Industrial Relations

October 21, 2005

I’ve been meaning to do a post on the whole industrial relations issue for a while. Both the Government and the ACTU have spent an awful lot of time and money trying to convince us that they’re right, even though not one word of the legislation has been released. I think one thing is certain – it definitely will not be the doom and gloom which the unions will have us believe.

One the centrepieces of the Government’s proposal is that the Industrial Relations Commission will be replaced by a new Fair Pay Commission to set minimum wages. The FPC will set the minimum wage based on ‘parameters set in legislation to ensure minimum wages operate as a genuine safety net for agreement making’. Whatever this means, and how this differs from the current IRC, I don’t know. I gather that both the unions and business groups will continue to make wage submissions to the FPC, as they have done so in the past.

The other ‘big’ change being touted around is the elimination of unfair dismissal laws for businesses with less than one hundred employees, although it turns out that firing someone on discriminatory grounds such as race, sex, union membership, pregnancy and so on will still be illegal. Fair enough I guess, but then what other forms of dismissals are ‘unfair’? If you’re lazy, can’t handle the job, or steal from work, then surely the employer has every right to sack you. I’d imagine that even under the current unfair dismissal laws, these are not considered ‘unfair’.

There was a similar, if not much bigger, scare campaign against the Government before the introduction of the GST. These days, no one’s bothered. Although having said that, I suppose the difference with the GST and industrial relations is that people knew what they will gain directly with the implantation of the GST (income tax cuts, removal of a dozen or so other taxes etc.), but no one can really pinpoint how exactly the IR reforms will benefit them.

I don’t think anything will change drastically. Australia’s low unemployment is due to its healthy economic growth over the past decade or so, not its current industrial relations laws. Friendly IR laws will not help save jobs if the economy goes in the shits. I don’t think the current proposals will do change much at all. If the Government really wants to make its mark on IR, it may as well abolish unions and do away with the minimum wage. But that wouldn’t be very politically smart now, would it?


Hello WordPress

October 19, 2005

Let’s see how this goes.

Initial reactions, and comparisons with Blogger:

Pros –

  • Good, clean interface
  • Able to import posts from Blogger
  • Categories! Yes, Categories! Ah… I’ll get over it…
  • Can create sub-pages

Cons –

  • Can’t really edit or create your own template in any great way like you can with Blogger (hopefully this will change soon)

More to come for sure, as I try and figure the nuts and bolts of this.

Some good news from the UK

October 17, 2005

About bloody time.


October 13, 2005

Uruguay again.

I guess the good news is that this will be the last time Australia will have to qualify for the World Cup via a cross-confederation play-off, with us joining Asia next time. The whole ‘revenge’ factor will make next month’s games exciting, and hopefully attract the media attention the game so desperately deserves in this country. Plus, this time we have Hooos! On a personal note, whoever decided to schedule the games smack bang in the middle of final exams week should be shot.

Electoral reform

October 8, 2005

There’s been talk this week of electoral reform, with the biggest attention focused on introducing voluntary voting, and excluding prisoners from voting. I haven’t really made up my mind up on either issue. I suppose that compulsory voting does kind of contradict the nature of a liberal democracy, although Australians already do, to an extent, enjoy voluntary voting. There is nothing ‘compulsory’ about the actual voting process. The only compulsory part is registering and then showing up at the local polling booth. What one then does with the ballot paper is completely up to them. I guess the real issue here is whether we should have compulsory enrolment.

Are Government Bonds Net Wealth?

October 8, 2005

…pondered Robert Barro in his famous 1974 paper (‘ol Bazza’s one of the favourites to pick up this year’s Nobel Pri… – I mean – Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel, to be announced in a few days, partly for his work on this and the micro foundations of macroeconomics). More to the point – does the financing of government debt by selling bonds to the public have different effects on consumption than would be by financing it with increased taxes? No, according to Barro (and intermediate macroeconomic textbooks). This is just an extension of the Barro-Ricardian equivalence, which more or less reckons that consumers will not adjust their consumption levels if there is a tax cut, because they know that the government deficit which may result will have to be paid off by tax increases in the future. The same goes for government bonds – when government sells bonds to finance debt, they will have to increase taxes in the future to pay these bonds off. So bonds aren’t part of net wealth at all, and shouldn’t affect consumption patterns. All well and good I guess, but there’s one thing that sounds a bit dodgy about this (I’m not worthy enough to argue with a Nobel-Laureate-in-waiting over his own work, but no one else seems to have brought this up, and my tutor was stumped too). Funding debts by raising taxes and selling bonds are two different things. Everyone pays taxes, but only those who choose to purchase bonds are affected by bonds. When these bonds mature and the government raises taxes to pay these off, everyone is hit with a tax hike. So in the end, people who purchase bonds have indeed increased their net wealth, as the tax hikes they pay is more than offset by the returns on their bonds. Conversly, those who did not purchase the bonds are worse off.

Having said that, I suppose on the aggregate level, net wealth doesn’t change, but perhaps there is an equity issue in dealing with bonds, given its zero-sum-type nature.

Plus, there are obviously several major limitations to Barro-Ricardian equivalence such as liquidity contraints and myopia. The theory didn’t hold up during Reagan’s ‘let’s cut taxes and raise spending at the same time’ era either.

Is religion the biggest threat to society?

September 28, 2005

These guys reckon it is. It turns out that the US, where religion plays a big role in daily life, suffers from much greater social problems than more secular developed countries such as the UK, Sweden, and France.

“In general, higher rates of belief in and worship of a creator correlate with higher rates of homicide, juvenile and early adult mortality, STD infection rates, teen pregnancy and abortion in the prosperous democracies. The United States is almost always the most dysfunctional of the developing democracies, sometimes spectacularly so.”

I haven’t read the actual journal article (I will, if/when I get my hands on it), but it appears that the author made the classic correlation vs causality mistake. Just because the more social ills a country suffers from, the more religious its citizens are, does not mean that religion is the cause of these social ills. Correlation does not equal causality. To use a similar example – Christmas only occurs in the months when people start sending cards to each other. In the months when people don’t send cards, there’s no Christmas. So Therefore, Christmas is caused by people sending cards to each other. This is nonsense of course, but the authors seemed to have used a similar line of logic. There are plenty of other possible explanations for why Americans are more likely to kill each other than people in other developed countries. Poverty cycles, lenient gun laws, lack of decent welfare programs, education etc. etc. But that’s another debate altogether. While responsible for a lot of bad stuff, I don’t think religion is to blame here. Plus, you could argue the reverse – that because of the higher number of social problems in the US, more people turn to God for hope, guidance, an excuse, or whatever. UPDATE: For anyone who’s interested, here’s a link to the original journal article. Academic wanking, really.