Economists are the last people you should ever ask to design an industrial relations system

Went out to dinner a few nights ago and out of nowhere found myself in an argument about industrial relations. Having been involved in one National Wage Case after another, even having presented the employer economic submission on a number of occasions, after having written many others before that, this was an issue close to my heart. And here is my central conclusion having represented employers in so many forums over so many years:

The free market system depends for its survival on providing buffers between buyers and sellers and between workers and employers.

Leaving such matters “to the market” as it is often put is certain to end in some kind of socialist/anarchist revolution which would not be long in coming. The notion that someone who successfully manages a business enterprise is in any way evidence that such a person is actually in any way morally superior is absurd. They may put their own capital at risk, or perhaps it is the capital they have borrowed that has been put at risk, but beyond that, there is no evidence of superior virtue and moral authority of the entrepreneur. There must therefore be laws and regulations in place to create industrial peace as best as a community is able.

That there must be some kind of wage setting process in place has been discovered by every market economy that has ever existed. No one agreed with me, but what’s new about that?

These were then my morning-after thoughts following this conversation. The central issue was whether Australia’s system of conciliation and arbitration, which embeds a minimum wage adjustment process, is consistent with good economic theory and practice. That virtually no economist thinks this is true only shows what a useless preoccupation economic theory has become.

———————
Tampering with the employer-employee relationship that leaves employees without any recourse to the actions of employers will not work anywhere. And I am conservative enough to recognise that a system that has evolved over more than a century embeds within it all kinds of features that no one can identify but which make it work out there in the real world.


The market system depends for its existence on institutions that buffer the relationships between businesses and their customers and between employers and their employees. This is the Australian system.

So let me begin. Even more than ever I was reminded that economists know almost nothing worth knowing about the practicalities of running an economy, and this is shown in spades in their thoughts, such as they are, about industrial relations. The last thing that will work is “to leave it to the market” where union power exists, and where socialist trouble makers are to be found at every turn. So I did the tiniest bit of research when I came home, and was amazed I still remembered where to look, given that I have not been personally involved in any of this for eighteen years.

The Fair Pay Commission

First there was The Fair Pay Commission. How did I even remember its name? And what a name! It might as well have been “The Just Price Commission”. Australia’s IR system was in its origins designed “to prevent and settle industrial disputes” that ranged beyond the compass of a single state. Being fair to both employers and employees was obviously a necessary ingredient if it were to function, but that was not its purpose. The aim was to provide a structure to encourage industrial peace.


“Fair pay” is not a market principle. Do economists nowadays discuss “fair” prices? The discussion of The Fair Pay Commission at the link is a generally sympathetic account, andgets the story mostly the way I remember it. There we find under the heading “2006 decision”:

On 26 October 2006, the Commission handed down its first decision. The Commission’s media release stated: The Australian Fair Pay Commission today announced an increase of $27.36 per week in the standard Federal Minimum Wage and in all Pay Scales up to $700 per week. This covers just over one million Australian workers who rely on the Commission’s decisions for adjustments in their wages.

The Commission also awarded an increase of $22.04 per week to all Pay Scales paying $700 per week and above, or more than $36,000 per year, representing another 220,000 workers, about 2% of the workforce.

In hourly terms, the Australian federal minimum wage increased to $13.47 per hour (for workers on pay scales of less than $700 per week), with effect from 1 December 2006….


Many commentators were surprised the Commission’s first decision was so generous. For example, the Australian Council of Trade Unions had asked for a minimum wage increase of $30 per week.

An absurd decision which virtually granted the entire ACTU claim in full. “Surprised” is not the word for such an extravagant decision based on nothing whatsoever, and certainly neither on economic sense nor industrial need. And just for the record, let me mention who were the members of the FPC who had made this decision.


The inaugural chairman of the Commission was Professor Ian Harper and there were four commissioners: Hugh Armstrong, Patrick McClure AO, Mike O’Hagan, and Honorary Professor Judith Sloan.

Work Choices

Work Choices was the name given to changes made to the federal industrial relations laws in Australia by the Howard Government in 2005, being amendments to the Workplace Relations Act 1996 by the Workplace Relations Amendment (Work Choices) Act 2005, sometimes referred to as the Workplace Relations Amendment Act 2005, that came into effect on 27 March 2006.

