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Why are wages low? Because it is government policy

As Frydenberg and Cormann front the cameras to talk about Labor (will they ever realise they are in their third term in office?), everybody keeps talking about the need for wage growth and scratching their heads as to why it isn’t happening.

It isn’t happening because we have a pro-employer government who has made wage restraint a goal.

It was only 9 months ago that David Speers asked Senator Linda Reynolds “Do you agree flexibility in wages and keeping wages at a modest level is a deliberate feature of our economic architecture?”

An outraged Reynolds quickly replied “No I don’t. No, absolutely not. And for Bill Shorten to even suggest that, I think, shows a fundamental lack of understanding about economics.”

“Well I’m actually quoting Mathias Cormann, the finance minister, here. Your colleague. He says that wage flexibility is ‘a deliberate feature of our economic architecture,” Speers said.

“He’s absolutely right,” Ms Reynolds replied.

Two contradictory answers, 16 seconds apart. At least she blushed while she blustered.

“The whole point – it is important to ensure that wages can adjust in the context of economic conditions – is to avoid massive spikes in unemployment, which are incredibly disruptive,” Cormann told Sky News in March. “This is a deliberate feature of our economic architecture.”

Undermining the power of unions has been key to this strategy.

Malcolm Fraser changed the Trade Practices Act to ban workers from taking action in solidarity with other workers. He also created the Industrial Relations Bureau to act as an industrial “tough cop on the beat”.

Howard introduced the Workplace Relations Act 1996 to extend the scope for non-union agreements, followed later by WorkChoices which limited the scope of collective bargaining, and wound back protections against dismissal.

The organisations created by the Abbott and Turnbull governments (the Registered Organisations Commission and Australian Building and Construction Commission) have been so nakedly anti-union that they have repeatedly broken the law they are supposed to uphold.

Michaelia Cash’s hand-picked Commissioner, Nigel Hadgkiss, had to resign, but not before he ran up a $436,000 legal bill at public expense trying to defend the indefensible. Cash knew this court case was coming up when she appointed Hadgkiss.

Being a government for employers and the wealthy, the Coalition has never understood the importance of wage earners sharing in the wealth their labour generates.

Showing just how completely out-of-touch they are, Eric Abetz, as Employment Minister, warned of a coming “wages explosion” in 2014 where “unsustainable wage growth” would push “thousands of Australians out of work”.

Instead, we have seen the Fair Work Commission, in a highly politicised process led by Deloitte Canberra managing partner Lynne Pezzullo (Dutton side kick Mike Pezullo’s wife), cut penalty rates to the lowest paid workers, affecting mainly women and young people.

We have seen parental leave entitlements cut, with mothers who combined their workplace entitlement with the government entitlement condemned as “double-dippers”.

Increasingly insecure employment, underemployment, sham contracting, labour hire firms, the casualisation of the workforce, the gig economy, and foreign worker visas are all stripping workers of entitlements and any hope of collective bargaining.

Frydenberg and Cormann, in the brief moments when they are not talking about what would have happened if Labor had won the election, will tell you that household disposable income is growing the fastest it has in a decade.

What they will never admit is that, whilst the average has gone up, the median has gone down.

Since 2009 and the global financial crisis, the average and the median have moved in different directions.

The average household’s annual real disposable income has climbed a further $3,156. The median (or typical) household’s income has fallen $542.

The reason they won’t mention that is because the lower fifty per cent of the population never enter their consciousness. We are the leaners, the bludgers, the burdens, those who won’t have a go. It’s our own fault that our parents didn’t start a trust fund for us and provide us with the deposit for our first penthouse and a position on the board of the family company.

All we have to bargain with is our labour and they have made it basically illegal for us to even do that.

And yet, it is us in the lower fifty per cent who keep these charlatans in power – a classic case of Stockholm syndrome.

