"Unless we make further reforms to industrial relations, to workplace relations, the current level of productivity which is underpinning our economic prosperity will not continue", PM John Howard told the John Laws radio show on August 10.
"We need to make further changes because it's a never ending race, the battle to maintain economic strength and economic prosperity", he added.
"If you look around the world, the countries that have the freer, more flexible labour markets are the countries with the lowest levels of unemployment and the highest levels of productivity."
This sounds like economic blackmail because it is.
A careful look at the latest official unemployment figures released by the Australian Bureau of Statistics exposes the lie at the heart of Howard's argument. While the headline stated that unemployment remains "steady at a 28-year low of 5%", the details are not so cheery:
* Part-time employment was up 27,200 to 2.9 million, while full-time employment dropped 14,500 to 7.2 million. In NSW, 35,000 full-time jobs were lost in July.
* According Sue Richardson, professor of economics at Flinders University, the low official unemployment rate hid a "disastrous" trend to semi-employment among many men, not seen since the 1930s. Of the 1.5 million extra jobs created between 1992 and 2004, only 12% were permanent full-time jobs taken by men. Another 24% were described as full-time for men, but were actually contract, labour hire, or casual jobs without conditions such as annual leave or sick pay. (Adele Horin, Sydney Morning Herald, July 23, 2005.)
* Last year the Australian Bureau of Statistics reported nearly twice the number of people judged by Centrelink to be entitled to unemployment benefits were "marginally attached to the workforce", willing to work if the jobs were there. In 2003, an independent three-year study for the Reserve Bank found more than 800,000 willing workers unemployed to add to the 660,000 entitled to the dole.
* Previous concessions to corporate profitability and flexibility have made the big corporations more profitable but at a terrible cost to the community. Public health, education and transport systems are in crisis, and inequality has grown. The first study of household wealth in Australia conducted since World War I found that the bottom half of the population owned less than 10% of total household net worth, while the wealthiest 10% owned 45% of total household wealth. (Melbourne Institute of Applied Economic and Social Research, June 2005.)
Further concessions to the insatiable appetite by the corporate rich are also unlikely to stave off the recession that always follows a boom, as the collapse of house prices in NSW reminds us.
What goes up must come down, Reserve Bank governor Ian Macfarlane reminded the House of Representatives' Standing Committee on Economics, Finance and Public Administration on August 12.
"I think the thing that distinguishes NSW from the other states over the last five or 10 years has been that NSW had a much bigger run-up in the boom period and, as a result, is suffering a bigger run down", he said.
Now the "r" word is being used, according to a report by John Garnaut in the August 12 Sydney Morning Herald. "It's a distinct possibility that NSW is in a so-called technical recession", Garnaut quoted the chief economist at ANZ, Saul Eslake as saying.
An economist with the Commonwealth Bank, Michael Workman, said NSW's economy probably shrank in the June quarter as it did in March, meaning the state was technically in recession. "It's a pretty good chance of it happening when the data is released on September 7", he said. "You're lucky if you've got a full-time job in NSW."
While the bursting of the housing bubble may not, by itself, propel the economy as a whole to head towards a recession, it is a reminder that feeding the profit-hungry corporate rich won't guarantee prosperity for all.
From Green Left Weekly, August 24, 2005.
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