Bill Shorten talks up the ‘fair go’ but his policies betray real workers

The Australian
NICK CATER
January 31, 2017
ColumnistSydney

Bill Shorten has a plan for jobs. Not just any old jobs, well-paid jobs. New jobs, green jobs, jobs of the future, the ones that come from renewable energy. Jobs with generous penalty rates, jobs that are protected from the incursion of foreign labour.

Jobs created by government “investment in human capital”, which is another way of justifying ill-targeted spending on education and training.

It is hard to conceive of a policy less in tune with the times than Labor’s strategy to build employment. A low-growth economy at a difficult stage of transition is keeping wage rises low in the private sector. Labor intends to change all that by strengthening enterprise bargaining arrangements and locking in penalty rates.

Mandated targets for renewable energy are driving astronomically high power prices, squeezing business margins and throwing people out of work. Labor, however, intends to push a mandatory renewable energy target to a crazy-brave 50 per cent.

Australia’s 30 per cent company tax rate provides a direct incentive for businesses to make their investments elsewhere. Labor is implacably opposed to reducing it.

We know from historical experience that free trade and skilled migration create economic growth and jobs. Labor has thrown in the towel on a crucial trade agreement and wants to put up barriers to skilled migrants. 

Labor once delighted in portraying itself as party that looked to the future while the Liberal Party took refuge behind the picket fence. These days it is a difficult line to sell, as Shorten demonstrated last week in a speech at the opening of the John Curtin Research Centre, a new centre-left think tank in Melbourne.

Labor was “a party prepared to learn, to change, to moderate and modernise”, claimed Shorten, in one of those grandiloquent openings Labor politicians are expected to provide on these occasions. Labor was “a party that has always had the courage to remake itself, to raise its sights”.

What followed was a pro-union speech that would have seemed cravenly obsequious even if he had saved it for the annual gathering of the ACTU.

He called for the strengthening of enterprise bargaining, a form of industrial negotiation that has become so corrupted in many industries it is essentially pattern bargaining by another name. 

He wanted family violence leave incorporated into National Employment Standards. The family violence leave campaign is an insidious bid for additional sick leave entitlement — not that the unions would ever call it that — that is creeping into wage agreements across the public sector and in those areas of the private sector where the unions still hold sway.

Labor’s vision of the future is “strong penalty rates” — the ones that favour the big retailers and service companies that are able to do deals with the unions, and penalise the small cafe and restaurant owners who can’t.

And so on. Shorten’s moderate and modernised party resembles one that would have been familiar to John Curtin, a socialist party that falls obediently into line behind organised labour, one that obliges sectional interests rather than the national interest, and one that looks at business as an enemy.

He adopts the somewhat perverse idea that wages are stagnant because of the meanness of business and its unwillingness to meet the workers’ legitimate demands. Perhaps he hasn’t noticed that the Australian economy shrank in the September quarter last year, and that businesses — large and small — are struggling with increasing overheads.

The standard economic response to low wage growth — the one advocated, for instance, by Treasury — would be policies that encourage economic expansion. It might include reducing taxes or lowering regulatory barriers. It would certainly include a deregulated labour market and lowering barriers to trade.

Shorten proposes the opposite course of action, and supports his arguments with tub-thumping rhetoric and the logic of socialism.

If wages are not rising fast enough they must be prised out of the mean fists of business by an industrial regulator backed by the strong arm of the law. Reducing company taxes is presented as a cash-grab by big business, rather than a response to the international mobility of capital at a time when corporate tax rates are falling rapidly throughout the world.

Labor will protect Australian jobs and Australian products by returning to policies it eschewed in the 1980s.

On the problem of national debt — the one that is costing us more than $1 billion a month in ­interest — Shorten remains practically silent. Silent, that is, unless you count the snide campaign to undermine the government’s attempts to pull back spending.

Of these, the attack on the government’s welfare compliance measures may be the most cynical of the lot. A social support system that is easily gamed not only erodes the budget but eats away at the dignity of people who are encouraged to see welfare as way of life, rather than support to set them back on their feet.

The hollowness of Shorten’s portrayal of Labor as a party that is prepared to learn is revealed in his unwillingness to repudiate the high and poorly directed spending on welfare, health and education it enshrined in law in its last destructive term in power.

They were justified by the principle of “fairness”, a word that conveniently blurs the distinction between parity of opportunity and equity of outcomes. It’s a word, incidentally, that was not uttered by Curtin as far as we can tell.

When Gough Whitlam repeated the term “fair go” six times at his 1974 election launch, it was a message of empowerment, not bland equality.

Yet the last Labor government became so eagerly attached to fairness that it was inclined to redistribute wealth before it had been earned. We can expect more of the same under a Shorten government. “It’s about injecting new ideas, adopting new causes,” said Shorten last week. “Broadening and enlarging the definition of fairness.”

For all its talk of jobs, Labor is pitching itself to the constituency for which government provides a living, not the one that works for it.

Nick Cater is executive director of the Menzies Research Centre.