This is how it is described.


In May 2005, Prime MinisterJohn Howard informed the Australian House of Representatives that the federal government intended to reform Australian industrial relations laws by introducing a unified national system. WorkChoices was ostensibly designed to improve employment levels and national economic performance by dispensing with unfair dismissal laws for companies under a certain size, removing the “no disadvantage test” which had sought to ensure workers were not left disadvantaged by changes in legislation, thereby promoting individual efficiency and requiring workers to submit their certified agreements directly to Workplace Authority rather than going through the Australian Industrial Relations Commission. It also made adjustments to a workforce’s ability to legally go on strike, enabling workers to bargain for conditions without collectivised representation, and significantly restricting trade union activity.

I was also long gone from involvement with the system by then so just watched from the sidelines. This is where it ended up.


WorkChoices was a major issue in the 2007 federal election, with the Australian Labor Party (ALP) led by Kevin Rudd vowing to abolish it. Labor won government at the 2007 election and repealed the whole of the WorkChoices legislation and replaced it with the Fair Work Act 2009.
The FWA was a disaster and I did a lot of work on trying to overturn it working with various IR organisations. Not mentioned, for some reason, is that not only did Labor win, but John Howard lost his own seat, the only time other than in 1929 this had happened, which also happened to be the only previous occasion when a government had tried to get rid of the Federal industrial relations system. Lots of detail at the link, but this is where it comes down to.


The Australian Government stopped using the name “WorkChoices” to describe its industrial relations changes on 17 May 2007. Workplace Relations Minister Joe Hockey said the brand had to be dropped due to the union and community campaign against the WorkChoices laws. “It has resonated because it has been the most sophisticated and articulate political campaign in the history of this country.” The ACTU countered that the name may have changed but the laws were the same. The Government did not rename the brand, but did launch a new advertising campaign that did not refer specifically to WorkChoices.

And the political washup.

Howard’s successor as leader of the Liberal Party, Brendan Nelson declared that his party has “listened and learned” from the Australian public. He also declared that WorkChoices was “dead” and would never be resurrected as part of Coalition policy, and called on Rudd to move quickly to introduce draft industrial relations legislation. Former IR minister Joe Hockey said the laws “went too deep” but were introduced with “the best intentions”. “As I said yesterday and I’ve said since election day, WorkChoices is dead, and there is an overwhelming mandate for the Labor Party’s policy of tearing up WorkChoices,” he said.And from the sidelines:

Former Prime Minister John Howard broke his post-election silence in March 2008 by attacking Rudd’s industrial relations policy while defending WorkChoices.

Tampering with the employer-employee relationship that leaves employees without recourse to the actions of employers will not work anywhere. And I am conservative enough to recognise that a system that has evolved over more than a century embeds within it all kinds of features that no one can identify but which make it work out there in the real world. 

The market system depends for its existence on institutions that buffer the relationships between businesses and their customers and between employers and their employees. This is the Australian labour-relations system. No one will think of dismantling it any time soon. There may well come a time, but it won’t be in any time soon. 

What a djoke!

If it were up to Scott Morrison, or even Daniel Andrews, there is little doubt Novak Djokovic would be allowed to compete in the Australian Open. But we are in the midst of a mania where his presence, even if it presents ZERO risk to anyone else, is intolerable to the voting population so out he must go. This is our version of tossing virgins into volcanoes to placate the gods, and so it must be done.

Here is how Djokovic looks at it: Healthy Athletes Suddenly Fall Ill, Die After Forced Covid Injection – And The Media’s Silent

So here we are: Djokovic visa cancelled in sensational twist.

It appears the dream of a 10th Aus Open title in 2022 is over.

With this as the added bit of diplomatic savour:

The matter has escalated in the last few hours with Serbian president Aleksandar Vucic now involved.

Shortly after 8am AEDT, Vucic announced he had spoken with Djokovic on the phone and told him: “Our authorities are doing everything to see that the harassment of the world’s best tennis player is brought to an end immediately.’

Home Affairs Minister Karen Andrews says the Morrison government would not apologise for the cancellation of Djokovic’s visa.