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10 comments

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  1. Phil Pryor

    It’s a conservative government of unwiped arseholes, so what could possibly flow from that? Cormann, a pillock of old European fascist filth, is a fraud, a dud, a useless front for the greed of the cunning crooks. If they don’t pay tax, or decent wages, they can’t seem to lose. As for the treasurer, that lying third rate actor going grey in the gob from untruths as they flow freely, we are cursed to have a shitheaded shyster and shonk in office. But, at the head of this crew of crap craniums, is the Moron, the liar from the shire, a spiv and ad man superb, grinning in his oozing ugliness over all things of which he is unaware, e g, decency, honesty, accuracy, excellence.,

  2. Terence Mills

    From the Australian Financial review in August :

    “Reserve Bank Governor Philip Lowe has warned that public sector pay caps are entrenching low wage growth and wants them lifted to at least 3 per cent.

    Dr Lowe told a parliamentary economics committee on Friday that federal and state government wage caps of 2 to 2.5 per cent across the country were helping to depress wages by setting the standard in the private sector.

    RBA governor Philip Lowe said society is making a trade-off with its governments to entrench low wage growth.

    He said both public and private sector wages should increase by 3 per cent or more, based on target inflation of 2.5 per cent plus 1 per cent in labour productivity growth.”

  3. wam

    It seems unbelievable that any worker would vote for this coalition but they have done so for last 3 elections.
    Why?
    This lnp took the penalty rates from a poorly paid section of workers. Many thousands have had wages stolen or underpaid. Yet they put one in hansons or scummo’s square on the ballot paper. .
    Why?
    Perhaps what you have is safe as long as there are people without. Fear that labor will take from you to give to them is real and fear of losing your job is ‘realer’ and fear of the loonies is ‘realest’.

    The Police have always been fiercely right wing and anti-labor. They can see a difference between police unions striking and cfmeu striking or baggage handlers striking and vote to take such action from unions. They call themselves ‘associations’. Perhaps to avoid the policy??

  4. John Lord

    Mathias admitted as much on Television.

  5. Bronte ALLAN

    Very well said, as usual Kay! This effing COALition mob would naturally oppose ANY decent wages for the working people, after all, they are ALL only in power to help their big corporations etc, to ensure that our wages are kept as low as possible-how else can they make excessive profits etc if they were to pay a “realistic” bloody wage? As for them always blaming Labor, they have been in power now for so many wasted years that any “blame” cannot & should not be directed towards anything that Labor is supposed to have done so many years ago now! SloMo & ALL his lying, inept bloody COALition mates can & should go to HELL!! BASTARDS, the lot of them!

  6. Jano

    Masters and Slaves ! – Its not rocket Science ! – The trickle down economics – ,Are an insult to common humanity ! –

    How about we storm the castles ..Storm the mansions .Storm parliment and institutions of power !
    Over throw ..Over kill and trickle our piss, on their Greedy rorts of mass profits and greed ! ………

    Let the Poor become rich ! – And, the Rich become poor !!! ……………..

    Trickle down the shit ,they fed us !! …………………………………………………

    Is there a cure for Greed disease and power ?

    Hand them over to Modern day Robin hoods and hunt these rich ,wealthy c*nts down !!!- you trickle down- fark wits – And make them eat their own shit ..Live on the crumbs of the earth – and eat your own shit ..You tyrant dogs !!! ……………………………………

    Let the rich -become poor ! – And, The Poor- become Rich , !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

  7. Stephengb

    Labor have been the governing party for 6 out of the last 23 years, when will our so called fourth estate not remind this government each time they blame Labor.

  8. Geoff Andrews

    Joke from another website (“Pearls & Irritations”) today:

    When you see a photo of Cormann & Frydenberg standing side by side, what do you call the space between them?

    A perineum.

  9. David

    I found this very enlightening:

    The Spider’s Web: Britain’s Second Empire (Documentary)

    and if you feel the need for more anger making content try:

    The Dirty War on the NHS John Pilger 2019 (John Pilger)

    https://www.youtube.com/watch?v=yM9ybXI01c4

    Together they illustrate What they are doing and How they are doing it and How long it has been going on!

    Wake up Australia!

  10. Ianus Christius

    I think that the wages will go even more down in the next few decades, all over the world…

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