cost escalation.

    Their points seem reasonable, I don’t recall the government having a mandate to significantly increase costs in these labour intensive industries. Some here seem to suggest that cash in hand to backpackers is the response.

    Right of entry of union officials and inspection of employee records, without employee consent will worry some, quite justifiably I think.

    Looking on the bright side though, the recession will moderate some of the excessive claims that unions would otherwise make. The recession has a positive influence after all.

  50. There’s always an upside to a downside brother Tom

    “Looking on the bright side though, the recession will moderate some of the excessive claims that unions would otherwise make. The recession has a positive influence after all.”

  51. Some here seem to suggest that cash in hand to backpackers is the response.

    No, I thought they suggested that is what the industry is already doing, already not properly paying staff.

    So are you going to nit-pick over the mandate of workcoices tom, try to break the voter intention into little compartments of intent? Didn’t the people just say no?

  52. John McPhilbin, on March 11th, 2009 at 8:09 am

    Ahhh, the politics of moral hazards and double-dipping. TB had a point back on the other thread…transferring debt from private back to public accounts still isn’t ‘paying off the debt’, though, is it?

  53. Tom of Melbourne, on March 11th, 2009 at 9:46 am Said:

    Regarding the topic – the IR legislation of the federal government, the hospitality, agricultural industries are legitimately concerned about cost escalation.

    Of course they are TomM, who would expect them to pay a decent days pay for a decent days work when there is a GFC in progress.

    Interesting to see that the unions in America have worked out an agreement with Ford on time share, the same sort of proposal which is being put forward here at some companies. Wonder if the company by itself would have done that, or just taken advantage of workchoices and slashed pay rates.

  54. Legion, on March 11th, 2009 at 9:53 am Said:

    John McPhilbin, on March 11th, 2009 at 8:09 am

    Ahhh, the politics of moral hazards and double-dipping. TB had a point back on the other thread…transferring debt from private back to public accounts still isn’t ‘paying off the debt’, though, is it?”

    True

  55. Tom R & Kittlylitter, I think my point was that the government has a mandate to rip up Workchoices.

    I don’t think many had expected this to mean that through the “modernisation” process several labour intensive industries would be loaded up with costs and penalty rates that they had not previously had.

    These are new and additional costs, without offsets. The economic fact is that if the cost of labour increases and nothing else changes, the demand for it will fall.

    I don’t think these are the times to impose additional costs in labour intensive industries, and the government would be wise to re-examine its approach.

    Thanks Comrade John, for your solidarity.

  56. Legion

    Either way, there;’ no getting away from the damage that excesses have caused. Haggling over IR laws may become irrelevant.

    Depression dynamic ensues as markets revisit 1930s
    March 11, 2009 – 8:46AM
    The US economy’s vital signs may not confirm a diagnosis of depression. The symptoms increasingly point to one.

    As in the Great Depression, world trade is collapsing, wealth is evaporating and the banking system is broken. Deflation is a growing threat as companies slash production, pay and prices. And leaders worldwide are having difficulty making headway in halting the self-perpetuating decline.

    “We are tracking 1929-1930,” says Barry Eichengreen, a professor of economics and political science at the University of California, Berkeley.

    The result: This contraction may leave a lasting imprint on the economy and society, just as the Depression did. In the wake of the devastation of the 1930s, Americans swore off stocks, husbanded their own resources and looked to the government for help. Now, another generation might draw some of the same lessons from the deepest economic collapse of their lifetime.

    “This is going to scar the collective psyche,” says Mark Zandi, chief economist at Moody’s Economy.com in West Chester, Pennsylvania. “People will become much more conservative in borrowing, lending and investing.”

  57. TomM

    Are you able to highlight these ‘costs and penalty rates’ that are completely new?

  58. Having now read the article, I’d have to say my assessment of Gittins’ ex post facto narrative about the rationality of microeconomic behaviours stands at odds with his previous articles about the stimulus and intentional macro behaviour, and your observations that it’s ‘another great article by Gittins’. It’s the same lack of guilt which was involved in prior exuberances and dissavings converted to a virtue in changed circumstances. What’s laughable is Gittins’ building himself a new narrative where people doing the opposite of what he previously argued for in terms of the stimulus itself, and rationalising that away as the thing they were always going to do with it, when that was the very criticism others made of the package, to forestall criticism of Gittins and his role as ‘mere commentator’ or chuckler from the sidelines.