Old Parliament House “set on fire”

Police officers stand in a line in front of a burnt door.

The Australian left are as stupid as the American left and just as vicious and malicious. This may be the most disgusting story I may have ever come across in Australia in many years: Old Parliament House’s front door set on fire a second time as protests in Canberra continue. Not even for the first time, but the second time. And if it is the second time, this was no accident but deliberate. What a repulsive lot these people are. I found this particularly striking.

Commander Linda Champion from the Australian Federal Police said the fire likely began during a smoking ceremony performed by protesters, which police were aware of and had approved to occur.

“There was a small smoking ceremony and that is something that we had agreed with a lot of the members who were attending each day as part of a peaceful protest,” she said.

“It then became a little bit out of hand and then when ACT police went to respond, that’s when it was greatly exacerbated.”

A smoking ceremony! In North America I can sort of see the point, since that is where tobacco comes from, peace pipes and all. But here? Such an unimaginative lot who have no ideas other than to destroy, with no concept whatsoever what it takes to build or to cherish one’s heritage and history, never mind the source of our freedoms and prosperity.

Firefighters clean the damage from a burnt-out doorway.

Let me bring this added detail up from the comments with much gratitude to Cliff Boof. I knew none of this which will teach once again never to depend on the media to keep me aware of what’s going on.

“The Australian” reports that no arrests have been made.

On 10 August 2021 activists representing Extinction Rebellion committed acts of vandalism in Canberra. On 24 August, four of the activists had all charges “proven but dismissed” by Magistrate James Stewart. Magistrate Stewart remarked to one of the activists, Eric “Sergeio” Herbert, “Your actions arose out of peaceful demonstration to further local, commonwealth and world attention to climate change and the inevitable effects it will have on the world community”. Canberra ‘Duty of Care’ rebels have court cases dismissed or given $20 fines – Extinction Rebellion Australia (ausrebellion.earth)
The above link includes the following statement attributed to Herbert: “Today in the ACT court of law it has been reaffirmed that property damage and public disruption in this rebellion are required to enforce the law and protect the occupants of this land. This outcome has provided me with the unimpeachable understanding that the ACT Judiciary are willing to stand behind us as we enact our lawful indispensable duty to bring down this government through. That is our Duty of Care.”

So it will be interesting to see, if arrests are eventually made, how the ACT judiciary will react.

P.S. This bloke Herbert tried a similar trick in Newcastle a month later and was arrested but unfortunately for him Mark Latham’s missus was the Magistrate.

“NO ONE CARES, MANDATES ARE KILLING US”

SHOCK As Melbourne Woman Sets Herself On Fire Inside Car With Sign Saying: “NO ONE CARES, MANDATES ARE KILLING US”. She’s certainly right about that. This is the most unreported story you have ever seen.

The woman parked her car, blocking off a road in Cherry St, Werribee, a suburb in Victoria, and poured 4 cans of petrol over herself before placing the sign containing her written plea in the window of her car. Police attended and tried to talk her down, but she ultimately set herself on fire after telling the police she had “nothing left”.

The condition of the woman is currently unknown and the mainstream Australian media has yet to cover the incident. However, video from Wyndham News Australia shows the aftermath of the fire, with the sign containing the woman’s desperate plea plainly visible for all to see.

Witnesses have confirmed the incident on Facebook and the story is currently gaining some serious traction online, making it an open question of whether the mainstream Australian news outlets will be forced to cover the incident.

The horrific incident is a shocking indictment against “Dictator” Dan Andrew’s lockdown policies which have reduced the state of Victoria to an authoritarian hellscape.

Andrews is notorious for his indifference to the suffering of the people he rules over, as evidenced by the fact that he was told back in 2020 that a tenth of all Victorian suicides were a result of his lockdown policies.

Below is the aftermath video by Wyndham News Australia:

 

Have not seen this mentioned anywhere else!

“Just zip it Andrews…we have had enough of you”

I think Daniel Andrews is finally beginning to see what a screw up he has been and how tragically he has mangled the response to Covid. Of course, he doesn’t put it quite that way: Andrews declares Covid response a ‘triumph’. From the article:

Daniel Andrews has declared Victoria’s response to the pandemic has been a “triumph” but has conceded his government has made mistakes in its handling of COVID-19.

