In Australia work is fair and it’s getting better

byMatt Thistlethwaite

Australia is a great place to live. Our economy is strong, unemployment is low, companies are making good profits and real incomes are rising, as is our living standard. The Fair Work Act is an important building block of that strength.

The facts show us that our workplace relations system is producing lower levels of industrial disputes, increasing profits and fostering agreement making while providing a workable safety net.

The recently negotiated Holden Enterprise Agreement shows that the Fair Work Act equips employers and employees with the tools to produce high quality, mutually satisfactory agreements.

With the unemployment rate at 5.1 per cent, Australia’s position in the world economy is extraordinary and we remain the envy of the western world. Compared to when we were elected, there are now over 700,000 more jobs and we are on track for 300,000 more by 2013, hardly the hallmarks of an industrial relations system that promotes militancy, disruption and inflexibility.

With this in mind, we consider two additional indicators in this debate – real weekly earnings and business profits.

Since 1991, wages have increased from $929 to $1287 per week in real terms. That means even once cost of living increases over the past two decades are taken into account, Australians are now $358 better off per week. Over this 20-year period, combined real wage growth was 33 per cent, an average increase real in wages of 1.7 per cent per year.

Since the introduction of the Fair Work Act, real wages have increased by 2.8 per cent, an average of 1.4 per cent per year. This is consistent with real wage growth trends seen over the last 20 years and shows that real claims about wages breakouts are grossly exaggerated.

Contrast this with the United States where unemployment is 8.3 per cent and real wage growth over the last decade has only averaged 1.1 per cent per year.

Since 1991, the total gross operating surplus (profit) of all Australian companies (from their operations in Australia and excluding unincorporated enterprises) has grown exponentially.

Just as real wages have continued to grow under the Fair Work Act, Australian companies’ profits have also continued to grow.

From 1991 up to the commencement of the Fair Work Act, company total profits increased an average of 7.8 per cent each year. Over the last two financial years, company total profits have grown by 9.9 per cent. In 2010-2011, the total amount of profit earned by Australian companies was $358,520,000,000.

Company profits have softened in the couple of years since the introduction of the Fair Work Act because of the GFC. But we have hardly seen a collapse in company profits.

The Fair Work Act allows for flexibility. Flexibility provisions are part of all industrial instruments. An employee, who strikes an agreement with their employer, cannot be worse off under that agreement. The Fair Work Act does not allow for unfair flexibility because that is not the way we treat workers in Australia. Voters made that decision in 2007.

The alternative is a return to WorkChoices style policies, which allow hard line employer groups to force workers onto individual contracts, to avoid paying weekend penalty rates, reduce overtime rates and cut back on entitlements such as annual leave. Under the Fair Work Act unemployment is low, real wages are growing, disputes are reducing, agreements are rising and profits are increasing.

Our industrial relations system complements growth in our economy. And they are the facts.




Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s