  59. Tom of Melbourne, on March 11th, 2009 at 10:04 am

    I tend to agree on the timing aspect. The time to introduce those sorts of things was when real wages were going backwards while company and non-salary private profits were accelerating, causing mountains of debt for those at the bottom and oodles of excess for those at the top; which still doesn’t explain the timing of WorkChoices, which, again, was the wrong legislation for its time. It’s just plain all ass-about.

  60. I don’t think many had expected this to mean that through the “modernisation” process several labour intensive industries would be loaded up with costs and penalty rates that they had not previously had.

    These are the same workers that everyone knew were at greatest risk with WorkChoices, they were already being exploited by many businesses. Didn’t hear too many complaints from business at the time WC was being mooted.

    Out of interest, what are the new costs and penalties?

  61. which still doesn’t explain the timing of WorkChoices, which, again, was the wrong legislation for its time. It’s just plain all ass-about.

    Exactly legion, at a time of huge profits to business and exorbitant CEO wages, they wanted to bring in WorkChoices – nothing fair or right about it.

    Greed and a drunk on power government with control of both houses of parliament was their downfall. But the Liberals wait still, they want it bad, they will never give up on WorkChoices or similar schemes.

  62. Legion

    Keynes once said “when the facts change, I change my mind, what do you do Sir?” I sincerely believe that the Rudd Government are trying to ease the pain short -term as Gittin’s has also mentioned. Longer term solutions are elusive simply because we don’t know where all the ‘bodies are buried yet’ – I mean bad debts.

    Who knows? The government may, in the end, be throwing good money after bad but surely their attempts to buffer us has got to be better than doing nothing at all and allowing the economy and markets take their course? The argument I think you pose is that debt is debt whether it’s government or private – therefor we need to consider Total Debt.

    We know the private debt is a major concern, however, the banks have not been as upfront as they need to be about the full extent of their exposures – i.e. private and business lending as well as exposures to international markets and the potential fallout.

    Gittins has also done an admirable job in explaining why this isn’t any ordinary recession. The hardest thing most of us are trying to come to grips with is ‘the unknown’ and which way this is all likely to turn. It’s been assumed for a long time that recessions come as go and booms that turn to busts will once again turn to booms and so on. This is all fine in theory, however, it’s the experience of large scale losses that brings real pain with it. Many of us have had no direct experience of this type of pain.

  63. Award modernisation means a new “modern” award has been created by merging a number of old awards. In hospitality, retail and related service industries the new award sets higher penalty rates, allowances, overtime, annual leave and overtime for all employees in the industry.

    Some of these awards had entirely different structures for penalties etc.

    Labour costs will therefore increase.

  64. TomM

    From what I have seen, this is merely re-instating pre-workchoice awards (albeit under one umbrella award from what I can garner)

    Yes, costs will rise, back to pr-workchoice conditions before pays were slashed.

    So these are not ‘new’ conditions, they are simply pre-exisitng, and some business owners want to maintain the cheap wages they gained under workchoices, remarkable as that seems.

    Yes, it is not a good time to try and get rights back for workers, but that is not Labors fault, they are merely keeping an election pledge.

    And, as I mentioned, there are more ways to save costs at the coal face than siply lowering wages, perhaps the business community needs to get back to being smart instead of greedy.

  65. I don’t wish to be an apologist for a militant employer group such as the Australian Retailers Association, but they do seem to have a point.

    They say –

    “The ARA’s costings analysis based on a roster for a small retailer with two full time and two casual employees indicates a $22,000 wage bill increase on average across Australia with state costings estimated to be the following:

    New South Wales: $28,473p/a (16.5% increase)
    Victoria: $18,821p/a (11.5% increase)
    Queensland: $25,402 p/a (15.5% increase)
    Western Australia: $19,496 p/a (11.5% increase)
    South Australia: $26,123 p/a (15.6% increase)
    Tasmania: $23,693 p/a (14% increase)
    Australian Capital Territory: $24,863 p/a (15% increase)
    Northern Territory: $15,581 p/a (9.5% increase)”

    end qote

    So, small retailers are up for an extra $22,000 per year? Even if they’ve exaggerated the calculation by a factor of 2, this is scarcely the time to add in these costs.