And then he gnashes at the ungrateful sods who fail to appreciate his towering genius:

“We’ve got some people who just can’t find it in themselves to say ‘well done’ and to speak out against extremism.”

As a completely clueless buffoon, he reaches astonishing heights.

More broadly, Mr Andrews argued it was state governments, and not federal ones, who now play a more consequential role in driving the economy and improving people’s standards of living….

Mr Andrews said states now oversee the “big levers of productivity” including health, education, energy and infrastructure, which will drive future economic growth.

“The big drivers of our standard of living and our quality of life, productivity and therefore people’s prospects, sense of security and options in life … are all run by the states now,” the Victorian Premier said.

“It’s the main game.” 

This is from the man who has left the state a financial wreck and taken Melbourne from The World’s Most Liveable City to a barren wasteland. But he does now say this.

But Mr Andrews – who presided over the world’s longest lockdown in Melbourne in an effort to quash the virus – admitted his government’s response to the pandemic hasn’t been flawless.

“I wouldn’t want anyone to think we regard our pandemic response across the board as having been perfect, he told former Labor campaigner Stephen Donnelly.

Not flawless, was it? As noted by the first 15 “Most Liked Comments” out of 620:

Victoria under Daniel Andrews has become a tragedy – for those people who never vote Labor, but worse still for those of us who entrusted him to the role of Premier of our state. Power has gone to his head and when he is not trumpeting his triumphs he resorts to lecturing those who are opposed to him. He has become addicted to power and control so he needs to be removed as soon as we can do it. You cannot argue with individuals like this who have become so fixated on their own self preservation. The only option is to vote them out as soon as the opportunity arises.

I am so over him using the word extremist to describe everyday Australians voicing their opinions. Thousands upon thousands demonstrating against him for weeks and no arrests, no damage and no injuries. Where are the people getting hurt dan? Do us a favour and release the data used to inform your restrictions instead of wasting taxpayer dollars to keep it hidden.

Just zip it Andrews…we have had enough of you.

Triumph of incompetents I would say.

In light of the terrible misery, sadness, divisiveness and lack of accountability experienced in Melbourne and Victoria over the last 2 years, triumph is the last word I would think of, let alone apply to this most hopeless of Premiers and State of Governments. We deserve so much better. #VoteThemOut

The bloke is utterly deluded. Most deaths in the country Most locked down Most debt etc etc etc History will not be kind to the current government, that is for sure. But the question is, how much damage can this bloke do to the srate between now and then? The ‘polls’ say he’s leading by a majority, yet only one person (my mother) says she’ll vote for him again. And I cannot remember the last time anyone had anything positive or nice to say about him. What a 2 years !

It’s this sort of shameless arrogance that enrages long suffering Victorians even more.

No-one believes any of the pathetic Daniel Andrews spin.  He has been atrocious as the leader of the ALP in Victoria and his constant hidden agendas are despicable. The worst premier of any Australia state.

Where is that health advice premier?

Just shows he has no idea.

My goodness! What does failure look like then?

Destroying long running businesses due to forced lockdowns is not a triumph.

Andrews doesn’t want to know that thousands of Victorians are marching every week to oppose his dictatorial government. His ego can’t stand it.

If it has been such a triumph, why can he not be interviewed by regular media or speak with regular Victorians? He hides away and cannot face regular Victorians. And we are told he is popular? 

Andrews and his mob need to be voted out next election. Anyone who thinks he did a good job during the Corona virus saga cannot be serious. Vote this mob out !!!!

There are lots more just like these with this the most on the money:

So under Dan’s watch:

1.  Victoria had 67% of all COVID deaths in Australia.
2.  Victoria had 60% of all COVID cases in Australia.
3.  Melbourne has recorded, so far, 263 days of hard lockdown – a world record.
4.  No responsibility from anyone for the 2020 hotel quarantine fiasco despite an inquiry and millions of dollars spent on lawyers for Govt. ministers and the Premier.

If that’s “a triumph” well . . . 

Worst premier ever is how he will be remembered. 

“Why are we made to be bouncers?”


