Institute for Private Enterprise

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The wheels of reform are
turning — but oh so slowly

18 February 1999

During the holiday period, there was further follow-up to my report on The Case for Further Deregulation of the Labour Market, including a 20 minute pre-recorded TV interview by ABC Late-Line at my holiday house — then 'cut' to about 30 seconds when the program went to air! I at least had the pleasure (sic) of being attacked twice on the program by ACTU President, Jenni George — though without having the opportunity to respond. Such treatment by the media is standard practice, of course. Even so, given that the report has had some reportage in the written press and one or two favourable mentions by Workplace Relations Minister, Peter Reith, it is a little surprising that I have not been interviewed at all on radio since its release and that none of the major economic writers has even mentioned it.

However, the Financial Review did publish an article by me on the US labour market and that will be followed shortly by a more analytical piece in the March edition of the Australian Bulletin of Labour. I have also been invited to address two conferences on the issue in the near future. Further, although I have not yet had time to do anything about it, in response to the December newsletter one subscriber has offered to help with the production of a video highlighting some of the ridiculous aspects of labour market regulation. More help is needed.

In his letter to the Prime Minister of 3 December (publicly released on 17 February after a 'leak' of a draft), Peter Reith, has also canvassed a wide range of further possible reforms that would help improve the functioning of the labour market. The letter contains a section which states that "The case for more radical deregulation of the labour market has been well summarised. . ." in my report. That section is attached and if any subscriber is interested I can let them have the complete letter. Perhaps the most interesting aspect of the letter is the suggestion that minimum wages be determined by a panel comprising the AIRC, the Productivity Commission, the Reserve Bank and/or Treasury. Separately, Reith has proposed the 'formal recognition' of voluntary mediation services in industrial disputes as an alternative to the IRC. It will be recalled that my report proposes that the IRC itself be turned into a voluntary advisory/mediation body and that, if minimum wages are to be set (which I oppose on equity grounds), government should do that on the basis of advice from an advisory panel rather than the IRC.

Treasurer Costello has also made a useful contribution to the debate by pointing out that, with changes (including a more flexible labour market), Australia should be able to get close to the US' unemployment rate of 4-5 per cent; and by allowing publication of an IMF Staff paper entitl The Causes of Australia's High Unemployment Rate. The main causes are identified there as the disincentives created by high social security benefits and the 'lack of responsiveness of real wages to unemployment'…which.. 'may be due to features of the wage bargaining system, including union power and the award system'.

All this is grist to the mill. But reform is moving so slowly! Why does the process have to be small step by small step? Moreover, the increasingly aggressive position being taken by the Senate will make it very difficult to achieve the necessary reforms without changes to the way the Senate is elected. That is looming as a major issue and the Government will surely have to pursue it, particularly if (as seems likely) the GST legislation is rejected in its present form. It is noteworthy that Reith raised this matter in his letter to the Prime Minister.

My continued pursuit of police policy regarding trade unions and picketing may have contributed to the Victorian Chief Commissioner's decision to tell the Police Association in December last that in future the 'Force' will not meet the cost of attendance at Association meetings and that it is 'unlikely' that secondments of police to the Association to perform executive duties will be approved. The full text of the Commissioner's letter, obtained via FOI, is attached.

The developing virtual certainty that UNESCO will recommend against uranium mining at Jabiluka led to an invitation from the Courier Mail to contribute an article on the issue. That recommends that the Government review its membership of UNESCO. Instead of lobbying other countries to vote in support of our position (a lost cause), Australia should now take the opportunity to withdraw from UNESCO as the US did some years ago.

Further work has been undertaken for the NSW Opposition, which faces an election at end March. The Coalition's announced privatisation policy towards the electricity industry includes some proposals similar to those contained in a paper I prepared for them over a year ago.

Finally, I bought into the controversy over the failure of journalists David Marr and Wendy Bacon (among others) to report the McClelland 'confession'to them that he perjured himself at Lionel Murphy's trial. Their "excuse" — that this confession was made to them in confidence — does not stand up to close examination but is another example of the left bias in the media. If the person concerned had been from the other side of the political fence there can be little doubt that the confession would have appeared somewhere in the media. Only one of several of my letters was published. The standards of the "popular" media appear to be deteriorating almost day by day.

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