    I seem to recall something about an economic stimulus and cash handout intended to support employment in retail etc.

  66. The fundamental argument on this thread, it seems to me, is essentially a re-hash of the old Free Market vs Regulation dispute.

    You can talk about costs, you can talk about safety. But in the end, they’re the same thing.

    Quite apart from the pain and trauma of an injury itself to the worker and his family, there’s a cost to Employers in real dollar terms in every industrial accident: There’s the cost of medical treatment; The cost of time and production lost; The cost of rehabilitation; And in bad accidents, the cost of a funeral.

    I don’t think even TOM would dispute these facts.

    The real question is how best to address this.

    I take the view that Industrial Prosecutions, whether Union or Workcover initiated, are a useful tool in reducing the frequency of workplace accidents. Sure, they’re a form of dreaded Regulation and an additional cost to Employers, but I don’t subscribe to the view that this is, ipso facto, a bad thing.

    If a timely prosecution over, say, an unguarded power press, prevents some worker from getting his hand smashed in the damn thing, then in the long-run it’s likely to save the employer concerned -and its Compo Insurer- a shitload of dosh ( to use a Ruddism). Much more, in fact, that the measley $2,500-$5,000 fine he’d get for such an offence in the NSW Chief Indistrial Magistrates’ Court.

    TOM talks about the additional costs to Employers, but just consider what those costs would be if were open slather, without the sorts ot protection Legislation like the OHS Act provides.

    We’d be up to our ears in amputees and walkng down King Street Newtown would be like taking a jaunt through the Mogadishu markteplace, judging from the number of stumps on display.

    Industrial safety legislation is not a new concept. We’ve had machine guarding laws for a century now. And the arguments raised against them when they were first introduced are the same tired old arguments we get from Industry now: It’s going to cost too much; It represents unwarranted Government interference in the Free Market; etc etc etc.

    And so, my firends, the song remains the same.

  67. Evan said – “You can talk about costs, you can talk about safety. But in the end, they’re the same thing.”

    and

    “TOM talks about the additional costs to Employers, but just consider what those costs would be if were open slather, without the sorts ot protection Legislation like the OHS Act provides.”

    Perhaps you would be so kind as to point out exactly where I have criticised safety costs.

    I think you are confusing things a bit here Evan.

    I sought your clarification over the additional powers you think unions should have, particularly given your experience with the unique power of prosecution they already have in NSW.

    I have then raised questions about cost imposition resulting from award “modernisation”, which seems to involve levelling up of various allowances and penalties.

    These are entirely discrete issues, though somehow you seem to have confused them.

    Do try to keep up Evan.

  68. I don’t believe the Unions need additional powers at all, TOM. Apart from the right of entry (which Howard tried to abolish), I’d rather they left Industrial prosecutions to Workcover for the simple reason that Workcover is better eresourced to to the job.

    Provided, of course, Workcover does that job. If it doesn’t, I have no problem with the Unions initiating OHS prosecutions. Indeed, I’d encourage them to do so in such circumstances.

    As for Award modernisation, wasn’t that another one of Howard’s Industrial fetishes?

    Following introduction of the 1996 Worplace Relations Act, I seem to recall him proudly announcing that, henceforth, Modernised Federal Awards would be limited to several key clauses and that everything else was to go. All that Old-Fashoined stuff, like Parental Leave, Anti0discrimination, Redundancy/Severance clauses etc.

    Running a rip-saw through existing Awards was his idea of Award Modernisation.

    And now that Rudd wants to premit re-introduction some of the lost provisions, its all costs, costs, costs. (The same bleat we got from Employers in regards to Indistrial safety laws, when they were dragged kicking and screaming into the 20th Century).

    My heart bleeds, it really does.

    Unions fought for years to get some of those clauses that Howard abolished with the stroke of apen. You may recall they were a bit anoyed about it at the time, too.

    And now the wheel has turned.

    Pity about that.

  69. So Evan, first you say – “I reckon it’s high time the Unions stepped into the breach and did their job for them .” in reference to Workcover.