Here’s something unexpected: Dymocks hires security after jump in assaults on staff over COVID rules

A popular bookshop in Melbourne’s CBD has been forced to hire security guards to guard its main entrance after employees were attacked by customers refusing to follow Victoria’s COVID-19 rules, with one worker being pushed down an escalator.

Pretty gruesome story, but perhaps a lesson here about what really matters to those who have been kept in lockdown. Why are liquor stores open to the public generally  but not book stores? You can’t even go to the library unless you are vaxxed. As one of the co-owners of Dymocks is quoted as saying:

There was a big divide between essential services and non-essential retail when it came to enforcing the restrictions, with authorities putting less of an onus on essential businesses to follow the rules.

“We are booksellers, we are not security guards. Why are we made to be bouncers?” Mrs Traverso said.

“It’s one week into this mandate. People are just not able to cope with it. They are just sick of it. We are nearing 92 per cent fully vaccinated. Enough is enough. Just give up those stupid mandates.”

And speaking of bouncers.

Johannes Leak Commentary Cartoon for 02-12-2021

Version: Commentary Cartoon  (1280x720 - Aspect ratio preserved, Canvas added)

COPYRIGHT: The Australian's artists each have different copyright agreements in place regarding re-use of their work in other publications.

Please seek advice from the artists themselves or the Managing Editor of The Australian regarding re-use.

Of course, the supposed rebound in the economy does not quite tell the story since business costs to monitor who comes in and who does not may look like an increase in economic activity to a statistician but it’s not in any way an improvement in our living standards.

Oh my goodness, a pandemic!!

From Jupes in a previous thread, with thanks.

The ‘38th’ figure is where Covid was placed on the ABS list of 2020 causes of death.

Thirty. Eight. No, seriously. It’s official.

Well, as official as a number from the ABC can be. Anyway all part of our current forms of insanity. As others have pointed out, Omicron is an anagram for moronic. I can only hope when we get to Omega it will really be the final end to it all, as in the Alpha and the Omega. Omega is last!

Kill the Bill

IMG_7990

There I was minding my own business sitting on the pavement having a coffee in the sun but what should come by but a truck with a billboard on back-and-both-sides with the picture of Daniel Andrews and the words “Kill the Bill”.

Here’s where we are about that Bill:

A key supporter of the Victorian government’s pandemic legislation says she will not vote to extend the current state of emergency powers if proposed law changes are blocked by her fellow crossbench MPs.

The comments by Reason Party MP Fiona Patten raise the prospect that, unless the government can find another vote in support of its proposed pandemic regime, it could be left powerless to enforce its mandatory vaccination rules and other coercive measures to contain the spread of COVID-19.

A meeting on Friday afternoon between crossbench MPs and senior staff of Health Minister Martin Foley did not resolve the impasse, with the government not yet offering any significant concessions to appease demands for greater parliamentary oversight and other checks on the proposed new powers.

The aim of the Bill is to allow the Premier to declare a Pandemic and thereafter rule by decree on his personal judgement with no recourse by anyone else or by the Parliament to limit the actions that can be taken supposedly to deal with the spread of Covid. Daniel Andrews is amongst the last leaders one would wish to have such power. 

This was last week’s demo in Melbourne, as filmed by Sam at True Arrow.

Donations to Sam can be made here.

Novavax the vaccine for the vaxxine-hesitant


This is my kind of article: Novavax: the good vaccine. It’s not that most of us are in any sense “anti-vaxxers” but lots of us are very reluctant to take any of the currently existing experimental forms now on offer. But there is Novavax which many of us have been looking out for. Who can be sure of any of it, but here we find it discussed in a very positive way. But first, there is a discussion of Daniel Andrews in a way that makes me trust her judgement just that little bit more.

He takes away your freedom to work. He prevents you from seeing friends and loved ones. He only lets you watch programs which distort your sense of reality and supress your independent thought. He watches and monitors everywhere you go. He threatens to keep you locked up if you don’t comply.

And the final straw?

He forces you to get a medical treatment that you never wanted.

In many ways, Victoria’s relationship with Daniel Andrews resembles more of an abusive relationship than a government that is in power to serve the people.

