The campaign by The Australian newspaper against the Fair Work Act has had a few phases. I’d like to go through a few of their key claims and evaluate them against recent data.
A discussion of Australian political and economic issues and ideas, by Matt Cowgill.
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How would we know if the labour market was ‘flexible’? One way is to look at how the jobs market responds to economic shocks. During the GFC, when the Howard Government’s labour laws were still in effect, the number of hours worked in Australia fell while the number of people in employment didn’t fall.
My last post consisted of the sort of Sisyphean snark about The Australian that I’d like to cut back on, but can’t resist writing. I was a little taken aback that the same paper that labelled a modest trim to family payments for high-income households as ‘class warfare’ would unashamedly lament that ”the old principle that welfare should exist only for those who genuinely need it appears no longer to hold.”
The Australian editorial, 11 January 2013:
Australia’s welfare system is crying out for comprehensive reform… Is it fair that a couple with one child and a household income of $160,000 a year receives a family tax benefit, or that a young couple buying, for their first home, a $700,000 apartment in Toorak are paid the first-home owners grant? The old principle that welfare should exist only for those who genuinely need it appears no longer to hold.
You might remember that in late 2010, we were warned repeatedly that Australia was facing a ‘wages breakout’. The Australian, in the typically calm and measured tones of its editorial page, warned that “the economy, unfortunately, is facing an economically irrational assault on a scale we have not witnessed for a quarter of a century.”
Yesterday, the national accounts released by the ABS showed that we had the fastest productivity growth in over a decade, in the year to the March quarter. You would think that this would give pause to the alarmists who claim that our current industrial relations laws are ruining the economy. You would be wrong.
Imagine if Australian prices and wages both went up by five per cent in a year. The cost of living for Australians would be unchanged.
I don’t want my blog to just be a forum for rebutting claims made in The Australian, but it can be difficult to resist.
For example, this quote from Stephen Matchett in today’s Oz [paywalled], regarding the slowdown in productivity growth, riled me enough that I couldn’t let it through to the keeper.