    Now you say – “I’d rather they left Industrial prosecutions to Workcover for the simple reason that Workcover is better eresourced to to the job”

    Really Evan, I quite unable to follow your line of thinking here.

    With regard to additional employment costs – we’re not talking about big business here, these changes impose additional costs on local shops, agriculture and farming.

    It’s fine for you to dismiss their genuine concerns with your bland anti all employers sentiment. No doubt you exercised exactly the same impartiality as an inspector.

    ps – pedants please not that I have not found it necessary to point out spelling mistakes.

  70. TomM

    I have then raised questions about cost imposition resulting from award “modernisation”, which seems to involve levelling up of various allowances and penalties.

    I

    Just to make me happy TomM, that should read ‘re-levelling of various allowances and penalties to pre-workchoice standards.

    This is not e new imposition, but a return to pre-workchoice standards, as troublesome as they can be

  71. Tom – it isnt that simple. different state awards had different penalties and allowances.

    Some have different casual loadings – for example.

    Combining all this into fewer federal awards requires some levelling up. This is a cost.

  72. Would it not also include some levelling down

    I have yet to see explicit evidence of it costing more, on an overall basis, from pre-worchoice awards to the new ones.

    In fact, the data you provide, which is a comparison from workchoice awards to the new one, is horrifying in its extent.

    According to this data, workchoices made people in those industries roughly $5,500 worst off each each year.

    That is a big loss in income, particularly considering these are not industries well known for their high wages initially.

  73. Tom, Workchoices didn’t render awards inoperable.

    The problem here is that some states have low penalties for hospitality (for example). I think Queensland always had lower penalties for evening work in the tourism/hospitality industry.

    Now waiters will have a penalty rate for working the evenings they always have.

    The government has some phasing/transitional structure, to deaden the pain for a while.

    It really isn’t enough.

  74. I’m not keen on the “right to enter any business by union representatives and inspect any employee records”

    This is the domain of the State or Federal regulators not union representatives.

    If a union member or non union employee has a remuneration or condition issue it should be sorted by the appropriate government IR department and has nothing to do with the unions – a member may complain to his/her union but it should then be referred to the government IR department

  75. TB – The inspection of employee records by unions seems to be contrary to freedom of association.

    But I’m sure there’s always a very ethical and entirely non-political reason for this.

  76. Tom of Melbourne, on March 11th, 2009 at 7:37 pm Said:

    “The problem here is that some states have low penalties for hospitality (for example). I think Queensland always had lower penalties for evening work in the tourism/hospitality industry.”

    But your figures are not an example of old pre-workchoice awards compared with new awards, they are a worse case scenario of the most brutal workchoice awards compared with the new awards.

    A look at Queenslands awards for retail show that penalties still apply for weekends etc.

    I am not sure if any close analysis has been done outside of parliament about the similarities between them, but, knowing unions as you do, I would assume they are all very similar.

    And, awards generally have plenty of room for bargaining, so most employees could end up on similar agreements to pre-workchoice.

    If you have empirical data that shows these pre and post workchoices are extrememely different awards, then there would be cause for alarm, apart from that, they are comparing apples with oranges, and just proves how disgusting workchoices was.

    6.2 Overtime and Sunday Work

  77. Tom, I had a look at that award.

    For example it contains specific provisions such as –

    “In the Cairns Tourist Area:
    The ordinary weekly working hours for all employees shall be worked between 7.45 a.m. and 8.30 p.m. on Mondays to Fridays; between 7.15 a.m. and 6.00 p.m. on Saturdays and between 12.15 p.m. and 8.30 p.m. on Sundays.”
    This is what I meant when I said the Queensland awards were more accommodating of the flexibility of hours required in hospitality.

    I’ll be interested to see how the new “modernised” awards cope by defining specific regions throughout the country for special arrangements, without adding to cost. There must be hundreds of regions, there are company specific awards.

    Consolidating this into a simplified structure will involve levelling up, and very little/no levelling down. I’m an advocate of a simpler award structure, but I think it is costly to complete it quickly, and increased costs will reduce demand for labour. It’s a bad time to do this.

    The timing of this could not be worse.

  78. Actually TomM, you look to be right on this one.

    There are a couple of stories in the Australian that highlight the awards between states.

    Although, it looks as if the government is preparing to move to acknowledge these changes, as are the unions.