Victoria’s two-tiered society has witnessed the use of isolationist language and tactics to separate the vaccinated from the unvaccinated. 

Dictator Dan pushes Victorians to consider the vaccinated as superior citizens and the unvaccinated as less than helots.

But then to Novavax. She writes:

The highly anticipated Novavax vaccine may act as a kind of saviour to those with health issues who cannot take other Covid-19 vaccines which are currently on the market. Also, those who just plain and simple do not feel confident in our current variety of vaccines….

Novavax is clearly standing out from the crowd. With the absence of the contentious mRNA technology from Pfizer and Moderna (which has been linked to myocarditis, pericarditis, potential pregnancy and neonatal adverse eventsmenstrual changes and in some very rare but serious cases, death) and Astra Zeneca’s reputation crushing blood clotting saga, Novavax’s safety is demonstrating a higher success rate.

In relation side effects, the decreased rate of adverse reactions is promising. In fact, this table from the New England Journal of Medicine looks at Novavax’s adverse reactions records in relation to a study. When looking at the toxicity grade (mild, moderate, severe or potentially life threatening) there is no data to suggest a potentially life threatening reaction in their study. This is incredible news in optimising the safety and confidence for Australians to get vaccinated.

Novavax also has an incredible 96% efficacy which has been seen in their first trial.

So far so good. So let’s get on with it.

Daniel Andrews’ Victoria: “a sadistic experiment with unintended consequences”


I hate to dwell on Daniel Andrews but he represents a measure of incompetence and stupidity that will be hard for any future premier to exceed. However, I am drawn to all this again by Nick Cater’s article in The Oz today whose title sets the scene: The tyranny of ineptitude drives more to the streets.

I will stick to the highlights, but Andrews is a sad example of how fear and uncertainty can make absolutely anyone an apparent refuge, even when he has overseen the worst record anywhere in Australia, perhaps even across the world, shaded only by the devastating results achieved by Andrew Cuomo in New York (from whom Andrews may well have copied much of what he has done). All this is from Nick.

Lockdowns are a sadistic experiment with unintended consequences.

On Friday, 127 days, 87,000 cases, 9.2 million jabs and 460 deaths later, Andrews revoked the mask rule. There was no explanation or attempt to hide behind the fig leaf of health advice. If there was any advice, it would have contradicted the advice on which he claimed to be acting when he imposed mandatory mask wearing four months ago.

With more than 9000 active cases in the now unmasked community, Victorians are 530 times more likely to run into an infected person than they were in the middle of masked-up July.

Lockdowns did nothing to halt the spread of the virus; indeed, the number of people infected in the past four months of the pandemic in Victoria is four times larger than the number infected in the first 14 months.

Andrews’ brutal style of politics can allow for no admission of defeat or personal culpability. It demands a steady supply of scapegoats, the so-called idiots but for whom the virus would now be under control.

Andrews’ zero-Covid promise of July turned out to be utterly worthless and the pain he inflicted was degrading and ineffective.

Idiocy has assumed many forms in Andrews’ rhetoric in the past 20 months.

Today’s idiots are those who exercise their right not to consent to taking the vaccine. In doing so they are denying themselves the benefits the vaccine bestows but that hardly makes them idiots. They simply may be distrustful, and the more coercive public health measures become, the more sceptical they become….

Our intelligence has been insulted and our lives disrupted by these buffoons, safe behind their laptops, churning out executive orders, randomly enforced, that run to 83,000 words across 254 pages in Victoria, none of which has been endorsed by the elected parliament.

The social fabric is disintegrating as police are conscripted to enforce these garbled decrees that change on a whim. Police officers are calling in sick or resigning in disgust, uncomfortable with the declining public trust in the uniform they were once proud to wear. The permanent expansion of executive power Andrews seeks with the extension of emergency power legislation will further entrench the tyranny of ineptitude that is driving Victorians on to the streets.

I will finish with two comments from the paper.

How any intelligent reasonable Victorian, regardless of their political persuasion, can honestly believe Andrews and his government has performed well is frankly “unfathomable”. I just don’t get it.

But what does that say about Victorians, if Andrews goes on to win the election?

It’s the Melbourne Syndrome.