Voters Emphasise importnace of Jobs

As the Australian Financial Review notes that jobs is the number one concern of voters (see below), it is useful to remember that The Reserve Bank’s latest analysis in its August statement on monetary policy shows that under the present government “wages growth has dropped to its slowest pace since the early 2000’s” and that the “increase in the unemployment rate over the past year or so indicates that there are more people actively looking for work”. Indeed, this has occurred with “employment growth remaining below the growth of the working age population” ie people have been dropping out of the work force because of the difficulty of finding jobs and despite slower growth in wages.

The performance of (real) wages and employment growth is much worse than under the Howard government. Something wrong with the existing industrial relations policy?

 Des Moore is a member of the HR Nicholls Society Board of Management 

Media Reports: How Super Rules Limit Competition

The launch of our report yesterday on how changes under the Fair Work Act to superannuation requirements stifle competition and innovation, has attracted significant media interest.

Here are three pieces worth reading closely:

 The Australian (Paywall Protected) – Super rules limit competition, report says

COMPETITION to manage the super contributions of workers who don’t choose their own fund is being strangled by excessive, pro-union regulations, a new report argues.


The federal government’s decision to limit the number of funds that can be listed as default funds in modern awards to about 15 from 2015 — against the advice of the Productivity Commission — will bias the industry in favour of the status quo, says Barry Rafe, a former head of the Actuaries Institute.

Click HERE to keep reading Read more

Anti-Competitive Superannuation Requirements in Fair Work Act

Following changes to the Fair Work Act in December 2012 and June this year requiring awards to list default superannuation funds, after a two stage vetting by the Fair Work Commission, the HR Nicholls Society commissioned the superannuation expert and actuary Barry Rafe to review the changes.

The report finds that the changes entrench the industry funds (controlled jointly by unions and employer associations) and duplicate APRA’s oversight.  The new requirements are biased against new entrants, including retail funds, and against innovation.  The changes are anti-competitive and will create cost to employers as well as potentially disadvantaging superannuation fund members.

Report abstract and full report after the jump Read more

Union Activity During the Election Campaign

Although unions appear in this campaign to have less funding to help Labor (and themselves) than in 2007, union criticism of Coalition policies (or supposed policies) is increasing and there is precious little analysis in the media of such critiques. The AFR report (below) on union advertising is basically descriptive and, while my attempt to draw attention to the internal contradictions was published (see letter below), the editor chose to omit the important last sentence.

The acknowledgement in the PEFO that the economy may grow at a much lower rate than the official forecast adds weight to the need for structural reforms that would help lift investment, employment and productivity, such as IR and regulatory (particularly environmental) reforms. It almost takes us back to the early 1980s when Hawke called a meeting of business leaders and Wran ran with “a jobs, jobs, jobs first” agenda. Today, we don’t have the inflation problem that existed then but, with people dropping out of the work force, we need a reforming program to help/encourage business to create jobs. The steady downward trend in business confidence (the latest NAB survey is almost down to levels reached in the GFC) highlights the many regulatory problems faced by business, but which have so far received little attention in the election campaign. Important as the budget figuring is, the micro reforms are being overlooked.

It is of some importance that Holden workers appear to have accepted some kind of wage freeze. With our unit labour costs now being much higher than most other countries in the OECD, the case for changing out award system is very strong.

Des Moore is a member of the HR Nicholls Society Board of Management Read more