    PAY rises for thousands of workers in the nation’s struggling retail and hospitality sectors could be deferred for up to five years, as unions concede the need to minimise cost pressures on employers during the economic downturn.

  79. Interesting Tom – the penny finally drops with unions and the government.

    Why is it that mere, humble bloggers are more up to date with the workings of the real world than politicians and union officials? The reason is that most have never bothered to have an actual job that involves accountability for real revenue and expenditure.

    By the way, unions aren’t giving up anything. They are merely deferring the implementation of a levelling up in conditions that is of dubious merit.

    ps – as you are aware, I’ve not been wrong yet.

  80. So Tom, therefore if the conditions are of “dubious merit” you believe that the workers should not be paid what they are worth – that is, the levelling is not required.

    I would have thought that people working in these jobs actually are the ones who need help to make ends meet.

    Then again, what would I know – I am just someone who believes that people should be fairly compensated for their work.

  81. It appears that if there is to be an increase in wages, the unions are prepared to see it phased in over 5 years to assist business in this downturn and protect jobs, which seems pretty reasonable.

    The young adults who work in hospitality have been exploited for too long. Just because they are young, it doesn’t mean they should be used and abused by ruthless employers. If the employees work evenings and nights, they should get paid penalties. If the employer charges customers a weekend and public holiday surcharge to cover expenses, it should be going to the worker’s wages.

    Considering that many of these workers would be uni students, the people who are propping them up financially are their parents, adding to the private debt problem. So, why should business be offloading their wage costs to the community anyway?

  82. Tom of Melbourne, on March 12th, 2009 at 9:04 am Said:

    ps – as you are aware, I’ve not been wrong yet.

    In the same vain (sic) though, you have yet to be right 🙂

  83. Well Joni, I think you are right on this occasion when you say – “Then again, what would I know – I am just someone who believes that people should be fairly compensated for their work.”
    The myriad of awards all have different conditions. Perhaps you should have a look at a few.

    Some may have a 20% casual loading, but overtime at double time after 2 hours. Others may have a 25% casual loading and overtime a double time after 3 hours. Some may have an afternoon shift that is for work after 6pm, others may have it after 8pm.

    Which of these conditions do you think should be applicable “help to make ends meet”.?

    These types of differences may exist on a regional or industry sector basis for good reason. The levelling up may not relate to the value of the work, it may relate of specific industry or regional factors.

    So perhaps have a look at the facts, rather than make broad, inaccurate comments such as – “therefore if the conditions are of “dubious merit” you believe that the workers should not be paid what they are worth – that is, the levelling is not required”, (which is not all what I’ve suggested).

    You might try to suggest your solution in a way that does not impose new costs in the labour market during a time when the demand for it is falling.

    Kittylitter – here’s a simple question – why is it that in an industry such as hospitality in north Queensland a restaurant waiter should now get a shift penalty for serving meals during the time that people eat?

    If this has not been a standard of employment in the past, what is the purpose of requiring this now?

  84. Kittylitter – here’s a simple question – why is it that in an industry such as hospitality in north Queensland a restaurant waiter should now get a shift penalty for serving meals during the time that people eat?

    Apologies for throwing my three pennies worth in for a question for Kitty. Tom, it’s probably because people in FNQ also like to spend time with their partners, take their kids to soccer and therefore should be compensated with a few extra $s if they are required to work outside regular hours. Not everything should revolve around the needs and requirements of tourists.

  85. Tom

    “…does not impose new costs in the labour market during a time when the demand for it is falling…”

    And there we find the detail-devil of Workchoices. Workchoices was to have everyone negotiate their own contract, thereby dragging down conditions and rates when times are bad just to keep an income.

    I do not know that answers, but you were the one who said that they had “dubious merit”.

  86. Re – “dubious merit”.

    I said that levelling up of conditions was of dubious merit. If this imposes additional costs during a falling labour market, what is your justification?

    So far it seems to go to some form of equity argument, but fails to consider that awards are structured in a way that provides different weightings to different conditions, depending on the history and circumstances of different industries and diverse regions.

    It is rationalisation for the sake of it.

    But you have an opinion that you have expressed, and I think you misrepresented the point I made. So I will press you for justification of your opinion.

    Re – “Not everything should revolve around the needs and requirements of tourists.”

