Wage breakouts and the Fair Work Act

16 December 2010

Professor Ron McCallum, AO has seen many wages breakouts during his long career, and dismisses some of the business hype about the Fair Work Act.

According to a report in The Australian, anxiety about wages pressures and labour market shortages in the business community are growing by the week.

Labor's Fair Work Act, cuts to immigration numbers and reform fatigue, combined with renewed union militancy, seem destined to intensify these pressures and could lead to a strong pick-up in wages growth, in turn putting upward pressure on interest rates.

Professor McCallumpoints out that since 1993 Australia has had four attempts at reforming labour laws.

The Keating government in 1993; Howard in 1996, and again in 2005 with Work Choices, and now the Fair Work Act.

The legislation for Work Choices ran to 1700 pages of regulations, while Fair Work Act runs to 1220 pages of regulations.

He argues that the new act represents both "a consensus and an amalgam of previous legislation".

Even though the Keating reforms moved towards enterprise-based bargaining, the right to bargain collectively was retained, and it has been kept by every government since then.

"The 2007 election was decisive because it settled the debate on whether to keep collective bargaining, while retaining strong anti-strike laws," he says.

View the entire article - Wage fears: perfect storm begins to brew as industry braces for breakout - The Australian

Contact: Greg Sherington

Phone: +61 2 9351 0202

Email: 0a052a12051f2900451c235f203b5d1605233259353644151c5a794a03