    Perhaps not in your view. But in the tourism industry, you might try running a business that does not seek to look after them.

  87. Indeed Tom, I agree that it depends on the different industries and diverse regions. But is that really what the changing of the awards is removing?

  88. ‘Allo ‘allo it’s Tom. Tom, I said ‘not everything should revolve around…’. Having worked the markets in Byron Bay, Bangalow and The Channon for over 6 years (leadlight handcrafts made by myself and not reselling imported items) I certainly do not underestimate the importance of the tourism industry.

    My point was that people required to work outside of regular hours should be entitled to a few additional $s. This was in relation to your comment: “why is it that in an industry such as hospitality in north Queensland a restaurant waiter should now get a shift penalty for serving meals during the time that people eat?”.

    I was assuming that you meant by ‘during the time that people eat’ that someone, a waiter, a chef should not be entitled to penalty rates because tourists lob in say Cairns at 2.00am.

  89. Also in regard to – “Tom, it’s probably because people in FNQ also like to spend time with their partners, take their kids to soccer and therefore should be compensated with a few extra $s if they are required to work outside regular hours”

    The conditions I identified regarding the Nth Qld award were structured to provide additional flexibility, not limit it.

    It can be noted that it provides for normal working hours to occur on various days of the week, at times that meet the peak demands of tourists eating habits.

    It was not an example of a restriction; it is an example of a level of flexibility that can be lost during “modernisation”. The flexibility is tailored to specific industries and regions.

    Even the government and unions seem to have finally, belatedly acknowledged the problem, but several here seem to lack this understanding.

  90. “But is that really what the changing of the awards is removing?”

    If award B has a shift penalty that provides an allowance for work after 6pm, and award B for work after 8pm, but award A has a 20% casual loading, and award B has a 25% casual loading, how do you think the combination of these awards will operate?

    It involves rationalisation of these conditions. This is achieved mostly by levelling them up. This is of dubious merit.

    And I’m quite happy to be held to justify the comments I make, I don’t require misrepresentation of them to make them more contentious.

  91. An earlier comment on this thread was –

    “while the Libs were f*rt*ars*ng about Rudd’s public persona and his wife plus then throw in mega Costello for good measure, hey guess what is happening in the rest of the world..it’s Julia Gillard and WorkChoices.”

    Alternative and current status –

    While the ALP was f*rt*ars*ng disrupting long standing employment conditions and legislating to provide unions with access to employment records, whether these employees are members or not, most contributors at Blogocrats were f*rt*ars*ng about discussing now defunct legislation, and a coalition dill. Rather than trying to get an understanding of a complex issue, and the inadequacy of the policy of the government.

    Julia Gillard has proven she is incapable of delivering policy coherent policy on a complex issue yet again.

  92. Kittylitter – here’s a simple question – why is it that in an industry such as hospitality in north Queensland a restaurant waiter should now get a shift penalty for serving meals during the time that people eat?

    Because he is serving meals to others at the time he should be enjoying a meal with his own family. Note that it only applies after normal business hours, when most other people have finished work for the day and are having their normal family life at home.

  93. ” why is it that in an industry such as hospitality in north Queensland a restaurant waiter should now get a shift penalty for serving meals during the time that people eat?”

    Because they’re essential cogs in the wheel.

    Like hairdressers…like garbage bin collectors…like cleaners…like everyone else some people choose to see as INVISIBLE…

    unlike some:


    (Bobby – Trailer)

    I still have tears thinking about what could of been…

    it drove me.

    And now…I know it can be.

    N’

  94. Kittylitter and Nasking – penalties for disabilities, such as shift work and weekend family disruption exist in every award.

    Some awards compensate casuals differently (20% or 25%), some have a shift allowance from 6pm, others 8pm, some have overtime at double time after 2 hours, others after 3, some have all overtime at double time. Some have 5 weeks annual leave, but not as high a penalty on public holidays.

    Perhaps you would suggest the correct combination of these arrangements in an award, in a way that does not unnecessarily or unsustainably increase labour costs, but which meets your views.

    When you put all these conditions into a fast tracked rationalisation, there they are levelled up. Julia Gillard sought to fast track this process, and has again been found to lack judgement. This is about the third significant policy failure for her.

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